In "The Ascent of Money," Niall Ferguson discusses the potential concerns surrounding the Japanese yen, which is essential since it is the currency in which Japanese bonds are denominated. If investors start to feel uneasy about the yen's stability, particularly regarding its health and the risk of default, it could lead to a significant sell-off of these bonds. This would result in a drop in bond prices as the market reacts to the heightened risk.

As investors seek to mitigate their losses, they may only show interest in purchasing bonds at much lower prices that reflect these risks. This dynamic underscores how currency instability and fears of default can ripple through financial markets, influencing investor behavior and bond valuations significantly.