About Our Founder Tokushichi Nomura | 9. Strengthened Firm's Financial Basis

In 1904, Japan went to war, in an attempt to the ambitions of Russia in Manchuria, theoretically part of the Chinese Empire but the object of fierce rivalry over control of its huge economic resources. The decision to settle the issue by force of arms had an important symbolic significance, for Russia was a European great power. Japan's challenge reflected confidence in her military and industrial strength, acquired in less than thirty years. Racial pride was also at stake. Victory, on land and at sea, was as total as it was generally unexpected. Although not immediately treated as such, Japan had become a world power.

Success in war acted as a powerful stimulus to the stock market, tempered only briefly by Japan's failure to have a war indemnity clause included in the terms of the Treaty of Portsmouth, signed in 1905. The boom peaked in January 1907, when the shares of the Tokyo Stock Exchange reached ¥780, having stood at ¥165.95 in May 1905. Total trading volume for 1906 went over 10 million shares for the first time. By then, Nomura's sales had increased to such an extent that the decision in 1904 to build a bigger office proved well justified. The company moved to the new premises in 1906.

In 1907, Japan's stock market continued to flourish. Shinnosuke approached the market aggressively during this period and then, sensing that a major turnaround was at hand, reversed his position and began selling as the market approached its height. In the second half of January 1907, the market plunged dramatically. Whereas many brokers suffered very badly in the ensuing weeks, Shinnosuke emerged from the fall with significant gains and thus further strengthened his firm's financial basis.