Views on the yen continue to diverge widely, and while the world's third largest foreign-exchange bank slashed its short-term forecasts on the currency Tuesday, world number one Deutsche Bank AG (DB) maintains that it is too early to call for a weaker yen.

UBS AG (UBS) slashed its forecasts for the yen on both the one-month and three-month horizon, citing surprise monetary easing steps from the Bank of Japan, and now expects the dollar to trade at Y80 and at Y85, respectively. Both views have been revised up from Y77 previously.

"Regardless of the reasons behind the BOJ's [Bank of Japan] sudden switch in attitude, the quantities involved in their potential asset purchases are significant and we expect aggressive deployment of the balance sheet to meet their inflation mandate," UBS said in a note to clients.

But Deutsche Bank, the world's largest currencies trading bank, said the effects of the BOJ's decision to expand its asset purchase program by Y10 trillion to Y65 trillion will fade, and the yen will return to near record strength against the dollar.

Bilal Hafeez, global head of foreign-exchange research at the bank, said the dollar will probably trade at levels close to Y75 again soon, unless the Japanese authorities engage in further monetary easing steps.

"A lot of investors want to see the yen weakened on a sustained basis, but I don't think that's going to happen yet. The actions last week were in some sense like the recent attempts at currency intervention," he said in an interview with Dow Jones Newswires.

Hafeez added that currency effects from Japan's shifting trade dynamics are being overplayed and the country will probably return to a trade surplus this year. The BOJ surprised markets with its easing steps after the country recorded its first annual tra