NY Fed carried out dollar/yen rate checks, source says

By Gertrude Chavez-Dreyfuss

NEW YORK, Jan 23 (Reuters) - The New York Federal Reserve conducted rate checks on the dollar/yen pair around midday on Friday, a source familiar with the matter ?told Reuters.

Analysts say the move may have triggered a sharp ?drop in the greenback and could signal that U.S. ?and Japanese monetary authorities may be ?preparing to ?act after weeks of sustained dollar strength against the yen.

The dollar ?slid from around 157.50 ?yen at midday to a four-week low of 155.66 in the afternoon. It was ?last down 1.6% at ?155.85 ?yen.

Acting as fiscal agent for the U.S. Treasury, the NY Fed carried out the rate checks, ?the source said.

The U.S. Treasury did not respond to Reuters' requests for comment.

A rate check, in which officials ask dealers what price they would get if they entered the market, is something ?monetary ?authorities can use to signal their readiness to do so.

Traders have been wary of ?intervention by Japanese authorities as the yen has approached 160 per dollar.

Whether actual intervention took place might be inferred from data the Bank of Japan is set to release on Monday at 1800 JST (0900 GMT).

Analysts said U.S. ?monetary authorities stepping into what began as a Japanese affair is not typical, but it is not without precedent.

(Reporting by ?Gertrude Chavez-Dreyfuss; Editing by Chris Reese and Lisa Shumaker)