[Economist: Weak Yen Clears Path for December Rate Hike by Bank of Japan, Further Hikes Possible if Downtrend Persists] BlockBeats News, December 17 — According to economist Alicia Garcia Herrero's analysis, the continued weakness of the yen is becoming a decisive factor for the Bank of Japan and the Japanese government to reach consensus this month and support the long-awaited rate hike. Despite concerns over U.S. tariffs and broader geopolitical risks, Japan's economy has proven to be more resilient than expected. Short-term, medium-term, and long-term inflation expectations remain above the Bank of Japan's 2% target, reinforcing the rationale for further policy normalization. Food prices have pushed up core inflation, and the yen's sustained weakness against the dollar, hovering around 155, may exacerbate imported inflation pressures. Alicia Garcia Herrero expects the Bank of Japan to raise the policy rate by 25 basis points to 0.75% at its December 19 meeting. Looking ahead, if the yen fails to stabilize after the rate hike and continues to weigh on real incomes, the Japanese government may also accept further policy tightening, potentially paving the way for another 25 basis point rate hike early next year. (Jin10)