As the Bank of Japan is set to announce its latest interest rate decision on the 19th, the yen has rapidly depreciated over the past week, nearing the critical level of 155 yen to 1 dollar, prompting analysts to warn that further weakness in the yen may increase pressure on the Bank of Japan to unexpectedly raise interest rates this week. (Background: Why did Bitcoin surge? The Bank of Japan rumored not to raise rates in December! The yen plummets to a three-week low) (Additional context: The Bank of Japan is rumored to be 'inclined not to raise rates' next week, continuing the space for yen carry trades; can Bitcoin continue to rise?) The Bank of Japan will announce its latest interest rate decision on the 19th, and Bank of Japan Governor Kazuo Ueda will hold a monetary policy press conference thereafter. According to Bloomberg, based on overnight index swap data, the probability of the Bank of Japan raising rates this week is currently 19%, a significant decline from about 60% at the beginning of the month, due to previous reports suggesting the Bank of Japan is inclined not to raise rates in December to assess overseas risks and next year's wage outlook. The rapid depreciation of the yen may force the Bank of Japan to raise rates. However, the yen has sharply depreciated over the past week, nearing the critical level of 155 yen to 1 dollar, causing strategists to warn that further weakness in the yen could increase pressure on the Bank of Japan to raise rates. So far this month, the yen has depreciated about 2.8%, making it one of the worst-performing currencies among major currencies, and it has fallen for six consecutive days, the longest decline since June. If it falls to the 155 level, it will be a new low since November 22, with the current dollar-yen exchange rate slightly rebounding to 153.65 yen to 1 dollar. Akira Moroga, Chief Market Strategist at Aozora Bank Ltd, stated that 155 is an important milestone, predicting that the Japanese authorities' stance will change at 155, and the likelihood of the Bank of Japan raising interest rates will also increase. Vishnu Varathan, Head of Economics and Strategy at Mizuho Bank, stated that the direction and speed of the yen's depreciation have not slowed down this week, which is not reassuring news for either the central bank or the Ministry of Finance. If the dollar-yen exchange rate exceeds 155, the likelihood of verbal intervention from Japanese authorities is very high; if the yen falls to 157 or 158, the pressure for the Bank of Japan to raise rates will increase. The direction of the yen will also depend on the Federal Reserve's policy meeting hours before the Bank of Japan makes its decision. The Federal Reserve is expected to announce its latest interest rate decision early on the 19th, with expectations of a 1 basis point cut. Yujiro Goto, Head of Forex Strategy at Nomura Securities, noted that the yen may face strong depreciation pressure around these meetings, with expectations of breaking below the 155 level. Yen depreciation aids export growth, but pressure to raise rates may increase. It is worth noting that Japan's Ministry of Finance recently released the latest trade data showing that Japan's exports in November grew by 3.8% compared to the same period last year, marking two consecutive months of growth, surpassing market expectations of 2.5%. This growth is partly due to the continued depreciation of the yen, providing a competitive advantage to exporters; however, imports fell by 3.8%, narrowing the trade deficit to 117.6 billion yen. Although export data appears strong, the actual situation is not entirely optimistic. In terms of export volume, there has been no change, and with increasing global economic uncertainty, demand from the U.S. and Europe remains weak, with exports to the U.S. and Europe declining by 8% and 12.5%, respectively, while exports to China grew by 4.1%, somewhat alleviating the export pressure. The Chinese government has recently implemented active stimulus measures to support the economy, making it one of the main driving forces for Japanese exports. The yen's recent approach to the 155 level provides favorable support for Japanese exporters, but as the pressure for yen depreciation increases, Japan faces potential considerations for raising rates to prevent the exchange rate from getting further out of control. While yen depreciation may improve export competitiveness in the short term, it also brings pressure from rising import costs, potentially further elevating inflation. If inflation continues to heat up, especially with increasing prices for energy and raw material imports, the Bank of Japan may have to adjust its policy framework, including unexpected rate hikes, to stabilize the exchange rate and market confidence. Related reports: Bank of Japan Governor hints: The timing for a rate hike is near 'Dollar-Yen' falls below 150, arbitrage liquidation alarm sounds again. Relief! The Bank of Japan maintains interest rates unchanged; when will the dollar arbitrage bomb explode next? The yen rises again; foreign capital sells off for three consecutive weeks; will the Bank of Japan raise rates next week? The arbitrage bomb is hard to defuse. 'The yen has depreciated for six days! Analysts warn: The Bank of Japan may be forced to raise rates tomorrow; the 155 level is a critical point.' This article was first published on BlockTempo (the most influential blockchain news media).