What if Tokyo openly directs the Bank of Japan to absorb new debt?
Tokyo directing the BOJ to absorb JGB issuance breaks the fiscal-monetary firewall — the trade is short JPY and long gold/BTC, with the global spillover being higher long-end yields elsewhere as the world's largest creditor monetizes. Rhymes with Kuroda's 2013 'bazooka' and YCC, which drove USD/JPY from 80 toward 150 over the cycle. Japan is the marginal global bond buyer; the forward twist is that overt monetization (vs. stealth YCC) could trigger the long-feared JGB/yen disorderly unwind and a carry-trade reversal akin to August 2024 but larger.
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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 (electric blue) over time vs the market's (Polymarket, amber), 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. Loading the probability audit trail…
What it would mean
If this plays out, it is a mixed shock. Tokyo openly directs the BOJ to absorb new JGB issuance, breaking the monetary-fiscal firewall. The trigger decomposes into signed root‑shocks — Dollar/reserve confidence ▼ · Fed policy path ▼ · Inflation expectations ▲ — which propagate through our causal graph to the markets below.