Using global market data released by Dow Jones on February 13, 2016, this essay demonstrates that the Tokyo Stock Exchange suffered an exceptionally severe decline. The figures support the hypothesis that only a state actor with massive foreign-exchange reserves—such as China—could have executed such a targeted and sustained market collapse.

February 13, 2016

The following is an article distributed to the world today by Dow Jones.

Here as well, readers will know that my commentary—this time, my hypothesis—was one hundred percent correct.

…I myself was astonished. The numbers—that is, the facts—vividly prove who was targeting the Tokyo Stock Exchange. As I have repeatedly stated, among the world’s markets, the TSE is the easiest and most arbitrarily manipulable. By driving the yen higher through currency futures and forcing stocks sharply lower through Nikkei futures, one can trigger a massive collapse of the TSE with just these steps.

Moreover, Japan’s elite—raised on Asahi Shimbun—have long looked down on stock markets. As a result, roughly 70 percent of daily trading volume on the TSE is dominated by foreign capital. In other words, Japan has allowed its market to exist as one that foreign capital can manipulate at will. For anyone seeking to move it arbitrarily, pushing the yen into rapid appreciation and plunging the stock market into collapse is easier than twisting a baby’s arm.

However, to realize such a collapse on the scale seen this time—to carry it through to completion—would be impossible without a country like China, which holds the world’s largest foreign-exchange reserves, that is, vast amounts of dollar-denominated cash.

Funds on the scale of George Soros alone could not bring about a collapse of this magnitude.

My hypothesis that it was the Chinese government accomplished everything. They prevented Chinese tourists visiting Japan during the Lunar New Year from engaging in their usual “explosive buying.”

Whether in nuclear power or railways—fields in which Japan is China’s greatest competitor—China drove the yen sharply higher by an extraordinary ten yen in just ten days, effectively pushing the yuan lower. During the Lunar New Year holiday, this dramatically boosted the international competitiveness of Chinese products. The enormous foreign-exchange reserves that had flowed out due to U.S. interest-rate hikes were also recovered as massive cash through the completion of the TSE collapse.

The facts below clearly show that the TSE’s plunge was outstanding in its severity.

In other words, they prove that my hypothesis was largely correct.

Bold emphasis is mine.