Eri nodded.
"The experts at the station analyzed it the same way. They said the most sensitive issue right now had nothing to do with the Korean won exchange rate. It was all about counterparty risk. Hokkaido Takushoku Bank had collapsed, and local banks were now guarding against one another like thieves. Yamaichi had gone under, and the credibility of all those small and mid-sized securities firms beneath it had completely crumbled. I heard from Father that forty percent of them were close to failing."
"Japan was South Korea's largest creditor." Nakayama Takuya placed the remaining oranges into the fruit bowl. "If South Korea defaulted, Japanese banks and trading companies would all have to set aside bad-debt provisions. But South Korea not repaying its debts was secondary. What they feared more now was a peer beside them suddenly blowing up. That was what could truly kill them."
The television switched to a foreign-exchange market chart.
The yen-to-dollar exchange-rate curve had plunged all the way down, breaking through the 128 mark and hitting a five-year low.
"The yen has fallen too hard." Eri watched the green line. "A few months ago, it was still at 115. When I went to the supermarket today, imported beef had gone up in price again."
"A fall was normal." Nakayama Takuya took a tissue and wiped his hands. "With the Korean crisis making such a huge scene, all the money was fleeing into dollars for safety. On top of that, several huge bombs had exploded in a row at home, and even Japan's own sovereign credit was being discounted. International capital wasn't stupid. The exchange rate followed Japan's own bad assets. Whether South Korea was rescued or not wouldn't have much impact on the yen."
Eri sighed.
"The mood outside is truly terrible right now."