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.

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 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 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.

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.