In other words, after a brief strengthening of the yen, the market quickly returned to buying the dollar, as the fundamental factors that have supported the rise in USD/JPY over the past several months have not gone away. The intervention changed the short-term dynamics but did not eliminate the key imbalance between the monetary policies of the US and Japan.

The maintenance of a significant interest-rate differential between the two economies is the primary driver of the USD/JPY pair's recovery. Despite a gradual easing of expectations for the Fed's future actions, yields on US assets remain significantly higher than those on Japanese assets. The differential between the interest rates of the Federal Reserve and the Bank of Japan stands at 2.5-2.75 percentage points.

This factor underlies the resilience of carry trade strategies—one of the main reasons for structural pressure on the yen. Investors borrow funds in low-yield currencies (primarily in Japanese yen) and direct them into higher-yielding assets in the US. As long as the interest rate differential remains significant and market volatility is contained, this strategy will remain attractive.

In fact, the intervention only temporarily increased the cost of opening new carry positions but also provided traders with more attractive entry levels for buying the dollar. After the primary downward impulse subsided, market participants gradually restored previous positions, which again boosted demand for USD/JPY. This is why many traders view such sharp declines not as the beginning of a long-term trend reversal but as corrective movements within an ongoing upward cycle.

The BoJ has also not become an ally of the yen. Last Friday, the central bank maintained all parameters of its monetary policy unchanged and confirmed the previously announced course towards gradual normalization. However, market participants expected much more decisive signals from the central bank. BoJ Governor Kazuo Ueda adopted an extremely cautious tone, stating that further actions by the central bank would depend entirely on incoming macroeconomic data.

This approach has proven to be insufficiently "hawkish" for the overwhelming majority of market participants. Traders were hoping to receive clearer guidance on subsequent rounds of rate hikes and the potential acceleration of the tightening cycle. However, the BoJ chose to leave itself room for maneuver (i.e., a wait-and-see position), stating that further normalization would be gradual. As a result, the market has come to a justified conclusion that the gap between Japanese and US rates will remain significant for a long time.

Notably, the inflation data from Tokyo, published last Friday, also failed to support the Japanese currency. Although the TCPI index is considered a leading indicator of nationwide inflation and usually provokes significant volatility in the USD/JPY pair, Tokyo's overall consumer price index rose to 2.0% in July and to 1.9% when excluding fresh food prices.

However, traders reacted coolly to this release, as a significant part of the inflationary pressure in Japan (including in Tokyo) is driven by "imported" inflation and rising food and energy costs. For the BoJ, it is much more important to see sustainable domestic demand accompanied by stable wage growth and expanding consumer activity. Currently, these conditions are only partially met, which is why the central bank is not rushing into further tightening decisions. This is clearly evidenced by the results of the July central bank meeting, which were announced just a few hours after the publication of July's TCPI data.

Thus, the intervention proved a powerful but short-term factor supporting the yen. It is worth noting that such "rebound" dynamics are not new for the USD/JPY pair. The market exhibited a similar reaction following previous currency interventions by the Japanese authorities; the initial southward impulse gradually faded, after which the pair reversed 180 degrees and regained almost all of the losses.

This time, we are witnessing a similar picture, with long-term drivers continuing to work in favor of the dollar. The sustained interest-rate differential, the attractiveness of carry-trade operations, and the cautious stance of the BoJ suggest that demand for USD/JPY remains robust. Therefore, subsequent price declines should still be considered as opportunities to open long positions. The nearest target for upward movement is at 158.40 (the upper line of the Bollinger Bands indicator on the H4 timeframe). The main target is 159.00 (the lower boundary of the Kumo cloud on the daily chart).