What if a 30-year Japanese government bond auction fails?
A failed 30y JGB auction sends the long end vertical and reprices Japan's debt sustainability: the trade is short duration-sensitive risk (Nasdaq, HY) and long vol as the global term-premium shock radiates from the world's most-indebted sovereign. No clean modern analogue — closest is the 2022 UK gilt/LDI crisis, where a long-end buyers' strike forced central-bank intervention and global duration sold off. Forward: BOJ ownership of half the JGB market means a true auction fail implies the BOJ has stepped back, the systemic trigger.
Every number ships with its receipt — the odds, the range, the precedents, and a public grade at Reality Check. The statistical machinery that produces it is proprietary.
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 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. Loading the probability audit trail…
What it would mean
If this plays out, it is a risk-off shock. A 30-year JGB auction draws catastrophically weak demand, sending long yields vertical and questioning Japan's debt sustainability. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Fed policy path ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.