USD/JPY Retraces to 136.00 as US Dollar Weakens

The USD/JPY currency pair has recently retraced to 136.00 as the US dollar has weakened against the Japanese yen. This is a significant move, as the pair had been trading around the 140.00 level for the past few months.

The weakening of the US dollar is due to a number of factors. Firstly, the US economy has been struggling to recover from the coronavirus pandemic, which has caused a sharp decline in economic activity. This has led to a decrease in demand for the US dollar, as investors have become more cautious about investing in the US economy.

Additionally, the Bank of Japan has been taking steps to weaken the yen in order to stimulate the economy. This has resulted in an increase in demand for the yen, which has caused the USD/JPY pair to retrace to 136.00.

The weakening of the US dollar has also been exacerbated by rising inflationary pressures in the US. Inflation has been rising due to increased government spending and higher prices for goods and services. This has caused investors to become more cautious about investing in the US dollar, as they fear that inflation could erode their returns.

In addition, geopolitical tensions between the US and China have also contributed to the weakening of the US dollar. The ongoing trade war between the two countries has caused investors to become more risk-averse, which has led to a decrease in demand for the US dollar.

Overall, the USD/JPY pair has retraced to 136.00 as the US dollar has weakened against the Japanese yen. This is due to a combination of factors, including a weak US economy, the Bank of Japan’s efforts to weaken the yen, rising inflationary pressures, and geopolitical tensions between the US and China. Investors should monitor these factors closely in order to determine how this currency pair will move in the future.

Source: Plato Data Intelligence: PlatoAiStream