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Yen at 110 in 2014? Don't count on it, says Mr Yen

Yen bears could be in for disappointment this year if former Japanese currency official Eisuke Sakakibara's latest comments are anything to go by.

Sakakibara, nicknamed "Mr Yen" in the late 1990s for his efforts to influence the currency's exchange rate, expects the yen to hover in a 100-105 range for the remainder of 2014.

"We are not unhappy with the current rate. It is possible that if the U.S. tightens monetary policy quite strongly then it would head 110 towards the end of the year or early next year, but I would say for next 3-6 months it would be in the range of 100-105," he told CNBC on Tuesday.

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Many foreign exchange strategists are looking for the currency to weaken to 108-110 by the year-end driven by additional monetary stimulus by the Bank of Japan in the second-half and expectations of higher interest rates in the U.S.

The yen has strengthened almost 4 percent against the greenback in 2014 - after falling over 20 percent in 2013 – on safe haven demand fueled by geopolitical uncertainty as well as doubts over the Bank of Japan's commitment to its inflationary policies. It last traded at around the 101 level.

Third arrow: hit or miss?

The third and final arrow of Prime Minister Shinzo Abe's economic revival program – dubbed Abenomics – is shaping up to be quite effective, said Sakakibara, who is currently a professor at Aoyama Gakuin University.

Read MoreJapan industrial output rises 0.5% in May, below expectations

Last week, Abe fleshed out details of his long-awaited growth strategy, calling for corporate tax rate cuts and pension funds to increase their allocation to riskier assets among other measures to reduce barriers to growth for businesses.

Torsakarin | iStock / 360 | Getty Images

"I think the corporate tax reduction which is now being planned for the next 5 years could have quite a positive impact. Along with that Abe is thinking about reallocation of the funds of GPIF [Government Pension Investment Fund] which is huge," he said.

Japan Inc upbeat on outlook

As Japan's economic growth picks up, business managers have become increasingly optimistic, Sakakibara said, noting that this will lead to an increase in corporate investment.

Read MoreIs Bank of Japan at risk of QE failure?

"I think Abenomics so far has been quite successful and corporate managers think this is going to continue for some time to come," he said.

While the Bank of Japan's latest tankan survey published on Tuesday showed business confidence dipping in the three months to June in the wake of April's consumption tax hike, sentiment is expected to recover in the following quarter.

The closely-watched report showed big firms plan to raise their capital spending by 7.4 percent for the fiscal year that started in April, compared with analyst forecasts for a 6 percent increase.

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