LONDON- JPMorgan has cut its forecast for China's yuan, adding to the increasingly gloomy view on the currency among top investment banks as concerns about ultra-tough COVID lockdowns and other pressures build.

The domestically traded yuan, dubbed "CNY" by currency traders, notched its biggest weekly drop since 2018 on Friday, while the internationally traded "CNH" version was set for its largest fall since 2015.

"This week’s sharp move merits a revisit of our USD/CNY forecast," JPMorgan said in a note published late on Thursday.

"We revise our near-term USD/CNY target from 6.35 (yuan per dollar) to 6.50 for 2Q22 and 3Q22 and also lift the 1-year target, albeit at a smaller, increment to 6.60 vs 6.55 previously."

They added that the large changes Beijing has been making to its daily official yuan rates "marked a change" in FX policy although traders "should not overestimate PBoC’s desire for policy-engineered volatility and/or disruptive currency weakness."

(Reporting by Marc Jones; Editing by Hugh Lawson)