Despite the Japanese government's request, the media continued to report daily on the losses of the public pension fund. Public dissatisfaction also showed no signs of subsiding.
Japan continued to threaten a strong response and requested assistance from the United States and the international community. However, everyone's reaction was lukewarm.
It is true that OTK Company profited by exploiting a mistake, but making the mistake in the first place was wrong.
This time, the amount is large, so it became an international issue, but minor order errors happen frequently in the financial world. Unless Japan had actively taken measures against the mistakes of foreign financial companies in the past, it's natural that no one would take their side, since they remained silent when they profited but are now raising their voices when they are losing.
The US government ignored them, and the Korean government made it clear that it would not get involved in this incident.
Unlike Japanese politicians who were denouncing them every day, most Korean politicians were reluctant to even mention this incident. Because they saw the approval rating of the Liberty National Party plummet with just one statement from Party Leader Yeon Nakyeong, and because of the "lesson learned" from Kang Jin-hoo in the past.
Prime Minister Okazaki gritted his teeth.
"It was easier when President Park Si-hyeong was in office."
He was someone who understood the importance of Japan-Korea relations well. Because of this, he accepted Japan's proposal to cover up past issues and cooperate.
That's how the comfort women agreement was signed, and South Korea no longer raised the comfort women issue in the international community. Furthermore, regarding the forced labor compensation issue, he cooperated with the Chief Justice of the Supreme Court and took the approach of continuously postponing trials. The goal was to avoid issuing a ruling at all.
However, everything changed when the government changed. President Heo Chang-min overturned the comfort women agreement that had been agreed upon by the previous administration. And the Korean judiciary ruled that Japanese companies must compensate for forced labor.
If Lee Jung-hye had become president after Park Si-hyeong, she would have somehow taken action for Japan's sake.
But thinking about it, Kang Jin-hoo is the reason why Lee Jung-hye didn't become president. Kang Jin-hoo is also the one who nurtured CarOS, a competitor to Japanese automobile companies.
So, they have been making Yoshizawa Masao's death an issue and fueling public criticism, but, of all things, 14.97 million shares of Toyota stock went into his hands!
Rumors began to spread that Zhou Auto's side had contacted Kang Jin-hoo. The fact that neither side denied it made it highly likely to be true.
If Zhou Auto acquires 10 percent of Toyota's shares, it is clear that they will actively intervene in management.
This is the worst-case scenario for Toyota and the Japanese government.
If Kang Jin-hoo has any sense, he wouldn't hand over the shares to Zhou Auto…
'I wish I knew what this guy is thinking!'
***
Despite Party Leader Yeon Nakyeong's explanation, criticism towards the Liberty National Party did not stop.
Eventually, in just one day, Leader Yeon Nakyeong retracted her statement and officially apologized. While doing so, she once again spouted nonsense, saying that various interpretations could exist for individual incidents.
Taek-gyu, watching the scene on TV, asked.
"Why does that party always side with Japan like that?"
I said, skimming through the Japanese economy data that noona Hyun-joo had given me.
"It's not like the Liberty National Party valuing Japan-Korea relations is a new thing."
When Park Si-hyeong made the comfort women agreement with Japan, the Liberty National Party was the ruling party. To the victimized grandmothers who were protesting and saying they could not accept the agreement in anger, Representative Yeon Nakyeong said that it was an excellent agreement that advanced Japan-Korea relations and that it should be accepted from a broader perspective.
Furthermore, when the fact that the previous administration had continuously postponed the forced labor compensation trial through judicial deals with the Chief Justice of the Supreme Court was revealed, they defended it, saying it was an appropriate measure considering Japan-Korea relations.
But now, when this incident has occurred, they are saying that our citizens should understand the feelings of the Japanese citizens, so it's no wonder the public is furious.
"Isn't it just because they don't want to side with you?"
"Well…"
That might be part of it too.
"It's true that Japan is an important partner for Korea. Leaving aside everything else, we can't disregard Japan's economic power. Japan is the only country that has chased the US economically right up to its heels."
From the fact that subculture markets like games and anime are so developed, it's clear how strong Japan's economy is.
"Why did such a successful country fall into a long-term recession?"
"Because of the Plaza Accord."
In 1985, the United States, no longer able to tolerate the trade deficit, forced the yen to appreciate through the Plaza Accord. As a result, the Japanese economy faced difficulties due to decreased exports, and the government eased interest rates and loan regulations to stimulate the economy.
The liquidity supplied to the market in this way drove up asset prices. Real estate and stocks skyrocketed. House prices in downtown areas rose tenfold, and the stock market also soared, with the Nikkei index soaring to just before 40,000 from below 10,000.
