USD/JPY Drops as Fed Conducts Rare White House 'Rate Check'

USD/JPY and the broader US Dollar Index face significant selling pressure after reports emerged that the Federal Reserve conducted an unusual 'rate check' at the request of the White House, a move ING described as 'extremely rare in foreign exchange markets.' A rate check involves the central bank calling dealers to inquire about current exchange rates—a signal often interpreted as a precursor to potential intervention or coordinated policy action aimed at weakening the currency. The development marks a notable escalation in Washington's apparent desire for a softer dollar, raising concerns about politicization of monetary policy tools. For USD/JPY specifically, the yen has strengthened meaningfully as markets digest the implications of explicit government involvement in currency dynamics. Traders should monitor whether this action is followed by actual intervention or further verbal jawboning. Key support for USD/JPY lies at recent lows, while resistance may cap any recovery attempts as uncertainty around US FX policy persists. This event significantly increases near-term dollar volatility risk across all major pairs.