Dollar sinks against yen after sales tax increase postponed
The kiwi slid to 74.55 yen at 8am in Wellington.
The New Zealand dollar sank against the yen after Japanese Prime Minister Shinzo Abe said he would delay a planned increase in the sales tax rate, dampening expectations for further monetary stimulus.
The kiwi slid to 74.55 yen at 8am in Wellington, from 74.95 yen at 5pm yesterday. The local currency increased to 68.15USc from 67.84USc yesterday, aided by a 3.4% gain in prices on the GlobalDairyTrade platform overnight.
The yen strengthened after Abe announced he would postpone increasing Japan's sales tax to 10% until 2019. That dampened speculation that the country may add more monetary stimulus, pushing up the currency.
"Japan delayed a sales tax hike for two-and-a-half years," OMF senior dealer foreign exchange Stuart Ive says. "The longer than expected delay raised fears that Japan was also in no hurry to weaken the yen currency through monetary stimulus."
The New Zealand dollar rose to 93.91Ac from 93.24Ac yesterday ahead of Australian data on trade and retail sales for April today.
The kiwi increased to 47.28 British pence from 46.83 pence yesterday, advanced to 4.4807 yuan from 4.4734 yuan, and was little changed at 60.88euro c from 60.98euro c. The trade-weighted index gained to 73.48 from 73.21 yesterday.
(BusinessDesk)
Tina Morrison
Thu, 02 Jun 2016
Thu, 02 Jun 2016
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Dollar sinks against yen after sales tax increase postponed
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