The USD/JPY pair is testing the key support level of 140 as the unwind of carry trades continues. Carry trades involve borrowing money in a low-interest rate currency, such as the Japanese yen, and investing it in a higher-yielding currency, such as the US dollar. As investors unwind these trades, the USD/JPY pair is facing pressure.
The 140 level is important because it has historically been a significant support level for the pair. If this level is broken, it could indicate further downside potential for the USD/JPY pair.
Overall, the carry unwind is impacting the USD/JPY pair as investors reassess their risk appetite and adjust their positions accordingly. It will be important to monitor how the pair reacts to the 140 support level in the coming days to gauge the potential direction of the currency pair.