By moving the clutch switch wires is probably moving the wiring loom enough so the connection in the loom is complete.
Has this bike had the eastern Beaver headlight rely mod done? this is a number one mod for the older models as the load on the ign switch is too much - if this is the case you will find the white wire from the ign switch will be burnt looking and the solder joint in the ign switch would have failed.
Three fixes come to mind:
- pull the ing switch out (Not easy - but its covered on the forum somewhere) I took the top triple clamp off to do mine but it can be done in situ. Find the white wire and repair.
- Replace Ign Switch. this will mean you have a different ign key to your tank and side cover and is costly.
- Purchase a key-less ign module from @DEcosse (No need to pull out your ign switch. DEcosse can also include the headlight wiring upgrade in this module (I have one of these and they are fantastic)
ALWAYS a good idea to identify the issue first prior to spending $.
Also apply dielectric grease to your clutch switch as it also can be effected by water.