Yen set to slump to 125 vs USD in 2017 - RBS

Mansoor Mohi-uddin, a strategist at NatWest Markets, a unit of Royal Bank of Scotland Group, said in an interview on late-Tuesday, that he sees Yen weakening to 125 per dollar in 2017.

The forecast shows Mohi-uddin, who previously estimated a trading range of 110 to 120 for the yen versus the greenback, has turned more bearish.

Key Quotes:

“The Bank of Japan is the one major central bank set to keep monetary policy super-loose this year.”

“Dollar-yen is a popular trade already but shorting the yen is the purest play for a stronger dollar¥. The yen is likely to be the weakest major currency this year.”

“The Fed is likely to wait until June when the FOMC has more clarity on the new administration’s fiscal plans and congressional approval.”

“The markets, however, are likely to become more concerned about a March hike if the U.S. labor market keeps generating higher inflation now to the benefit of dollar-yen.”