The Japanese yen declined in the Asian market on Friday against a basket of major and minor currencies, extending its losses for the second consecutive day against the US dollar, moving away from a two-week high, amid continued correction and profit-taking, in addition to the ongoing rise of the US currency ahead of the release of US monthly jobs data.

Less aggressive comments from Bank of Japan Governor Kazuo Ueda reduced the likelihood of a Japanese interest rate hike in October, pending the release of more key data on developments in the world’s fourth-largest economy.

Price Overview

• Yen exchange rate today: the dollar rose against the yen by 0.35% to (147.77¥), from today’s opening level at (147.26¥), with a low recorded at (147.09¥).

• The yen ended Thursday’s trading down by 0.15% against the dollar, its first loss in five days, due to correction and profit-taking from a two-week high at 146.59 yen.

US Dollar

The dollar index rose on Friday by 0.15%, extending gains for the second straight session, reflecting the continued rise of the US currency against a basket of global currencies.

This rise comes ahead of the release of the US monthly jobs data, which will provide further evidence regarding whether the Federal Reserve will continue easing monetary policy and cutting interest rates during the remainder of this year.

Kazuo Ueda

Bank of Japan Governor Kazuo Ueda said in a speech before business leaders in Osaka, western Japan, on Friday: if uncertainty over external economies and trade policies persists, companies may focus more on cutting costs, which could weaken efforts to reverse price increases in wages.

Ueda added: the future path of the US economy and the course of monetary policy could significantly affect Japan’s economy and prices. He explained: therefore, we will continue to monitor the situation closely.

Opinions and Analysis

• Shotaro Mori, chief economist at SBI Shinsei Bank, said: there was no clear change in the Bank of Japan’s statement indicating that it was trying to pave the way for a rate hike in October.

• Mori added: if the impact of tariffs increases going forward, the key will be to study precise data on Japan’s economic growth and corporate earnings in the third quarter.

• Mori explained: a rate hike by the Bank of Japan in December is now more likely than in October.

• Traders currently price in less than a 40% chance of a quarter-point rate hike in Japan on October 30, according to London Stock Exchange data.

• In order to reprice those expectations, investors are awaiting the release of more data on inflation, unemployment, and wages in Japan.

Most cryptocurrencies rose during Thursday’s trading as investors in the market ignored the ongoing US government shutdown and its potential impact on the world’s largest economy.

As a result of the continuing shutdown in the United States, no economic data were released today, most notably the weekly jobless claims figures.

Market expectations also point to the possibility that the US government may delay the release of the monthly jobs report, scheduled for tomorrow, to a later date.

The US federal government shutdown came into effect on Wednesday, raising fears of a prolonged negative impact on the economy.

Fitch commented on the government shutdown, saying it will not affect the United States’ sovereign credit rating in the near term, but it will have a negative impact on the economy.

Meanwhile, Dallas Fed President Lorie Logan stated that the Fed’s interest rate cut in September was an appropriate step to hedge against any sharp deterioration in the labor market, but she called for caution in any further cuts, noting that inflation risks outweigh the risk of labor market weakness.

Ripple

In trading, Ripple jumped by 4.4% at 20:38 GMT on CoinMarketCap to $3.08.

Gold prices declined during Thursday’s trading amid a rise in the US dollar against most major currencies following remarks from a Federal Reserve official.

This comes as the US government shutdown continues, which prevented the release of key economic data today, most notably the weekly jobless claims figures.

Market expectations also point to the possibility that the US government may delay the release of the monthly jobs report, scheduled for tomorrow, to a later date.

The US federal government shutdown came into effect on Wednesday, raising fears of a prolonged negative impact on the economy.

Fitch commented on the government shutdown, saying it will not affect the United States’ sovereign credit rating in the near term, but will have a negative effect on the economy.

Meanwhile, Dallas Fed President Lorie Logan stated that the Fed’s interest rate cut in September was an appropriate step to hedge against any sharp deterioration in the labor market, but she called for caution in any further cuts, noting that inflation risks outweigh the risk of labor market weakness.

At 20:08 GMT, the US dollar index rose by 0.1% to 97.8 points, recording a high of 98.1 points and a low of 97.5 points.

In trading, spot gold fell by 0.4% at 20:09 GMT to $3,881.9 an ounce.

The International Energy Agency (IEA) revealed that electricity consumption in the Middle East and North Africa (MENA) region has tripled since 2000, making it one of the fastest-growing regions in global energy demand. The agency explained that this accelerated growth was driven by rising populations and higher income levels, with air conditioning accounting for nearly half of peak demand.

The agency expects the region to see an additional 50% increase in electricity demand by 2035, based on current policies, supported by urban expansion, industrial growth, and rapid population increases.

Despite the dominance of oil and gas in the region’s energy mix, accounting for more than 90% of total generation, the coming stage will witness a major transformation. Oil’s contribution to electricity generation is expected to decline to just 5% by 2035, down from 20% currently, while natural gas, renewable energy, and nuclear will lead the next phase of growth. The agency estimates that solar capacity will expand tenfold to reach 200 gigawatts by 2035, with the share of renewable energy rising to 25% of the mix compared to 6% currently, while nuclear energy will record significant growth in the UAE, Egypt, and Iran.

Fatih Birol, Executive Director of the IEA, said: “Electricity demand is rising rapidly in the Middle East and North Africa, driven by growing needs for cooling and water desalination in a region suffering from heat and water scarcity, in parallel with population and economic growth. Since the start of the century, the region has recorded the third-largest global growth in electricity consumption after China and India. To meet this demand, generation capacity is set to expand by more than 300 gigawatts over the next decade, equivalent to three times Saudi Arabia’s current capacity.”

Natural gas is expected to account for half of the region’s energy mix by 2035, amid major investments from national oil companies such as Saudi Aramco, ADNOC, and QatarEnergy, which are channeling billions of dollars to expand their share in the liquefied natural gas (LNG) market.

Gulf producers aim to double their LNG capacity over the next decade, with gas serving as a transitional fuel and a bridge toward clean energy sources, as well as a means of maximizing returns and diversifying revenues away from crude oil.

Okan Kose, Managing Director at Accenture, told Bloomberg: “LNG still appears to be the best bet among all hydrocarbon commodities, as investments and trade in it deliver profit margins that are nearly unprecedented compared with any other commodity.”

But the agency warned that some countries in the region will be unable to meet growing demand. Countries such as Iraq, Syria, Yemen, Lebanon, and Sudan have faced repeated electricity crises. Iraq, despite its oil wealth, still suffers from chronic outages that cost it around $100 billion between 2014 and 2020.

Lebanon, meanwhile, has relied for years on polluting private generators and illicit fuel trade to cover shortages. In Syria, generation capacity has fallen to less than 40% of pre-war levels. In Libya, production capacity has dropped by half due to civil conflict.

Nevertheless, the region holds enormous opportunities thanks to abundant renewable resources. For example, on July 15, 2024, Yemen inaugurated the Aden solar power plant with a capacity of 120 megawatts, funded by the UAE.

The plant supplies electricity to between 150,000 and 170,000 homes, reducing reliance on fossil fuels. Solar currently represents around 10.4% of Yemen’s total electricity, and this share is expected to double by 2026 with the launch of the project’s second phase.