National Tide 1980.

The Bank of Japan's interest rate hike in November 1989 came as a complete surprise.

For no other reason than that this is the fourth interest rate hike by the Bank of Japan this year.

If we start counting from the first interest rate hike in April 1989, in just over six months, the Bank of Japan has already doubled its original interest rates.

Secondly, just last month, the Bank of Japan announced that it would raise interest rates from 3.25% to 3.75%.

Less than a month later, the Bank of Japan surprisingly chose to raise interest rates again, bringing them up to 4.25%.

Such a close frequency of interest rate hikes is unprecedented in Japanese financial history. What does this signify?
In the public eye, this probably only demonstrates one thing: the Japanese government's determination to curb the economic bubble.

After all, since the beginning of this year, the Ministry of Finance and the Bank of Japan have repeatedly expressed their deep concern about the Japanese stock market beginning to show signs of a bubble, and hope to use interest rate hikes to stop the irrational surge in the stock market.

Although this method has never been very effective, the previous interest rate hikes had very limited impact on the stock market. Both institutional and retail investors almost ignored them, and the Japanese stock market continued to rise as usual.

However, it must be said that the timing of this interest rate hike was indeed somewhat unexpected.

As the saying goes, once is enough, twice is too much, but not a third time. From this unusual pace of interest rate hikes, it's clear that both the Ministry of Finance and the Bank of Japan are getting a little anxious.

Given all these factors, when will the next interest rate hike occur after this one?
Will the pace and frequency of interest rate hikes continue to increase? And to what extent will interest rates eventually rise?
This has all become uncertain.

Neither securities companies nor individual investors can help but think about it carefully.

In other words, the scope for imagination has been fully opened up.

Therefore, the unexpected "black swan" event has an unexpectedly powerful impact, and this time it really affected the stock market.

As various financial professionals interpreted this measure, and as major Japanese media outlets focused their financial news on this unexpected interest rate hike, the Nikkei 225 index reacted significantly, experiencing a widespread decline across the board on the same day.

Moreover, there is no doubt that under this market logic, among all stocks, those with higher debt ratios are more severely affected by the negative impact.

Because the more money you borrow, the greater the pressure to repay the principal and interest.

Therefore, companies like EIE International, which are highly indebted and rely on desperate financing for capital expansion, naturally became the first group to fall, and their decline was extremely sharp.

The stock price fell below the 40,000 yen mark at the opening bell and continued to decline, closing down 5% on Monday and 7% on Tuesday, showing almost no resistance.

But that's not all. Don't forget, the stock market is a place where people scheme and plot, which makes stock market speculators the most suspicious.

At this moment, the Bank of Japan's sudden interest rate hike, coupled with the recent drop in EIE International's stock price, immediately sparked endless speculation among unsuspecting speculators, who saw it as a meticulously planned conspiracy.

The previously inexplicable drop suddenly had a reason, with many believing that someone must have anticipated the policy's release and fled in advance, leaving those of them, who were unaware of the situation, stranded at the top.

Needless to say, anyone who bought at the bottom in the first few days is now kicking themselves, feeling like they've been tricked and foolishly become the ones left holding the bag.

Some of these people have an even stronger ability to fill in the gaps in their imaginations.

Not only did they regret it, but they also scared themselves, actually believing that EIE International must have some major hidden danger that they were unaware of, otherwise how could such a huge amount of funds have fled in advance?
As a result, the fear spread like wildfire through EIE International's stock, creating a sense of panic that was almost like a virus.

By Wednesday, after two days of sharp declines, the market had almost bottomed out, and most stocks began to rebound.

However, EIE International only rebounded by three points in the morning session, following the general trend.

Then, due to rumors circulating about the stock, it started to have severe diarrhea, plummeting and falling for several days longer than other stocks.

What does "competitive trampling" mean?
That means most shareholders started a panic sell-off, regardless of cost.

In fact, every single day of this week, EIE International saw a significant drop in trading volume.

By Friday's close, EIE's stock price had fallen below the 30,000 yen mark, a weekly drop of more than 22%.

This has resulted in Ning Weimin and Sagawa Kenichi being able to act recklessly and arbitrarily without any justification.

What was originally a foolish and reckless act turned out to be a stroke of incredible luck, coinciding with the Bank of Japan's interest rate cut. They made a fortune.

Those who originally wanted to take advantage ended up suffering a huge loss, and those who secretly bought the goods by following behind them were all dumbfounded.

