Reading Financial News Through Manga: Why Do Bank Stocks Fall Even When AI Stocks Drop? The Connection Between Government Bonds and Interest Rates
Why are bank stocks being sold off even when AI stocks have fallen?
The key lies in “government bonds” and “interest rates.” When investors buy government bonds to reduce risk, long-term interest rates tend to fall, which can weaken expectations for banks’ future earnings.
In this episode, we will explain this connection through a conversation between two characters and an illustration. By comparing figures from a fictional bank, we will also introduce why the impact varies by bank and how an increase in the value of held government bonds can be helpful. Let’s also check the relationship with the investment trusts you are accumulating.
※This video does not constitute investment advice. Please invest at your own risk. Audio uses VOICEVOX: Shikoku Metan, Zundamon.
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Key Points
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When government bonds are bought for risk aversion, their prices rise and yields fall. However, they do not always move in the same way.
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A decline in long-term interest rates is different from the Bank of Japan’s decision to lower policy interest rates.
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Bank stocks also move based on changes in expectations that they will “earn more in the future.” A drop in stock price does not mean a confirmed decrease in earnings.
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The impact varies depending on the composition of loans, deposits, and investments, as well as short-term versus long-term interest rates and the timing of interest rate revisions.
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Improved valuation of held bonds can also be a tailwind. However, this does not necessarily translate directly into current net income.
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Beyond just the interest rate spread, let’s also check fee income, credit costs, and earnings forecasts.
Sources
NRI: Stock prices fall significantly, centered on AI and semiconductor-related stocks (2026/10/15)
Bloomberg/TBS CROSS DIG: Bank stocks expand losses, 20-year bond auction strong (2026/10/20)
Ministry of Finance: How are government bond yields determined?
Bank of Japan: Multilateral Review of Monetary Policy (December 2024, Analysis of Interest Rate Declines and Financial Institution Earnings/Valuation Gains and Losses)
Sumitomo Mitsui FG: FY2025 Financial Results Presentation Materials (May 2026, Impact of Interest Rates/Exchange Rates, Earnings Forecasts, and Business Structure)
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