[Part 1] Was the Stock Market Drop on the 13th Caused by the IMF's Interest Rate Warning?

Headlines and Stock Prices

On the afternoon of October 13, 2026, the views of the International Monetary Fund (IMF) appeared in news headlines.

The content stated that a sudden rise in government bond yields has become the greatest danger in global finance.

IMF An international organization to which many countries around the world belong. It issues a report twice a year summarizing the risks in global finance.

Government bond yield The interest rate received when lending money to a government. As yields rise, more people choose government bonds over stocks. Consequently, stock prices tend to fall.

At that time, the Nikkei Stock Average had already fallen by about 1,700 yen.

Nikkei Stock Average A figure calculated based on the stock prices of 225 companies representing Japan. It is often used to gauge the health of the entire Japanese stock market.

When you line up the headlines and the stock prices, you want to combine the two into a single story. The story is that stocks were sold because interest rates rose, and the IMF acknowledged this.

When you rearrange the events in chronological order, this story does not connect well.

The sell-off began before the warning

The Tokyo stock market opens at 9:00 AM. On this day, the Nikkei average was down 466 yen at the opening price.

Just after 10:00 AM, news agency bulletins reported a decline in AI and semiconductor-related stocks. The explanation was that it was the impact of a drop in US semiconductor stocks the previous day.

By 11:30 AM, when the morning session ended, the decline had widened to 1,738 yen.

Figure 1: The Nikkei average’s decline on the 13th and the scheduled release time of the IMF report. The decline is the value compared to the closing price on October 9, before the three-day weekend. The bulletin just after 10:00 AM reported the decline in AI and semiconductor-related stocks. Only the values at the three recordable times are shown as bars, and the movement between them is not depicted. 12:15 PM is the scheduled time for the IMF to release Chapter 1 of the report, and the distribution time of the English article by major news agencies is the same.

The scheduled time for the IMF to release the central chapter of the report was 12:15 PM, which followed that. English articles from major news agencies were also distributed at the same time.

This means the large drop in the morning occurred before the warning was issued.

In the afternoon, after the warning was issued, the decline actually narrowed. The closing price was down 1,253 yen, a decline of 1.82%.

Morning and afternoon sessions In the Tokyo stock market, the morning trading session is called the ‘zenba’ and the afternoon session is called the ‘goba’. The morning session on this day ended at 11:30 AM, and the afternoon session began at 12:30 PM.

So, was the IMF’s warning irrelevant? I cannot judge that far. This is because it has not been confirmed whether the content was communicated in advance. It is also possible that the same concerns were expressed in the report six months ago and had already been reflected in stock prices.

Even so, as far as the chronological order is concerned, there is no basis for the explanation that ‘stocks were sold because the warning was issued’.

Interest rates are high. However, they did not rise suddenly in the few days immediately preceding.

According to data published by the U.S. Department of the Treasury, the 10-year Treasury note yield was 5.24% on October 9. This is a level exceeding 5%.

For the seven trading days since the beginning of October, it has remained within the range of 5.22% to 5.31%. The difference between the highest and lowest days is 0.09 percentage points. The value on the 9th was the same as on the 1st.

Figure 2: U.S. 10-year Treasury yield (October 1–9). Daily published values from the U.S. Treasury (calculated from quotes around 3:30 PM on each trading day). Since the vertical axis starts at 5.15%, the actual change is smaller than it appears. The U.S. Treasury market was closed on the 12th, and there is no corresponding official value during Tokyo trading hours on the 13th.

The U.S. Treasury market was closed on the 12th. Therefore, there is no corresponding official value during Tokyo trading hours on the 13th.

There was no sign of interest rates rising suddenly in the few days immediately preceding. However, the starting point for this comparison is the beginning of October. The impact of interest rates having risen from before that time is not included in this comparison.

What was sold was almost exclusively semiconductors.

The Nikkei Stock Average’s decline rate for the day was 1.82%. On the other hand, the index gathering semiconductor-related stocks fell by 6.65%.

The JPX-Nikkei Index 400, which includes more companies, rose by 0.28%. The Real Estate Investment Trust (REIT) index remained almost flat. As of the morning, nearly 70% of the stocks on the Tokyo Stock Exchange Prime Market were rising in price.

Figure 3: Rate of change by index on the 13th. Values for October 13 displayed on the Nikkei’s official website. All are comparisons with the closing prices on October 9. Only the semiconductor index fell significantly, while the index including more companies barely moved.

Index A figure that aggregates the stock prices of many companies to represent the condition of the market with a single number. Depending on which companies are combined and how, the way each index moves changes.

Stocks that fell in price were concentrated in semiconductors and their related sectors.

The Nikkei Stock Average is an index that heavily reflects the movements of a few stocks with high share prices. Because large-cap semiconductor stocks are included among them, the decline in the Nikkei Stock Average stood out.

This price movement aligns with the explanation that AI-related stocks fell in price. Even so, the influence of interest rates cannot be denied.

The stock prices of semiconductor companies contain many expectations for profits years into the future. When interest rates are high, profits in the distant future are calculated to be smaller when converted to present value.

Figure 4: What is 100 yen 10 years from now worth today? Calculation example. 100 yen received in 10 years was discounted at 2% and 5% interest rates to convert to present value. The higher the interest rate, the smaller the present value of money in the distant future. Actual stock price calculations are more complex, and this figure is intended to show the concept.

The decline in expectations for AI and high interest rates are compatible as reasons for the same stock price decline.

What can be confirmed by the indices is only that the selling did not spread to real estate stocks, which are susceptible to the influence of interest rates.

What was being sold during the decline on the 13th?

Returning to the initial question.

The selling began in the morning before the warning was issued, and the decline narrowed after the warning. There was no sudden spike in interest rates in the days immediately preceding it. The stocks that fell were concentrated in semiconductors and related sectors, while many stocks in the market were rising.

Explaining the decline on the 13th as being ‘sold off due to the IMF’s warning’ is unreasonable in terms of both timing and substance. What was being sold that day was primarily expectations for AI and semiconductors. While it remains possible that high interest rates supported that selling, the trigger was not the warning.

So, was the warning itself wrong? Since this cannot be determined by the price movements on the 13th, we will consider how to verify it in the second part.

3-line summary

1. The stock market decline on the 13th began in the morning before the IMF’s warning was issued.

2. The stocks sold were mainly semiconductor and AI-related, not the entire market.

3. The decline on the 13th cannot be explained by the warning. Whether the warning is accurate is a separate issue that will be handled in the second part.

Click here for the second part

Sources

• IMF ‘Global Financial Stability Report, October 2026’ publication schedule page

• IMF Media Center ‘Global Financial Stability Report Annual Meetings, 2026’

• U.S. Department of the Treasury Daily Treasury Par Yield Curve Rates (October 2026)

• Nikkei Stock Average Profile Index List (October 13, 2026)

• Market reports from October 13 by Nihon Keizai Shimbun, FISCO, and Japan Interview Newspaper

• Bloomberg reports on October 13 (distribution time)

Disclaimer

• This article is based on information confirmed as of October 13, 2026.

• This does not recommend any specific trading.

• The observation dates for the figures vary by item. U.S. interest rates are as of October 9, SOFR as of October 8, Japanese stocks and Nikkei VI as of October 13, and options are based on screen displays from October 12.

• All figures were created by the author based on published data or screen values.