Not mentioning Zhongshi who was recuperating in the hospital.
After initially paying a cost of ten billion dollars, the mysterious short sellers in the Singapore market reappeared in the Nikkei futures market after being silent for half a month. Unlike the last time when they quietly infiltrated, this time the short sellers made no attempt to hide their motives. They immediately began to openly suppress the Nikkei 225 futures, throwing out tens of thousands of short positions without restraint, determined to bring down the Japanese market.
In their headquarters in Kobe, Jim and his team, who were in charge of the operations, gathered again. With the financial support from the consortium behind them, they now had as much as eighty billion dollars at their disposal.
Combined with the speculative funds in the market that followed the trend, they could influence a market value of up to one trillion dollars this time.
A staggering number.
However, compared to Japan's total market capitalization of four trillion dollars, it was still a negligible amount.
How terrifying was the Japanese stock market? To give a simple example, in 1987, the Japanese stock market surpassed the U.S. market to become the world's largest, accounting for 40% of the global stock market capitalization. By 1989, it reached its peak, with the market capitalization of the Japanese stock market being 1.3 times that of the U.S. market, which at the time had a total market capitalization of three trillion dollars.
Attempting to manipulate such a massive global market was akin to a dreamer's fantasy.
Japanese funds had withdrawn; they simply could not believe that they could short the Japanese market, and they could not afford the public's anger if they were to learn that they were shorting their own country.
The U.S. and European coalition named this campaign the "Christmas Campaign," with the goal of suppressing the Japanese stock market to 36,000 points by Christmas of that year.
Japan's Securities and Exchange Law was peculiar, prohibiting securities investors from engaging in futures trading. Therefore, Japanese funds could not openly enter the Singapore Exchange. However, profit-seeking capital was unwilling to give up such a lucrative tool as futures. They set up shell companies overseas and entrusted part of their business to these companies. With the funds, these shell companies then invested in the Nikkei futures on the Singapore Exchange.
This additional step slowed down their response to sudden events.
In the initial few trading days, Japanese funds were caught off guard, watching helplessly as the Nikkei index fluctuated and adjusted, losing its former robust momentum.
They immediately became restless and decided to counterattack after a meeting.
What was surprising was that the Nikkei futures on the Osaka Exchange showed a very strong upward trend, indicating that investors there were very optimistic about the Japanese market.
Unfortunately, the two exchanges could not settle with each other; otherwise, someone would have certainly taken advantage of the price difference to make a substantial profit.
Two years after the Singapore Exchange launched the Nikkei futures, Japan also listed Nikkei futures on the Osaka Exchange for domestic investors. However, due to the later launch, it was far less influential and less priced than the Singapore product.
At this point, a Nikkei 225 futures contract required nearly two million yen (about $10,000, for calculation convenience, all amounts will be in dollars), and ten thousand contracts would require about $100 million.
The Japanese forces quickly invested the ten billion dollars they had earned last month into the December Nikkei futures contracts, flooding the market with 100,000 contracts.
"Look, the Japanese are entering the market?" A trader in the pit pointed to the screen and said to a colleague who was on the phone.
The Japanese entry was interesting and showed strong confidence. One by one, accounts simultaneously threw out 3,000 long positions each, and soon the market was filled with 15,000 long positions. Affected by this, the index, which had been lingering at 38,500, immediately surged, instantly forming a bullish candle. (Futures prices are generally slightly higher than the real-time index.)
The Singapore Exchange had position limits for each account, with the Nikkei 225 futures capped at 10,000 contracts per account. This restriction was not a problem for the Japanese funds with numerous accounts.
Similarly, for the other large funds that had been planning for a long time, accounts were not an issue. The short-selling U.S. and European funds had already opened dozens of different accounts.
The Singapore Exchange was well aware of this method of circumventing regulations but, to maintain trading activity and market influence, they tacitly accepted it.
The sudden appearance of 15,000 long positions shocked every trader, and people realized that a new round of bets on the Japanese stock market had begun.
Sure enough, not long after these long positions were opened, the short side responded, with trades occurring one after another. In less than five minutes, all these long positions were swallowed up at 38,500.
"Traded?"
"Yes, the counterparty has established their position. Both sides have invested... uh... over forty billion dollars!"
