What if Japan exits deflation: BoJ normalizes, global yields drift higher?
Japan durably exits deflation and the BoJ normalizes policy, lifting JGB yields and pulling global yields higher as the carry-funding anchor loosens.
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. Japan durably exits deflation and the BoJ normalizes policy, lifting JGB yields and pulling global yields higher as the carry-funding anchor loosens. The trigger decomposes into signed root‑shocks — Volatility (VIX) ▲ · FX carry appetite ▼ · 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 | Tech sector XLK 📈 chart | Equity | ▼ -0.6% hist -0.38–-0.12% · other way +0.69% (n=12) |
| 2 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.5% hist -0.4–-0.01% · other way +0.45% (n=12) |
| 3 | 30y Treasury yield DGS30 📈 chart | Rate | ▲ +5bp hist -2.14–+3.58% · other way -6.7% (n=12) |
| 4 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -0.5% hist -6.05–+1.78% · other way +13.43% (n=12) |
| 5 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -0.5% hist -0.89–+0.39% · other way -2.88% (n=9) |
| 6 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.4% hist -0.79–+0.7% · other way -11.43% (n=12) |
| 7 | 10y Treasury yield DGS10 📈 chart | Rate | ▲ +4bp hist -2.47–+4.05% · other way -7.2% (n=12) |
| 8 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▼ -0.4% hist -0.27–-0.16% · other way +1.2% (n=12) |
| 9 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -0.3% model prior · unmeasured |
| 10 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -0.3% hist -6.97–+2.21% · other way -1.48% (n=10) |
| 11 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.3% hist -0.86–+0.24% · other way +5.05% (n=11) |
| 12 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.2% hist -0.45–+0.09% · other way +0.6% (n=12) |
| 13 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▼ -0.2% hist -5.44–+6.39% · other way +15.12% (n=9) |
| 14 | Arm ARMon Hyperliquid 📈 chart | Equity | ▼ -0.2% hist -3.8–+2.46% · other way -9.62% (n=9) |
Probable recommendation
Historical precedent — what analogous events actually did
Across 40 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 |
|---|---|---|---|---|---|---|
| ARM ARM | SHORT | -3.9% · 5d -0.6% | 80% | 5 | 0.39 | ✓ matches cascade |
| ETH ETH | SHORT | -6.2% · 5d -7.6% | 69% | 17 | 0.30 | ✓ matches cascade |
| XHB XHB | SHORT | -0.6% · 5d -1.8% | 68% | 30 | 0.30 | ✓ matches cascade |
| MSTR MSTR | SHORT | -5.3% · 5d -4.6% | 62% | 33 | 0.17 | ✓ matches cascade |
| 30y yield DGS30 | SHORT | -4bp · 5d +1bp ↺ fades | 57% | 40 | 0.12 | ⚠ differs |
| High-yield credit HYG | SHORT | -0.0% · 5d -0.3% | 53% | 29 | 0.05 | · |
| 10y yield DGS10 | SHORT | -4bp · 5d +1bp ↺ fades | 52% | 40 | 0.04 | ⚠ differs |
| COIN COIN | LONG | +7.0% · 5d +1.9% | 52% | 11 | 0.04 | ⚠ differs |
| US dollar DXY | LONG | +0.5% · 5d +0.4% | 52% | 40 | 0.04 | · |
| SPX SPX | SHORT | -0.3% · 5d -0.7% | 51% | 40 | 0.02 | ✓ matches cascade |
| XLK XLK | LONG | +0.1% · 5d -0.4% ↺ fades | 44% | 31 | 0.00 | ⚠ differs |
| NDX NDX | LONG | +0.2% · 5d -0.4% ↺ fades | 48% | 40 | 0.00 | ⚠ differs |
| SOL SOL | LONG | +0.7% · 5d -8.6% ↺ fades | 40% | 12 | 0.00 | ⚠ differs |
| Volatility VIX | SHORT | -1.1% · 5d +5.7% ↺ fades | 46% | 40 | 0.00 | ⚠ differs |