On Christmas Day in 1989, the Japanese stock market surged by nearly 400 points, briefly approaching 38,500, and finally closed at 38,423, just a hair's breadth away from 38,500.
All the traders on vacation were urgently recalled to discuss the next steps.
In fact, the so-called discussion was just a facade. The real financiers had already decided on the strategy. They were only called back to give an account.
The small trading room was filled with a sense of despair. Everyone was silent, staring blankly at the K-line chart from the previous trading day. They had left with high hopes, thinking they had successfully suppressed the momentum of the Japanese stock market, and everyone was looking forward to a pleasant Christmas. But just two days later, the Japanese stock market began to soar again.
"Gentlemen, at least we still have another fund, don't we?" In the dead silence, only Jim's mood was relatively good. He had thoroughly understood that since the financial group behind him didn't care about gains and losses, why should he worry? Given today's trend, the market would definitely rise again tomorrow, and perhaps even for the whole week, possibly breaking the 40,000-point mark by the 30th. But who cares!
The small fund he managed was operating in the opposite direction. According to today's trend, he could earn millions of dollars when the Singapore market opened tomorrow. With a few more such days, he could quickly build up a new fund.
"Yes!" The thought of their own fund immediately excited everyone. Professional ethics and duty were all thrown to the back of their minds.
The atmosphere became lively again. Few people cared about the trading strategy for the next day. Everyone was thinking about how much money they could get.
"Alright, gentlemen, it's Christmas today. I apologize for bringing you back so soon. Let's go out and celebrate. Let's hand the damned Japanese stock market over to hell!" Jim seized the moment to say.
This immediately ignited everyone's enthusiasm. The traders cheered and flocked to a strip club in the city, where they partied with the almost naked strippers.
A special Christmas party was held for these traders, with over a hundred beautiful prostitutes sent by the Yamaguchi-gumi as a small reward for the financial support they had provided to the gang in the past year.
Speaking of the Yamaguchi-gumi, one cannot help but mention their dedication and integrity. For the two to three months that Jim's team had been in Kobe, the gang members outside the freezing plant had diligently guarded the entrance without prying into what the white men were doing. Such people were rare in modern Japan.
Seeing the wild scene, Matt quietly approached Jim and asked with concern, "Is there really no way to turn things around?"
"Yes!" Jim's eyes were fixed on a stripper who was making provocative gestures at him. He answered absentmindedly, "That's the order from above. I can't do anything about it!"
Matt sighed deeply, picked up his glass, and walked to another woman who had been eyeing him for a while. He knew very well that he had received the same order to short the Japanese stock market.
The party lasted all night.
On December 26th, the Japanese stock market opened at 38,470 points and continued the strong upward trend from the previous trading day. It didn't even break the opening index at its lowest point during the day, reaching a high of 38,786 points, just 14 points away from 38,800, and finally closed at 38,681 points.
Another significant gain of 257 points.
On this day, Jim and his team were fully energized, aggressively shorting the Nikkei index in the Singapore futures market. Influenced by the Japanese market, the Nikkei 225 futures opened above 39,500 points and briefly broke the 40,000-point mark during the day. The shorts had no way to counter this, and although there was some fluctuation at the close, the futures finally stood at the historical 40,000-point mark.
The entire market's shorts had lost over a billion dollars in the past two days, and Jim's fund, which accounted for more than 20% of the short positions, had lost over 400 million dollars.
This was not the end. What surprised the market even more was that the shorts were frantically selling at high prices, showing no intention of reducing their positions.
Analysts believed that the shorts were trying to raise their average entry price to reduce losses and maintain their bearish outlook on the Japanese stock market, hoping for a sharp decline at some point in the future.
However, most analysts were not optimistic about this behavior, believing that the shorts had lost their rationality. They predicted that the Nikkei index would break the 40,000-point mark this week.
As one of the largest shorts, Jim and his team's operations had become a market indicator. On this day, they sold another 50,000 contracts at the 40,000-point mark, spending over 600 million dollars.
This large short position caused a significant stir in the market, but the bulls quickly absorbed it, and the Nikkei index only slightly retraced before surging again.
The market's enthusiasm had reached its peak. Almost all investors were betting on whether the Japanese market would reach the 40,000-point mark by the end of the year. A massive amount of funds flowed in, most of which joined the bulls.
On the Japanese side, after the decline last week, some Japanese financial groups had withdrawn from Singapore, but they regretted it when the Japanese market opened on Monday. Now, only a few Japanese financial groups, including Iwamoto Kaoru, were still fighting in the Singapore futures market.
