The currency interventions carried out by the Japanese authorities last week did not bring the expected effect, at least in the context of the price dynamics of the USD/JPY pair. After the first emotions subsided, the yen began to become cheaper again amid the general strengthening of the US currency. The pair initially collapsed to the 140 mark, but on the same day the downward momentum choked and actually faded away. Literally the next day after the currency intervention, the Japanese currency began to gradually lose its position. As a result, bulls pulled the price into the area of the 144th figure, where they lay down to drift.

The situation for the pair is close to a stalemate. On the one hand, dollar bulls are advancing on all fronts: the US dollar index returned to the area of the 114th figure, simultaneously updating a 20-year high (114.7). The US currency is strengthening its position due to the growth of anti-risk sentiment, the growth of geopolitical tensions. In addition, hawkish expectations regarding the Federal Reserve's further actions are increasing in the market. The indicator of US consumer confidence published on Tuesday added fuel to the fire. The CB Consumer Confidence index jumped to 108 points (with a forecast of growth to 104 points) - this is the strongest result since March of this year.

The dollar also strengthened its position thanks to the publication of Reuters. The economists surveyed by the agency voiced more hawkish forecasts compared to forecasts two weeks ago. According to the majority of experts (59 out of 80), the Fed will raise the rate by 75 points in November, and by 50 points in December. Some of them allow the option of a 75-point increase at the December meeting. This suggests that the Fed may close 2022 with the highest rate since the beginning of 2008.

All these fundamental factors allow USD/JPY bulls to move up, winning back lost positions. But this is only one side of the coin. The other side carries risks for USD/JPY bulls. We are talking about repeated currency interventions that can be carried out by the Japanese authorities after overcoming the 145.00 mark.

Let me remind you that rumors that the Japanese government may react to a sharp devaluation of the national currency were exaggerated at the end of the summer. The only question was where the conditional red line was located, overcoming which would provoke a reaction from the authorities. Many experts pointed to the area of marks 145-146, arguing that in 1998 the Japanese Ministry of Finance began similar actions when crossing the level of 146.00. Other analysts assured their clients that the risks would increase only when approaching the target of 150.00. But in the end, the patience of the Japanese authorities burst earlier, when, amid the dovish results of the September meeting of the Bank of Japan, the yen fell to the level of 145.90. There is no doubt: if it were not for the intervention of the authorities, the pair would now be trading around the 146th figure.

Thus, the 145th level has become a kind of price ceiling for the USD/JPY pair. The Japanese Ministry of Finance has made it clear that if traders overcome this red line, the consequences will not be long in coming. It is worth noting that Japanese Finance Minister Shunichi Suzuki initially commented rather vaguely on the current situation. First, he refrained from commenting on the size of the intervention. Secondly, he refused to answer an equally important question - was it a single action or will the country's authorities continue to strengthen the position of the national currency? Suzuki only added that the government is concerned about excessive fluctuations in exchange rates, "which cannot be ignored."

However, later he announced more specific messages. The Finance Minister said that the action held last week had "a certain effect" and that the authorities were ready to take further action, if necessary, against "speculative movements of the national currency." Deputy Finance Minister Masato Kanda made a similar statement, saying that "further actions in the foreign exchange market can be taken any day, including weekends."

As you can see, the situation for the USD/JPY pair is ambiguous. The yen still holds a trump card up its sleeve in the form of currency intervention, which can be carried out at any time – obviously, when crossing the 145.00 mark. On the other hand, a significant uncorrelation of the rates of the Fed and the BOJ pushes the pair up, thereby offsetting the actions of the Japanese Ministry of Finance.

All this suggests that long positions are still a priority for the pair, but with certain reservations. It is advisable to go into longs on downward pullbacks, with the main upward target at around 145.30 (the upper line of the Bollinger Bands indicator on the D1 timeframe). Keeping longs above this level is very risky, given the aforementioned risks.