Chapter 89

===================

Translated by Heavenly Cat

Read it only at Novelbyu.com & Utoon.net

===================

“President. It seems Japan finally drew its sword.”

What everyone worried about became reality.

Japan announced export regulations on three core semiconductor items for our country, and even removed our country from the white list they’d maintained.

It was the start of full-scale Korea-Japan diplomatic war.

“How’s our country’s response?”

“For now, our government side also excluded Japan from the white list. But nothing special besides that. Since we don’t have weapons to strongly pressure Japan on our side.”

This was a predetermined course.

Japan could attack us with semiconductors, but we didn’t have such powerful regulation cards.

“How are Kangsung side and NK doing?”

“They say they’ve been contacting Gwangwoon Shipping and activating emergency networks even before things burst. The problem is those items have large Japanese market share globally, so they’re receiving from multiple places.”

What’s fortunate is they’re quickly cooperating with Gwangwoon Shipping to pull quantities from elsewhere for now.

“And while establishing AMC and semiconductor factories in Hwaseong and Giheung, they say they were also researching domestic production of those items. If done well, that’ll play a big role this time.”

They’re responding somehow or other.

But bleeding was inevitable.

Because if Japan stops supply, disruptions occur in our country’s semiconductor production.

“Here’s the stock market situation. Due to semiconductor issues, the domestic stock market dropped overall. Semiconductor-related stocks all suffered damage too. Above all, foreigners reacting sensitively to the Korea-Japan diplomatic war is big.”

“Because they judge long-term Japan will definitely win?”

“Yes. Short-term and long-term, Japan being dominant is fact. If they keep tormenting us with semiconductors, we Korea will be the ones suffering.”

In contrast, the Japanese stock market rose slightly.

Definitely not a very pleasant feeling.

“And here’s the Japanese company list you requested last time. Research side investigated and made a list of where to invest.”

Japan was a place where putting money anywhere could expect slight rises.

But only that far.

You shouldn’t expect big volatility here.

“Due to YCC policy, they’re forcibly blocking interest rate rises, aren’t they? Because of that it actually became a market with almost no volatility.”

Japan is a place practicing zero interest rates.

America also followed that system once, then now is diligently raising interest rates.

But Japan’s situation differs from America.

If Japan raises interest rates, the system built up until now risks shaking all at once.

So through YCC policy, they’re forcibly suppressing interest rates while also protecting the yen’s value.

That the core of what people call Dobenomics depends on this YCC is no exaggeration.

“The main evaluation is possibility of YCC collapsing is almost none, so expecting volatility for now is difficult.”

In other words, to invest in Japan, you shouldn’t expect high returns.

Why did yen carry trade come out?

Since they can’t make money in Japan’s stock market, everyone takes loans utilizing zero interest rates and invests abroad with that.

“…”

I thoroughly examined the report document research gave me.

As expected, no intuition came.

Due to this diplomatic war, the domestic stock market is greatly fluctuating, but Japan is just calm.

As if the market itself died.

Still, probably nothing worth salvaging.

Thinking that while turning the next page.

“..?!”

Like someone scribbled with black pencil, it was full of noise to the point of barely seeing what stocks were written on paper.

At the flustering sight, I just stared blankly at the paper momentarily.

“Perhaps stocks to instruct investment in..”

With me doing that for a while, Manager Seo carefully spoke to me.

There I came to my senses.

“One moment.”

Among these, I separately checked only stocks with the most noise.

Bringing a pen to such places felt like someone was scribbling on my cornea.

Now even the phenomenon of eyes feeling gritty while selecting stocks was happening.

“Here.”

I quickly passed the report to the manager.

I thought about checking more, but at this rate my cornea might really get torn out causing blindness.

“..Should I buy all these stocks?”

If accompanied by this level of noise and unpleasant feeling, it’s not telling me to go long.

My intuition was telling me.

That something capable of shaking Japan’s market is approaching.

“Please take the stocks I checked as shorts. Gathering up to maximum limit.”

“Oh. Sh-short-selling?”

Manager Seo made puzzled eyes.

As mentioned earlier, Japan’s market is one with almost no volatility.

Taking massive shorts there.

Even I saw it had more risk than taking longs.

Because Japan’s stock market is rising very slightly now.

“But since President is saying so, there must be reasons. However, since you checked quite many stocks, it’ll probably take some time. Need to check quantities too. But funds to what extent..”

“We can operate about 6 trillion won, right?”

“Yes. That’s the amount increased from last time’s Tisla incident.”

6 trillion won.

Really a large amount.

But going to global scale, even 6 trillion won wasn’t very large money.

Since fund companies managing close to 1 quadrillion won exist right away.

