Yen Seen Rallying 15% Threatens Abe’s Successes: Market Reversal

Mitsubishi UFJ Morgan Stanley Securities Co. and Westpac Banking Corp. are breaking from the pack to bet the yen will rally in 2014, which could threaten Japan’s efforts to reflate the economy.

The yen will surge 15 percent from its low for this year to about 90 per dollar, which would be the strongest level since last January, according to Naohiko Miyata at Mitsubishi UFJ, citing trading patterns. The yen slid 18 percent versus the dollar last year, the most since 1979, after Prime Minister Shinzo Abe began his economic strategy of fiscal spending, monetary easing and growth initiatives.