Dec 24 (Reuters) - The unrealistic expectations that Japanese firms have for the yen spell trouble for the currency which is likely to fall further and potentially faster as a result.

In the December Tankan survey, firms forecast an average USD/JPY rate of 146.88, and while that is closer to reality than prior forecasts have been, it is still 10 yen below the pair's actual level.

Forecasts were made for this financial year which ends in March and while they are possible to achieve, both fundamentals and tech factors support bigger gains.

The unwinding of bets on a drop which has underpinned recent USD/JPY gains is yet to be completed and without speculation to counter any intervention would be less effective.

On the other hand, the maintenance of a very dovish monetary policy that includes the continual purchases of large amounts of bonds is constantly weighing on the yen.

Should Japan opt to intervene, the Ministry of Finance would mainly be fighting with itself, and because bond buys are much greater than interventions, the yen is set to lose the battle.

Japanese firms should probably target a higher USD/JPY rate and while they do not it is safe to assume that they are not well prepared for its rise. Unexpected moves tend to endure and could even result in disorderly movement toward the next upside targets at 165.83 and 176.45.

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(Jeremy Boulton is a Reuters market analyst. The views expressed are his own, editing by Ed Osmond)

((jeremy.boulton@thomsonreuters.com))