What if a snap election topples Japan's new LDP majority?
A snap election erasing the LDP majority whipsaws the yen and JGBs on fiscal-discipline uncertainty — the cleaner read is JGB supply/term-premium risk and a yen that swings on the carry-unwind channel. Rhymes with the August-2024 yen carry-trade unwind that crashed the Nikkei -12%, and the 2024 Ishiba-vote JGB jitters. Forward angle: post-carry-unwind positioning is lighter, so a Nikkei air-pocket is plausible but the global VaR shock should be smaller.
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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 0–6 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 2026 snap dissolution erases Takaichi's new LDP majority, yen and JGBs whipsaw on coalition-bargaining and fiscal-discipline uncertainty. The trigger decomposes into signed root‑shocks — FX carry appetite ▼ · Risk appetite ▼ — which propagate through our causal graph to the markets below.