What if Japan's wage talks deliver a 7% inflation breakout?
A 7% Shunto print entrenches Japanese inflation and forces faster BOJ normalization than priced: the read is higher global real yields and a selloff in long-duration tech as 2y/10y/30y back up. The provided US-CPI/Jackson-Hole 2022 analogues capture the mechanism — a hawkish repricing crushed Nasdaq via the discount rate. Transmission: a normalizing BOJ pulls Japanese capital home, lifting global yields at the margin. Forward: this is the first wage-driven (not import-driven) Japanese inflation in a generation, so it is stickier and harder to fade.
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 6–18 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. Shunto wage talks deliver 7% raises, entrenching above-target inflation and forcing faster BOJ normalization than markets price. The trigger decomposes into signed root‑shocks — FX carry appetite ▼ · Fed policy path ▲ · Inflation surprise ▲ — 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 | ▼ -1.6% hist -6.17–+1.23% · other way +2.16% (n=12) |
| 2 | Tech sector XLK 📈 chart | Equity | ▼ -1.2% hist -0.92–-0.2% · other way +1.25% (n=12) |
| 3 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -1.0% hist -0.64–-0.37% · other way +0.61% (n=12) |
| 4 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -1.0% hist -2.94–+2.7% · other way +13.0% (n=4) |
| 5 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.9% hist -6.55–+2.12% · other way -0.23% (n=7) |
| 6 | Gold XAUon Hyperliquid 📈 chart | Commodity | ▼ -0.9% hist -2.09–+0.36% · other way +0.42% (n=11) |
| 7 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -0.8% model prior · unmeasured |
| 8 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -0.8% hist -8.18–+2.34% · other way +6.68% (n=5) |
| 9 | 30y Treasury yield DGS30 📈 chart | Rate | ▲ +8bp hist +2.49–+5.45% · other way +8.9% (n=12) |
| 10 | 10y Treasury yield DGS10 📈 chart | Rate | ▲ +7bp hist +1.64–+6.18% · other way +9.5% (n=12) |
| 11 | US dollar (DXY) DXYon Hyperliquid 📈 chart | FX | ▲ +0.6% hist -0.14–+1.12% · other way +0.68% (n=12) |
| 12 | Turkish lira TRY 📈 chart | FX | ▼ -0.6% hist -3.93–+1.53% · other way +0.84% (n=9) |
| 13 | Aussie dollar AUD 📈 chart | FX | ▼ -0.5% hist -0.8–+0.04% · other way -1.6% (n=8) |
| 14 | 2y Treasury yield DGS2 | Rate | ▲ +6bp model prior · unmeasured |
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 |
|---|---|---|---|---|---|---|
| CNY CNY | SHORT | -0.6% · 5d -0.3% | 76% | 29 | 0.46 | ✓ matches cascade |
| ARM ARM | SHORT | -5.9% · 5d -6.2% | 80% | 5 | 0.41 | ✓ matches cascade |
| AMD AMD | SHORT | -1.6% · 5d -2.1% | 66% | 40 | 0.28 | ✓ matches cascade |
| ETH ETH | SHORT | -7.1% · 5d -7.2% | 68% | 18 | 0.26 | ✓ matches cascade |
| XLK XLK | SHORT | -0.3% · 5d -0.9% | 66% | 30 | 0.25 | ✓ matches cascade |
| SMH SMH | SHORT | -0.4% · 5d -1.0% | 65% | 30 | 0.23 | ✓ matches cascade |
| NVDA NVDA | SHORT | -3.2% · 5d -4.3% | 63% | 30 | 0.20 | ✓ matches cascade |
| MSTR MSTR | SHORT | -4.9% · 5d -3.8% | 63% | 31 | 0.19 | ✓ matches cascade |
| TSM TSM | SHORT | -1.4% · 5d -2.1% | 62% | 32 | 0.19 | ✓ matches cascade |
| MRVL MRVL | SHORT | -2.5% · 5d -2.8% | 62% | 30 | 0.18 | ✓ matches cascade |
| AVGO AVGO | LONG | +1.8% · 5d -1.4% ↺ fades | 58% | 27 | 0.14 | ⚠ differs |
| USDJPY USDJPY | LONG | +0.8% · 5d +0.1% | 58% | 34 | 0.13 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.1% · 5d +0.1% ↺ fades | 59% | 28 | 0.13 | ✓ matches cascade |
| Gold XAU | SHORT | -1.5% · 5d -1.6% | 57% | 30 | 0.12 | ✓ matches cascade |
Why this probability
Shunto running hot (~5%); a 7% print entrenching inflation possible but above-trend, not base case. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.