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(Bloomberg) -- By asking New York traders to confirm the price of the Japanese yen against the dollar on Friday, US authorities handed investors yet another reason to sell the greenback.

The yen jumped and the dollar weakened on Monday as investors decided the so-called rate check was the biggest sign yet of official disquiet toward the sliding Japanese currency and that the next step could be an intervention to buoy it.

That the calls were made in US hours by the Federal Reserve Bank of New York also fanned speculation President Donald Trump’s administration might be willing to unite with Japan to rescue the yen for the first time since 1998, in turn reviving the hot debate about whether the US is happy to see the dollar drop.

The Bloomberg Dollar Spot Index is trading near a three-year low, having fallen 9.3% since the beginning of last year. While that raises questions about the long-term value of the world’s reserve currency and risks fanning inflation, the decline might also help American exporters compete with rivals in Asia.

If the US unites with Japan “then that would amplify the yen rally — and not just for symbolic reasons,” said Gareth Berry, strategist at Macquarie Group Ltd. “Japan has lots of dollars to sell, but the NY Fed has an infinite amount. It would also be interpreted as a sign that Trump wants a weaker dollar more generally.”

In the US, the Treasury Department sets currency policy and would authorize any intervention, which is then typically carried out by the Federal Reserve, hence the role of the New York Fed on Friday.

Forces already weighing on the dollar include expectations that Trump’s forthcoming nominee to run the Federal Reserve will be more biased to cutting interest rates than the outgoing Jerome Powell. US trade wars, fiscal profligacy and widening political polarization are also viewed as dimming the appeal of the US dollar and debt, the so-called debasement trade.

Coordinated intervention to prop up the yen is rare, with one occasion happening in 1998 and another being the Plaza Accord, a 1985 deal between the US, France, Japan, the UK and then West Germany to weaken the dollar.

Early last year, analysts debated the likelihood of a so-called Mar-a-Lago Accord, prompted by a research paper by Trump administration economist and now-Federal Reserve board member Stephen Miran on weakening the dollar.

“When the US Treasury starts making calls, it’s usually a sign this has moved past a normal FX story,” said Anthony Doyle, chief investment strategist at Pinnacle Investment Management. “The potential of coordinated action caps dollar-yen upside and makes the long dollar trade more fragile.”

In options, pricing on the greenback headed for its most bearish level since at least 2011. Risk reversals, which capture positioning and sentiment, have shifted not only in yen pairs but across major currencies. On the euro, for instance, sentiment has turned the most bullish since May.

Demand has also risen for options that pay out if currencies experience larger-than-expected swings. Traders are now the most convinced since April that the euro will make a sizable move against the greenback over the next month.

What a ‘Mar-a-Lago Accord’ Would Mean for the Dollar: QuickTake

The yen strengthened more than 1% on Monday, while Bloomberg’s dollar gauge fell 0.4%, extending last week’s 1.6% decline. Gold rose beyond $5,000 an ounce for the first time.

The possibility of more disruption in Washington also put dollar traders on edge. Over the weekend, Trump threatened 100% tariffs on Canada if it reached a trade deal with China, and Democrat leaders warned they will oppose a government spending bill.

What Bloomberg Strategists Say...

“The US dollar’s selloff will accelerate as foreign investors increase their currency-hedging ratios and now that the yen depreciation trend has been stalled via action from officials.”

Mark Cudmore, Markets Live Executive Editor

To be sure, there’s still debate about whether the Trump administration actually favors a weaker dollar. Treasury Secretary Scott Bessent said last year that the US continues to have a “strong dollar” policy and dismissed concerns about the greenback’s status as the world’s key currency.

“The price of the dollar has nothing to do with a strong dollar policy,” Bessent told Bloomberg Television at the time.

For Daniel Baeza, senior vice president at Frontclear, any sign of co-ordinated action could hit sentiment toward the greenback.

“The bigger signal is policy coordination,” he said. “If markets interpret coordination as a willingness to tolerate easier global dollar conditions, especially alongside a dovish Fed reaction function, that could reinforce short-term dollar downside.”

--With assistance from Vassilis Karamanis.