How Low Will the Yen Go?

Masaaki Shirakawa
Bloomberg | Getty Images
Masaaki Shirakawa

Just when you thought the yen couldn't sink any lower, along comes news to keep its historic fall — falling.

After Bank of Japan Governor Masaki Shirakawa announced his resignation several weeks earlier than expected, the yen hit a 33-month low against the dollar and also fell against the euro.

But if you're worried that you have missed the big dollar-yen move, think again, says Kathy Lien, a managing director at BK Asset Management.

Lien expects an announcement of a new governor from Prime Minister Shinzo Abe after his trip to the U.S. from February 20 to 24, and "there's no doubt all three candidates he's talking about are dovish." She expects additional yen weakness leading up to the announcement.

Abe "is going to talk about reinforcing the message" of stimulus with the appointment, Lien told CNBC's Melissa Lee. "When the person's nominated, they'll talk about reinforcing the message. So I think dollar-yen is headed higher."

That said, the pair has had a great run, and it's slightly lower today. So Lien sees an opportunity to get into a trade slightly below current levels.

She wants to buy the dollar against the yen at 92.50, setting a stop at 91.50 and looking for a move to 94.85. That target is right below what she thinks is "the next point of contention" - the yen at 95.00.

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