“I continue to have a number of duties I must fulfill for the nation,” Shigeru Ishiba said Sunday, announcing his intention to stay on as prime minister following a lackluster result in pivotal elections for seats in Japan’s legislature.

As of this writing, it was still unclear whether LDP and its junior partner Komeito would secure the 50 seats they needed to retain a majority in the less-powerful upper-house of the National Diet, but even if they pulled out a miracle, the message was clear enough: Voters are increasingly disaffected. (LDP lost its lower-house majority last year.)

One way or another, LDP will have to take seriously the notion that Japanese want the sales tax cuts promised by opposition parties, and that in turn means JGBs will have to grapple with the implications of those cuts (or other costly measures) for Japan’s fiscal trajectory.

It’s important investors see this for what it is: Another manifestation of the politico-market zeitgeist behind the “anything but bonds” trade. “No one’s worried about the economy, no one’s talking valuation and no one’s asking about China, but everyone’s asking about bonds and deficits and avoiding long bonds,” BofA’s Michael Hartnett said recently, describing summer conversations with clients.

The two charts above are informative. Secular deflation’s “over” in Europe and Japan, Hartnett said, in the same note, adding that European and Japanese stocks are testing multi-decade highs against their respective bond markets.

That, Hartnett went on, shows the UST-centric “anything but bonds” trade has well and truly “gone global,” and while the “macro community thinks government bonds are on the cusp of a disorderly selloff, stock and credit clients are asleep at the wheel.”

Separately, but relatedly, Deutsche Bank suggested the situation in Japan may be a preview of where America finds itself some years down the road given the Trump administration’s attempts to improve its fiscal position through “trade partner repression (tariffs) and real rates repression (pressure on the Fed).”

“Japan’s upper-house election matters more than it might seem, and we would argue it matters for everyone [as] it can be seen as a referendum on financial repression, namely the redistribution from household to government balance sheets that high-debt societies engineer to make debt sustainable,” Deutsche’s Mallika Sachdeva wrote. “High inflation and negative real rates are helpful for governments with large-debt burdens, but democratic governments have to face the ballot box.”

(As a quick aside, If Trump got the 300bps of Fed cuts he says he wants, the real policy rate in the US would be -1.30%, give or take, the second-lowest of any G10 economy behind Japan.)

Oh, and I’d gently (and only half-jokingly) note that Trump and the inheritors of his MAGA movement may have a solution for the ballot box “problem” Sachdeva mentioned.