🇯🇵Major Overlooked Risk To Global Bond Markets: Japan Upper House Elections Jul 20 🇯🇵Upper House elections have already been pushing long-dated JGB & UST yields↑ MTD & YTD as is But it’s outcomes can trigger a potentially massive surge in global yields What you need to know🧵

1/ After soaring in March, April, then blowing out to record highs in May, JGB long end yields are back up to ATHs from July 3rd: start of 🇯🇵Upper House campaigning Meanwhile UST long end has just gone blindly along for the ride Yes, UST yields↑ are being driven by 🇯🇵elections currently. This is now the 4th time (out of 4 times) in 2025 where a decisive upside move in UST long end yields is being driven out of 🇯🇵 & JGBs. So, for those who are STILL resorting to looking for UST price behaviors via solely US-centric matters (& thereby coming up with nothing / having to cram in some irrelevant “reason”) - you should really get on board with monitoring the JGB situation - or, as I have been identifying as the world’s most dangerous market that is now in the midst of an extremely dangerous moment

2/ Why JGBs = Dangerous •Long-end JGB yields blasting to record highs due to an irreconcilable supply vs demand imbalance, spilling out to global bond markets •Severely impaired market functionality & illiquidity → increasingly erratic & volatile behavior (Explained🎥👇) See full video: “World's Most Dangerous Market: Japanese Government Bonds”

4/ 🇯🇵Political Background & Setup: Liberal Democratic Party (LDP) currently led by PM Ishiba, enjoyed single party rule throughout postwar era, alongside its coalition partner Komeito Party LDP temporarily lost its majority in 1993-‘96, & most recently from 2009 for ½ decade of political chaos from opposition parties going through 5 PMs in 5 years After Abe-led LDP regained its majority rule in 2012, it held onto power - until a few months ago in October 2024, when PM Ishiba dissolved the Lower House and called for a snap election immediately after being named PM, thinking he had voter support/momentum. He was very wrong, as LDP + Komeito got crushed, losing their majority in the Lower House at the hands of PM Ishiba, who has subsequently been suffering ever-lower approval ratings ever since. Now, Upper House elections are underway - where the ruling LDP + Komeito coalition currently has a majority, and may very well lose it. Should they lose it, then the ruling coalition would no longer have its majority in both the Lower House and Upper Houses of parliament. It could also put Ishiba’s role as PM into question (note that the upcoming Upper House elections are not a direct referendum on PM Ishiba’s premiership itself - PMs are not directly elected by the voting population in Japan, and Ishiba ultimately can or can’t be unseated at the hands of leadership).