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By Rocky Swift and Lucy Raitano TOKYO/LONDON (Reuters) -The dollar headed for its worst week since late July on Friday as the U.S. government shutdown increased uncertainty, while the yen pulled back from this week's highs as traders mulled the Bank of Japan's next move ahead of a ruling party leadership election this weekend. The dollar index, which measures the greenback against a basket of key currencies, was flat at 97.77. The euro was up 0.2% at $1.1736. Sterling firmed 0.1% to $1.345. "We've got the government shutdown in the U.S. … for market participants it means we're not getting any of the data releases we would usually get like the non-farm payrolls data today," said Michael Brown, senior research strategist at Pepperstone. "I think that's why we're seeing things trade in such listless fashion." BOJ GOVERNOR STRIKES CAUTIOUS TONE Though ISM data is due out of the U.S. later, Brown said he did not expect it to move the needle. The yen eased 0.1% to 147.375 per dollar, having earlier fallen as much as 0.4%. But it remained on track for a 1.4% advance this week that would be the biggest since mid-May. BOJ Governor Kazuo Ueda struck a cautious tone in comments about the global economy, lowering expectations of an imminent rate hike. Markets were also focused on a Liberal Democratic Party election on Saturday that will determine Japan's next prime minister. "Market participants are a little bit disappointed potentially … he (Ueda) didn't really lean into the idea of an October rate hike as much as some of his colleagues have done in recent sessions, that's why we've seen a little bit of pressure on the yen," said Brown. Markets were keeping a close eye on speeches by BOJ officials this week after the central bank's tankan survey on Wednesday showed confidence among big manufacturers improved for the second straight quarter. Deputy Governor Shinichi Uchida said on Thursday that the business mood was improving and corporate profits remained high even as U.S. tariffs weighed on exports. But in a speech on Friday, Governor Ueda put the focus back on how global factors, particularly the health of the U.S. economy, could affect the trajectory of wages and prices in Japan. Goldman Sachs economists said in a note that Ueda's speech "supports our view that the possibility of an October rate hike is very low." The LDP election also has consequences for Japan's budget and central bank policies. Among the frontrunners, dovish party veteran Sanae Takaichi could trigger more bond market uncertainty, while farm minister Shinjiro Koizumi and top government spokesperson Yoshimasa Hayashi are less likely to rock the boat. TWO MORE FED RATE CUTS EXPECTED THIS YEAR In the U.S. overnight, a Chicago Fed report that combined private and available public data estimated the September jobless rate was 4.3%, the same as in August and evidence that a feared rapid rise in unemployment had not yet begun. But details of the report, along with other data, pointed to sluggishness in the labour market. The ADP National Employment report on Wednesday showed private payrolls decreased by 32,000 in September, boosting expectations that the Federal Reserve would cut interest rates twice more this year. Traders see a 25-basis-point cut at the Fed's October meeting as almost certain and are pricing in an 89% probability of an additional cut in December, according to the CME Group’s FedWatch Tool. Dallas Fed President Lorie Logan on Thursday said the central bank appropriately cut rates last month to guard against the risk of a sharp deterioration in the job market, but said that so far the cooling has been gradual and signalled she was not eager to cut rates further. Elsewhere, a few Fed, ECB, Bank of England central bankers were due to speak at the farewell symposium of the Dutch central bank governor Klaas Knot, including ECB President Christine Lagarde and the Bank of England's Andrew Bailey. (Reporting by Rocky Swift in Tokyo and Lucy Raitano in London; Editing by Shri Navaratnam, Toby Chopra and Alex Richardson)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)

By Mike Stone WASHINGTON (Reuters) -The much-needed modernization of the U.S. Army's battlefield communications network being undertaken by Anduril, Palantir and others is rife with "fundamental security" problems and vulnerabilities, and should be treated as a "very high risk," according to a recent internal Army memo. The two Silicon Valley companies, led by allies of U.S. President Donald Trump, have gained access to the Pentagon's lucrative flow of contracts on the promise of quickly providing less expensive and more sophisticated weapons than the Pentagon's longstanding arms providers.   But the September memo from the Army's chief technology officer about the NGC2 platform that connects soldiers, sensors, vehicles and commanders with real-time data paints a bleak picture of the initial product. "We cannot control who sees what, we cannot see what users are doing, and we cannot verify that the software itself is secure," the memo says. Palantir and Anduril did not comment for this story.  The assessment, seen by Reuters and first reported by Breaking Defense, comes just months after defense drone and software maker Anduril was awarded a $100 million to create a prototype of NGC2 with partners including Palantir, Microsoft and several smaller contractors. The Army should treat the NGC2 prototype version as “very high risk” because of the “likelihood of an adversary gaining persistent undetectable access," wrote Gabrielle Chiulli, the Army chief technology officer authorizing official. Despite the early September memo's scathing critique, Leonel Garciga, Army chief information officer and Chiulli's supervisor, said in a statement to Reuters that the report was part of a process that helped in "triaging cybersecurity vulnerabilities" and mitigating them. In March, the 4th Infantry Division used the system in live-fire artillery training at Fort Carson, Colorado, in an exercise Anduril described as demonstrating faster and more reliable performance than legacy systems. The Army memo identifies some major security gaps. The report says the system allows any authorized user to access all applications and data regardless of their clearance level or operational need. As a result, "Any user can potentially access and misuse sensitive" classified information, the memo states, with no logging to track their actions. Other deficiencies highlighted in the memo include the hosting of third-party applications that have not undergone Army security assessments. One application revealed 25 high-severity code vulnerabilities. Three additional applications under review each contain over 200 vulnerabilities requiring assessment, according to the document. (Reporting by Mike Stone; editing by Chris Sanders and Sergio Non)

(The article has been published through a syndicated feed. Except for the headline, the content has been published verbatim. Liability lies with original publisher.)