TOKYO — Japanese businessmen, housewives and pensioners betting against the yen in their spare time are wrecking the forecasts of the world's biggest currency traders.

The yen has slumped 4.6 percent to a 4 1/2-year low against the dollar this quarter, making it the worst performer among 72 major currencies and confounding predictions by strategists at Deutsche Bank AG and UBS AG for gains of about 1 percent.

The banks didn't reckon on the risk appetite of Japanese individuals, who are borrowing money like never before to buy currencies with higher yields. They tripled their trading in the year ended March to a record $11 billion a day, according to Tokyo-based Yano Research Institute Ltd., publisher of an annual report on the business.

Globally, currency trading by retail investors rose 54 percent in 2006, according to research firm Greenwich Associates in Greenwich, Connecticut.

"Japan's interest rates are too low," said Hiroshi Ono, a 40-year-old sales clerk at a telephone company in Tokyo. Ono said he has made about $17,000 since March by borrowing $200,000 of yen and buying U.S. dollars to take advantage of the 4.75 percentage-point difference between Japanese and U.S. interest rates.

Japanese investors are borrowing yen at the central bank's 0.5 percent overnight lending rate and buying higher-yielding currencies in New Zealand, the U.K., Australia and even Brazil to increase returns on 1,536 trillion yen ($12.5 trillion) in savings.

The strategy is called the carry trade.

Japan's overnight rate, the lowest among major economies, is 7.5 percentage points less than New Zealand's key rate and 3.5 percentage points below that of the European Central Bank.

"Japan's margin traders have the power to support currencies against the yen," said Derek Halpenny, a strategist in London at Bank of Tokyo-Mitsubishi UFJ Ltd., a unit of Japan's biggest lender.

"We estimate they make up 15 percent of yen trading in Tokyo hours. Maybe even more."

The yen weakened to 1.4 percent last week to 123.44 per dollar and dropped 1.5 percent to 165.26 to the euro. The currency fell to a record low of 165.60 per euro this week.

"The yen carry trade is still alive," said Koji Fukaya, senior currency strategist in Tokyo at Deutsche Securities, a Deutsche Bank subsidiary. "Capital outflows from Japan remain steady and more than we expected."

Retail investors' strategy of selling yen during rallies helped push volatility implied by one-month dollar-yen options on June 5 to 5.85 percent, the lowest since the Bank of Japan began compiling data in August 1992, compared with 10.15 percent on March 5. Lower volatility may encourage carry trades, as it implies smaller exchange-rate fluctuation risk.

"They are the bane of professional currency traders," said Masanobu Ishikawa, general manager of foreign exchange at Tokyo Forex & Ueda Harlow Ltd., who has been trading in Japan's capital city for 25 years. "It's becoming hard to make money as the dollar-yen doesn't move as it used to, because of their constant buying on dips."

Global trading by investors other than banks, fund managers and companies surged 54 percent last year, said Peter D'Amario, a consultant at Greenwich Associates.

The category, which includes retail investors, accounted for 16 percent of trades handled by 1,700 firms surveyed, up from 10 percent a year earlier. It grew 80 percent in Europe, 55 percent in Asia Pacific and 30 percent in the Americas.

In Japan, individuals have opened 600,000 so-called margin trading accounts at brokerages that lend money for currency bets, 80 percent more than a year ago, according to Yano Research.

When the yen rose to a two-week high of 162.20 against the euro on May 25, Naoko Ogawa, a 34-year-old freelance writer, used a 1,000-euro ($1,300) deposit to buy 10,000 euros. She sold four days later, close to a then-record high of 164.29 yen.

"You just need to buy the dollar and the euro on dips, then sell them at a profit," said Ogawa, who added that she has made a 20 percent return on her 1 million-yen trading account since December. "It's better than stock trading, as you can rely on daily interest."

Deposits in margin trading brokerages have risen 60 percent to $4.9 billion in the past year, Yano Research found. While that's about 2 percent of the $272 billion that Japanese individuals have put into mutual funds that invest overseas, borrowing typically makes their positions 10 to 30 times larger.