Money in Motion

Strategist: Yen Still Has Room to Fall

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If you've been buying the dollar against the yen, congratulations. It has been one of the most popular currency trades in recent weeks - and one of the most successful.

After a run like that, does the trade still have legs?

You betcha, says Kathy Lien, managing director at BK Asset Management.

"While it's tempting to say this move has gotten overdone, let's try to pick a top, I think doing so would be like standing in front of a runaway train," she says.

Lien told CNBC's Melissa Lee that even though the dollar has risen about 12% against the since the beginning of 2012's fourth quarter, by her count the pair is "fairly valued, not overvalued." Also, new trading data shows that net long positions in the dollar-yen pair, while large, have declined for two straight weeks. That means, Lien says, "that there are still some people sitting on the sidelines who may want to get back in."

Stay Short the Yen?
Stay Short the Yen?

That said, Lien is wary of chasing the dollar-yen rally too hard. She wants to wait for a rebound in the yen to about 86.00, and then she recommends buying the dollar against the yen, setting a stop at 84.00 and a target of 90.00

Rebecca Patterson, chief investment officer at Bessemer Trust, is even more bearish on the yen. She argues that fair value on dollar-yen is probably closer to 110.00. She also says an opportunity to get into Lien's trade could come soon. That's because U.S. interest rates rose sharply after meeting minutes suggested some unease with continued aggressive stimulus - and Patterson thinks traders will soon decide that is less likely and move back into bonds, driving rates and the dollar lower.

(Read more: Quantitative Easing: CNBC Explains.)

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