NOVEL NEXT Chapter 792: On the Verge of a Circuit Breaker!
"You don't need to do anything."
Lu Liang smiled confidently.
Unlike Soros, who only mouths off, this time the yen short isn't like shorting the British Pound or Nasdaq, which required waiting for news like Brexit or Trump's election to build a foundation for victory.
Two years ago, Neon stabilized the market with An San economics, but now it's ineffective, the ill effects are apparent, an undeniable fact.
Speculators from various countries are about to flood in, the Japan Central Bank is bound to lose, so there's no need for help from Mitsui Sumitomo.
"Sir, can Mitsui Sumitomo participate?" Ota Ling pondered for a moment and suddenly asked.
Lu Liang laughed, "Ota, that's your business, no need to ask me."
Sunshine lending, rainstorm collecting, is the inherent character of investment institutions.
Whether Mitsubishi UFJ or Mizuho Financial, once they, like Mitsui Sumitomo, realize they can't resist foreign capital shorting the yen, they'll inevitably think of not letting the profits slip away, mercilessly wielding the scythe against their own nationals.
That's why every financial crisis results in the rich getting richer and the poor poorer.
Because the wealthy know how to hedge risks, and even participate to scoop up profits.
In contrast, the poor know nothing, only to lament someday in hindsight that money doesn't stretch like it used to.
"Sir, I understand."
Ota Ling seemed thoughtful; although he was a Neon person, he wasn't against Lu Liang shorting the yen at all.
Like Kennedy once said, "Ask not what you can do for your country, ask what your country can do for you."
If the Neon authorities could be more firm and say 'NO' to the unreasonable demands from the United States, perhaps they wouldn't be so self-serving.
Just like Lu Liang, for years intentionally avoiding shorting the RMB or the A-share market, sometimes even stepping in to maintain it.
The reason is, he knows East Country is a reliable nation; if a choice had to be made one day, East Country would withstand global pressure on behalf of Lu Liang without hesitation.
In contrast, Neon would likely send him to the United States overnight as soon as there's pressure during the day.
A country that can't protect its own enterprises and citizens isn't worth maintaining.
During the conversation, Lu Liang suddenly became curious, "Ota, who just asked you to relay a message?"
"Hmm~ The Imperial Army, perhaps."
Ota Ling smiled, making a suitable joke.
Although the risk level of the Neon Prime Minister doesn't match up with the neighboring Cheongwadae, the speed of replacement far exceeds it.
Just like An San, who had stabilized the market economy for two years with An San economics, secured his position for two years, the prior three times were just over a year or even a month before resigning in disgrace.
This time, Lu Liang led the vanguard, global speculators waited to strike.
If the Japan Central Bank failed to resist, it's expected that An San would be impeached again, hence knowing his better relationship with Lu Liang led him to act as a middleman.
"However, the words were not strong, seemed more like a trial, best if it worked, no harm if not." Ota Ling added, revealing a sense of lament between the lines.
An San is actually an exceptional politician, economist, and diplomat; he was once a passionate patriot, diligently serving the nation and vowing to lead Neon away from US control.
But alas, he failed due to the limited capabilities of his country, leading to a somewhat slack attitude nowadays.
"Alright, let's leave it at that. We'll talk again if needed."
Lu Liang smiled indifferently, knowing Ota Ling was not trying to whitewash An San.
Just like Ota Ling's description, he was once a passionate warrior, but after seeing reality's harshness and realizing he couldn't make a change, he finally chose to go with the flow.
Visiting the toilet was a pledge, earning East Country netizens' condemnation, completely cutting ties with the nationalist fighter who once advocated pro-China and anti-US.
Ending the call with Ota Ling, Lu Liang appeared thoughtful, sitting by the coffee table, only leaving the office after finishing his cup, heading to the neighboring trading room.
Sun Yutao saw him coming and hurriedly stepped forward to report the latest situation, "Mr. Lu, the Nikkei 225 Index has dropped over 800 points."
