From the Singapore Nikkei 225 futures market in December 1989 to the corresponding markets in January and February 1990, both sides engaged in fierce battles with funds amounting to tens of billions of dollars at every price level.
This was a war for national destiny, where the victor would lead the world economy, and the loser would be cast into hell.
At this point, neither side realized that this was a war that would determine the direction of the world economy, at least where the future economic center would be.
The rapidly growing Japanese market was given sufficient attention by Western countries. Major financial institutions around the world set up branches in Tokyo, some of which even surpassed their headquarters in status.
Even in later years, when the Japanese stock market fell back below 10,000 points, most companies still listed Japan as a separate and important region. For example, even when the Chinese economy maintained rapid growth and surpassed Japan in GDP to become the world's second-largest economy, these large companies mostly set up their Asia-Pacific headquarters in a city in mainland China, but this Asia-Pacific region did not include Japan.
Many large companies' branches in China were first listed as the China region, then the Greater China region (including Hong Kong and Taiwan), and then the Asia-Pacific region (Southeast Asia). Even at this level of coverage, they generally did not include Japan.
The importance of the Japanese market is evident from this!
The United States has always been wary of Japan, after all, it is the only country that has attacked the U.S. mainland, and during the invasion of the Japanese archipelago, the samurai spirit and the terrifying "kamikaze" tactics of the Japanese caused heavy losses to the U.S. military.
Ordinary people may not remember, but politicians who always control national interests will not forget. They constantly remind Japan not to go out of control.
Wall Street, which has close ties with Washington, naturally understands this and plays the role of enforcer every time there is a crackdown.
This is not an exaggeration; in fact, economic wars that are not widely known are constantly breaking out.
For a real example, in 2006, to dismantle China's heavy industry, the Goodman Company attempted to acquire a Chinese heavy machinery company through bribery and then break it up and sell it. However, due to the strong opposition of some enlightened individuals, this conspiracy-laden transaction ultimately failed.
Under this seemingly peaceful world, countless undercurrents and whirlpools flow, most of which cannot be made public, otherwise the consequences would be very serious.
Regarding the stock market bubble, the Japanese government has always maintained an ambiguous attitude, seemingly not intervening too much in the market, but who could know that behind the scenes, it was preparing to burst the bubble together with the United States!
In addition to the enormous pressure from the U.S., they were also very confident in their ability to influence the market, believing that even if the bubble burst, they could still control the situation. However, they did not know that the outcome of dealing with a tiger would be to be devoured completely.
Returning to the main topic, after the Japanese funds formed an alliance, the next day they were transferred to Iwamoto Kaoru's account, and the agents' subordinates also gathered together, all taking orders from Iwamoto Kaoru.
Once the funds were combined, the situation was indeed very different from when they were fighting individually. In the nearest three months' main contracts, there appeared opponents of considerable scale, the amount of funds was so large that it was breathtaking.
Both sides invested more than $5 billion in these three months' contracts, realizing that it was impossible to defeat the other side in one step, they could only hold out, waiting for the moment when the other side's funds were insufficient, and then deliver a fatal blow.
Influenced by both sides, more funds were placed on bets, even the contracts for the following two months became active.
While there were certainly short-term speculative funds taking advantage of the chaos, the majority were heavy bets on one side.
The Singapore Exchange was delighted to see this situation. On the one hand, they collected a large amount of fees, and on the other hand, they consolidated the Singapore Exchange's unshakable influence on the Nikkei index.
The reaction in the futures market began to affect the performance of the Japanese stock market, and the confidence of some investors began to waver. However, in the midst of the frenzied atmosphere, this number was insignificant.
In that year, the Japanese stock market successively crossed important levels such as 30,000, 32,000, 35,000, and 36,000 points. Compared to the brief downturn at 21,000 points in 1988, it had risen by more than 50% in just one year.
After breaking through 35,000 points, the Japanese stock market experienced a very short period of volatility, but it could not withstand the enthusiasm of investors and the huge expectations, and the index began to climb again, finally breaking through 36,000 points in November.
This was not the end; the upward momentum seemed endless. After breaking through the historic 36,000-point level, the index continued to rise, and it looked like breaking through 38,000 points was just around the corner.
Most investors were looking forward to breaking the historic 40,000-point level!
Everyone was eagerly awaiting it!
"How is this possible?"
