The dollar-yen trade could reach 120 by the end of 2014, according to economists at Capital Economics, who said the yen's downward drive will persist throughout this year and next.
"We continue to expect the yen's slide to continue, based simply on the relative outlooks for Japanese and U.S. monetary policy," said Capital Economics Chief Economist Julian Jessop, in a research note on Tuesday.
The yen has depreciated by around 30 percent against the U.S. dollar since last September as a result of Japan's newly launched aggressive fiscal and monetary stimulus measures, dubbed "Abenomics".
(Learn More: Abenomics Gets a 10 out of 10: Pro)
"The Federal Reserve is likely to scale back its own asset purchases over the next 12 months or so and perhaps halt them completely. At least as importantly, we suspect the planned doubling of Japan's monetary base will still not be enough to lift inflation, prompting the Bank of Japan to loosen policy even further," said Jessop.
"This is the basis of our forecast that the yen could weaken as far as 120 to the dollar again by the end of 2014."
Jessop's bearish long-term views on the yen concurred with those of other analysts, such as UBS economist Larry Hatheway who said he expected the dollar-yen to hit 125 if the Bank of Japan expands its asset purchases further.
(Read More: Dollar-Yen Could Spike to 125: UBS)
Meanwhile, BNP Paribas currency strategist Vassili Serebriakov predicted the yen will fall to 105 by year-end, and Daiwa Capital Markets forecast the yen will average 105 in the third quarter, in a research note on Friday.
Jessop warned, however, that continued currency depreciation could prove negative for the Japanese economy in the longer-term.
(Read More: Why Weak Yen Remains Wild Card for Japan's Growth)
"Further yen weakness may soon run into diminishing, or even negative, economic returns. For now it is taken for granted that yen weakness is 'good' for Japan because of the potential boost to export revenues. However, export volumes, at least, are far more dependent on the overall health of the global economy, which is still fragile," he said.
"What is more, the conventional wisdom usually ignores the adverse impact of yen weakness on the cost of imports."
(Read More: Conflicting Japan Data — What Is it Telling Us?)
Long Hanhua Wang, a Japan economist at RBS, said negative returns for Japan would kick-in if the yen falls to 120.
"That level will not only put pressure on households, as their energy costs increase as gas and electricity prices rise, but it will also hurt corporate productivity," said Wang. "Both these elements could push gross domestic product down."
In the shorter-term, Dennis Gartman of The Gartman Letter named 101 as the next "big figure" for the dollar-yen. The dollar crossed the key 100-yen level for the first time in four years last week, and was trading around 101.36 on Tuesday, after dipping to 102.15 over the weekend.
"As is often the case, the next 'Big Figure' has proven to be of some resistance. It shall however, be broken through after a day or two or three of consolidation. We have every intention of sitting quite tight with this position, and those not involved should become so," Gartman said in his daily trading note on Tuesday.
—By CNBC's Katy Barnato