Government of Western Australia Official Site


Japan retains status as top creditor

Japan has kept its position as the world’s largest creditor nation for the 22nd straight year in 2012, as the US dollar’s gains helped inflate the value of overseas assets. Tokyo was followed by mainland China and Germany in third place in the ranking.

The ranking reflects the difference between the value of assets held abroad, including foreign debt and property, minus a nation’s liabilities, such as foreign purchases of its own debt and domestic assets. In Japan’s case, net overseas assets stood at Y296.3 trillion at the end of last year, or $3.02 trillion at Tuesday’s rate, according to the finance ministry.

Japan’s currency has tumbled since Prime Minister Shinzo Abe swept landslide December elections on a pledge to boost the world’s third-largest economy with a plan that includes big government spending and aggressive central bank monetary easing, which tends to weigh on the unit.

A weaker yen means that assets denominated in another currency, such as the US dollar, would become more valuable when calculated in yen terms.

Analysts said there were no guarantees Japan would retain the title going forward as it faces big trade deficits, fuelled by surging US dollar-denominated energy imports in the wake of the Fukushima atomic crisis, while carrying a massive public debt.