Japan's International Investment Position at Year-End 2007*
* This is an English translation of the Japanese original released on May 27, 2008.
August 29, 2008
International Department
Bank of Japan
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I. Summary
Japan's international investment position (IIP) recorded net assets -- i.e., external financial assets of residents in Japan minus external financial liabilities of residents in Japan -- of 250.2 trillion yen at year-end 2007. This represents an increase of 35.1 trillion yen or 16.3 percent from the previous year-end, and marks a new record high for the second consecutive year.
The major trends for each component were as follows.
(1) "Direct investment" (assets: 61.9 trillion yen; liabilities: 15.1 trillion yen)
Direct investment assets increased for the fourth consecutive year, rising by 8.4 trillion yen or 15.7 percent from year-end 2006. In addition to large-scale acquisitions and capital participations with the aim of expanding overseas business, there were also a number of investments for the development of natural resources. Direct investment liabilities increased for the ninth consecutive year, rising by 2.3 trillion yen or 18.3 percent from year-end 2006.
(2) "Portfolio investment" (assets: 287.7 trillion yen; liabilities: 221.5 trillion yen)
Portfolio investment assets increased by 8.9 trillion yen or 3.2 percent from year-end 2006. This was due to acquisitions of foreign equity securities and debt securities by individual investors through investment trusts, and an increase in the value of equity prices. Portfolio investment liabilities increased by 11.8 trillion yen or 5.6 percent due to purchases of Japanese government bonds by foreign investors.
(3) "Financial derivatives" (assets: 4.4 trillion yen; liabilities: 5.0 trillion yen)
Both financial derivative assets and liabilities increased from year-end 2006.
(4) "Other investment" (assets: 146.2 trillion yen; liabilities: 118.7 trillion yen)
Other investment assets increased by 29.5 trillion yen or 25.3 percent from year-end 2006, due to the outflow of funds in response to overseas demand for funds. Other investment liabilities increased by 1.7 trillion yen or 1.5 percent.
(5) "Reserve assets" (assets: 110.3 trillion yen)
Reserve assets rose for the ninth consecutive year, increasing by 3.8 trillion yen or 3.6 percent from year-end 2006. This was due to the addition of interest accruing from bonds and notes to reserve assets.
Japan's international investment position (IIP) statistics were made public in Japanese on May 23, 2008, by the Ministry of Finance and the Bank of Japan as the Report on External Assets and Liabilities as of Year-End 2007 . The regional breakdown is available on the Bank of Japan's web site.
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