Lu Liang's intention to short the yen not only affected the Foreign Exchange Market but also Neon's financial market.
The yen is accelerating its depreciation, already impacting Neon Stock Market, foreign capital and national assets opting for temporary withdrawal for hedging.
Nikkei 225 Index, Topix Index, Nikkei 400 Index, among the three markets' 2381 listed companies, 1520 companies showed a drop of 4-10%.
Without individual stock limit mechanisms, only a circuit breaker for the overall market, otherwise at this rate, a thousand stocks hitting the limit is no longer Big A's exclusive patent.
"How's the debt raising going?" Lu Liang glanced at the central screen, seeing Japanese stocks covering in lush green, as if in a vast wilderness.
For instance, Big A or East Asia cultural spheres like Japan and Korea, and Taiwan all adopt red-for-rise, green-for-fall models, only Xiangjiang being deeply penetrated by the West, adopting green-rise, red-fall like Europe and America.
Sun Yutao frowned tightly, pulling up the data and saying, "Mr. Lu, Neon, while holding a press conference to express condemnation, is also redeeming its bonds as much as possible, making it increasingly difficult for us to acquire chips, currently holding only 95 billion US dollars' worth of Neon debt."
Perhaps due to years of facing cyclical harvesting from the US, Neon has its exquisite understanding of resisting shorts.
Just three hours after Lu Liang's comments, redemption of 15 trillion yen worth of bonds issued four years ago, equivalent to roughly 130 billion US dollars.
Not only the Japan Central Bank repurchasing, but international major financial institutions also scrambling for chips, resulting in a pitiful scarcity of market chips now.
They had the capital but lacked chips.
Lu Liang pondered for a moment, asking, "How about the mainland Central Bank? Have you asked them?"
Non-official institutions don't hold much yen debt; the true giants holding yen and US debt are actually East Country.
These years East Country, for development and for RMB internationalization, holds about 2.35 trillion US dollars of US debt, and 15.85 trillion yen of yen debt, as well as British Pounds, German debt, calling East Country the world's largest creditor wouldn't be exaggerated.
"We have asked, but they said they need to think about it." Sun Yutao showed helplessness.
He had inquired with the mainland Central Bank immediately.
If the Central Bank agreed to support, raising 280 billion US dollars of yen debt would be a trivial matter, but the reply was that it needed discussion in a meeting.
Lu Liang pondered thoughtfully for a long time before sighing, "That means they don't agree, no need to contact them further."
Currently, it's solely Tianxing Finance and his personal behavior; if the mainland Central Bank agreed, the nature would change.
Shorting a nation's currency isn't something a country should easily engage in, whether offensively or defensively.
Just like when Xiangjiang returned, the UK and US disagreed, leading Soros to accost Xiangjiang.
The mainland quietly helped, providing over 100 billion US dollars in support, but so far has steadfastly refused to admit it.
Because once a nation intervenes, it escalates into a financial conflict between countries.
Zhong has always followed the rules, just like foreign policy, never firing the first shot proactively.
Back then, he was forced with no choice; if it returned in those years, it would probably spark a wave of opposition.
In the current situation, they have even less reason to intervene, sitting quietly on the mountain watching Lu Liang charge into battle is enough.
"Still 185 billion dollars left, correct?"
Lu Liang felt a sudden melancholy, previously due to lack of money, now it's because there's money that can't be spent.
"If no funds are reserved, after investing in Cheung Shing Port and acquiring the Tesla shares held by JPMorgan, 184.2 billion dollars remain."
Listening to Sun Yutao's words, Lu Liang looked at the central screen, resolved: "Divert 50 billion to short Japanese stocks, even a mosquito is meat."
Now they couldn't borrow Japanese debt, they could only target the stock market; although they earn less and have to bear infamy and pay more fees, it's still better than nothing.
At this moment, the trading hall suddenly burst into an exclamation: "Mr. Lu, Mr. Sun, look at the Foreign Exchange Market, someone is selling yen, it's about to break 120 yen."
