Albert Edwards, a strategist at Societe Generale who calls himself a "super bear," has warned that investors concerned about the sustainability of the US stock market rally should keep an eye on Japanese bond yields. Edwards noted back in May that the surge in Japanese bond yields represents the biggest risk to global markets since the post-2008 crisis era of suppressed yields.

In a recent commentary, Edwards highlighted that while investors focus on Nvidia's (NVDA.US) earnings and delayed US economic data, "the single most important development in markets right now is the sharp rise in Japanese government bond yields... The 10-year JGB yield has breached 1.82%. Could this be the factor that ends the equity bull market?"

Edwards believes Japan has historically served as an early warning signal for major financial turning points. He added that Japanese institutions may repatriate funds, reversing years of yen-funded carry trades and heavy purchases of foreign bonds, including US Treasuries.

He cautioned that both US Treasuries and equities have benefited from sustained Japanese capital inflows, making US markets vulnerable. If rising Japanese yields trigger a domestic investor retreat, the outflow could severely impact US assets and put pressure on the dollar.