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CH202 | GSI
🕑 Added 2025-03-09 05:28:27 +0000 UTC[Tokyo, Chiyoda Ward, Ministry of Finance.]
When Sato Kazuya, the Minister of Finance, entered the ministry's lobby in a dark suit accompanied by his aides, the waiting reporters swarmed towards him.
They thrust their microphones forward, bombarding him with questions.
"It has been revealed that Nippon Life Insurance suffered a foreign exchange loss of 400 million dollars following Nissan and Sony. Could you comment on this?"
"What is your opinion on the current situation?"
"What measures will the Ministry of Finance take against Eldorado Fund, which sold derivative options?"
As the noisy barrage of questions continued, the seasoned politician Sato calmly scanned the surrounding reporters, straightened his shoulders, and began to speak.
"The Ministry of Finance and the Cabinet recognize the gravity of the situation and have decided to conduct an urgent safety inspection and fact-finding investigation into the currency option products that have caused massive losses to domestic companies. Furthermore, we will thoroughly examine whether Eldorado Fund adequately explained the potential losses when selling high-risk derivative financial products and whether there were any legal violations. If any issues are found, appropriate penalties and sanctions will be imposed."
An NHK reporter quickly pushed his microphone forward and asked,
"Does that mean legal action could be taken against the foreign-based Eldorado Fund?"
"Of course. Even if they are foreign-based, they must face punishment if they have violated domestic laws."
When Sato answered firmly, another reporter swiftly asked,
"Is the travel ban imposed on Eldorado Fund executives, including Manager John Porter, a preemptive measure?"
"That's correct."
Sato answered curtly and gave a subtle glance to his aide.
The aide stepped forward, spreading his arms to block the view.
"The Minister has work to attend to, so this will be the last question."
"Will there be any relief measures for the affected companies?"
"Just one more comment, please!"
"Minister! Minister!"
Despite the reporters' persistent questions to extract more information, Sato lightly waved his hand and walked towards the elevator.
"How was it?"
"As always, you answered skillfully."
Satisfied with the aide's response, Sato smiled contentedly.
Sato's deliberate appearance before the press with a firm attitude was undoubtedly aimed at the new Cabinet formation next year.
While there was an intention to deflect the public's criticism toward the Cabinet, the more crucial goal was to shape his public image.
'With the resignation of the Prime Minister and the entire Cabinet already a foregone conclusion following the defeat in the House of Councillors election last July, it's better to switch to another ship than go down with this sinking one.'
The current Cabinet was set to remain in place until next year, as the Liberal Democratic Party's request for an extension was driven by the reluctance to take over power amidst the aftermath of the Kobe earthquake and the Tokyo subway sarin gas attack.
Not wanting to inherit the mess and take the blame, they left the difficult cleanup to the current Cabinet.
Aware of these dark motives, Sato smirked and muttered,
"Crafty snakes."
"Excuse me?"
“It’s nothing.”
Replying as if to dismiss any concern, the attendant refrained from asking further and straightened his posture.
The Liberal Democratic Party's (LDP) attempt to use the current cabinet as a scapegoat was despicable, but Minister Sato was in no position to criticize — he had been secretly liaising with the LDP despite the cabinet still being intact.
‘He was originally a member of the LDP before briefly breaking away. No one would blame him for returning to his original party.’
With that thought, Minister Sato justified his actions.
Although the election had been won, the LDP failed to secure a majority — making this the perfect time to leverage his position and negotiate his return at the highest price.
‘If I play my cards right, securing a spot in the next cabinet won’t be difficult.’
Sato imagined himself reclaiming the coveted position of Minister of Finance, stepping out confidently as the elevator doors opened.
As he walked down the carpeted corridor into the antechamber, the staff working at their desks quickly stood and greeted him.
“Welcome, Minister.”
“Hmm.”
With a curt nod, Sato acknowledged them in his usual arrogant manner — until he spotted Vice Minister Okawara among the staff. His eyes gleamed as if he'd found the perfect opportunity.
