The yen's outlook in the new year is for the currency to head lower as justified by evidence presented above. Inflation should also continue its trend towards the Bank of Japan's 2% target.

This means that the Nikkei equity index, which trades inversely to the direction of the yen, should continue to push higher in 2014.

If Japanese corporate results improve and economic growth remains stable, then 2014 could be a very strong year for the Japanese economy.

FXY Chart

FXY data by YCharts

CurrencyShares Japanese Yen Trust (FXY)

At the time of publication the author had no position in any of the stocks mentioned.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

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