After divorce, I can hear the voice of the future

Chapter 794 The Circuit Breaker Is About to Happen!

"You don't have to do anything."

Lu Liang smiled confidently.

Unlike Soros, who only talks big, this time his shorting of the yen is not like his previous shorting of the pound or the Nasdaq, where he needed to wait for news of Brexit or Trump's election to lay the foundation for victory.

Two years ago, Japan stabilized its market by relying on Ansan's economics. Now that approach has failed and the negative consequences are becoming apparent. This is an indisputable fact.

Speculators from various countries are about to invade, and the Bank of Japan is doomed to defeat, so there is no need for Sumitomo Mitsui to provide any assistance.

"Sir, can Sumitomo Mitsui participate in this?" Ota Rei pondered for a moment before suddenly asking.

Lu Liang smiled: "Ota, this is your business, you don't need to ask me."

Offering umbrellas on sunny days and taking them away on rainy days is the consistent nature of investment banking institutions.

Whether it's Mitsubishi UFJ or Mizuho Financial Group, once they realize, like Sumitomo Mitsui, that they cannot resist foreign short-selling of the yen, they will think of keeping the profits within their own borders and will not hesitate to wield the sickle against their own people.

This is why during financial crises, the rich get richer and the poor get poorer.

Because wealthy people know how to hedge their funds and even participate in it to make a fortune.

In contrast, the poor know nothing and will only realize in the future that money really doesn't last long.

"Sir, I understand."

Ota Rei seemed to be deep in thought. Although he was Japanese, he did not dislike Lu Liang shorting the yen at all.

As Kennedy once said, don't ask what you can do for your country, ask what your country can do for you.

If the Japanese authorities had been tougher and firmly said 'NO' to the unreasonable demands of the Americans, they probably wouldn't have acted so disloyally.

Like Lu Liang, for many years he has been intentionally avoiding shorting the RMB and the A-share market, and sometimes he even intervenes to protect them.

The reason is that he knows that Dongda is a reliable country, and if a choice needs to be made one day, Dongda will not hesitate to withstand the pressure from the whole world for Lu Liang.

In contrast, in Japan, if the Americans exert pressure during the day, the authorities will likely send him to the United States overnight before nightfall.

A country that cannot even protect its own businesses and its own people is not worth protecting.

During their conversation, Lu Liang suddenly asked curiously, "Ota, who just asked you to deliver a message?"

"Hmm~ Imperial Army, I guess."

Ota Rei smiled and made a joke.

While the Japanese prime minister is not as dangerous as the Blue House next door, the speed at which he is replaced is definitely much faster.

Just like Ansan, who had served as prime minister four times, he stabilized the market economy for two years and secured his position for two years by relying on Ansan economics. The previous three times, he only served for a year and a half, and the fastest was a month before he resigned due to his responsibilities.

This time, Lu Liang led the charge, while speculators from all over the world waited for their chance to strike.

If the Japanese central bank is unable to resist, Ansan will likely be impeached and removed from office again. Therefore, knowing that Ansan has a good relationship with Lu Liang, Ansan asked Lu Liang to act as an intermediary.

"However, his words weren't forceful; it felt like he just wanted to give it a try. If it worked, great; if not, fine too," Ota Rei added, his words revealing a sense of感慨 (gǎnkǎi, a feeling of mixed emotions, often including regret or apprehension).

"Okay, that's all for now. We can talk again if anything comes up."

Lu Liang smiled calmly.

Just as Ota Rei described, he was once a passionate fighter, but after witnessing the cruelty of reality and knowing he was powerless to change it, he ultimately chose to go with the flow.

Paying homage to the toilet is a pledge of allegiance, drawing fierce criticism from netizens at Dongda University and forcing a complete break from the nationalist fighter who once advocated for closer ties with China and distance from the United States.

After ending his call with Ota Rei, Lu Liang sat thoughtfully by the coffee table. He didn't leave his office until he finished a cup of tea and went to the trading room next door.

Upon seeing him approach, Sun Yutao quickly stepped forward to report the latest situation: "President Lu, the Nikkei 225 index has fallen by more than 800 points."

Lu Liang's remarks about shorting the Japanese yen not only affected the foreign exchange market but also Japan's financial market.

