Japan's net external assets hit a record ¥411 trillion in 2021, to retain its position as the top creditor for 31 years in a row, the Finance Ministry said on Friday.
A weak yen — it lost about 11% against the dollar last year — boosted the value of foreign assets held by the Japanese government, businesses and individuals.
And that currency factor, together with a rise in direct investment overseas, helped Japan post a record ¥5.6 billion annual increase in the value of net external assets.
"The weak yen and the gains in the U.S. stock market helped net external assets pile up," said Daisaku Ueno, chief FX strategist at Mitsubishi UFJ Morgan Stanley Securities, adding that the data held no implications for near-term currency moves.
The data could ease some concerns about the currency's recent sharp drop to two-decade lows beyond ¥131 to the dollar, which has raised worries about Japan's purchasing power.
Japan's net external assets were 1.3 times than those held by Germany, the world's No. 2 creditor, followed by Hong Kong and China, as of the end of 2021.
Gross external assets stood at ¥1.25 quadrillion and external debt came to ¥838.7 trillion, bringing Japan's net external assets to ¥411.2 trillion, or roughly $3.24 trillion based on current exchange rates.
Separate data confirmed Japan's current account surplus at ¥15.5 trillion in 2021, down 1.2% from a year earlier, with primary income gains worth ¥20.5 trillion adding to a trade surplus of ¥1.7 trillion.
The data underscored the view that Japan's hefty income gains from its overseas investment more than offsets a weak trade balance, helping keep the yen's status as a safe-haven currency, for now.
"In the medium to long run, however, the yen won't be perceived as a safe-haven currency given Japan's trade deficit and its shrinking population," Ueno said.