Extraordinary Genius

Chapter 985 - Japan’s tragedy

Chapter 985 – Japan’s tragedy

Soros should not have succeeded because of Japan’s economic power. But because of the financial crisis in Southeast Asia, Japan was affected.

Japan’s banking industry is very developed and had used its excess currency to invest in the finance and real estate industry of Southeast Asia. Many Southeast Asian countries’ finance and real estate industry become their core industry are because of Japan.

This investment model had once brought Japan to become one of the top economic powers of the world.

However, because of the US, Japan fell into recession, and Japan decided that it should use this investment model in other countries. If anything happens, it will be that country that suffers. This is what Japan learned from the US. At the same time, Japan can continue to be the economic superpower of Asia.

But Japan had never expected that someone had acted before them, and those countries’ economies crashed before they could exit!

The Japanese banks have operations in those countries and had invested and gave out loans in large amounts.

These investments will help those countries economically and can yield significant returns. So, Japan increases its investments every year, and the invested amount becomes bigger and bigger.

In the end, Feng Yu and Soros attacked the countries in Southeast Asia last year, crashing their economies, and caused the depreciation of their currencies.

Those countries suffered massive losses, but every country that was hit by the crisis had implicated Japan.

Since the middle of last year, Japan starts to have banks and brokerages going bankrupt. Within a few months, the number of banks and brokerages going bankrupted increased. This is due to the increasing number of bankrupted companies in those countries.

The Japanese banks cannot recover their loans and investments, how can they still stay afloat?

Japanese banks and brokerages bankrupting and recovering their investments and loans caused bigger miseries to the affected countries.

At this time, Yen started to fall slowly. At the start of this year, the rates of Yen against USD had fallen to 120:1. Around the middle of last year, the exchange rates are 115:1, and it is still within an acceptable range.

But today, Yen fell to 124:1 suddenly. This is the biggest single-day drop for a long time.

Japan was alerted and knew someone is attacking Yen. The only possible suspect is Soros!

Japan was right. Soros and his men had started to attack Yen. Even if they don’t attack Yen, Yen will also depreciate because of their bad debts.

Yen depreciating caused panic for investors in Japan. No one expects the Asian Financial Crisis to affect Japan.

Soros started to spread rumors on mainstream media that Japan’s economy is going to collapse again and persuaded all investors to dump their Yen for USD quickly.

Some people believed Soros, and with Soros’ attacks, Yen starts to fall.

After Feng Yu receiving this news from He Zhaoji, he took a look at Yen and Japan’s stock index graphs. He is sure that it was Soros behind the fall!

“Old He, follow our plan to short Yen. Remember to hedge against the short position. Any fluctuations will cause massive losses for us.

Futures trading has high returns, but at the same time, the losses are high.

“Don’t worry, Boss. We will be careful.”

After hanging up He Zhaoji’s call, Fu Rongqi called and discussed with Feng Yu about their strategy to invest in Yen.

Feng Yu and Fu Rongqi agreed to use low leverage to short Yen and, at the same time, hedged against their position to prevent any sudden increase of Yen.

After getting high returns in their previous investments, Feng Yu and Fu Rongqi became risk-averse now!

……

“President Norio, our share prices fell again.”

“I know. Stop reminding me!” Norio Ohga snapped at his subordinate.

This damn financial crisis had caused the collapse of several Southeast Asia economies, and Sony’s investments in those countries, especially their factories and branches, suffered massive losses.

Sony’s production and sales fell. Some factories even go bankrupt, and they still owe Sony their deposits and material fees!

Norio Ohga was frustrated, as even their shares on the Tokyo Stock exchange, start to fall.

Of course. Sony is not the only Japanese company that is hit by the Asian Financial crisis. Many other Japanese MNC were affected, and Japan’s stock market is falling.

Everyone had thought that Japan’s economic recovery had been doing well, and should withstand the impact of the financial crisis.

But as the Japanese banks and brokerages are bankrupted, the situation in Thailand and many other countries worsen, their economies crashed.

All these formed a vicious cycle, and there is no way for Japan not to be affected.

Although many Japanese MNCs and financial institutions join-hands to try to stabilize the stock market and Yen’s exchange rates, they failed.

No Japanese MNCs and financial institutions dare to invest too much in stabilizing the stock market and Yen. If they fail, their companies will be in a worse situation.

Those organizations that own banking shares suffered the most. Japanese banks’ shares plummet, and their assets shrink. The banks have more than 35% of bad debts, and many of their outstanding loans had requested extensions. The amount the banks can recover is too little.

The loans in other currencies caused the banks to suffer more losses. The Japanese banks did not know that those countries’ currencies will crash so fast.

This month, many of those countries’ property bubble crashed. Thailand, Singapore, and those affected countries’ property prices plummet and can no longer be stabilized.

The property market crashing in those countries caused increased losses in Japan.

Japan had thought that Japan’s economy would improve when those countries developed, and they can cause those countries’ economies to crash when they withdraw their investments suddenly.

But Soros acted faster than the Japanese, and Japan was implicated in it!

……

“Feng, you said that once Yen falls, Soros will start to target Hong Kong or Russia. Should we start preparing?” Kirilenko asked.

“No. We will wait. When the stock market or currency starts to rise abnormally, that means Soros and his men are starting to attack. At that time, we will retaliate and give them a deadly blow!”