The New Zealand dollar slipped against the yen ahead of Japanese economic growth figures and a Bank of Japan meeting tomorrow, after a Group of Seven nations' statement indicated concern about excessive movements in Japan's currency.
The kiwi fell to 78.22 yen at 5pm in Wellington from 78.72 yen yesterday. It traded at 84.12 US cents from 84.17 cents at 8am and up from 83.50 cents yesterday.
Japanese government figures are expected to show the world's third biggest economy grew an annualised 0.4 percent in the three months ended December 31 and emerging from its third recession in five years as cold weather sparked consumer spending, according to a Bloomberg survey of economists.
The same day, the Bank of Japan will announce the result from its monetary policy review in governor Masaaki Shirakawa's swansong. Prime Minister Abe was elected late last year on a platform of a more interventionist government.
"It'll be the status quo until we see something from the Bank of Japan tomorrow," says Tim Kelleher, head of institutional FX sales at ASB Institutional. "Mrs Watanabe is quite long," he says, referring to the stereotypical Japanese retail investor and the position of holding an asset on the basis it will appreciate.
The yen had a roller-coaster ride in Northern Hemisphere trading after a G-7 official comment that foreign exchange should be set by the market was misinterpreted, provoking a clarification that top officials in the world's seven biggest economies were unhappy with the excessive volatility in Japan's currency.
The yen traded at 93.03 per US dollar at 5pm in Wellington from 94.24 yesterday.
The kiwi fell to 81.32 Australian cents from 81.45 cents after business confidence across the Tasman improved, according to a Westpac Banking and Melbourne Institute survey.
New Zealand's Finance Minister Bill English talked down the likelihood of currency intervention, telling politicians in Wellington that he hasn't seen any "viable sustainable proposition" to do so.
Treasury, which advises the government on fiscal policy, told parliament's finance and expenditure committee its half-year economic and fiscal forecasts were still intact, with economic growth picking up in December, and offsetting weaker growth in the middle of last year.
It expects the kiwi dollar to stay at its current levels into next year.
The local currency rose to 62.55 euro cents from 62.33 cents and gained to 53.66 British pence from 53.33 pence. The trade-weighted index advanced to 76.21 from 76.05 yesterday.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Sky shares tank on subscriber warning
- Clinton shows she has bite in social media scrap with Trump
- Zespri ordered to reconsider collaborative marketing proposals
- Airways clarifies fee plans, sees average 1.2% rise per airline, up to 30% hike in capital budget
- Reserve Bank bans MediaWorks from media conferences after lockup leak
Most listened to
- NZVCA executive director Colin McKinnon on the deals and divestments of 2015
- Lee Buchheit of US law firm Cleary Gottlieb explains why the crisis in the eurozone may not be over yet
- BNZ CEO Anthony Healy on his bank's falling margins, dairy woes and the mortgage market
- Toulouse School of Economics professor Thomas-Olivier Leautier says electricity retailing would be more profitable if retailers offered real-time pricing but few do
- David Seymour says the government is hypocritical to believe EVs are next big thing but also need help