The USD/JPY currency pair falls near 130.60 again on Wednesday. As the North American session starts, the pair is getting close to its daily low of 129.75-129.70.

The Japanese yen goes up, which decreases the USD/JPY pair. Even though the BoJ chose to be more dovish last week, people in the market think that rising inflation could make the BoJ more hawkish later this year. A new wave of risk-averse trading worldwide also makes the JPY safer.

The worst COVID-19 outbreak in China and the long war between Russia and Ukraine have hurt the market’s mood and made it more likely that a recession will happen. After a recovery from the recession, the World Bank said that the world economy is in its worst slump since 1970. It makes investors feel worse and raises the demand for JPY.

As people worldwide look for safety, the US dollar goes up from a nine-month low. It could make USD/JPY stronger and reduce losses. Before this week’s big macroeconomic news from the US, which could affect the Fed’s plan to raise interest rates, traders may want to avoid making risky bets. USD demand will tell the significant currency what to do.

Conclusion

In the short term, USD/JPY chances will base on how the market feels about risk and how the USD price is moving. The way prices are moving now, and the economic situation suggest that the recent downward trend may continue. So, any attempt to get money back may be sold into and limited for now.