The stock market crash was inevitable. By the time the Japanese government realized what was happening and forcibly halted trading, the market had already caused massive asset depreciation across the nation. In just six months, the index plummeted from 40,000 points to 14,000. The total market value of listed stocks dropped from 667 trillion U.S. dollars to 287 trillion, meaning that in half a year, Japan lost 380 trillion dollars in assets. The myth of the Japanese stock market had completely collapsed.
The consequences of the bursting bubble were severe. On one hand, the securities industry faced unprecedented depression. In the six months following the sharp market decline, trading volume dropped to just 20% of previous levels. More than 200 brokerage firms, which mainly relied on transaction fees for survival, all faced deficits, and their losses continued to grow. Many large firms suffered deficits exceeding 40 billion yen.
In terms of foreign capital transactions, the reduction in foreign securities trading caused a long-term surplus in the capital account, and Japan dramatically transformed into a capital-importing nation.
On the other hand, the previous stock market frenzy had drawn companies to seek direct financing, forcing banks to focus on riskier enterprises and non-banking financial institutions for lending, indirectly triggering a banking crisis.
After the bubble burst, Japan’s economic situation deteriorated rapidly, immediately resulting in stagnant investment, growing corporate inventories, declining industrial production, and sluggish economic growth. The real estate market was also not spared. Japanese property prices reached staggering heights in 1990, with the value of the Imperial Palace’s land alone equaling the total value of all real estate in California, U.S. After the bubble burst, property prices dropped nearly 50% before finally stabilizing, and the nation’s overall wealth shrank by nearly half.
The previous surge in asset prices had fueled people’s desire to borrow for speculation. Japanese banks, eager to lend to real estate developers, eventually reaped bitter consequences. The collapse of the real estate bubble and the inevitable rise in non-performing loans burdened the Japanese banking system, triggering deflation and plunging the economy into a prolonged and painful depression.
Mu Lin launched the stock market attack on the “July 7th” Incident anniversary as a symbolic retaliation for Japan’s initiation of the 1937 Marco Polo Bridge Incident in China. To avoid leaving any clues, Mu Lin and his team employed extremely covert methods. Since Japan’s stock market was heavily influenced by the U.S. market, when Claus suddenly withdrew massive funds from the U.S. market, it caused a sharp drop in the U.S. stock index. When Japan’s market hit its limit-down threshold, the U.S. market, influenced by Japan, also hit its limit-down the next day. As Japan’s market collapsed, the U.S. market also suffered heavy losses—an outcome that Mu Lin and Claus had not anticipated. As more and more speculative capital poured into the market, Mu Lin ordered Claus to withdraw, unwilling to become a target for Japanese retaliation. By that time, however, they had already made enormous profits. When Claus reported the total earnings to Mu Lin, he was stunned, realizing now why so many people were drawn to financial speculation.
In this world, strength and capital are measured in money. The big players had originally thought themselves powerful enough to protect the market and earn even greater profits. They never expected the crash to come so quickly, nor that they could not withstand it. When they tried to sell, there were no buyers left in the market. Burdened by excessive loans, these major players were completely trapped, teetering on the brink of bankruptcy and consumed by their own crises.
Once order was lost, chaos quickly followed. With nearly the entire population caught up in stock speculation, many people burdened by massive debts committed suicide, while those too afraid to take their own lives turned to robbery and looting. The entire society fell into turmoil.
Tokyo, being Japan’s largest city, naturally became home to the most powerful yakuza families. The last rays of the setting sun still painted the sky with streaks of red, while streetlights and neon signs from shops began to glow, trying to block the encroaching darkness. Yet the streets were now nearly empty. Ever since the stock market downturn, robberies had driven pedestrians to stay indoors. With no extra money for spending, the once-bustling streets now lay eerily deserted.
At this moment, a black BMW sped down the deserted street. When it reached the outskirts, arriving at the Hejin family estate, Mu Lin, dressed as a ninja and holding a samurai sword, stepped out of the car and entered the largest yakuza family in Tokyo. As soon as he entered through the main gate, Mu Lin loudly announced, “Zhongdao Kang comes to visit the Hejin family!”
Hearing Mu Lin’s voice, the servants of the Hejin family stood stunned, unable to react even after he had entered the courtyard. As the most powerful yakuza family in Tokyo, the Hejin family had not faced any open challenges for decades. Normally, even the slightest disrespect near their gate would provoke their men to publicly teach the offender a lesson, with no one daring to object.
Because of the Hejin family’s overwhelming financial strength, they could invest heavily in training their subordinates, making their power unmatched by any other family. As for how many strongholds the Hejin family had in Tokyo, no one could say for sure—only the head of the family knew the full count.
Out of fear of the Hejin family’s deep and unpredictable power, no one dared to challenge them openly. However, this time, the Hejin family and other major yakuza clans had lost nearly all their assets in the stock market crash. Each family was now preparing to return to their old criminal trades to raise funds and repay bank loans.
But Japan was only so large, and even though Tokyo was an international metropolis with a relatively large population, the massive losses suffered by each family meant that the local market could only support one family in the short term—nowhere near enough for the seven major families. Since the Hejin family controlled nearly two-fifths of the market, they aimed to monopolize it completely. The other families, in turn, began forming alliances to divide the market among themselves.
No one dared to start a conflict first—whichever family made the first move would immediately become the target of all others and likely be the first to fall. Secret mobilization orders had already been issued at all Hejin strongholds, ready for immediate combat. No one could have imagined that someone would dare to challenge the Hejin family, the top family in Tokyo. The servants stood frozen in shock, staring blankly as Mu Lin’s voice echoed through the courtyard.
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