"Forty billion? My God!"
In a small room where the Japanese had temporarily gathered, there was only a row of sofas and a table with two phones for communication. Several high-ranking representatives of Japanese financial conglomerates sat on the sofas, their faces grave, waiting silently.
"Ring..."
The moment the sound rang, the person closest to the phone picked it up.
"What? All taken? How long did it take? Less than five minutes? Okay, I understand. Wait for my instructions!" No greetings, no pleasantries, he got straight to the point and quickly clarified the situation.
Everyone in the room held their breath, and when they heard "five minutes," they all gasped.
"Mr. Iwamoto, how much capital do you think they will gather this time, and can we withstand it?" Ota Zetaro put down the phone and sighed, losing his composure in this situation.
Just half a month ago, most people in the room believed they had thoroughly defeated the short side, except for Iwamoto Kaoru, who was still very worried. The others did not believe his feelings.
Now everyone looked at Iwamoto Kaoru, waiting for his decision.
"Gentlemen, how much capital do you have in your accounts? At this point, there's no need to hide it!"
During the few minutes of waiting for Iwamoto Kaoru to speak, everyone felt like a long time had passed. When he finally spoke, they all breathed a sigh of relief. Some even took deep breaths, as if they had just been rescued from drowning.
They knew Iwamoto Kaoru had made up his mind.
"I have eight billion dollars."
"Mine is not much, only five billion dollars."
...
After everyone reported their capital, Iwamoto Kaoru did a quick tally and found they now had over seventy billion dollars, which invigorated everyone present.
Indeed, with the ten billion dollars invested in the market today, they had nearly ninety billion dollars in capital. This amount was enough to influence the entire Nikkei futures market on the Singapore Exchange.
Of course, this was before the U.S. and European capital entered the market.
"The only way now is for us to unite and fight this capital, or we will all be left with no place to bury our bodies!" Iwamoto Kaoru nodded, clearly satisfied with this number.
"What? Follow your lead?"
"That's impossible. If we incur losses, how can I explain to the president?"
"Exactly!"
...
Another argument broke out, and everyone jumped up as if they had been stepped on.
Iwamoto Kaoru coldly observed everything, noting everyone's reactions. After a while, they noticed his expression and the noise gradually subsided.
"Gentlemen, this concerns Japan's economy, and we have no choice but to take responsibility. If any of you want to join them (the shorts), go ahead, but if your actions ruin our country's economy, I will not forgive you."
"I believe that even if your presidents were here, they would make the same decision. Now, it's up to you to decide what to do!"
Iwamoto Kaoru's words brought everyone back from their shock. Indeed, even if they made a lot of money here, they would face public condemnation upon returning home. Moreover, with the Japanese stock market currently thriving, anyone who shorted it now would likely be removed from their position soon.
But if they did not unite, they would be quickly picked off one by one by this massive capital. Even without considering other factors, just the daily limit-downs caused by this capital would be enough to blow out their positions.
"I will give you five minutes to consider. When you're ready, find me outside!" Iwamoto Kaoru took out a cigarette from his pocket and walked out the door.
As he opened the door, a wave of heat rushed in from outside. Singapore, near the equator, was in the midst of a hot summer. The pampered individuals could not bear the heat and preferred to stay in air-conditioned places.
"I have decided to entrust the funds to Mr. Iwamoto!" After a long silence, Ota Zetaro suddenly spoke. After making this decision, he breathed a sigh of relief and looked much more relaxed. "Mr. Iwamoto is right. If this capital succeeds, our country will be finished!"
Hearing his words, everyone fell silent again, quickly calculating their options.
...
Before he finished his cigarette, Ota appeared in front of Iwamoto Kaoru, deeply bowing at a ninety-degree angle and sincerely said, "Mr. Iwamoto, everyone has decided to entrust the funds to you. For the sake of Japan's economy, we rely on you!"
Hastily dropping his cigarette, Iwamoto Kaoru hurriedly returned the bow. At this moment, he deeply felt the weight of his responsibility.
Under the pressure from U.S. and European capital, Japanese funds were also forced to unite. This time, they were not in the Pacific or on their home soil, but on a small island in Southeast Asia, engaging in a silent battle with the West. (The exciting part is about to begin. I hope everyone continues to support us. Thank you!)