“I was about to summon you. This works out well. Follow me.”
“Yes, sir.”
Okawara followed Sato into the minister’s office.
After unbuttoning his jacket and taking the top seat on the sofa, Sato gestured for Okawara to sit.
“Please excuse me.”
Okawara took the vacant seat on the right.
Leaning back, Sato asked,
“How’s the investigation going?”
“We’ve summoned Eldorado Fund officials for questioning and are analyzing the seized materials, but we haven’t found any solid evidence yet.”
Noticing Sato’s displeased expression, Okawara quickly added,
“However, we're considering shifting our approach — arguing that the options contract was unfair from the outset due to its profit-loss structure.”
“Hmm... Is that so?”
Sato sat up, showing interest.
“Explain your plan in detail.”
Relieved by Sato’s response, Okawara straightened his posture and began explaining calmly.
“The structure of the derivative shows that if the exchange rate moves within the contract range, the maximum profit rate is less than 15%. However, if the upper limit is breached and the knock-in option is triggered, losses can exceed 400%.”
Sato’s eyes gleamed.
“That’s an incredibly one-sided contract.”
“Exactly. We plan to focus on this point to pressure Eldorado Fund.”
“Good. If we frame it that way, we can definitely charge them with illegal practices. They’ll face fines, administrative sanctions, and possibly criminal penalties.”
Hearing Sato's low chuckle, Okawara nodded in agreement.
“It won't be easy, but I believe it's possible.”
The two men’s judgment completely disregarded the inherent characteristics of derivatives, where the probability of profit is reflected in the yield rate.
At the time Japanese companies had signed the option contracts, the likelihood of the dollar-yen exchange rate surpassing 100 yen was extremely low.
Therefore, in a high-probability yen appreciation trend, the yield rate would naturally be low — while in the event of a yen depreciation, the corresponding losses would inevitably be much greater.
However, such rational explanations meant nothing to Sato. He was simply pleased to have found a pretext to latch onto.
With a satisfied smile, Sato praised Vice Minister Okawara in a gentle voice.
“You’ve come up with an excellent approach. I’m quite pleased.”
“I’m glad to hear that, sir.”
“Yes, yes. Keep it up.”
Just then, a knock at the door interrupted their conversation. An attendant from the antechamber entered cautiously.
“Pardon me for interrupting.”
“What is it?”
Annoyed by the sudden disturbance, Sato snapped curtly.
“It’s a call from U.S. Secretary of Commerce Vincent.”
Both Sato and Okawara widened their eyes in surprise at the unexpected news.
“Patch him through immediately.”
“Yes, sir.”
As the staff member hurried out, Sato tilted his head slightly, muttering to himself.
“What could that man want out of the blue?”
It was highly unusual for the U.S. Secretary of Commerce to contact him without prior notice — Okawara, too, looked puzzled.
Moments later, the telephone on the side table beside the sofa began ringing. Sato promptly picked up the receiver.
In heavily accented English, he greeted the caller.
“Hello.”
[Mr. Sato. It’s been a while.]
Sato instantly recognized Vincent’s voice.
They had crossed paths several times during U.S.-Japan automobile trade negotiations — failing to recognize him would have been far stranger.
“To what do I owe the pleasure of a direct call from the Secretary himself?”
Though slightly tense, Sato was a seasoned politician. His voice remained composed, betraying none of his unease.
However, Vincent’s blunt reply cut through the small talk.
[I believe you know the reason better than I do.]
A grimace crossed Sato’s face as a suspicion flashed through his mind.
“Is this about the Eldorado Fund?”
[That’s correct. We’re both busy men, so let’s skip the formalities.]
“……”
[Stop the unjust investigation and pressure against Eldorado Fund immediately.]
Frowning deeply, Sato struggled to maintain his composure.
“It seems there’s been some misunderstanding. We’re simply investigating Eldorado Fund’s unlawful practices through proper legal channels.”
[Do you really think we would make this call without first reviewing the contracts between Japanese companies and Eldorado Fund?]