The yen is depreciating rapidly, which has already impacted the Japanese stock market. Foreign and state-owned enterprises are choosing to temporarily withdraw in order to avoid risks.

Of the 2381 listed companies in the Nikkei 225, Topix, and Nikkei 400 indices, 1520 companies experienced declines ranging from 4% to 10%.

In other words, there is no limit down mechanism for individual stocks, only the overall market has a circuit breaker mechanism. Otherwise, if this trend continues, a thousand stocks hitting the limit down will no longer be a unique phenomenon in the A-share market.

"How's the debt financing going?" Lu Liang looked up at the central screen, where the Japanese stock market was a lush green, making one feel as if they were in a wilderness.

For example, the A-share market, or the East Asian cultural sphere including Japan, South Korea, and Taiwan, all adopt the red-rising-green-falling pattern. Only Hong Kong, which has been deeply infiltrated by the West, follows the European and American pattern of green-rising-red-falling.

Sun Yutao frowned and pulled up the data, saying, "President Lu, while Japan held a press conference to express its condemnation, it is also trying its best to redeem Japanese bonds, making it increasingly difficult for us to acquire leverage. Currently, we only hold Japanese bonds worth $950 billion."

Perhaps due to the long-term need to deal with the periodic exploitation by the US, Japan has its own unique insights into resisting short selling.

Just three hours after Lu Liang made his remarks, Japan redeemed 15 trillion yen of Japanese bonds issued four years ago, equivalent to approximately US$1300 billion.

Not only is the Bank of Japan repurchasing shares, but major international financial institutions are also scrambling to acquire them, resulting in a very limited supply in the market.

They have the funds, but no leverage.

Lu Liang pondered for a moment, then asked, "What about the central bank in mainland China? Have you inquired with them?"

Non-official institutions do not hold much Japanese bonds; the real giant holding both Japanese and US bonds is the University of Tokyo.

In recent years, in order to develop and to promote the internationalization of the RMB, the University of Tokyo has held approximately US$2.35 trillion in US Treasury bonds, 15.85 trillion yen in Japanese Treasury bonds, as well as British and German bonds. It is not an exaggeration to say that the University of Tokyo is the world's largest creditor.

“I asked them, but they said they’d think about it,” Sun Yutao said with a helpless expression.

He immediately inquired with the People's Bank of China.

If the central bank were willing to support it, borrowing 2800 billion yen would be a trivial matter, but the response was that a meeting was needed to discuss it.

Lu Liang looked thoughtful, and after a long while, he sighed, "That means they don't agree. There's no need to contact them again."

Currently, this is just Tianxing Financial and its personal actions. However, if the People's Bank of China agrees, then the nature of the matter will change.

A country cannot easily intervene in shorting a country's currency, whether it's to launch an offensive or to defend against it.

Just like when Hong Kong returned to China, neither Britain nor the United States agreed, which is why Soros was sent to short Hong Kong.

The mainland quietly provided assistance, offering over $100 billion in support, but has so far denied it. This is because state intervention would escalate into a financial conflict between nations.

Ah-chung has always been very rule-abiding, just like his foreign policy; he never fires the first shot.

They were forced into it back then; if the year of return were the day of the fall, it would probably provoke a wave of opposition.

In this situation, there's even less need for them to take action. They can simply sit back and let Lu Liang lead the charge.

"There's still $1850 billion left, right?"

Lu Liang felt a pang of melancholy. Before, he had no money; now, he had money but couldn't find a way to spend it.

"If we don't set aside funds to invest in Cheung Kong Ports and acquire Tesla shares held by JPMorgan, we still have $1842 billion left."

Listening to Sun Yutao's words, Lu Liang looked at the central screen and made up his mind: "Divide 500 billion to short Japanese stocks. Even a small amount is still something."

Now that Japanese bonds are no longer available, the only option is to invest in the stock market. Although the returns are small, there's the risk of being criticized and additional transaction fees, it's better than nothing.

Just then, a cry of alarm rang out in the trading hall: "Mr. Lu, Mr. Sun, look at the foreign exchange market! Someone is selling yen, and it's about to fall below 120 yen."

Lu Liang was startled. He looked up and saw that the US dollar-Japanese exchange rate, which had been slowly rising, suddenly shot up in a straight line, like a horse galloping across a swallow.

