Bloomberg says yen to return to 100 to the dollar next year

According to Bloomberg:

The yen is poised to replace the dollar as the top funding currency for investments in cities from Sydney to Sao Paulo after borrowing from Japan became almost as cheap as U.S. loans for the first time in four months.

Rates on 90-day yen loans between banks have fallen the most in 13 years amid record deflation that prompted the Bank of Japan to start a $113 billion lending program last week. By easing demand for private-sector loans, the move helped shrink the gap between U.S. and Japanese London interbank offered rates by two-thirds over the past three months to 0.024 percentage point, the least since Aug. 26, data compiled by Bloomberg show.

In the near term this is really important because it means the yen will weaken against the dollar. Bloomberg states that many analysts are saying the yen could be back up to 100 yen to the dollar by the end of next year, 2010. However, the most important thing to note is that this analysis is based on the idea that the American economy will be recovering. That too me seems to be a bit far fetched. Or even if America's economy does manage to recover over next year, it will still be in for big trouble in the future.