Especially Hiroji Goto, whose stock purchases resulted in a paper loss of no less than 30%, his face turned green with anger. How could anyone reason with that?

But is this what makes them most upset?
No, what upset these people the most was that the positive news that EIE originally planned to release to boost the stock price had turned into negative news under these circumstances.

Forget about announcing it to the public, they're even afraid of covering it up.

Imagine if people knew that EIE was going to continue seeking financing from "Changyin" to expand its asset size, it would definitely exacerbate the panic, and the stock might fall another 10% or 20%.

However, even if they wanted to cover it up, it wouldn't be so easy.

Because EIE International's stock price movement is too abnormal, it has already attracted the attention of many investment institutions. Everyone wants to know what major thing happened to this company, and they will try every means to find out.

Moreover, EIE was originally intended to be released this week as positive news, with the aim of boosting the stock price.

Because the time was approaching, there was an intention to encourage people to rush to buy, and the confidentiality measures were not very strict.

Now look what's happened! It's drafty everywhere, and it's hard to say whether we can even cover it up.

Therefore, whether it was Hiroji Goto, the Finance Minister of EIE Iwasawa, or the related companies of EIE, they all felt frustrated by the unforeseen circumstances and didn't know what to do.

Logically, they should be replenishing their stock and buying more shares at this time.

In order to stabilize the stock price, they had to take action, and only by acquiring a sufficient amount of stock at a low price could they push the price up to make up for the losses.

The problem is that while they are accumulating stock, they are also afraid that leaking the news will cause a greater negative reaction in the market.

All the money they've invested now will be buried.

But if they don't buy in and let the stock price fall freely, their unrealized losses will only increase. The key point is that it will benefit those who have already bought most of the stock and get out of the market. Wouldn't that be letting the opponent get what they want and playing right into the enemy's hands?

No, taking any action seems inadvisable.

Just when they were in a period of confusion and indecision, it was Sagawa Kenichi, representing Ning Weimin, who made the move before them.

Ning Weimin and Sagawa Kenichi had no worries. They started buying up stocks at low prices without hesitation, and gradually bought back the stocks they had sold in the first few days. They seemed to be very satisfied with their profits and were ready to settle their positions.

The essence of stock trading is to buy high and sell low.

There's a saying that goes something like this: Seeing others make money is more painful than losing money yourself.

Seeing your competitors making big money is naturally twice as painful.

This made Hiroji Goto extremely envious. He couldn't understand how his opponents could be so lucky. What should have been a dead end was not only turned around by accident, but they also made money with ease.

According to his conservative estimate, with the borrowed securities, Ning Weimin's account has gained at least 20 billion yuan in profit, all from nothing.

As for EIE, Harunori Takahashi was furious.

Upon learning that Ning Weimin had actually benefited instead of suffered a loss, he nearly ground his teeth to dust.

As his subordinate, Iwasawa was naturally seen as incompetent and was severely reprimanded.

Fueled by resentment, Takahashi made a choice that was "to kill eight hundred enemies while losing a thousand of his own." He didn't have time to let Iwasawa slowly buy at low prices; he hardened his heart and demanded that Iwasawa immediately raise the stock price.

Even if it's a loss for him to do so, he absolutely will not allow his thorn in his side to gain too much advantage.

Then an even more amazing scene unfolded: as the Nikkei 225 index gradually improved and the market correction was complete, it showed signs of regaining its upward momentum.

This time, EIE International's stock price actually rebounded sharply after a slight drop of three points, leading the market and rising every day without stopping.

By the second week of November, all losses had been recovered, and the stock returned to a high of 55,000 yen. Then, it showed signs of weakness and fell to 53,000 yen before consolidating.

This insane market trend was interpreted by financial professionals and the media as a sign that all the bad news had been priced in, which naturally made the institutions and retail investors who had rushed to cut their losses and exit the market curse and almost collectively vomit blood.

As for why the stock price should be maintained at this level?

In fact, Takahashi Harunori and Iwasawa's intention was to feign weakness and let Ning Weimin and Sagawa Kenichi, who hadn't had time to replenish their stock at low prices, see the hope of making another profit.

Hopefully, they won't rush to exit, but instead will sell off the shares they've acquired at this point.

In this way, as long as they sell again out of greed, Takahashi can make Iwasawa continue to drive up the price. With EIE's strong financial strength and financing capabilities, he can completely squeeze Ning Weimin out of the market and make him lose everything.

