The New York Federal Reserve (NY Fed) conducted rate checks on the dollar/yen pair, a source revealed. This move may have triggered a sharp drop in the greenback, suggesting that U.S. and Japanese monetary authorities could be preparing to intervene after weeks of the dollar's strength against the yen. The dollar slid from 157.50 yen to a four-week low of 155.66 in the afternoon, indicating a potential response from the authorities. The NY Fed, acting as the fiscal agent for the U.S. Treasury, conducted these rate checks, which involve officials asking dealers about market prices. This strategy can signal the authorities' readiness to intervene. Traders have been cautious about potential Japanese intervention as the yen neared 160 per dollar. The Bank of Japan's upcoming data release on Monday may provide insights into any actual intervention. While U.S. monetary authorities stepping in on a Japanese issue is unusual, it is not unprecedented. This development is reported by Gertrude Chavez-Dreyfuss, with editing by Chris Reese and Lisa Shumaker.
