What if a BoJ credibility crisis triggers a self-reinforcing yen sell-off and inflation jump?
A perception that the BoJ is behind the curve and politically constrained from tightening triggers a self-reinforcing yen sell-off and inflation-expectation jump, a credibility-loss spiral the IMF treats as a severe tail.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 1–3 years horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a risk-off shock. A perception that the BoJ is behind the curve and politically constrained from tightening triggers a self-reinforcing yen sell-off and inflation-expectation jump, a credibility-loss spiral the IMF treats as a severe tail. The trigger decomposes into signed root‑shocks — Dollar/reserve confidence ▲ · Inflation expectations ▲ · Real yields ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -4.3% hist -7.64–+0.9% · other way +31.9% (n=12) |
| 2 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▼ -2.5% hist -5.38–+0.84% · other way +0.47% (n=12) |
| 3 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -2.4% hist -4.83–+0.49% · other way +7.54% (n=12) |
| 4 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -1.9% hist -3.71–+0.97% · other way -0.48% (n=12) |
| 5 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▼ -1.6% hist -10.76–+9.54% · other way +22.86% (n=12) |
| 6 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -1.4% model prior · unmeasured |
| 7 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -1.3% hist -1.56–-0.81% · other way +4.46% (n=12) |
| 8 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▲ +1.1% hist +0.1–+1.56% · other way +0.47% (n=12) |
| 9 | Tech sector XLK 📈 chart | Equity | ▼ -0.9% hist -2.06–+0.5% · other way -0.47% (n=12) |
| 10 | EUR/USD EURUSDon Hyperliquid 📈 chart | FX | ▼ -1.0% hist -1.66–+0.1% · other way -0.56% (n=12) |
| 11 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.7% hist -1.11–+0.46% · other way -0.56% (n=12) |
| 12 | Turkish lira TRY 📈 chart | FX | ▼ -0.9% hist -10.46–+8.66% · other way -0.47% (n=12) |
| 13 | GBP/USD GBPUSDon Hyperliquid 📈 chart | FX | ▼ -0.8% hist -2.43–+0.57% · other way -0.74% (n=12) |
| 14 | Indian rupee INR 📈 chart | FX | ▼ -0.7% hist -1.53–+0.33% · other way -0.1% (n=12) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 11 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| GBPUSD GBPUSD | SHORT | -1.9% · 5d -0.4% | 100% | 4 | 0.76 | ✓ matches cascade |
| Gold XAU | SHORT | -3.8% · 5d -3.1% | 100% | 4 | 0.75 | ✓ matches cascade |
| CNY CNY | SHORT | -1.6% · 5d -0.3% | 75% | 4 | 0.42 | ✓ matches cascade |
| NDX NDX | LONG | +0.9% · 5d +0.1% | 80% | 5 | 0.38 | ⚠ differs |
| INR INR | SHORT | -1.0% · 5d +0.8% ↺ fades | 75% | 4 | 0.37 | ✓ matches cascade |
| AUD AUD | SHORT | -1.4% · 5d -0.1% | 75% | 4 | 0.34 | ✓ matches cascade |
| CL CL | SHORT | -2.9% · 5d -5.2% | 75% | 4 | 0.34 | ✓ matches cascade |
| EURUSD EURUSD | SHORT | -0.8% · 5d +0.2% ↺ fades | 75% | 4 | 0.30 | ✓ matches cascade |
| MSTR MSTR | SHORT | -4.2% · 5d -2.3% | 75% | 4 | 0.29 | ✓ matches cascade |
| High-yield credit HYG | LONG | +0.7% · 5d +0.6% | 75% | 4 | 0.29 | ⚠ differs |
| COIN COIN | LONG | +11.6% · 5d +3.7% | 67% | 3 | 0.27 | ⚠ differs |
| KRW KRW | LONG | +0.3% · 5d +0.5% | 75% | 4 | 0.27 | ⚠ differs |
| HOOD HOOD | LONG | +5.5% · 5d +0.9% | 67% | 3 | 0.27 | ⚠ differs |
| SOL SOL | LONG | +2.3% · 5d -5.6% ↺ fades | 67% | 3 | 0.20 | ⚠ differs |