Calling for a weaker yen was a lonely post six months ago for Royal Bank of Scotland Group PLC's Mansoor Mohi-uddin. Now the Singapore-based strategist is getting plenty of company from others who are joining him in forecasting the currency will slide to 120 per dollar.
While Bank of America Corp. expects the yen to reach that level at the end of next year, Sydney-based asset manager AMP Capital Investors Ltd. and BNP Paribas SA are even more bearish, predicting a slump past the 13-year low of 125.86 reached in June last year. Morgan Stanley sees the Japanese currency at 130 by mid-2018. In the options market, the premium on contracts to buy yen in three months fell to the lowest level since November last year.
The yen has weakened more than 7 percent since the U.S. election earlier this month, the worst performer among developed-market peers. President-elect Donald Trump's promise of fiscal stimulus has sparked a selloff in Treasurys, widening the gap between benchmark U.S. yields and their Japanese counterparts to the most since 2011, boosting the appeal of American assets.