Chapter 72: The Yen Depreciates
After Tang Caidie left, Lu Liang turned on his computer to browse the day’s financial news from around the globe.
He only glanced at the domestic stock market—it was another straight plunge. Retail investors were suffering massive losses, oscillating between cursing and praying for intervention from Xiao, the regulator they had once denounced.
Zhongxin Fuying and 12 Futian Road were ruthlessly dumping shares every day. Over ten billion had already been sold, with no signs of stopping.
Stock prices had plummeted from 48.25 yuan, dropping three consecutive limit-downs to 35.19 yuan, incurring a net loss of 1,306 yuan per lot.
Retail investors’ meager profits had been wiped out, leaving them worse off as they were bled dry by the relentless sell-offs.
What made it worse was that these bottom-level dumps prevented even those wanting to cut their losses from selling out.
"Just endure a bit longer—two more days at most," Lu Liang muttered to himself.
He was also losing millions daily, but having made significant prior gains, he remained unfazed.
He pulled up a chart of Japan’s consumption tax hikes over the past 20 years, pondering its implications.
Once, Japan had boldly declared plans to sell off Tokyo and buy America, only to be severely crushed by the U.S.
Since then, its economy had stagnated for over two decades. Prices and taxes rose incessantly—everything except wages.
The last time the consumption tax increased, from 3% to 5%, was in 1997 when the Thai baht’s collapse triggered a financial crisis that swept across Asia.
"Eighteen years without a hike—will they raise it now?"
Lu Liang considered the possibilities. If they did, it would definitely be bearish for the yen, creating an opportunity to short it.
If not, it would benefit the yen, and shorting would pit him against the market.
After analyzing historical data, Lu Liang pulled up the yen-to-dollar exchange rates from the past few years and suddenly chuckled.
Four years ago, a natural disaster and a man-made crisis had opened the floodgates for the yen’s decline.
Back then, one U.S. dollar was worth 79 yen. Now, it was worth 108 yen.
For a national currency, a 37.5% devaluation over four years was catastrophic.
It was akin to someone earning 3,000 yuan a month.
Four years ago, a bottle of soda cost 3 yuan; now, it cost 4.12 yuan.
Previously, they could buy 1,000 bottles; now, only 728.
The cost of producing the soda hadn’t changed. The 272 bottles that “disappeared” were the result of currency devaluation—a clear sign of inflation.
After careful thought, Lu Liang decided to go for it.
The yen’s depreciation was an irreversible trend. While disasters and crises acted as triggers, the real cause lay in Japan’s aging and shrinking population. 𝐫𝐚ΝȯꞖƐṧ
Children were the foundation of any economy. From conception to college graduation, at least 20 years of expenditure without revenue were required—stimulating countless industries along the way.
In contrast, the elderly, with their houses, cars, pensions, and medical insurance, had limited consumption needs, even failing to boost service industries like bathhouses.
Half an hour later, at Hongfa Apartments in Guangzhong Fifth Village, Su Wanyu stood at the door with her crutch.
Pulling up beside her, Lu Liang joked, “Do you need me to get out and open the door for you?”
Ever since their relationship had blurred beyond employer and employee, Su Wanyu seemed naturally dazed and a step behind whenever she interacted with him.
Hopping over to the passenger seat, she stowed her crutch and softly said, “I’d like to request a few days off.”