The top-ranked Spaniard, who had his knee taped during the third set of his third-round win over Pablo Cuevas, said he wouldn't be able to play Serbian qualifier Filip Krajinovic.
He did not say if he would be fit for the Tour Finals in London later this month.
"He just started to move around the court again when he got here", he said.
"Yesterday, the pain during the match was too much".
"For me it's not about London". He is now the oldest end-of-year No. 1, at age 31, something that he didn't even seem to know.
"Being No. 1 for a part of the year is great, that's obvious, but ending the year No. 1 is better still", Nadal said at a press conference at the Paris Masters.More news: Geoffrey Kamworor wins NY marathon
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Nadal bounced back from wrist problems a year ago to win his 15th and 16th Grand Slam titles at the French Open and US Open.
"I believe he's quite sceptical about his chances of playing in London now, and he came to Paris all the same", Forget said. Federer is 36, while is long-term rival Nadal is five years his junior. "But I didn't want to stop", Nadal said.
"It was impossible for me to think about that when you are coming back from a tough period of time without playing tennis and with so many injuries in the last couple of years".
The 35-year-old had not managed a win over a top-10 player since 2014 before this week, but has now claimed two in as many days after knocking out seventh seed David Goffin in the last 16.
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Both players exchanged breaks early in the first set, but Nadal managed to carve out a 4-2 lead.