BOJ Defeats Basci Cut as Lira Carry Trade Revives: Turkey Credit
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Turkish central bank Governor Erdem Basci’s efforts to weaken the lira are being undermined by stimulus from his counterpart in Japan as investors buy the Mediterranean nation’s assets in carry trades funded by the yen.
Investors who borrowed in Japanese yen and invested in lira-denominated securities earned 4.3 percent over the past month, outpacing all major emerging-market currencies in Europe, the Middle East and Africa. The lira strengthened for a fourth consecutive day today, while yields on two-year lira notes rose after dropping to a four-week low yesterday.