The New Zealand dollar rose against the yen after Japanese growth was revised lower, damping demand for the nation's currency.
The kiwi advanced to 89.37 yen at 8am in Wellington, from 88.77 yen at 5pm yesterday. The local currency gained to 73.75 US cents from 73.31 cents yesterday after the greenback consolidated following stronger employment data on Friday.
The yen was the worst performing major currency overnight after a report showed the Japanese economy grew just 0.4 per cent in the fourth quarter of last year, lower than the previous 0.6 per cent estimate.
Japanese consumer demand has been weak since the government hiked the sales tax in April last year.
"The Japanese economy is still reeling from the effects of that sales tax rise in April last year on an economy that was already at best fragile and at worst going backwards slightly and what's happening with its major trading partners has hit the export side," said Bancorp Treasury Services client advisor Peter Cavanaugh.
