The Bank of Japan will debate whether to raise interest rates next week, Governor Kazuo Ueda said on Wednesday, reiterating the bank's resolve to push up borrowing costs if the economy continues to improve.

Following Ueda’s remarks, the yen strengthened as much as 0.4% to ¥157.34 against the dollar, after earlier hovering around the ¥158 level.

Governor Kazuo Ueda yesterday joined his deputy in raising market expectations of a potential interest rate hike next week, boosting the yen and signaling the central bank is doing its utmost to avoid a global market crash that followed the rate hike in July last year.