She Bilked Japan’s Banks in the Run-Up to the Lost Decade - OZY | A Modern Media Company

She Bilked Japan’s Banks in the Run-Up to the Lost Decade

She Bilked Japan’s Banks in the Run-Up to the Lost Decade

By Nithin Coca


The story of the Dark Lady of Osaka encapsulates the excesses and absurdity of Japan’s bubble era.

By Nithin Coca

In 1991, a relatively unknown restaurant owner, Nui Onoue, was arrested and charged in what would become the single largest investment fraud case in Japanese history. Her story is one that encapsulates the absurdity of Japan’s 1980s bubble period, when the economy boomed and money was everywhere. Through means that remain mysterious even today, Onoue rose from a lowly hostess to become a powerful figure among investors and many far less savory characters. She was known as the Dark Lady of Osaka, a stock and investment savant who, at one time, was the single largest private investor in the entire country, worth an astounding $4.4 billion. 

Her story is an unlikely one, and little is known about Onoue’s early life. Born in 1930, she would have grown up during the heyday of Japan’s militaristic expansion across Asia, and then experienced the devastation of the war and the subsequent occupation by the U.S. Army. She moved to Osaka at a young age, and after years working as a hostess and waitress, she opened her own restaurant at the age of 35. It remains unclear how she received capital — some rumors suggest that Yakuza gangs, or crime syndicates, might have played a role. 

Gettyimages 453010194

The trading floor of the Tokyo Stock Exchange in 1990.

Source Gerhard Joren/Getty

Onoue’s role as Japan’s largest investor was quite a position for someone who was, legally, just an owner of a restaurant that wasn’t making any profit. Her wealth and intuition about stocks turned her restaurant into a key meeting point for many of Osaka’s richest and darkest figures. Onoue also regularly called on Buddhist and Shinto gods as investment aids and would sometimes hold religious sessions, mandating attendance for those seeking her advice. 

The ultimate lesson of Japan’s bubble is that all good things come to an end. 

At that time, many saw Japan’s rise and economic growth as unstoppable. In the 2007 Japanese movie Bubble Fiction: Boom or Bust, a modern girl travels back in time to witness hedonistic parties, people handing out money everywhere and unbridled optimism that Japan would always grow. To the protagonist, bubble Japan appears like an alien planet.

“Distortions in Japan’s financial markets were a key cause of the bubble’s formation,” says Motoshige Itoh, a Japanese economist at the University of Tokyo. “The particularly explosive bubble formed as the combined result of the myth of fast growth and emerging-country-type financial markets.”


If that sounds familiar, well, it should. Since the Great Recession ended, America’s economy has grown rapidly, if unevenly, for nearly a decade. The tech industry, in particular, has seen rapid growth with companies like Google, Facebook and Microsoft now among the most valuable in the world. A lot of this is being driven by the availability of cheap capital, most notably from venture capitalist funds run by charismatic figures, and it’s seen companies like Uber — which have not only never made a profit but lost tens of billions of dollars — valued at $82 billion in May, despite losing $3 billion in 2018. China, too, is in a massive real estate bubble, and critics point to millions of empty homes as proof that it can’t last forever. 


It remains unclear how Nui Onoue received capital — some rumors suggest that Yakuza crime syndicates might have played a role. 

Source Tokyo Television

The ultimate lesson of Japan’s bubble is that all good things come to an end. When the economy crashed in late 1991, it was sudden and painful. The Nikkei 225 stock market index fell from a high of 38,915 points to just 14,309 in less than a year. 

“In the decades since Japan’s bubble burst … the economy has been in poor health,” says Itoh. “It has encountered successive financial crises, experienced price deflation for the first time since World War II and seen the public debt mushroom, all the while limping along at a very slow growth rate.”

The 1990s would be called the lost decade, as the economy stagnated, wages fell and the dynamism of the ’80s faded until it seemed like a dream of another era. Real estate prices plummeted by 80 percent between 1991 and 1998. Only recently have they finally recovered to the level they reached in 1991, 28 years ago.

Onoue would crash from her lofty pedestal too. It turned out that she had used false certificates claiming deposits of over $2.5 billion as collateral to receive loans from some of Japan’s biggest banks, in what The New York Times in 1991 called “the largest ever [loan scheme] in Japan, and perhaps the world.” That was fine when the economy was booming. But the bust meant she could no longer pay her debts, leading to bankruptcy, a court case and her eventual jailing for 12 years on fraud charges.

Onoue’s end was as quiet as her start. Her death, in 2014, likely took place in prison but was not reported in the Japanese media. The Dark Lady of Osaka spent the last years of her life in obscurity — a far cry from when she was at the center of one of the greatest economic expansions the world has ever seen.

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