Foreign residents in Japan witnessed significant financial market movements on January 6, 2026, as the country's stock market reached new heights while long-term interest rates climbed to levels not seen in nearly three decades. These developments signal important shifts in Japan's economic landscape that could affect expats' savings, investments, and cost of living. According to NHK, the Nikkei average closed at 52,518 yen on January 6, marking the highest closing price in approximately two months. The rally was driven by strong performance in New York markets the previous day and growing expectations surrounding AI-related market expansion. The surge reflects renewed investor confidence in Japanese equities, particularly in technology sectors that continue to attract global attention. Simultaneously, Japan's bond market experienced notable movement as the 10-year Japanese government bond yield rose to 2.13 percent, the highest level since February 1999—approximately 27 years ago, NHK reported. This dramatic increase in long-term interest rates represents a significant departure from the ultra-low rate environment that has characterized Japan's economy for decades. The shift suggests that the Bank of Japan's monetary policy normalization is having tangible effects on financial markets. For expats living in Japan, these interest rate changes carry practical implications. Higher yields on Japanese government bonds could make yen-denominated savings accounts and fixed-income investments more attractive compared to the near-zero returns of recent years. However, rising rates may also lead to higher borrowing costs for mortgages and personal loans, potentially affecting those considering property purchases or refinancing existing debt. The yen also strengthened on January 6 in Tokyo's foreign exchange market, according to NHK. A stronger yen benefits expats by increasing purchasing power for international transactions, remittances to home countries, and overseas travel. However, it may reduce the relative value of foreign currency income when converted to yen. In corporate news, Tokyo Electric Power Holdings (TEPCO) announced plans for a massive 11 trillion yen investment over the next decade, NHK reported. The utility company aims to strengthen its management foundation by expanding its transmission and distribution networks, particularly to serve the growing demand from data centers. This substantial infrastructure investment reflects Japan's commitment to supporting the digital economy and ensuring adequate power supply for emerging technologies. TEPCO's investment plans are particularly relevant for expats working in technology sectors or considering long-term residence in the Tokyo metropolitan area. Improved power infrastructure could support business growth and potentially create employment opportunities in tech-related industries. However, such large-scale investments may eventually influence electricity rates, though the timeline and magnitude of any changes remain uncertain. Global factors also continue to influence Japan's markets. On January 5, New York crude oil futures rose approximately 2 percent following reports that the Trump administration had detained Venezuelan President Maduro, raising concerns about political instability and potential supply disruptions, according to NHK. While Japan imports most of its energy, oil price fluctuations can affect transportation costs and overall inflation. For foreign residents managing their finances in Japan, these developments underscore the importance of staying informed about economic trends. The combination of rising interest rates, strong equity markets, and major corporate investments suggests Japan's economy is entering a new phase after years of deflationary pressures and minimal growth. Expats should consider reviewing their investment portfolios and savings strategies in light of these changes. Consulting with financial advisors familiar with both Japanese and international markets may help optimize returns while managing currency and interest rate risks. As Japan's financial landscape continues to evolve, understanding these shifts will be crucial for making informed financial decisions while living and working in the country.