Don't bet on Trump, UBS warns, as yen set to strengthen

Tokyo

UBS Group AG's US$2 trillion dollar wealth-management arm says yen traders have got Donald Trump all wrong, and the currency will strengthen to 98 per dollar by this time next year.

The firm's Tokyo-based head of Japanese equity research Toru Ibayashi says expectations for fiscal expansion have become overblown, and protectionist policies will come first in the new US administration.

Mr Trump campaigned on pledges of "massive" tax cuts and spending of as much as US$1 trillion over a decade to rebuild infrastructure, while also promising to tear up existing trade deals and punish companies that send jobs overseas. Speculation that the president-elect will unleash reflationary stimu…