The Japanese yen declined in Asian trading on Friday against a basket of major and minor currencies, deepening its losses for the second consecutive session versus the US dollar, hitting a three-week low. The drop came as expectations of a US Federal Reserve rate cut in September receded.

The Japanese currency is on track to post its biggest weekly loss in a month and a half, despite stronger-than-expected data on core inflation in Japan, which kept alive the possibility of a rate hike by the Bank of Japan.

Price Overview

Yen exchange rate today: The dollar rose more than 0.2% against the yen to ¥148.69, the highest since August 1, from an opening level of ¥148.37, after touching a low at ¥148.24.

On Thursday, the yen ended down 0.7% against the dollar, its first loss in three days, after strong US economic data.

US Dollar

The dollar index rose 0.1% on Friday, extending gains for a second session to reach a two-week high at 98.70 points, reflecting continued strength of the US currency against a basket of majors and minors.

This momentum is being driven by renewed demand for the dollar as the best available investment in FX markets, following robust US data in August confirming that the world’s largest economy continues to grow at a pace exceeding forecasts, despite headwinds from President Donald Trump’s aggressive trade policies.

US Interest Rates

Following those data, CME FedWatch showed that the probability of a 25-bp rate cut in September fell from 81% to 75%, while odds of leaving rates unchanged rose from 19% to 25%.

To reprice those expectations, global markets are now awaiting Fed Chair Jerome Powell’s speech later today at the annual Jackson Hole symposium.

Weekly Performance

So far this week, the yen is down about 1.1% versus the dollar, heading for a second loss in three weeks and its biggest weekly decline since early July.

Japanese Inflation

Data from Tokyo on Friday showed that core consumer prices rose 3.1% in July, above the 3.0% consensus, after climbing 3.3% in June.

These figures underscore persistent inflationary pressures facing Bank of Japan policymakers, strengthening the case for another rate hike before year-end.

Japanese Interest Rates

Market pricing for a 25-bp rate hike by the BOJ in September is steady at around 40%.

Investors await more data on inflation, unemployment, and wages to recalibrate expectations.

BOJ Governor Kazuo Ueda is scheduled to speak at Jackson Hole, with comments expected to offer further guidance on the normalization path.

A survey showed that 63% of economists expect the BOJ to raise the policy rate to at least 0.75% by year-end, up from 54% in July’s survey.

Meanwhile, 92% expect the BOJ to keep the rate at 0.50% through September’s meeting.

Ethereum prices declined on Thursday amid a broader sell-off in risk assets, particularly cryptocurrencies, as investors awaited Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole symposium.

Markets are closely watching Powell’s remarks on Friday, with expectations pointing to a 25-basis-point rate cut at the Fed’s September meeting.

Fresh US data added to the cautious mood. Initial jobless claims rose by 11,000 to 235,000 in the week ending August 16, the highest in two months, versus expectations of 226,000. The prior week’s unadjusted reading stood at 224,000.

Meanwhile, S&P Global’s composite PMI for US output climbed to 55.4 in August from 55.1 in July, its highest in eight months. Manufacturing activity also improved sharply, with the PMI rising to 53.3 from 49.8, its strongest level in 39 months and signaling expansion. In contrast, the services PMI dipped slightly to 55.4 from 55.7, reflecting slower growth in the sector.

Ethereum

As of 20:59 GMT, Ethereum dropped 2.9% to $4,222.8 on CoinMarketCap.

Let’s start with the conclusion: the wave of cancellations hitting large-scale hydrogen projects is not a catastrophe—it’s a sign of progress. The sector is maturing quickly, shedding glossy proposals and players unwilling to adapt, while leaving space for quiet, effective pioneers.

The Hype Bubble Has Burst—And That’s a Good Thing

Between 2021 and 2023, demand for low-carbon hydrogen remained marginal—under one million tonnes compared with total global hydrogen demand of 97 million tonnes, still mostly fossil-based. At the same time, the “Hydrogen Insights 2024” report noted a seven-fold increase in global electrolysis capacity that passed final investment decision (FID) over four years, though still modest at around 20 GW.

In Europe, 3 GW of electrolyser capacity has cleared FID, expected to deliver about 415,000 tonnes of renewable hydrogen annually. By contrast, blue hydrogen projects have seen over 1.4 million tonnes per year cancelled, with only ~400,000 tonnes per year surviving to FID. The lesson is clear: oversized ideas that fail basic economics don’t survive.

This correction is healthy. Projects moving forward are smaller, better designed, and directly tied to decarbonisation needs.

Real Hydrogen: Focused and Practical Projects

Take Engie’s Yuri project in Western Australia: Phase 1 involves a 10 MW electrolyser powered by 18 MW of solar and backed by an 8 MW battery. It will supply ~640 tonnes of renewable hydrogen annually to Yara’s ammonia production. Unflashy, but effective—demand is clear, production is underway.

In Europe, Engie has also greenlit its share of the mosaHYc hydrogen pipeline between France and Germany, while the H2Med/Barmar corridor between Barcelona and Marseille is targeting up to 2 million tonnes a year by 2030. Germany’s Lubmin ammonia-to-hydrogen terminal aims for final approval by end-2025, targeting costs near $3–3.50/kg by 2027—well below current European levels of $8–10/kg.

These are not megaprojects chasing headlines. They are industrially anchored solutions, fitting into hard-to-abate sectors such as ammonia, methanol, refining, and steelmaking.

Why Smaller is Smarter

Failed megaprojects often lacked clear offtake, relied on unproven technologies, or pursued unrealistic scale. By contrast, today’s survivors are embedded in existing industrial demand, with clear economics. Blue hydrogen, for instance, can be produced in Europe at €3.8–4.4/kg—far cheaper than most green hydrogen.

This shift means fewer projects overall, but stronger, more sustainable ones—designed to deliver real industrial decarbonisation rather than speculative hype.

Policy Support Becomes More Targeted

Policy frameworks are also maturing. The EU’s Hydrogen Bank is directing funds to projects with genuine emission-reduction value. Germany’s KfW is financing import terminals rather than forcing uneconomic domestic production. Public money is being channelled where hydrogen is needed most.

A Smaller, Better Hydrogen Economy

The hydrogen economy will likely be smaller than early, exaggerated forecasts suggested. But that is a strength, not a weakness.

A leaner sector that displaces fossil-based hydrogen, cuts emissions in heavy industry, and builds on solid engineering is far preferable to a sprawl of doomed giga-projects. What matters now is not thousands of ideas, but a handful of excellent ones. Let the bad ones die. Let the noise fade. What remains is real.

US stock indexes declined during Thursday’s trading, with the S&P 500 posting its fifth consecutive drop, as investors awaited Federal Reserve Chair Jerome Powell’s speech at the Jackson Hole Symposium.

Markets are closely watching Powell’s remarks on Friday, with expectations pointing to a 25-basis-point rate cut at the Fed’s September meeting.

Meanwhile, government data released today showed initial jobless claims in the US rising by 11,000 to 235,000 in the week ending August 16, the highest level in two months. Analysts had expected claims to increase to 226,000, compared with the unrevised prior week’s figure of 224,000.

As for trading performance, the Dow Jones Industrial Average fell 0.2% (95 points) to 44,844 points as of 15:27 GMT. The broader S&P 500 slipped 0.1% (5 points) to 6,391 points, while the Nasdaq Composite edged up 0.1% (10 points) to 21,183 points.