However, it didn't matter. The influx of new bull funds quickly filled the gap left by the Japanese withdrawal, even surpassing their previous strength. The 50,000 contracts were absorbed by several new players in the market.
Iwamoto Kaoru was naturally pleased with this development. He knew his funds were not enough to directly confront the powerful shorts, but the strong performance of the Japanese market had ignited the bulls' confidence. However, he was still cautious and reduced his position to below 50,000 contracts, making his presence less noticeable in the market.
At the Singapore Exchange, numerous forces were engaged in a game of strategy, the outcome of which depended on the performance of the Japanese market.
Funds from South Korea, Japan, Taiwan, Malaysia, Indonesia, and even some from Hong Kong were bullish on the Japanese stock market, while the shorts were mostly from Europe and America, with only a few from other regions.
Of course, the sources of these funds were highly confidential and would never be disclosed, or the reputation of the Singapore Exchange would be ruined. This was the rule of the game.
In a book later written by Japanese scholars, it was revealed that 99% of the funds shorting the Japanese market were from Europe and America, with only a small portion from other regions.
Zhong Shi's funds entered the market through British brokers and were thus considered part of the European and American financial groups.
In fact, the recent market movements had left Andrew somewhat at a loss. After the decline last week, Zhong Shi's account had a significant profit, but after the market opened on Tuesday, these profits vanished, and he even had to pay a margin. Fortunately, Zhong Shi had only invested 100 million dollars, with the remaining 50 million as a reserve margin, preventing a forced liquidation.
"Mr. Zhong, given the current trend, the Japanese stock market is likely to break the 40,000-point mark this week. Aren't you considering changing your position?" Andrew wiped the sweat from his forehead, still shaken.
Zhong Shi, holding about 7,000 contracts, had lost over 7.5 million dollars in the past two days, and the losses were still growing.
However, Zhong Shi was clear that the upward momentum of the Japanese stock market was about to end. He vaguely remembered that on the last trading day of 1989, the Japanese stock market would reach its historical high and then sharply decline, losing more than half its value in six months.
Currently, he had limited funds, with only 40 million dollars in reserve.
"Close all positions and observe the market for a while!" After a moment of quiet reflection, Zhong Shi ordered. He was reluctant, but with the limited funds available, he had to enter the market at the most precise time to maximize profits.
Hearing Zhong Shi's order, Andrew let out a long breath. He had always been skeptical of Zhong Shi's decision and was now relieved to see him "repent."
On December 27th, the Japanese stock market continued to rise, briefly approaching 38,900 points and finally stabilizing at 38,800 points, with a daily gain of 0.31%, or 120 points.
Most investors no longer doubted that the Nikkei index would reach 40,000 points.
On the 28th, the market opened higher and continued to rise, though not as aggressively as before. It reached 38,920 points during the day, just a step away from 39,000, and despite some fluctuations, it finally closed at 38,876 points, up 75 points from the previous day.
On the 29th, the last trading day of the year, everyone was eagerly awaiting the performance of the Nikkei index. They knew it was unlikely to reach 40,000 points on the last trading day, but 39,000 was still within reach. A good closing would set the stage for a quick break above 40,000 points in the first few trading days of the new year.
But this would never happen!
On this day, the market opened at 38,913 points, 37 points higher than the previous day, a good start! The rest was to see how it would develop!
When this number was announced, Jim and his team let out a collective groan. They knew that on such an important day, the trend for the day was already set.
These three trading days felt like an eternity for them. They had lost over 200 million dollars in the past few days, and more surprisingly, they received new orders from the U.S. to increase their positions. They now held over 300,000 contracts, with an average price close to 40,000 points.
These short positions had already cost them over 4 billion dollars. After recent losses of over 500 million dollars, they had less than 1.5 billion dollars left.
Initially, they had gathered 4 billion dollars, and later, another 6 billion dollars came in, totaling over 10 billion dollars. However, repeated losses had already cost them over 2 billion dollars. Besides the 2 billion dollars invested in the Japanese stock market, this was all the money they could mobilize.
Ironically, the funds set aside for risk hedging, which were invested in the Japanese stock market, had now grown to over 2.5 billion dollars, a case of "flowers not blooming when planted with care, but growing wild when planted without thought."
(Updates have been a bit slow these past two days. I hope for your understanding. The author will try to resolve any issues as soon as possible. Some readers may be concerned that changes will affect their expectations for the protagonist, but rest assured, the plot and the protagonist's development will not be altered.)