Yen bears, many of which predicted the currency would end the year at 105-110 against the U.S. dollar, could finally be rewarded for their patience after the pair struggled to break above 100 for months.
The yen fell to a four-and-a-half month low of 101.30 against the dollar on Friday amid signs that the U.S. central bank is moving closer to winding down its monetary stimulus while the Bank of Japan remains fully committed to its expansionist policy.
"For dollar-yen, 100 is now in the rearview mirror. From a fundamental perspective, we have long said that U.S. rates are headed higher and as long as this remains true, dollar-yen will rise," said Kathy Lien, managing director, FX Strategy at BK Asset Management, citing the positive correlation between U.S. yields and dollar-yen.
By mid-2014, Lien said she expects 10-year Treasury yields will be comfortably above 3 percent and closer to 3.5 percent, which would be consistent with 105 in dollar-yen.
"Of course, this does not remove the possibility of a retracement before this level is reached especially if investors need to adjust their expectations for tapering in 2014 instead of 2013," she added.
(Read More: Are the stars re-aligning for dollar-yen?)