However, if putting this money entirely into Japan’s market, it was an amount that could sufficiently exert power. I briefly calculated the amount to input.

Without going long, as soon as I wrote 6 trillion won, a reaction came immediately.

“Put in all of it.”

***

Global securities companies including Gold Reagan had ranks set so they could rise step by step.

Thoroughly based on performance, starting from analyst and being promoted to associate, now the vice president path opens.

Here, VP was a concept slightly different from Korea’s vice president.

As actual middle managers, multiple VPs exist.

Then where is one step further from here?

Exactly MD.

A rank that can be called executive director in Korea.

Only people showing outstanding performance among VPs can rise.

“..Gwangwoon again?”

“Yes. They say they’re looking for large amounts of short-selling quantities on the Japanese side now.”

Gold Reagan’s MD, Veil, gave one common instruction to each team.

Exactly to make direct reports unconditionally when Gwangwoon shows special movements.

Where is Gwangwoon?

In this industry, a very famous place that hurts to say twice, while also a mysterious place.

Europe, Asia, and even America.

There’s nowhere Gwangwoon hasn’t touched. And places they passed give feelings like a huge storm swept through.

So nicknames for Gwangwoon are diverse.

Nightmare, architect, chaos, etc.

But the nickname Raynold Veil calls them was one.

‘Black Swan.’

Unpredictable, but once appearing, its ripple effect means an existence beyond imagination.

“But why suddenly Japanese side there?”

“Korea and Japan are waging diplomatic war this time.”

“What does that have to do with diplomatic war? Wasn’t it a tilted fight anyway? Japan is in an overwhelmingly advantageous position.”

But massively short-selling the Japanese side definitely means something exists.

“No Japanese side issues?”

“Nothing special.”

It was strange.

“Really nothing? Otherwise why would that side suddenly take massive short-selling?”

“Could the Korean government be preparing some secret weapon?”

“No way.”

Gold Reagan side already finished analyzing this matter.

Korea didn’t have elements to counter-strike the Japanese government.

At most they could attack using public sentiment to reduce tourist numbers or unfold boycott movements on various Japanese products, but compared to core semiconductor attacks it was somewhat weak.

“Yet pouring this much money here..”

“Rumor is some force in the FX market is also taking massive short-selling positions on yen.”

Though who that force is wasn’t revealed, guessing it’s Gwangwoon wasn’t difficult.

So it was even more puzzling.

Gwangwoon is an investment company with very aggressive tendencies.

Except when acquiring companies, they don’t pour money with long-term perspectives.

So it was truly strange.

“Is this the list?”

“Yes. The lists where Gwangwoon is looking for short-selling quantities.”

Veil thoroughly examined the list.

“..There’s quite a few related to bank stocks?”

“Yes. Along with major companies exporting overseas, bank-related stocks are also quite included. Plus releasing money on bond side too.”

“If bonds.. Wait.”

There Veil felt like catching thread of clues.

“If 10-year maturity bonds side.. Closely related to YCC?”

YCC.

Japan’s policy to maintain 0% interest rates.

What becomes core of that policy is exactly Japan’s 10-year government bonds.

If movements to sell 10-year maturity bonds strengthen in the market causing bond prices to fall and interest rates to try rising above target range, the Bank of Japan buys 10-year maturity bonds large-scale in the market.

Buying bonds like this increases demand making bond prices rise again, conversely interest rates fall returning to within target range was the system.

“Gwangwoon trying to short-sell bonds, and also looking for short-selling quantities on bank stocks in Japan’s stock market means..”

Puzzle pieces scattered everywhere found their places, then finally a picture was visible to Veil’s eyes.

“Gwangwoon is trying to collapse YCC now!”

“But.. Isn’t YCC too large-scale to collapse? The Bank of Japan is firmly controlling it.”

“Of course. But Gwangwoon doesn’t think that way. They probably see Dobenomics pushed by Prime Minister Dobe is showing almost bottom, and YCC also reached critical point.”

However, as the employee said, YCC was a large-scale system to bring down.

The Japanese government isn’t stupid, would they make YCC system loosely?

In other words, a trigger capable of collapsing YCC system is needed.

“But is there something like that now?”

With Veil’s head, no matter how much he thought, there was nothing that could be that trigger.

“This is different talk, but there are funds asking to inform them whenever Gwangwoon side tries taking large positions. What should I do?”

Seeing Gwangwoon’s shocking investment ability, forces following that place increased.

Accurately speaking, they were follower forces toward President Jeong Jin-ho commanding Gwangwoon from behind.

Especially bear funds with strong aggressive tendencies worship Jeong Jin-ho, which makes sense, because he’s a person who achieved countless successes with investments they dared not even imagine.