Jim, in Kobe, looked at the green line on the screen and suddenly felt that the tie around his neck was like a noose, choking him.
After the initial blow to the Japanese market in October, this time he was full of confidence. Although he lost $1 billion last time, he successfully stopped the further rise of the Japanese stock market, keeping it oscillating around 35,000 points for a while.
But this time, with far more funds and more institutions joining in, the effect was not as good as last time. The Japanese market stubbornly rose, seemingly indifferent to the pressure from Singapore.
"What do we do now? Not only the December contract, but even the January and February contracts are in the red. It won't be long before we have to put more funds in!"
To prevent a collapse, they used no more than $5 billion, keeping the rest as a reserve to pay the margin.
"Gradually clear the December contracts and transfer the funds to the January contracts. At the same time, slowly accumulate positions in the March contracts, but do it discreetly, don't let others know we have a backup plan. We need to make everyone think we are going all out in these two months against Japan!"
After thinking for a long time, Jim finally whispered to Maxim.
"Wait." Jim stopped Maxim, who was about to leave. "Go long on the March contracts, and you do it personally, keep it absolutely secret!"
"What? Are you crazy?" Maxim shouted, but his mouth was quickly covered by Jim.
Despite the sudden friction between the two, the busy traders around them only glanced curiously and then returned to their work.
During this period, despite their full efforts, they lost another $300 million in the December contracts. Now, all they could do was to liquidate small amounts through multiple accounts without being detected by the bulls.
If the news of the short-sellers' retreat leaked, the market would go wild, and all the funds would turn to attack the shorts. At that point, it would be difficult for them to liquidate their short positions, and if they couldn't get out, they would lose even more.
So everyone was very busy.
"No, I'm not crazy! I'm very clear. If you don't shout, I'll let go of you. Do you understand?" Jim whispered to Maxim, and seeing Maxim nod, he let go.
"Do you know how much we've lost? In the three months' contracts, it's $700 million! If we don't transfer the December funds to January, we won't be able to compete with the other side, and we'll be dead!"
"If we don't go long now, we won't last until December. If we fail to complete the task assigned from above, both of us will be fired."
"You're lucky; you can always find a new company. As for me, I've put all my funds into this, not just mine, but also my clients' funds. Do you understand?"
"Right now, I can still cover it with funds from home, but if these funds don't start making money, my performance will be exposed immediately. If just one investor demands redemption, my misappropriation of funds will be exposed!"
"Do you know the consequences of exposure? At least a lifetime ban from the market, and maybe even prison. Japan has the death penalty! Mark, you won't let me die, right? Only you can help me now, please!"
Jim revealed so many secrets in one breath and then looked at Maxim with pleading eyes, waiting for the final judgment.
When Maxim heard that Jim had misappropriated client funds, he could no longer hold back. He even wanted to expose him immediately; such a violation of business ethics could not be tolerated. But when Jim mentioned the death penalty in Japan, Maxim hesitated. He didn't know the Japanese legal system, but if there was a death penalty, Jim was finished.
After his face changed several times, Maxim finally gritted his teeth and nodded.
"Don't worry, dear Mark. I won't make it difficult for you. In fact, I'm doing this for everyone. The task assigned to me is to give the Japanese a harsh lesson at Christmas. I think the U.S. side is also prepared. As long as we don't lose too badly, it will be fine."
"Uh... Jim, I have something to say to you..."
"What?"
Seeing Maxim agree, Jim breathed a sigh of relief, knowing he had passed this time. But Maxim's sudden strange expression made him uneasy.
"It's about the returns on your fund. I want 30%! As a reward for keeping your secret, it's a deal, agree or refuse!"
"What? 30% of the returns? No! Mark, you're too greedy. I can give you 10% at most. Otherwise, I might as well go to the gallows!"
"20%, that's my final offer!"
"Deal!"
Two thick hands shook firmly.
"Hey, Mark, you know what? I think it won't be long before you have a new boss!"
"I don't give a damn! Who would want to stay in this stinky, gangster-filled place with some arrogant British guys? After this, I'm going on a world tour."
"Get the hell out of here, you bastard, disappear from my sight right now!"
After the deal and the threats, there was no more warmth between the two.
(Note: For the Christmas battle, I did a lot of research and spent a lot of time. To clarify, sometimes the Nikkei index exceeding 40,000 refers to the Singapore futures price, while the others are the actual Nikkei index.)