What if years of suppressed JGB volatility give way to a high-volatility rate regime?
Years of suppressed JGB volatility give way to a high-volatility regime as the BoJ steps back, structurally raising hedging costs and value-at-risk for every holder of yen rates, a regime change the FSR flags as under-provisioned.
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. Years of suppressed JGB volatility give way to a high-volatility regime as the BoJ steps back, structurally raising hedging costs and value-at-risk for every holder of yen rates, a regime change the FSR flags as under-provisioned. The trigger decomposes into signed root‑shocks — Volatility (VIX) ▲ · Financial conditions ▲ · 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 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -1.2% hist -3.38–+0.52% · other way +27.47% (n=12) |
| 2 | Solana SOLon Hyperliquid 📈 chart | Crypto | ▼ -1.0% hist -11.94–+4.77% · other way -1.04% (n=11) |
| 3 | Nasdaq 100 NDXon Hyperliquid 📈 chart | Index | ▼ -0.9% hist -0.55–-0.33% · other way +0.06% (n=12) |
| 4 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.8% hist -0.39–+0.66% · other way -0.58% (n=12) |
| 5 | Tech sector XLK 📈 chart | Equity | ▼ -0.8% hist -0.74–+0.34% · other way +0.09% (n=12) |
| 6 | Ether ETHon Hyperliquid 📈 chart | Crypto | ▼ -0.7% hist -5.46–+2.08% · other way +4.87% (n=11) |
| 7 | Bitcoin BTCon Hyperliquid 📈 chart | Crypto | ▼ -0.7% hist -1.33–+1.33% · other way +6.05% (n=11) |
| 8 | Hyperliquid (HYPE) HYPEon Hyperliquid | Crypto | ▼ -0.6% model prior · unmeasured |
| 9 | S&P 500 SPXon Hyperliquid 📈 chart | Index | ▼ -0.5% hist -0.56–-0.04% · other way +0.04% (n=12) |
| 10 | Coinbase COINon Hyperliquid 📈 chart | Equity | ▼ -0.4% hist -1.45–+1.18% · other way +21.75% (n=11) |
| 11 | 30y Treasury yield DGS30 📈 chart | Rate | ▲ +4bp hist -8.22–+5.06% · other way +8.8% (n=12) |
| 12 | 10y Treasury yield DGS10 📈 chart | Rate | ▲ +4bp hist -9.92–+7.36% · other way +9.1% (n=12) |
| 13 | Semiconductors SMHon Hyperliquid 📈 chart | Equity | ▼ -0.3% hist -0.68–+1.71% · other way +2.75% (n=12) |
| 14 | High-yield credit HYG 📈 chart | Rate | ▼ -0.3% hist -0.62–+0.04% · other way -0.28% (n=12) |
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 |
|---|---|---|---|---|---|---|
| XHB XHB | SHORT | -2.0% · 5d -0.6% | 79% | 36 | 0.49 | ✓ matches cascade |
| SOL SOL | SHORT | -11.0% · 5d -11.0% | 87% | 9 | 0.44 | ✓ matches cascade |
| AVGO AVGO | LONG | +4.8% · 5d +0.1% | 71% | 27 | 0.41 | ⚠ differs |
| ARM ARM | SHORT | -4.8% · 5d -1.5% | 86% | 5 | 0.40 | ✓ matches cascade |
| HOOD HOOD | SHORT | -2.1% · 5d -1.8% | 73% | 9 | 0.37 | ✓ matches cascade |
| ETH ETH | SHORT | -4.9% · 5d -5.4% | 73% | 13 | 0.33 | ✓ matches cascade |
| High-yield credit HYG | SHORT | -0.4% · 5d -0.3% | 63% | 34 | 0.22 | ✓ matches cascade |
| SMH SMH | LONG | +1.7% · 5d -0.2% ↺ fades | 62% | 37 | 0.21 | ⚠ differs |
| JPM JPM | SHORT | -0.8% · 5d -1.5% | 61% | 40 | 0.20 | ✓ matches cascade |
| MSTR MSTR | SHORT | -2.5% · 5d -2.9% | 62% | 37 | 0.19 | ✓ matches cascade |
| XLF XLF | SHORT | -1.3% · 5d -1.3% | 59% | 37 | 0.18 | ✓ matches cascade |
| COIN COIN | LONG | +1.6% · 5d +5.7% | 60% | 9 | 0.17 | ⚠ differs |
| 30y yield DGS30 | SHORT | -10bp · 5d -2bp | 59% | 40 | 0.15 | ⚠ differs |
| Gold XAU | LONG | +1.3% · 5d +0.4% | 58% | 37 | 0.15 | ⚠ differs |