Wasn’t he an investor who only gathered victories without a single defeat through extremely aggressive tendency investments they only imagined in their heads?

So they were very curious about Jeong Jin-ho’s next movements.

Plus taking positions of this scale definitely means Jeong Jin-ho is commanding.

For forces following him, it’ll be the best possible news.

There he suddenly had such thoughts.

Perhaps Jeong Jin-ho even put movements of forces following him into calculations beforehand.

“For now spread rumors. And check if we can also take positions similar to Gwangwoon.”

Since there’s risk management, probably can’t invest much money.

But bear funds hearing rumors are guys who originally don’t think about consequences, so they’ll definitely try charging foolishly following Jeong Jin-ho’s back.

Taking commission fees there and having one foot in to gain some profit would be even better. But there’s still one puzzling thing.

“It won’t happen just by throwing money in?”

To make this work, a trigger is needed.

Some event capable of striking Japanese companies must happen..

“Can’t figure it out at all.”

Climbing to this position, he heard much talk of being a natural-born investor.

But when facing the real thing, people realize.

That ultimately they’re just ordinary humans too.

***

Each country has a place playing central bank roles.

The Bank of Japan is likewise.

Following Japanese government policies while adjusting interest rates and preventing economic shaking was their role.

But the Bank of Japan had little to do greatly.

Having maintained zero interest rates from long ago, according to YCC policy they just need to do their work like machines.

New ideas aren’t needed.

That’s how the country of Japan is.

Status quo.

Neither growing nor collapsing.

Maintaining exactly that position.

That was Japan’s culture.

Because Japan already tasted bitter once from bubble collapse.

So perhaps?

Bank of Japan Governor Takeyama was feeling fed up with daily repeated routines.

“Wh-what’s going on? Why are bonds dropping starting from yen?”

But was heaven trying to soothe his boredom?

What shouldn’t burst, no, what couldn’t burst, burst.

“There were forces holding short-selling from before already.”

“I knew that too. But this scale is too large?”

“Probably this US-China trade war became the trigger.”

US-China trade war.. The two countries were already sharpening blades since Trent became president.

Then as full-scale trade war burst, Japan got caught in the crossfire between two great powers.

“Our Japan exports many items to China, but with this tariff war Chinese companies taking hits all at once completely halted imports.”

Chinese companies unable to supply goods to America anymore due to raised taxes couldn’t use raw materials received from Japan anymore.

“Above all, logistics is big. Suddenly logistics schedules got backed up, goods that should enter aren’t entering, and goods that should leave can’t leave, so ports are in chaos now with accumulating quantities.”

As if troubles weren’t enough, with logistics chaos this time even other companies starting to suffer, fear arose in the previously calm market.

“And there short-selling forces dealt the finishing blow, so everyone’s panic-selling now.”

“Above all, too many forces entered the market. With bear funds swarming at once attacking, price defense isn’t working.”

Actually looking at the problem itself, the market wasn’t at the level to shake this much.

However, with funds entering the market with malice attacking all at once, panic-selling accelerated even more.

As a result, even institutions unrelated to bear funds started liquidating positions swept by that fear.

“Th-then can we defend?”

To avoid raising interest rates, they must catch falling bond prices.

Then they must buy bonds in large quantities, but it exceeded bearable range.

Also must catch not just bonds but yen prices, so money will go out doubled.

“If this state continues.. Unavoidably must raise interest rates. Actually already exceeded levels the bank can handle.”

“How much must we raise?”

“At minimum 3-5% should stabilize.”

There Takeyama squeezed his eyes shut.

Simultaneously cold sweat flows.

Bond interest rates are the economic system’s base temperature.

If this rises rapidly, borrowing costs increase for government, businesses, and households all, and this causes investment contraction, consumption decrease, asset price decline, economic recession and other chain-like adverse effects across the entire economy.

That’s why stable management of bond interest rates is very important.

But the Japanese government raising 3-5% itself here means abandoning YCC in a word.

And a country maintaining zero interest rates suddenly taking such big steps will make businesses and real estate collapse in sequence.

If they don’t block it fearing that?

Then a catastrophic tsunami will strike all of Japan.

Past Japanese bubble collapse would obviously be child’s play level.

“…”

Takeyama briefly pondered.

No. It was an urgent situation with no reason to ponder or time for that.

“Prepare press conference first. Must put out the fire somehow.”

Executives also moved quickly.

“…”

Left alone in the conference room, Takeyama blankly stared at the scenery outside through the window.

That numerous forces attacking all at once means someone is behind this.

Can’t know by whose command exactly Japan was cornered this far.

No capacity to look into that now.

But one thing was clearly knowable.

That Japan’s cherry blossoms are rapidly falling to a storm someone intentionally caused.