"At the peak of the bubble, there was even talk of being able to buy the entire United States by selling Tokyo."
Taek-gyu nodded, as if he had heard of it.
"There was such nonsense."
It sounds ridiculous now, but back then, everyone believed it was possible.
However, bubbles always burst.
When the central bank, concerned about overheating the economy, started raising interest rates and recovering liquidity, the bubble collapsed in an instant. Real estate plummeted, and people who bought houses with loans were burdened with debt. The Nikkei index also fell back below 10,000, and financial institutions went bankrupt one after another.
From this point onwards, the Japanese economy effectively fell into a state of deflation.
Deflation, where prices continuously fall, is nothing short of a disaster for the economy. As product prices fall over time, there is no reason to consume immediately.
If everyone postpones consumption, products do not sell, and since products do not sell even if they are made, companies reduce investment, employment, and production. Workers become insecure about employment and income, which in turn reduces consumption, repeating a vicious cycle. (The most representative deflation in human history was the Great Depression. Due to this experience, when the global financial crisis broke out, the United States prevented deflation by frantically spreading dollars as if dropping money from a helicopter.)
Amid the recession called the Lost Decade, Prime Minister Okazaki ran for prime minister with a pledge to revive the Japanese economy and won.
Although there have been several attempts to escape the recession, the reason for their failure was that they were prescribed in stages and passively.
So, he proposed a method of simultaneously implementing monetary policy, fiscal policy, and structural reforms.
This economic policy was called Okazakinomics, or the Three Arrows. One arrow is easily broken, but three arrows are not easily broken.
Prime Minister Okazaki even replaced the Bank of Japan Governor who opposed him and put the plan into action.
He printed and supplied yen without limit, the government borrowed money and invested in social overhead capital (SOC), and he embarked on regulatory reforms and structural improvements.
"In a word, it's quantitative easing."
"What exactly is quantitative easing?"
"It's a term that wasn't originally used in traditional economics."
Governments use various means to prevent overheating and recession of the economy. The most representative of these is controlling the money supply.
The way to control the money supply is through interest rates. Raising interest rates brings money that was circulating in the market back to banks, reducing the money supply, and conversely, lowering interest rates not only encourages people to withdraw money from their bank accounts but also to take out loans, releasing money into the market.
What if you need to keep increasing the money supply to prevent a recession, but interest rates are 0 percent, so you can no longer lower interest rates?
This is where the concept of quantitative easing comes in.
The central bank prints money and directly supplies currency to the market by purchasing government bonds and corporate bonds with that money.
"No matter what, the core is ultimately yen depreciation."
By printing and releasing unlimited amounts of money into the market, the value of the yen naturally fell.
There are three main reasons why this was possible. First, Japan has a large economy and the yen has the status of a quasi-key currency in the international community. Second, Japan was in deflation, so there was no need to worry about inflation no matter how much money was released. Third, the United States tolerated it.
"Who benefited from the weak yen?"
Taek-gyu immediately replied as if there was no need to think about it.
"Otaku?"
"That's right. Otaku… Huh?"
Why are otaku coming up here?
"Because Japanese travel and Japanese goods became cheaper due to the weak yen. Thanks to that, you could enjoy richer otaku activities with the same amount of money."
"..."
Listening to him, it's true. Otaku activities are greatly influenced by exchange rates.
"Otaku are otaku, but automobile companies benefited the most."
They lowered the yen from 100 yen per dollar to a maximum of 115 yen. This means that if you sell goods at the same price overseas, you will generate 15 percent more profit.
As price competitiveness increased due to the weak yen, Toyota and Honda lowered prices and increased sales volume, and profits exploded.
As Japanese automobile companies flourished, the sales volume of automobile companies in other countries decreased.
The weak yen is actually a way to manipulate exchange rates to increase Japan's exports. In this case, other countries with overlapping export industries are inevitably harmed.
Therefore, this is also called a beggar-thy-neighbor policy. Korea, China, Germany, and others who were harmed criticized Japan, but Japan is still not stopping quantitative easing.
In any case, thanks to this, the Japanese economy escaped from its long-term recession and entered a recovery phase. The Nikkei index, which had been hovering around 8,000, soared to over 20,000, and inflation also slightly increased, escaping chronic deflation.
This is the reason why Prime Minister Okazaki's approval rating remains strong despite various scandals.
"Japan and Germany have the 3rd and 4th largest economies in the world, but they are not on the list of permanent members of the Security Council. What's the reason?"
"Is it because they are both Axis powers?"
"Correct."
The Peace Constitution, which stipulates the renunciation of war and the prohibition of possessing an army, is like shackles placed on Axis power Japan.
So, based on his strong approval ratings, Okazaki has stepped forward to revise Article 9 of the Constitution (Peace Constitution), which prohibits war and possession of an army.
