On May 7, 2026, the Nikkei 225 briefly touched 63,000 before closing at 62,833 — up 3,320 points (5.58%) from the previous trading day. This surpassed the prior record of 60,537 set on April 27, and the single-day gain of 3,320 was the largest in history, beating the 3,217-point rise on August 6, 2024.
(Source: Nikkei Asia / Nihon Keizai Shimbun, May 7, 2026)
The rally was led by AI and semiconductor stocks. Kioxia hit its daily price limit. SoftBank Group surged over 18%. Ibiden rose over 22%. Expectations of a US-Iran conflict resolution added fuel.
Headlines worldwide: “Japanese stocks are on fire.”
But for foreign companies thinking about Japan, the real question is: is now the time to enter?
What the numbers tell us
Japanese corporate earnings are strong. According to Nomura Securities, TOPIX EPS growth is projected at +7.4% for FY2025, +15.2% for FY2026, and +11.4% for FY2027 — all revised upward.
Nomura’s base case forecasts the Nikkei at 60,000 by end of 2026, 63,000 by end of 2027, and 66,000 by end of 2028.
(Source: Nomura Securities, “Upgrading Japan equity outlook to Nikkei 60,000 for year-end 2026”)
This rally is backed by real earnings growth, not speculation.
But look closer
The rally is narrow. Money is concentrated in AI and semiconductor names. The NT ratio (Nikkei vs TOPIX divergence) has reached record highs, indicating a handful of stocks are driving the index.
Currency risk is significant. The yen swung from above 160 to 155 against the dollar within days, with suspected government intervention. A stronger yen would pressure export-oriented companies.
The key question: is the entire Japanese market strong, or are a few hot themes masking a more complex picture?
The opportunity for foreign companies
Regardless of where the index goes next, several structural factors favor foreign market entrants right now:
Japanese companies have money to spend. Strong earnings mean more willingness to invest in new technology, services, and partnerships.
AI and DX demand is expanding. Japan’s AI adoption rate, especially among SMEs, remains low. The government’s AI Strategy Council has recommended significantly increasing AI utilization across all industries. A massive market is forming.
The weak yen lowers entry costs. In dollar terms, setting up an office, hiring staff, and investing in Japan is cheaper than it was a few years ago.
Don’t jump in tomorrow. Start preparing today.
A rising stock market doesn’t mean you can start a business in Japan overnight.
Japan tightened its Business Manager visa requirements significantly in October 2025. Capital requirements increased to ¥30 million, hiring a full-time employee became mandatory, and business plans now require professional verification.
(Details here → How to Set Up a Company in Japan — 2025 Updated Guide)
The smart play: start preparing now while the market is favorable, so you’re ready to enter when your structure is in place.
Your first step into Japan
“I’m interested in Japan but don’t know where to start.”
Let’s talk. We’ll assess the market opportunity, map out what you need, and build a realistic entry plan together.
※This article is not investment advice. It does not recommend buying or selling securities. It analyzes current market conditions from a business entry perspective. Market data is as of May 7, 2026. For the latest information, please consult securities firms or official sources.
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