What if a yen-carry unwind transmits contagion to global emerging-market assets?
A disorderly yen-carry unwind transmits globally as the funding currency of choice, slamming EM high-yielders, Mexican peso and equity momentum simultaneously and forcing cross-asset deleveraging well beyond Japan.
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 0–6 months 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 disorderly yen-carry unwind transmits globally as the funding currency of choice, slamming EM high-yielders, Mexican peso and equity momentum simultaneously and forcing cross-asset deleveraging well beyond Japan. The trigger decomposes into signed root‑shocks — EM currencies ▼ · Volatility (VIX) ▲ · FX carry appetite ▼ · 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 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +1.1% hist -1.7–+1.59% · other way -7.07% (n=12) |
| 2 | Turkish lira TRY 📈 chart | FX | ▼ -0.9% hist -5.88–+1.14% · other way -0.66% (n=12) |
| 3 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.8% hist -0.64–-0.06% · other way +0.63% (n=12) |
| 4 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -0.8% hist -2.73–+0.86% · other way -3.1% (n=10) |
| 5 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -0.9% hist -8.01–+1.87% · other way +23.24% (n=12) |
| 6 | Indian rupee INR 📈 chart | FX | ▼ -0.8% hist -1.18–+0.01% · other way -0.75% (n=12) |
| 7 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -0.7% model prior · unmeasured |
| 8 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -0.6% hist -9.07–+3.53% · other way +2.79% (n=11) |
| 9 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.5% hist -0.45–+0.5% · other way +0.24% (n=12) |
| 10 | Tech sector XLK 📈 chart | Equity | ▼ -0.5% hist -0.44–+0.08% · other way +0.75% (n=12) |
| 11 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.5% hist -1.75–+0.55% · other way +9.75% (n=11) |
| 12 | Chinese yuan CNY 📈 chart | FX | ▼ -0.4% hist -0.34–-0.11% · other way -0.55% (n=12) |
| 13 | USD/JPY USDJPYon Hyperliquid 📈 chart | FX | ▼ -0.4% hist -0.37–+0.15% · other way +0.37% (n=12) |
| 14 | Aussie dollar AUD 📈 chart | FX | ▼ -0.4% hist -0.25–-0.11% · other way -1.81% (n=12) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 35 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 |
|---|---|---|---|---|---|---|
| SOL SOL | SHORT | -2.2% · 5d -7.4% | 78% | 9 | 0.43 | ✓ matches cascade |
| AVGO AVGO | LONG | +3.4% · 5d -1.6% ↺ fades | 71% | 24 | 0.38 | ⚠ differs |
| ETH ETH | SHORT | -8.3% · 5d -7.6% | 71% | 14 | 0.34 | ✓ matches cascade |
| TRY TRY | SHORT | -4.8% · 5d -0.1% | 65% | 26 | 0.30 | ✓ matches cascade |
| INR INR | SHORT | -0.7% · 5d +0.0% ↺ fades | 65% | 26 | 0.30 | ✓ matches cascade |
| MSTR MSTR | SHORT | -6.8% · 5d -4.3% | 66% | 29 | 0.23 | ✓ matches cascade |
| AMD AMD | SHORT | -0.6% · 5d -1.6% | 63% | 35 | 0.22 | ✓ matches cascade |
| MU MU | SHORT | -1.6% · 5d -1.3% | 60% | 35 | 0.18 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.2% · 5d -0.4% | 60% | 25 | 0.16 | ✓ matches cascade |
| SPX SPX | LONG | +0.7% · 5d -0.4% ↺ fades | 57% | 35 | 0.13 | ⚠ differs |
| Gold XAU | LONG | +0.2% · 5d -1.0% ↺ fades | 56% | 27 | 0.09 | · |
| CNY CNY | SHORT | -0.1% · 5d -0.2% | 54% | 26 | 0.07 | ✓ matches cascade |
| 10y yield DGS10 | SHORT | -6bp · 5d +1bp ↺ fades | 54% | 35 | 0.07 | · |
| TSM TSM | SHORT | -0.9% · 5d -1.6% | 53% | 30 | 0.05 | ✓ matches cascade |