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Japan's International Investment Position at Year-End 2008*1

  • *1This is an English translation of the Japanese original released on May 26, 2009.

August 26, 2009
International Department
Bank of Japan

Click on ron0908c.pdf to download the full text.

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 225.5 trillion yen at year-end 2008. This represents a decrease of 24.7 trillion yen or 9.9 percent from the previous year-end, marking the first decrease in three years. The decrease was mainly due to a large decline in the yen value of foreign currency-denominated assets resulting from the significant appreciation of the yen.

The major trends for each component were as follows.

(1) "Direct investment" (assets: 61.7 trillion yen; liabilities: 18.5 trillion yen)

Direct investment assets decreased for the first time in five years, declining by 0.1 trillion yen or 0.2 percent from year-end 2007. Direct investment liabilities marked a new record high for the tenth consecutive year, rising by 3.3 trillion yen or 21.9 percent from year-end 2007.

(2) "Portfolio investment" (assets: 215.7 trillion yen; liabilities: 140.3 trillion yen)

Portfolio investment assets decreased by 72.0 trillion yen or 25.0 percent from year-end 2007, marking the largest decrease on record. Portfolio investment liabilities decreased by 81.2 trillion yen or 36.7 percent from year-end 2007, also marking the largest decrease on record.

(3) "Financial derivatives" (assets: 7.0 trillion yen; liabilities 7.8 trillion yen)

Financial derivative assets increased by 2.6 trillion yen or 58.1 percent from year-end 2007. Financial derivative liabilities also increased, by 2.8 trillion yen or 56.3 percent, from year-end 2007.

(4) "Other investment" (assets: 141.8 trillion yen; liabilities: 127.1 trillion yen)

Other investment assets decreased by 4.5 trillion yen or 3.1 percent from year-end 2007. Other investment liabilities increased by 8.5 trillion yen or 7.1 percent from year-end 2007.

(5) "Reserve assets" (assets: 93.0 trillion yen)

Reserve assets decreased by 17.3 trillion yen or 15.7 percent from year-end 2007, registering the first decrease in ten years.

Japan's international investment position (IIP) statistics were made public in Japanese on May 26, 2009, by the Ministry of Finance and the Bank of Japan as the Report on External Assets and Liabilities as of Year-End 2008. The regional breakdown is available on the Bank of Japan'sweb site.

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