Abolishing the Peace Constitution meant that Japan would end the post-war regime and return to being a normal nation. And normal nations must have military power commensurate with their economic power.
Currently, East Asia is in a delicate balance of power between China, Russia, South Korea, North Korea, and Japan. But what if Japan embarks on rearmament?
Japan is one of the United States' most important allies. From the US's point of view, there is no reason to stop Japan from strengthening its military power with its own money. (In this case, they will naturally buy US weapons.)
The problem is the surrounding countries.
Will China and Russia just stand by and watch Japan rearm? Naturally, these countries will also increase their military spending, and then Korea will have no choice but to follow suit.
Korea already has high defense spending compared to its economic power due to North Korea. If all of East Asia enters an arms race, it will also take an economic hit.
"Well, setting aside those problems, we will continue to clash with them in the automotive industry."
Prime Minister Okazaki not only encouraged exports through the weak yen, but also spared no support for the automobile industry.
2.3 trillion yen.
It is a huge amount of money, larger than the market capitalization of most large companies, but as Finance Minister Matsukata said, it is only 1.5 percent of Japan's public pension fund, and a drop in the ocean compared to Japan's astronomical economic scale.
This level will not significantly damage the Japanese economy.
But…
"It will certainly damage Prime Minister Okazaki."
***
Foreign Minister Okamoto Takeo of Japan arrived in Korea.
The Ministry of Foreign Affairs of Japan is like the Ministry of Foreign Affairs in our country. And the Foreign Minister is the Minister of Foreign Affairs, who oversees all Japanese diplomats.
This was his first visit to Korea.
As soon as Foreign Minister Okamoto got off the plane, he headed straight to the OTK Company headquarters.
"Okamoto, that's a name that seems familiar to men and women around the world."
"Well…"
If you go by that logic, condoms are also named after a person.
Protesters had gathered again in front of OTK Company. This time, it wasn't conservative groups, but comfort women victims and forced labor victims groups.
Taek-gyu gave instructions, and the cafe staff on the first floor of the building quickly came outside and handed out tea and blankets.
Despite the cold weather, comfort women grandmothers and forced labor victims grandfathers also came out in person. The reason they gathered was to demand an apology.
Foreign Minister Okamoto is the very person who led the Japan-Korea comfort women agreement. However, once the agreement was reached, he continued to make statements minimizing the issue or denying Japan's responsibility. At the same time, he loudly told the Korean government to responsibly implement the agreement.
After the comfort women agreement was overturned and the forced labor compensation ruling was issued, he began to spew truly trash-like insults without hesitation.
From the victims' perspective, it was an act no different from rubbing salt into an open wound.
When I was told that Foreign Minister Okamoto was almost arriving, I went out to the front gate myself to greet him.
I could see the protesters gathered, and hundreds of police officers standing in front of them blocking them. If something were to happen to the Japanese Foreign Minister, it would become a diplomatic issue.
Dozens of cameras were set up on one side. It looked like major domestic and international media outlets were all there.
Shortly after, three black Toyota vehicles arrived. Amidst the shouts and cries of the angry protesters, Foreign Minister Okamoto got out of the car. A translator was with him.
"Thank you for coming all this way."
Foreign Minister Okamoto smiled as if he was glad to see me.
"Not at all. I am grateful to you for making time for me."
We shook hands warmly in front of the protesters watching.
"But what brings you to Korea?"
He said.
"Let's go inside and talk about the details slowly."
I shook my head.
"We're both busy, so there's no need for that. I roughly understand why you came, so I'll speak first to save you time."
I summarized the insults he had hurled and threw them right back at him.
"The ruling of the Japanese Supreme Court is final and irreversible. If you continue to pressure us like this despite the court's ruling, who will trust and trade in the Japanese stock market? I will not return a single share, in accordance with the Japanese court's ruling. Isn't a promise supposed to be kept?"
As the translator conveyed the words, Foreign Minister Okamoto's expression hardened.
Indeed, where would the Japanese Foreign Minister have received such treatment? It's only because it's me that I'm treating him like this.
If OTK Company were a Korean company, it wouldn't have been easy to do this. But we are an American company. And we have legitimacy on our side.
I personally reopened the closed car door for him.
"If you have nothing more to say, you can go back now."
He got into the car as if nothing had happened. But as the car door shielded him from the cameras, he glared at me and said.
"You will regret this."
I lowered my body to avoid being caught on camera and said in English.
"You're not the first person to say something similar to me. President, Prosecutor General, Vice Chairman of Zhou Auto, Chinese Minister of Commerce, and so on. Aren't you curious about what happened to those people now?"
"..."