US dollar to Japanese yen

From 113…115…117…119……,
Almost instantly, it approached the 120 yen mark.

The foreign exchange market is generally pegged to the US dollar. When the US dollar is exchanged for the Japanese yen, a rise in the yen indicates that the currency is depreciating, and vice versa.

"Damn it, which bastard is stealing my thunder?"

Lu Liang's face darkened, and his brain started working at lightning speed.

He then turned to Sun Yutao and instructed him to change the focus. Previously, foreign exchange was the main focus and the stock market was secondary; now, the focus should be reversed.

Some people rushed to short the yen before us, and now those who are adding to their positions are just copying what others have done.

They decided to directly set the total foreign exchange investment at US$950 billion, and will only reduce their holdings, not increase them.

Anyway, they borrowed money at a price of 112.
As long as there is no increase in holdings, this is the lowest price in the short term.

We will focus our attention and most of our funds on the Japanese stock market.

"Mr. Lu, should we buy the Nikkei 225 short-selling index and short most of the blue-chip stocks?" Sun Yutao asked.

Lu Liang nodded: "Okay."

At a single command, more than a hundred traders sprang into action, filling the trading room with the sounds of keyboards, mice, and commands.

"Short selling of the Nikkei 225 index, $2000 million successfully purchased!"

"Short selling of the TOPIX index, $3000 million successfully purchased!"

"Short selling of the Nikkei 400 index, $3500 million successfully purchased!"

"..."

Lu Liang looked at the screen. As the yen plummeted and they took action, the three major Japanese stock indices all gapped up.

Just like the foreign exchange market in reverse, one is like a horse galloping into the sky, soaring to great heights, while the other is like suddenly stumbling and falling off a precipice.

The Nikkei 225 index is the mainstay of Japan's three major stock indices, roughly equivalent to the Shanghai Stock Exchange in mainland China and the Hang Seng Index in Hong Kong.

It was initially just a slow decline.

But from that second on, it suddenly began to free fall.

The stock price plummeted throughout the day, dropping from -2% to -4.55% to -5.84%.

"At this rate, it's on the verge of triggering a circuit breaker!"

Lu Liang stroked the stubble that had just sprouted on his chin, a look of melancholy on his face.

Foreign exchange is given far greater priority than the stock market because exchange rate fluctuations are difficult for ordinary people to perceive.

Even if they know that their currency is being shorted, they won't have a very direct feeling about it. They will only realize that their money is becoming increasingly difficult to spend on someday in the future.

To put it simply, even if there are huge fluctuations in the foreign exchange market, the impact is delayed.

But the stock market is different. It's very intuitive. Stock market participants can clearly see how much their account balance has decreased because of today's drop.

The culprit who caused the decrease in their account funds was Lu Liang of Tianxing Financial.

"Damn it, they're obviously using me as a shield."

Lu Liang's face darkened, and he grew angrier the more he thought about it.

He knew without even guessing who was stealing the deal.

After all, holding such a large amount of Japanese bonds, causing the yen to fall by more than 2.5% in an instant, is something that only the Bank of Tokyo and Wall Street financial institutions have the ability to do.

"There's no reason why one person gets blamed while a bunch of others suffer, and I'm left to shoulder this huge burden alone."

Lu Liang narrowed his eyes, revealing an evil smile, and decisively walked out of the trading room, beckoning Xu Jiawei over.

"Contact Ishikawa Maya and have him order Fuji TV to spread the word about the shameless behavior of those guys at Wall Street institutions."

Upon hearing Lu Liang's instructions and learning the whole story, Xu Jiawei's face showed a strange expression: "President Lu, is this appropriate? It seems like we're killing a thousand enemies while losing eight hundred of our own."

His boss, Mr. Lu, was the one who started the short selling. It was a case of killing a thousand enemies while losing eight hundred of your own, and that's just a euphemism.

If Lu Liang's plan is followed
To be precise, it's killing a thousand enemies while losing three thousand of your own.

Lu Liang glanced at him and said calmly, "Doing it will kill a thousand enemies, while not doing it will only result in the loss of eight hundred."

If we're going to make him stink, then everyone should stink together. There's no reason for him to face the condemnation of the Japanese public alone.

　My shingles have flared up again, and my breasts are so painful. I'll slow down my updates for the next few days to catch my breath.

　　
　
(End of this chapter)