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Stan Rogers Folk Festival 2024: 27 years of music and community | SaltWire #festival #music #nsORLANDO, Florida - Japan solidified its status as the world's largest creditor last year as the country's net international investment position grew to a new all-time high as a share of gross domestic product.
As long as yields on foreign bonds remain significantly above equivalent Japanese yields, repatriation flows back into Japan are unlikely to materialize. That's $3.36 trillion at Dec. 31 exchange rates and marks an increase of 51.3 trillion yen, or $366.5 billion, from a year earlier. It's also a record 84.3% of GDP, up sharply from 76.6% a year earlier and a reminder of Japan's muscle on the global financial stage.
Of the 86.1 trillion yen or $615 billion increase in the value of Japan's portfolio investments abroad last year, around 40% was due to exchange rate moves, almost a third a result of"other changes", and only 20% from actual asset purchases. The yen fell 7% against the dollar last year, 12% the year before that, and is down a further 10% so far this year to an all-time low 160.00 per dollar. The yen's broad effective exchange rate is the weakest it has been since the era of free-floating exchange rates was established in the early 1970s.
The exchange rate, in particular, has boosted Japan's paper wealth. As Deutsche Bank's George Saravelos noted recently, the government pension investment fund - the world's largest public pension fund - has roughly made more profit over the last two years than the last 20 years combined.
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