Foreign residents in Japan are witnessing significant shifts in the country's financial landscape as speculation about an imminent general election triggers major market movements. The yen has weakened to 159 per dollar, stock prices have reached record highs, and long-term interest rates have climbed to levels not seen in nearly three decades. On January 13, the Tokyo foreign exchange market saw the yen fall to the 159-per-dollar range, marking its weakest level since July 2022, according to NHK. The currency depreciation stems from growing expectations that Prime Minister Takaichi will soon dissolve the House of Representatives and call a general election. Market participants anticipate that an election could lead to more aggressive fiscal stimulus policies, prompting investors to sell yen in favor of other currencies. The weakening yen has immediate implications for expats living in Japan. Those receiving income in foreign currencies will find their purchasing power has increased, while those paid in yen may see the value of their savings decline when converted to other currencies. Import prices for goods from overseas are likely to rise, potentially affecting everyday expenses from groceries to electronics. Japan's Finance Minister Katayama addressed the currency situation during a visit to the United States on January 12, meeting individually with U.S. Treasury Secretary Bessent. According to NHK, Katayama expressed concern about the one-sided movement toward yen weakness in the foreign exchange market, signaling that Japanese authorities are monitoring the situation closely. Meanwhile, Tokyo's stock market experienced a dramatic rally following the holiday weekend. The Nikkei Stock Average closed above 53,000 yen on January 13, setting a new record high, as reported by NHK. The surge was driven by expectations that aggressive fiscal policies would support economic growth, encouraging widespread buying across the market. For expats with investments in Japanese equities or pension funds exposed to the local market, this represents significant portfolio gains. However, the bond market tells a different story. Long-term interest rates, represented by 10-year Japanese government bond yields, rose to 2.16% on January 13—the highest level since February 1999, approximately 27 years ago, according to NHK. This dramatic increase reflects investor concerns about potential government spending and inflation. The rising interest rates carry practical consequences for foreign residents. Those considering taking out mortgages or other loans in Japan may face higher borrowing costs in the coming months. Conversely, savers might finally see improved returns on deposits, though this depends on how quickly banks adjust their rates. These market movements are occurring against a backdrop of global economic uncertainty. In New York, the Dow Jones Industrial Average also reached a record high on January 12, despite concerns about the Federal Reserve's independence under the incoming Trump administration, NHK reported. Market analysts warn that future actions by the Trump administration could trigger concerns about U.S. assets, potentially affecting global markets including Japan. For expats in Japan, the current situation requires attention to several financial matters. Those planning to remit money overseas should monitor exchange rates carefully, as the yen's weakness could continue if election speculation intensifies. Expats with savings in yen might consider diversifying their holdings, while those with foreign currency income should evaluate whether to convert funds now or wait for potential yen recovery. The anticipated election and resulting policy shifts could bring further volatility to Japan's financial markets. Foreign residents should stay informed about political developments and consider consulting with financial advisors familiar with cross-border financial planning to navigate these changing conditions effectively.