Facing the Footsteps of a World with Interest Rates: September 2026 | Macroeconomic Waves and My Portfolio Management Journal

September 2026 was a month of significant volatility in the stock market, driven by additional interest rate hikes in both Japan and the U.S., expectations of higher interest rates, and lingering inflation. As I look back on the daily macroeconomic news, I am recording my own asset allocation and investment journey.

1 Economic News That Caught My Attention
* Sharp drop in the Nikkei Stock Average due to rising U.S. long-term interest rates and expectations of rate hikes in Japan and the U.S.
On the first day of September, the Tokyo market saw the Nikkei Stock Average fall sharply by over 700 yen at one point, as investors reacted negatively to rising U.S. long-term interest rates and expectations of accelerated interest rate hikes domestically. In addition to risk-off moves following adjustments in U.S. tech stocks, concerns over rising interest rates both at home and abroad weighed on the entire market, with the closing price ending at 66,215 yen, down 96 yen from the previous day.
https://s.kabutan.jp/news/n202609010925/
* Significant adjustment with the Nikkei down 1,889 yen following a rise in the yield on newly issued 10-year Japanese government bonds
Following a further rise in the yield on newly issued 10-year Japanese government bonds, which serves as a benchmark for long-term interest rates in the domestic bond market, selling pressure due to valuation adjustments spread widely across the stock market. The Nikkei Stock Average plunged by 1,889.70 yen to 64,325.64 yen, marking a start that strongly signaled a full-scale transition to a “world with interest rates.”
https://www.nomura.co.jp/wealthstyle/article/0861/
* Upward revision of Japan’s April-June real GDP second preliminary report and sell-offs in tech stocks
The Cabinet Office announced that Japan’s real GDP for the April-June period was revised upward to an annualized growth rate of 1.4 percent, confirming the resilience of economic indicators. However, the market saw profit-taking in high-performing stocks and a sense that the news was already priced in, leading to declines centered on electronic component stocks. The Nikkei closed at 65,269 yen, down 1,130 yen from the previous day.
https://www.smd-am.co.jp/market/lastweek/monthly/2026/month261002gl/
https://kabutan.jp/news/marketnews/?b=n202609080839
* Release of U.S. August Consumer Price Index (CPI) and caution over fuel inflation
Although the U.S. Department of Labor reported that the core CPI growth rate for August settled at 2.4 percent year-on-year, fuel oils such as diesel surged by 10.1 percent month-on-month. Concerns over a resurgence of inflation via transportation costs and the potential for policy interest rates to remain high emerged, acting as a factor that capped the upside for the U.S. S&P 500 and real estate-related stocks.
https://www.smd-am.co.jp/market/lastweek/monthly/2026/month261002gl/
* U.S. FOMC raises policy interest rate from 3.75 percent to 4.00 percent
The U.S. Federal Open Market Committee (FOMC) decided to raise the policy interest rate by 0.25 percent, setting the target range at 3.75 percent to 4.00 percent. With the core PCE forecast for the end of 2026 revised upward to 3.4 percent, the market became conscious of the room for additional rate hikes within the year, spreading caution regarding the prolonged period of high interest rates.
https://www.nishimura-sec.co.jp/wp-content/uploads/t20261002.pdf
* Bank of Japan raises policy interest rate to 1.25 percent (decision for consecutive rate hikes)
At its Monetary Policy Meeting, the Bank of Japan decided by a majority vote to raise the policy interest rate from 1.00 percent to 1.25 percent. Governor Ueda mentioned the upside risks to prices and clarified a stance of monetary tightening in response to changing circumstances. While bank stocks were bought on expectations of wider interest margins, export-related stocks were sold due to concerns over a stronger yen, further advancing the selection between sectors.
https://www.dlri.co.jp/report/macro/665928.html

2 My Investment Memo

My portfolio asset allocation as of the end of September is as follows:
Index (Stocks): 51.36 percent
Japanese High-Dividend Stocks: 22.81 percent
U.S. High-Dividend Stocks: 11.39 percent
Deposits/Cash: 6.65 percent
Commodities: 4.22 percent
REITs/Infrastructure Funds: 3.99 percent
Bonds: 3.78 percent
While I struggled with how to handle infrastructure funds facing the headwinds of rising interest rates, I did not engage in buying or selling individual stocks in September, instead calmly continuing my regular investment trust contributions and watching the rough waves of the market. I feel that it is precisely when the market environment is changing rapidly that it is important not to act in a panic and to stay grounded.

3 My Dividends and Distributions

September was a happy month when dividends from companies with June fiscal year-ends arrived.
I gratefully used the dividends I received as part of the purchase cost for my new iPhone 18 Pro. By combining this with the trade-in value of my previous device, I was able to significantly reduce my out-of-pocket expenses, making it easier to afford the latest model.
Being able to acquire tools that enrich my daily life with dividends made me realize once again the value of cash flow and the power of dividends. I hope to continue growing my investments steadily, dreaming of the day when I can purchase the latest iPhone model in a single payment using only my dividends and distributions.

4 Quotes for Investment

“In the short run, the market is a voting machine, but in the long run, it is a weighing machine.”
Investor: Benjamin Graham
With the overlap of monetary policy meetings in Japan and the U.S. and the announcement of key economic indicators, there were many scenes where stock prices fluctuated wildly due to daily speculation and supply and demand. The short-term market is merely a voting machine swayed by people’s emotions and enthusiasm, but in the long run, stock prices converge to a scale that reflects the weight of a company’s true strength—its earnings and cash flow. Precisely because we are in a phase of rising interest rates, I want to avoid being swayed by superficial price movements and keep the perspective of discerning a company’s intrinsic value.

[Conclusion]

Although the transition to a world with interest rates is becoming more realistic and market volatility is increasing, what I need to do remains the same. While calmly grasping the daily news, I will continue to make index investing my pillar, enjoy the fruits of dividends, and continue my disciplined asset management at my own pace in October.