Lu Liang was startled, lifted his eyes, and saw that the US-Japan Exchange Rate, which had been slowly rising, suddenly shot straight up like a horse galloping.
The US Dollar to yen exchange,
from 113...115...117...119...,
almost in an instant approached the 120 yen mark.
The Foreign Exchange Market generally uses the US Dollar as an anchor, with US Dollar exchanging yen; a rising yen means the currency is devaluing, and vice versa.
"Damn it, which bastard is cutting in on my action?"
Lu Liang's face darkened, the CPU in his brain rapidly calculating.
He then turned and instructed Sun Yutao to shift focus, previously prioritizing foreign exchange with stocks as support, now it's the reverse.
Someone beat them to shorting the yen, now adding positions would just be following in their footsteps.
Simply set the total investment in foreign exchange to 95 billion dollars upfront, only to reduce holdings thereafter, not increase.
After all, they borrowed at the level of 112,
as long as they do not increase holdings, this is the short-term lowest price.
Focus the next priorities and the majority of funds on the Neon Stock Market.
"Mr. Lu, purchase put indexes for Nikkei 225 and short most blue-chip stocks?" Sun Yutao asked.
Lu Liang nodded: "Yes."
With an order, over a hundred traders acted in unison, the trading room filled with keyboard clattering, mouse clicks, and voice commands.
"Nikkei 225 put index, purchase of 20 million dollars successful!"
"Topix Put Index, purchase of 30 million dollars successful!"
"Nikkei 400 put index, purchase of 35 million dollars successful!"
"..."
Lu Liang looked towards the screen, with the yen plunging and their actions, all three major Japanese stock indices gapped.
Like the Foreign Exchange Market in reverse, one storms up like a galloping horse, the other suddenly falling hard off a cliff.
The Nikkei 225 Index is the mainstay of Japanese stocks, equivalent to Big A's Shanghai Stock Exchange and Xiangjiang's Hang Seng.
Previously, it had been slowly declining,
but from this second it suddenly went into free fall.
The day's decline went from -2%...-4.55%...-5.84%... diving straight down.
"At this rate, it's going to hit a circuit breaker!"
Lu Liang scratched the stubble that had just surfaced on his chin, a touch of melancholy on his face.
Foreign exchange has a far higher priority than the stock market because currency fluctuations are hard for ordinary people to perceive.
Even knowing their domestic currency is being shorted, they won't feel it directly, only realizing one day in the future that their money buys less.
To summarize simply, even if there are massive fluctuations in the Foreign Exchange Market, the impact has a lag.
But stocks are different, very intuitive, stock market participants can clearly know because of the drop today how much their account funds have decreased.
The instigator of their diminishing account funds is Lu Liang of Tianxing Finance.
"Damn it, clearly putting me out as a scapegoat."
Lu Liang's face turned blacker, getting angrier the more he thought.
No need to guess, he knew who was cutting in.
After all, holding such a large quantity of Japanese debt, instantly causing the yen to drop more than 2.5%, besides East Country's Central Bank, only Wall Street financial institutions have this capability.
"Makes no sense, screwing one person, eating with a bunch, and leaving this huge burden for me alone."
Lu Liang squinted, flashing a wicked smile, decisively leaving the trading room and beckoning Xu Jiawei.
"Contact Ishikawa Mayu, have him instruct Fuji TV to heavily report on the shameless behavior of those Wall Street institutions."
Listening to Lu Liang's instructions, Xu Jiawei learned of the whole story, his face showing a strange expression: "Mr. Lu, is this appropriate? Seems like defeating a thousand enemies while losing eight hundred self."
His boss Mr. Lu was the instigator of the shorting, even just saying "loss of a thousand, defeat of eight hundred self" was putting it mildly.
If following Lu Liang's plan,
accurately, it's really defeat a thousand, lose three thousand self.
Lu Liang gave him a look, coolly saying: "Doing it can still defeat a thousand, not doing it just loses eight hundred for nothing."
If it's going to stink, then everyone should stink together, no reason for him to face the denouncement of the Neon people alone.