A rate check is a signal that monetary authorities are monitoring a currency and may be preparing to intervene, but it does not involve an actual transaction, Bank of America strategists explained. During a rate check, a central bank or government authority asks financial institutions for an indicative or immediately tradable exchange rate, then declines to buy or sell the currency. The action falls between verbal intervention and direct intervention using government funds, and can deter speculative trading by showing authorities are present without immediately committing financial resources. Japan has traditionally used this approach before intervening in the yen, while the U.S. adopted it for the first time in January 2026 when a Federal Reserve Bank of New York check was seen as evidence that Washington shared Tokyo's concern about the currency's weakness. The New York Fed reportedly conducted another USD/JPY check on behalf of the U.S. Treasury last week after Japanese authorities bought yen, causing USD/JPY to initially fall around 0.8% before returning to its earlier level, with no U.S. transaction confirmed. A second check involving EUR/JPY was more unusual, raising questions about why Washington signalled possible action involving the euro. Repeated checks can lose effectiveness if markets do not believe actual intervention will follow, and without further policy action, USD/JPY could return to the mid-160s, while a government-induced decline below 155 would have a larger effect, potentially forcing investors to unwind short-yen positions and prompting Japanese exporters to adjust currency hedges.