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Lira’s Crash Stuns Japan’s Mom-and-Pop Investors Again

  • Turkish currency drops as much as 12% against yen in Asia
  • Elevated longs suggest stop-loss selling for margin traders
Lira Tumbles as Turkey Inc. Rushes to Buy Dollars After Rally
Photographer: Jason Alden/Bloomberg
Updated on

The Turkish lira plunged as much as 12% against the yen, forcing Japanese investors to liquidate positions in one of their favorite emerging-market trades for the second time this year.

Much of the lira’s Monday sell-off happened about 7:20 a.m. in Tokyo, around when Japanese margin-trading firms typically start closing loss-making client positions. Net lira-yen longs held by margin accounts rose last week to the highest level since mid-June, according to data from the Tokyo Financial Exchange Inc.