WASHINGTON — Federal Reserve officials disclosed in their latest meeting minutes that the New York Fed conducted a rate check in the USD/JPY market, acting as the U.S. Treasury’s fiscal agent. The action, described in detail in the Federal Open Market Committee minutes from the Jan. 28-29 session, highlights unusual vigilance over yen weakness amid a weakening dollar rally.

The minutes, published late Wednesday, highlight how several FOMC participants favored a balanced description of future rate intentions. That stance acknowledges the possibility of hikes if inflation stays elevated. Officials noted downside risks to employment have eased. Economic activity remains solid. Inflation shows signs of softening, which could open the door to two rate cuts later this year, according to analysts at ING.

Focus now shifts squarely to upcoming inflation data, ING economists said. Those readings must decline to support markets’ pricing of two Fed cuts in 2024. The firm expects that to happen.

The USD/JPY revelation drew immediate attention. It confirms a rate check occurred around 5 p.m. London time on Friday, Jan. 23, when the pair traded near 157. Such moves are exceptionally rare in FX markets. They point to a more hands-on approach from the White House on currency matters.

Officials and traders see the check as a deliberate signal. Both Washington and Tokyo want to prevent USD/JPY from breaking and holding above 160. With the Fed ready for cuts and the Bank of Japan raising rates, asset managers now eye selling opportunities in the 156-158 range, ING said.

The dollar index, or DXY, gained some ground after the minutes. Yet analysts doubt the rally’s staying power. Thursday brings U.S. initial jobless claims data and December trade balance figures. President Donald Trump touted on social media Wednesday night that the U.S. trade deficit shrank 78% last year. He predicted surpluses ahead.

A smaller-than-forecast December deficit could bolster expectations for strong fourth-quarter GDP growth, due Friday. That might lend the dollar brief support. Still, broader sentiment favors selling the greenback.

ING’s daily FX note also covers other currencies. The euro shows potential for outperformance versus the dollar. The Swiss franc remains stubbornly strong. In Central and Eastern Europe, Polish data points to steady growth and a loosening labor market.

Traders will parse Thursday’s U.S. numbers closely. Initial claims offer a snapshot of labor market health. The trade report could sway views on growth momentum. DXY might test the 98.00 level. But the prevailing view stays bearish on the dollar amid Fed cut bets.