Surprisingly, their opponents were quite obedient this time.

Soon, Iwasawa learned from Nomura Securities that Kenichi Sagawa had succumbed to temptation and started selling his shares at 53,000 yen.

It is estimated that the less than 900,000 shares in stock will be sold off in less than a week.

Takahashi Harunori, having achieved his goal, finally smiled, believing that he had successfully lured the enemy into a trap by sacrificing himself, and that he could soon carry out his revenge to the fullest.

However, what followed was even more unexpected.

Such a sudden and significant fluctuation in a stock's price within a short period of time signifies a large amount of money and trading opportunities.

Banks, securities companies, and even ordinary stock investors are increasingly noticing EIE's unusual market performance.

This kind of eye-catching effect is actually no less than a stock causing a stir in the A-share market decades later, hitting three consecutive limit-up days.

Needless to say, after everyone is curious, the next step will naturally be to investigate why such an extreme market situation occurred.

Who exactly caused all of this?
As a result, the truth quickly came to light—the first mastermind exposed from the trading seats was the EIE Group, and Takahashi Harunori, the "son of Keio."

For the public, this behavior is easy to understand if it's this person.

As everyone knows, this person has always been arrogant and haughty, the kind of person who would do something like this.

The arrogant and conceited Harunori Takahashi didn't hold back. When cornered by a financial reporter, he readily admitted that he wanted to make EIE a top-tier golf company, buy the most famous golf courses in Europe and America, hold a golf tournament next year, and cultivate Japanese golf champions and stars.

Unexpectedly, some foreigners overestimated themselves and tried to take advantage of the Bank of Japan's interest rate hike to maliciously short his company.

He raised the stock price simply to maintain it and protect the interests of the majority of shareholders, not wanting to give any opportunity for opportunists to take advantage of the situation.

At the same time, this guy also played on nationalistic sentiments, saying that as long as you are Japanese, you should support them and not easily look down on a high-quality company like EIE that is in a period of rapid expansion, so as not to let bad guys from foreign countries who want to destroy the Japanese economy succeed.

It has to be said that this guy's combination of offense and defense is very skillful, and his ability to incite others is also very strong.

This not only put an end to the seemingly risky investment and uncertain prospects, but also boosted investor confidence and provided a new theme for speculation on EIE.

If the stock price is to rise further, the resistance is greatly reduced, and there is no shortage of followers.

In the following days, Harunori Takahashi's words were interpreted by the Japanese financial community and media as a positive sign that the bad news had been priced in, and the stock price rose instead of falling, along with the overall market.

It took about a week to break through 59,000 yen and approach the 60,000 yen mark, showing a very steady trend.

It's quite obvious that, judging from this, Harunori Takahashi seems to have really succeeded.

It seems unlikely that Ning Weimin will have any chance to buy back the stocks that Sagawa Kenichi sold off at a lower price.

If Ning Weimin is willing to throw in his early profits and buy more shares at high prices, this may be his last chance to exit safely.

But the problem is that everything usually has two sides.

Harunori Takahashi's high-profile and attention-grabbing scathing criticism of foreign rats in the media not only attracted the attention of the Japanese public but also caught the attention of American investment banks.

What was said in jest was taken seriously by the listener. Morgan Stanley, which introduced stock index futures to the Japanese and voluntarily paid management fees to them, was completely bewildered by Takahashi's remarks.

They didn't do anything!
It's not time to smash the cup yet, so who exactly did it?
Morgan Stanley quickly analyzed EIE's unusual price movement and the whereabouts of its outstanding shares, and was immediately alarmed.

Damn it, besides the Americans, there are other people secretly eyeing this opportunity to short-sell and devour the Japanese. Where did all these shares come from that they can sell? It's obvious that someone is already trying to run away before them!

Does this mean we need to readjust our strategy? The Japanese stock market is becoming increasingly dangerous; we must move our plans forward.

Morgan Stanley then urgently contacted their American allies, informing them of the news and also seeking opinions from several other investment banks and funds.

Ultimately, everyone reached a consensus: to be on the safe side, it was better to act ahead of time and not be soft-hearted, so as not to let the Japanese have a good New Year.

So, starting in the last week of November, the Nikkei 225 index suddenly surged, as if injected with adrenaline, and began to rise rapidly.

Not only are they winning everything, but their fighting spirit is also high, showing a strong momentum to leave others in the dust! (End of Chapter)