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.

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.

The Bank of Japan is likely to raise interest rates next week barring any market shocks when US President-elect Donald Trump takes office, and maintain a pledge to keep pushing up borrowing costs if the economy continues to recover,

Bank of Japan officials see a good chance of an interest rate hike next week as long as the arrival of Donald Trump at the White House doesn’t trigger too many negative surprises, according to people familiar with the matter.

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.