What if Japan's demographic deflation keeps real yields pinned negative?
A shrinking, aging Japan keeps domestic demand and inflation structurally soft, forcing the BoJ to hold real yields negative far longer than peers and keeping the yen a low-yield funder.
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 3–10 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 mixed shock. A shrinking, aging Japan keeps domestic demand and inflation structurally soft, forcing the BoJ to hold real yields negative far longer than peers and keeping the yen a low-yield funder. The trigger decomposes into signed root‑shocks — FX carry appetite ▲ · Global growth ▼ · 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 | ▲ +0.3% hist -0.4–+1.52% |
| 2 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▲ +0.4% hist +0.05–+0.39% |
| 3 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▲ +0.3% hist -0.3–+1.14% |
| 4 | 30y Treasury yield DGS30 📈 chart | Rate | ▼ -3bp hist -8.31–+1.33% |
| 5 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▲ +0.3% hist -1.75–+0.91% |
| 6 | 10y Treasury yield DGS10 📈 chart | Rate | ▼ -3bp hist -8.0–+1.74% |
| 7 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▲ +0.2% hist -1.91–+1.6% |
| 8 | Arm ARMon Hyperliquid 📈 chart | Equity | ▲ +0.2% hist -0.44–+0.65% |
| 9 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▲ +0.2% hist -0.54–+0.85% |
| 10 | Homebuilders XHB 📈 chart | Equity | ▲ +0.2% hist -0.91–+0.47% |
Probable recommendation
Historical precedent — what analogous events actually did
Across 31 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 |
|---|---|---|---|---|---|---|
| High-yield credit HYG | SHORT | -0.3% · 5d -0.1% | 67% | 18 | 0.25 | · |
| ARM ARM | SHORT | -0.6% · 5d -4.2% | 67% | 3 | 0.21 | ⚠ differs |
| 30y yield DGS30 | SHORT | -6bp · 5d -1bp | 62% | 29 | 0.19 | ✓ matches cascade |
| XHB XHB | SHORT | -0.9% · 5d -1.7% | 61% | 18 | 0.18 | ⚠ differs |
| XLK XLK | LONG | +1.2% · 5d -0.1% ↺ fades | 57% | 21 | 0.14 | ✓ matches cascade |
| 10y yield DGS10 | SHORT | -6bp · 5d -1bp | 57% | 30 | 0.11 | ✓ matches cascade |
| NDX NDX | LONG | +0.9% · 5d -0.4% ↺ fades | 55% | 29 | 0.10 | ✓ matches cascade |
| Gold XAU | SHORT | -1.8% · 5d -1.5% | 55% | 20 | 0.08 | ⚠ differs |
| Bitcoin BTC | SHORT | -2.2% · 5d -2.4% | 54% | 13 | 0.06 | ⚠ differs |
| Volatility VIX | SHORT | -3.7% · 5d -0.8% | 54% | 28 | 0.06 | · |
| MSTR MSTR | LONG | +0.2% · 5d -3.1% ↺ fades | 41% | 22 | 0.00 | ✓ matches cascade |
| SOL SOL | LONG | +0.7% · 5d -6.3% ↺ fades | 29% | 7 | 0.00 | ✓ matches cascade |
| US dollar DXY | LONG | +0.7% · 5d +0.5% | 47% | 30 | 0.00 | · |