The yen was poised on Friday for its strongest weekly performance in over a month as expectations grow that the Bank of Japan will raise rates next week, putting the dollar on the back foot ahead of Donald Trump's return to the White House.

TOKYO (Reuters) - Bank of Japan Governor Kazuo Ueda said on Thursday the central bank will debate next week whether to raise interest rates, based on its fresh quarterly growth and inflation forecasts.

The yen is on course for its strongest weekly performance in over a month, fueled by expectations of a rate hike by the Bank of Japan. Traders anticipatively priced an 80% chance of a hike next week amidst positive economic indicators.

The Bank of Japan holds its first policy meeting of the year next week and the outcome will be announced days after the inauguration of U.S. President-elect Donald Trump.

BOJ Gov. Kazuo Ueda reinforced his deputy’s message this week that his board will consider a rate hike at the meeting, boosting the yen and expectations for action.

The deputy governor said the bank will discuss whether to raise the policy rate or not at the meeting, based on the latest outlook on the economy and prices.

Japan's annual wholesale inflation held steady at 3.8% in December on stubbornly high food costs, data showed on Thursday, highlighting persistent price pressures that may prod the central bank to raise interest rates next week.

T he Bank of Japan’s Deputy Governor, Ryozo Himino, has hinted at a potential interest rate hike during the upcoming policy meeting on January 23-24. In an interview last Friday

Bank of Japan Gov. Kazuo Ueda echoed recent comments that have revived market expectations for imminent policy action.

The remarks, which echo those made by BOJ Deputy Governor Ryozo Himino on Tuesday, pushed up the yen as markets continued to price in the chance of a rate hike at the bank's next policy meeting on Jan. 23-24.