The Japanese yen edged lower in Asian trading on Friday against a basket of global currencies, moving into negative territory versus the US dollar after weak data showed a slowdown in Tokyo’s core inflation for August, reducing the likelihood of a rate hike by the Bank of Japan next month.

Over the course of August, however, the yen remains on track to post a monthly gain, supported by rising expectations of at least two US rate cuts before the end of the year, alongside renewed concerns about the stability of the Federal Reserve.

Price Overview

• USD/JPY rose by more than 0.1% to ¥147.11, from an opening level of ¥146.93, after hitting an intraday low of ¥146.76.

• The yen had closed Thursday up 0.3% against the dollar, marking its second gain in the past three sessions, buoyed by lower US 10-year Treasury yields.

Tokyo Core Inflation

Data released Friday showed Tokyo’s core consumer price index rose 2.5% in August, the slowest pace since March, in line with market forecasts. This compares with a 2.9% increase in July.

The slowdown in prices reduces inflationary pressure on policymakers at the Bank of Japan, diminishing the chances of further interest rate hikes this year.

Japanese Interest Rates

• Following the inflation data, market pricing for a 25-basis-point rate hike by the BOJ in September fell from 45% to below 40%.

• BOJ board member Nakagawa warned of risks stemming from trade policy and said he is awaiting the upcoming Tankan survey for guidance on the path of monetary normalization.

Monthly Performance

As August trading nears its close, the yen is up about 2.4% against the US dollar, poised to record its first monthly gain in four months.

The advance has been driven by rising expectations of a Federal Reserve rate cut in September, particularly after cautious remarks from Fed Chair Jerome Powell at the Jackson Hole symposium.

Safe-haven demand has also supported the Japanese currency amid growing concerns over Fed independence, following President Donald Trump’s unprecedented move to dismiss Governor Lisa Cook, a step widely seen as undermining confidence in the central bank and US assets.

Gold prices rose on Thursday after the release of US economic data that pushed the dollar lower against most major currencies.

According to government figures, US GDP grew at an annualized rate of 3.3% in the second quarter of 2025, compared with a contraction of 0.5% in the first quarter.

GDP was revised higher by 0.3 percentage points compared with the initial reading, driven by stronger investment while government spending weakened.

Separate data showed initial jobless claims fell by 5,000 to 229,000 in the week ending August 23, versus expectations for a decline to 230,000.

Meanwhile, the dollar index fell 0.4% to 97.8 by 19:29 GMT, after hitting a high of 98.2 and a low of 97.7.

In trading, spot gold rose 0.8% to 3,477.3 dollars an ounce at 19:29 GMT.

Lithium-ion batteries power much of the modern world, with their importance in daily life steadily increasing to the point where they now provide energy for nearly 70% of all rechargeable devices. From electric vehicles to smartphones and utility-scale energy storage, lithium-ion batteries have become the backbone of countless industries.

Yet despite their dominance, the industry faces serious supply chain challenges that make lithium a less-than-ideal foundation for the future. Lithium extraction is often environmentally destructive, while global supply chains are deeply tied to geopolitical flashpoints. China controls a significant portion of the world’s lithium supply, leaving markets exposed to shocks and Beijing’s political will. This dominance is especially evident in electric vehicle batteries, the result of a decade-long Chinese strategy to outpace global competitors.

EE Times reported: “China has carefully engineered a strategic rise in the global EV battery market over more than a decade, resulting in a dominance that now poses a massive challenge to Western manufacturers.” The publication added that this influence acts as a “moat” shielding China’s battery industry from international competition.

Given these drawbacks, EV makers are ramping up research into alternative battery technologies. A wide range of options are in development, including lead-acid, nickel-cadmium, nickel-metal hydride, sodium-nickel chloride, lithium-metal polymer, sodium-ion, lithium-sulfur, and solid-state batteries.

Among these, solid-state batteries are seen as the strongest contender. They use a solid electrolyte between the cathode and anode. While they do not completely eliminate lithium, they could reduce dependence on graphite—another strategic mineral largely controlled by China. Solid-state technology is also viewed as safer, offering higher energy density and faster charging than conventional lithium-ion batteries.

Though still in development, automakers have begun real-world testing. Mercedes and BMW are trialing solid-state batteries on public roads, though mass commercialization is still years away. Subaru is preparing vehicle tests of its own, while already deploying smaller versions of the technology to power factory robots.

Some experts, however, argue the hype may be overblown. Rivian CEO R.J. Scaringe said on the “Plugged-In Podcast”: “I think there’s a lot of noise about solid-state batteries being commercially ready, and it’s probably overstated.”

Sodium-ion batteries are another promising candidate. Sodium is a thousand times more abundant than lithium. James Quinn, CEO of UK-based Faradion, explained: “It’s available worldwide, which means it’s cheaper to source and far less water-intensive to extract.” He noted that producing one ton of lithium requires 682 times more water than one ton of sodium. Bloomberg projects sodium-ion batteries could displace as much as 272,000 tons of lithium demand by 2035.

Even so, lithium is unlikely to disappear. Thanks to its high energy density and strong performance in cold weather, the metal remains vital for high-performance applications. As EV World put it: “The future won’t belong to lithium or sodium alone—but to both, strategically deployed across sectors. The result will be a more diverse and resilient battery economy.”

Palladium prices rose on Thursday as the US dollar weakened against most major currencies and speculation increased that the Federal Reserve is moving toward a rate cut.

Sibanye-Stillwater, a US-listed miner, is seeking tariffs on Russian palladium imports, a step that could add volatility to the metal’s price.

The Johannesburg-based company said its petition adds further uncertainty to the outlook for platinum group metals (PGMs), following a rally since the start of the year driven by lower output in South Africa during the first half and thin liquidity in the spot market.

“We believe Russian palladium imports are being sold below market prices due to several factors, which began after Russia’s invasion of Ukraine in 2022,” CEO Neal Froneman said in a July 31 statement on the company’s website.

He added: “Securing protection against subsidized and dumped Russian imports will allow Sibanye-Stillwater, its employees, and the entire US PGM industry to compete in a fairer environment.”

A decision on the petition is expected within 13 months.

Norilsk Nickel, the Russian company that controls about 40% of global mined palladium output, declined to comment.

Sibanye-Stillwater, which operates production assets in South Africa and the US, reported a second consecutive annual loss last year after writing down 500 million dollars from its US palladium operations amid weaker prices.

Spot palladium prices have risen 31% so far in 2025, with positive expectations for the rest of the year. A July Reuters poll showed analysts expect palladium prices to climb in 2025 for the first time in four years, supported by gains in platinum.

However, Heraeus analysts cautioned that “tariffs on Russian metal may not change market balances, but could redirect global trade flows, increasing price volatility.”

According to Trade Data Monitor, Russia and South Africa are the main suppliers of palladium to the US, while China ranks second after the US as the largest buyer of Russian metal.

US imports of Russian palladium rose 42% year-on-year to over 500,000 troy ounces between January and May, according to Heraeus.

Palladium and PGMs are widely used in gasoline vehicle catalytic converters, and have so far avoided both US sanctions on Russian firms over the Ukraine war and any import tariffs announced by President Donald Trump.

Separately, according to CME’s FedWatch tool, markets currently see an 86% probability that the Fed will cut rates by 25 basis points in September.

Meanwhile, the dollar index fell 0.3% to 97.9 points by 16:02 GMT, after hitting a high of 98.2 and a low of 97.8.

On the trading side, December palladium futures rose 2% to 1,125.5 dollars an ounce at 16:02 GMT.