Sato’s face hardened, his silence betraying the turmoil behind his expression.
[We’re fully aware that you're using Eldorado Fund as a scapegoat to appease public opinion. Let’s not escalate this any further.]
Unable to suppress his irritation, Sato snapped back.
“This is a blatant case of foreign interference in Japan’s internal affairs!”
[Isn't it the Japanese government that is applying unjust and discriminatory pressure on Eldorado Fund, an American company? This is a blatant disregard for the United States and a clear violation of the trade agreements between our two countries.]
Vincent’s voice grew sharper, pressing Sato even harder.
[If this continues, we will consider it a serious unfair trade practice that infringes on American interests — and we will take appropriate action under the Omnibus Trade Act.]
The moment those words reached his ears, Sato's heart sank.
The Omnibus Trade Act Vincent referred to included the notorious Super 301 Clause — a provision that authorized the U.S. government to impose harsh and discriminatory retaliatory measures against target countries.
If invoked, Super 301 could slap tariffs of up to 100% on certain goods, enforce import quotas, levy various surcharges, or even revoke existing trade agreements — all devastating measures for Japan’s export-dependent economy.
Sato's face turned deathly pale. Clenching the receiver tightly, he barely managed to speak.
“Would you really go that far... over a single fund?”
[The United States will not tolerate any infringement on its interests — no matter how small.]
“Hmm…”
Confronted with a far more uncompromising stance than he'd anticipated, Sato grimaced, letting out a low groan.
He hadn't expected the Americans to react so aggressively — and the sheer forcefulness of Vincent’s warning left him flustered.
[Neither of us wants U.S.-Japan relations to deteriorate — I trust you will make a wise decision.]
“Wait—”
Without giving him a chance to respond, Vincent abruptly hung up.
“Damn it!”
Seething with rage, Sato slammed the receiver down so hard it seemed like it might shatter.
“Goddamn Yankees!”
His chest heaved as he struggled to suppress his anger.
Seeing the mood, Vice Minister Okawara hesitated before cautiously breaking the silence.
“Was that… a protest from the U.S. regarding the Eldorado Fund case?”
Sato remained silent, his face twisted in frustration, before biting his lower lip.
“Forget what I said earlier about tying them up with the unfair contract angle.”
“Pardon?”
Okawara’s eyes widened in shock, but Sato refused to meet his gaze.
“If we drop the case immediately, we'll look like fools. Drag it out for a while... then quietly close it with no charges.”
“Are you serious, Minister?”
“Whatever trick they pulled... they're using Secretary Vincent to threaten us — what the hell can I do? Damn it!”
Sato exploded, his anger echoing through the room.
Sensing the storm in the air, Vice Minister Okawara quickly bowed his head, choosing silence over further provocation.
“Understood.”
With irritation etched on his face, Sato roughly yanked at his tie, loosening it with a sharp tug.
“We tried to shift public anger elsewhere… and now we've ended up with the blame on our own backs.”
TL/n -
In Japan, a ward (区, ku) is an administrative division of a city, similar to a borough or district in other countries. Wards are typically found in designated cities (政令指定都市, seirei shitei toshi), which are large cities granted special administrative status by the government.
Examples of Wards in Major Cities:
Tokyo has 23 special wards (特別区, tokubetsu-ku), such as Shinjuku (新宿区), Shibuya (渋谷区), and Chiyoda (千代田区). These function like independent cities with their own mayors.
Osaka has 24 wards, including Kita (北区) and Naniwa (浪速区).
Yokohama has 18 wards, such as Naka (中区) and Minato Mirai (港未来区).
Wards in Tokyo have more autonomy than those in other cities, where they are mostly administrative districts.
###
An Omnibus Act is a law that covers multiple, often unrelated, topics within a single piece of legislation. These acts are typically used to pass a large number of measures efficiently, rather than voting on each one separately.
Omnibus acts are commonly used in many countries, including Japan, Canada, and the U.S., for comprehensive legislative changes.
