The Illusion of the Korean and Japanese Economies and GDP

"The statistics stating that Korea has caught up with the Japanese economy" are figures focused solely on a single specific indicator: GDP per capita.
When looking at 'external assets' and 'financial scale,' which demonstrate a nation's overall financial strength and the depth of its accumulated capital, a massive gap still exists; therefore, this should be viewed as a statistical illusion.
To accurately compare the economic scales of the two countries, let's look at per capita indicators versus actual national wealth (capital power).
GDP per capita
Korea: approx. $36,000 ~ $40,000
Japan: approx. $33,000 ~ $35,000
Korea has overtaken Japan (the indicator causing the illusion): This is a result of Japan's dollar-converted figures dropping significantly due to the plunge in the value of the Yen (weak Yen).
Total Economic Scale (Nominal GDP)
Korea: approx. around $1.2 trillion
Japan: approx. around $4 trillion
Net External Financial Assets (Money held overseas)
Korea: approx. the $900 billion level
Japan: approx. over $3.4 trillion
Japan holds an advantage of about 3.2 times (No. 1 in the world): Japan has been the country with the largest overseas assets in the world for over 30 years, creating immense national wealth through interest and dividends alone.
Why does the phrase 'caught up' create an illusion?
Causes of the 'Illusion Effect' that creates misunderstanding
The '1 trillion dollars in external claims' mentioned by domestic media or indicators is not pure bond investment, but a nominal figure that aggregates "all types of money that must be returned from abroad."
This includes inflated figures.
Bank of Korea Foreign Exchange Reserves: approx. $420 billion ~ $440 billion level. These are defensive funds for crisis response and cannot be used at will.
Pure Overseas Bonds (Debt-based securities investment): approx. mid-$200 billion. Excluding foreign exchange reserves, these are overseas bonds purchased by general corporations, the National Pension Service, institutional investors, and individuals (retail bond investors) for pure investment purposes.
Totaling these, the total scale of external claims held by Korea is approximately $1.18 trillion.
On the other hand, for Japan:
Foreign Exchange Reserves: approx. $1.1784 trillion. Of this, overseas marketable securities (bond) assets, including US Treasuries, amount to approximately $821.7 billion.
Private/Institutional Pure Overseas Bonds: approx. $2.4 trillion level. Excluding government foreign exchange reserves, these are external debt-based securities/bonds held by Japan's private banks, large life insurance companies, public pensions (GPIF), and individual investors for pure investment purposes.
Totaling these, the total scale of external claims held by Japanese residents is approximately $3.2 trillion.
In this way, Japan's private financial firms and pension funds alone hold $2.4 trillion in overseas bonds parked purely to earn interest income. This private capital is the true driving force behind Japan maintaining its status as the "world's largest net foreign asset holder" for decades.
When clearly comparing only pure private/institutional investment, excluding government foreign exchange reserves, Korea is in the mid-$200 billion range while Japan is approximately $2.4 trillion, representing a massive gap of nearly 10 times.
The Impact of the Weak Yen (Depreciation of the Yen)
In recent years, the value of the Japanese Yen has fallen record levels against the Dollar. While the income earned by Japanese citizens in Yen remains the same, because statistics are converted into 'Dollars,' Japan's GDP per capita appeared to drop sharply, making it look as though Korea had risen above it.
Statistics mentioned by the government and the media must be examined by dividing the criteria accurately.