Net external assets at record $3 trillion in 2014
YOICHI TAKITA, Nikkei senior staff writer
TOKYO -- Japan's foreign assets and debt are both increasing thanks to a weaker yen and the rise in stock and bond prices overseas.
Japan's net external assets rose to a record 366.86 trillion yen (around $3 trillion) at the end of 2014, up 41 trillion yen from a year earlier. Japan also maintained its title as the world's biggest creditor nation for a 24th year, easily surpassing second-ranked China's 214 trillion yen and third-ranked Germany's 155 trillion yen. Japan's companies and households therefore have enough money to cover government debt for now.
National net foreign assets subtract the value of the domestic assets owned by foreigners from those a country owns abroad. In 2012, Japan's foreign assets rose by 80 trillion yen, while its overseas debt increased by 50 trillion yen. The following year, when Prime Minister Shinzo Abe's economic policies began to be implemented, the country's foreign assets rose by 135 trillion yen, while foreign debt increased by 106 trillion yen.
While the country's foreign assets increased by 148 trillion yen, its overseas debt rose by 106 trillion yen in 2014, mostly because of direct investment and securities investment from Japan. The weaker yen and the rise in stock and bond markets overseas also helped boost the value of Japan's assets.
Meanwhile, debt overseas rose because of acquisitions of Japanese stocks and bonds by foreign investors. They acquired 17 trillion yen in Japanese stocks in 2013, though their stock acquisitions fell to slightly less than 4 trillion yen the following year. However, higher stock prices pushed up the value of Japanese shares held by international investors by 50 trillion yen in 2013 and 13 trillion yen in 2014.
Since the start of the year, Japan stocks have been on an uptrend, while U.S. stocks have stayed broadly flat near record highs. Foreign investors, who have been lagging behind, could start investing in Japanese stocks, following the lead of fund managers.
The weaker yen also pushed up the value of Japan's foreign assets by 105 trillion yen in 2013 and by 64 trillion yen in 2014.
There is always a risk when making acquisitions, and loans and investments overseas. Japanese housing equipment maker Lixil Group, which aims for overseas sales of 1 trillion yen, said that Joyou, a subsidiary listed in Germany, will commence insolvency proceedings.