What if foreign issuers default on samurai bonds as global rates stay high?
Defaults among foreign issuers in the samurai bond market and on Japanese banks' overseas project finance rise as global rates stay high, impairing internationally-sourced credit the banks added in the yield hunt.
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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 risk-off shock. Defaults among foreign issuers in the samurai bond market and on Japanese banks' overseas project finance rise as global rates stay high, impairing internationally-sourced credit the banks added in the yield hunt. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Real yields ▲ · Recession signal ▲ · Risk appetite ▼ — which propagate through our causal graph to the markets below.