Turkey's Next Headache: Tokyo Traders' Lira Long Positions

Speculators selling may prompt individuals to follow: Gaitame
Thin liquidity, Monday morning after vote is a risk: Fujitomi

A selection of Turkish Lira banknotes sit on a table in this arranged photograph in London, U.K., on Thursday, Dec. 13, 2018. After being overtaken by Turkey's lira in May, the South African rand’s one-week implied volatility against the dollar is now a hair’s breadth away from regaining the top spot.Photographer: Simon Dawson/Bloomberg

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By Hiroko Komiya and Yumi Teso

March 29, 2019 at 6:05 AM UTC

This article is for subscribers only.

After a roller-coaster ride in its markets, the latest headache for Turkey may come from investors miles away: Japanese retail investors.

Japanese margin traders’ long positions in the lira versus the yen totaled at 317,283 as of March 28, according to data from the Tokyo Financial Exchange Inc. That’s higher than the 288,563 contracts on Jan. 2, the day before the so-called “flash crash” at the start of the year when the yen’s sudden surge sent currencies across the world to a tailspin. The Turkish currency slumped as much as almost 10 percent against the Japanese counterpart on Jan. 3.