[4] As Nagasaki grew from a fishing village to a bustling community of Jesuit missionaries and Portuguese traders, its autonomy and religious influence eventually drew the ire of the top powers of Japan.

In 1608, a red seal ship belonging to the Hinoe daimyō Arima Harunobu weathered in Macau after coming back from Cambodia to fetch a cargo of agarwood, intending to winter there until the monsoon of 1609.

The Jesuits and the Bishop of Macau intervened as Pessoa prepared to storm the second house, and the Japanese there, numbering around 50, were induced to surrender on the promise of life and freedom.

However, Pessoa had the suspected ringleaders strangled in jail, while the rest were allowed to leave Macau after signing an affidavit absolving the Portuguese from all blame.

[11] This carrack, variously called the Nossa Senhora da Graça (Our Lady of Grace) or the Madre de Deus (Mother of God),[12] left Macau on May 10, six weeks ahead of schedule, because its captain, André Pessoa, heard from Malacca that the Dutch were planning to attack his ship.

[15] Van den Broeck, with Jacques Specx in tow, set sail on May 10, stopping by Patani to get a supply of some silk, pepper, and lead to trade in Japan.

As it happened, the Dutch only missed the Nossa Senhora da Graça by two days since Pessoa sailed right into a monsoon that carried the carrack way to the south, offsetting his early lead, and landed in the harbor of Nagasaki on June 29.

When all the merchants and merchandise were unloaded, Hasegawa paid the Portuguese scant courtesy and bought all the best silk at low fixed prices, ostensibly on behalf of the retired shōgun Tokugawa Ieyasu.

[17] For reasons not entirely clear, Hasegawa and his colleague, the daikan Murayama Tōan, showed hostility to the Portuguese traders at this time, whereas previous relations had been amicable.

[19] Hasegawa and Murayama complained to Ieyasu of Portuguese insolence, pointing out that they acted with virtual extraterritoriality in Nagasaki and accusing them of hiding the best silk to sell in the black market for higher prices.

Hasegawa explained that while Ieyasu was mindful of the truculent behaviors of the Japanese abroad, he would be forced to take his compatriots's side as a matter of principle if the issue was brought up officially.

[22] In any case, Honda, with authorization from Ieyasu, gave Pessoa's envoy written assurances that Japanese sailors would be forbidden to travel to Macau, and any who did could be handled according to Portuguese laws.

[26] In September 1609, the Japanese survivors of the Macau affair of 1608 returned to tell their version of events to their lord, Arima Harunobu, and the news was reported to Ieyasu.

Hasegawa drew up a lengthy report taking the side of Arima, who wanted revenge for his men, saying the Portuguese had obtained the Macau affidavits under duress and should be considered void.

The final push Ieyasu needed came unexpectedly when a Spanish ship sailing from Manila to Mexico was wrecked off the coast of eastern Japan in the same month.

When Ieyasu received the Spanish survivors in his court at Sunpu, he asked their leader Rodrigo de Vivero y Aberrucia, the newly replaced governor of the Philippines, if the Spaniards could supply the bulk of silk imports to Japan like the Portuguese.

[26] Ieyasu, now convinced that he could replace the Portuguese merchants with the Spaniards, the Dutch, and his red seal ships, ordered Hasegawa and Arima to arrest Pessoa at all costs.

Still, due to the large size of the cargo, the ship was not ready to sail until after New Year's Day in 1610, whereas previous Macanese vessels usually returned before Christmas.

[28] Before they struck, Arima, Hasegawa, and Murayama jointly sent a message to the Jesuits justifying their impending attack on the carrack with the fact that Pessoa was trying to escape Japanese justice.

[28] At night, Arima's armada of junks full of shouting men approached the Nossa Senhora da Graça unlit and quiet in stark contrast.

[32] During the third day, Arima sent a message to Pessoa that he wished to renew negotiations about the silk prices and was willing to send hostages aboard to prove his sincerity, provided that the carrack stayed where it was.

Pessoa, in return, demanded the sons of both Arima Harunobu and Murayama Toan and that he be allowed to take the ship to the neighboring anchorage of Fukuda, where he could wait for favorable winds to go back to Macau.

)[37] In March 1610, Hasegawa told the leaving merchants to "not cut the thread of trade, but arrange for at least a small vessel to come this year, and the Great Ship the next, when all would be well.

The Nossa Senhora da Graça incident made Ieyasu and his successors move away from their earlier toleration of the Portuguese in favor of the Dutch.

Harunobu felt that his efforts during the Nossa Senhora da Graça incident warranted further rewards – namely the return of territory in Hizen that was taken from the Arima during the Sengoku period.

[43] When the Nossa Senhora da Graça sank, its cargo mainly consisted of about 3000 piculs of unsold Chinese silk and 160 crates of silver bullion; altogether, the total loss was estimated at more than a million in gold.

Recovery efforts have persisted from the night of the sinking—when 200 floating baskets of silk were picked up with grappling hooks—right down to modern times, but most of the treasure caches have yet to be found.

[45] Modern attempts from 1928 to 1933 found another cannon (now placed at the front door of the Tenri Central Library in Nara), two iron helmets, an anchor, some oyster-shell window panes, and an astrolabe, among other artifacts.

As such, stories of the event were told and retold again over the next hundred years, often in an exaggerated and wildly inaccurate manner, and found themselves embedded as part of local folklore.

[48] A direct reference to the event can be found in 1808, during Japan's period of self-imposed isolation, when the Royal Navy frigate HMS Phaeton entered Nagasaki harbor to ambush two Dutch merchant vessels that were expected to arrive in an offshoot of the Napoleonic Wars.