Flash-crash risks are back as Japan shutters for six-day holiday
straitstimes.com -- Jan 01
As Japan enters a six-day New Year break, a sense of anxiety over the possibility of another flash crash is gripping currency traders.

The Financial Futures Association of Japan has already warned of market instability as the holidays create a liquidity vacuum. Meanwhile, importers are preparing to deal with a potential repeat of the turmoil that took place on Jan 3 this year, when the yen gyrated wildly and surged against its peers.

One red flag to watch for this time is the Turkish lira.

Japan's retail investors speculate on a number of currencies, and are currently most bullish on the lira, according to data from the Tokyo Financial Exchange Inc. At the same time, Turkey's currency has slumped more than 11 per cent against the yen this year, opening up the prospect of forced liquidation of margin positions if losses increase.

"Caution is needed with regard to the Turkish lira against the yen," said Takuya Kanda, general manager at Gaitame.com Research Institute Ltd in Tokyo.

"Any market shock could spur stop-loss selling on retail investors' bloated lira-yen positions, which may see a broader surge in the yen."

Retail traders take a contrarian view and go into the market when prices dip, typically having a moderating effect on currency moves, according to research from Japan's central bank. But when their bets go wrong, the results can be dramatic.

That's what happened in the early hours of Thursday, Jan 3, when the sell-off in the lira and the Australian dollar against the yen triggered an automatic liquidation of investors' loss-making positions. Algorithmic programs and the absence of Japanese banks only exacerbated currency moves as the yen soared almost 8 per cent against the Aussie and 10 per cent versus the lira within minutes.

With banks being shut from Tuesday until Jan 5, investors may not be able to respond to margin calls and risk seeing forced liquidation, the Financial Futures Association warned in a statement this month.

News source: straitstimes.com
Jan 25
Lebanon and Japan have about 40 days to decide whether ousted Nissan-Renault-Mitsubishi boss Carlos Ghosn will be extradited to Japan or stand trial in Lebanon, a judicial source and a source close to Ghosn said on Thursday. (Japan Times)
Jan 25
To encourage more customers to go digital, Japan’s largest bank is offering depositors who give up their paper bankbooks a ¥1,000 reward. (Japan Times)
Jan 24
Japan's Finance Ministry says the country's annual trade balance fell into the red in 2019 for the second-straight year, mainly due to the effects of the US-China trade war. (NHK)
Jan 23
A group of merchants on Rakuten Inc's online shopping mall on Wednesday submitted a petition with some 4,000 signatures to the Japan Fair Trade Commission, asking it to investigate the e-commerce giant's planned "free shipping" policy. (Japan Today)
Jan 21
Mitsubishi Electric says it was the victim of a major cyberattack last year. It says personal data of over 8,000 people as well as corporate information may have leaked. (NHK)
Jan 20
The founder of retail giant Lotte Holdings has died. (NHK)
Jan 19
Fears are mounting that a new coronavirus identified in China may spread, not only infecting humans but also hurting the world’s second-biggest economy, which already is beset by a trade war with the United States. (Japan Times)
Jan 19
Netflix, the streaming service that has shaken up Hollywood, has unleashed its brand of big-budget disruption in Japan's TV industry. (Nikkei)
Jan 19
Toshiba Corporation says it has confirmed that there were irregularities involving fictitious transactions at a subsidiary. The manufacturer is in the process of reconstructing its business. (NHK)
Jan 18
Japan's SoftBank Group Corp. has offered to invest between $30 billion and $40 billion in the development of the new Indonesian capital on Borneo Island, a close aide of President Joko "Jokowi" Widodo said Friday. (Kyodo)