Turkish Lira activity in Japan: Individual investors are taking Turkish Lira positions

Individual investors in Japan have turned toward the peso and the lira. According to Tokyo Financial Exchange Click 365 data, investors returning to high-yield currencies against the yen have seen their net short (sell) positions against the Mexican peso and Turkish Lira return to levels seen before "Black Monday."

According to a BloombergHT report, the data showed that positions betting on the rise of the TL against the yen have increased by 4 percent since August 5. Contracts had fallen by 17 percent on August 5, the day of the market crash also known as "Black Monday," due to the unwinding of carry trade transactions.

Carry trade is an investment strategy that involves borrowing in yen to invest in high-yield currencies. When the Bank of Japan (BOJ) raised interest rates for the second time on July 31, the Japanese yen gained value, and the resulting unwinding affected the markets.

Yoshio Iguchi from Traders Securities stated that individual investors are returning to carry trade transactions, but the recovery is slow. Emphasizing that "investors are returning to the market cautiously," Iguchi noted that leverage is low and risk is being kept under control.

As of August 21, 2024, 1 Turkish Lira is worth 4.31 Japanese Yen.

News Source: 12punto