The New Zealand dollar recovered some ground against the yen, mostly as the Japanese currency fell against other major trading partners, apparently on speculation that Group of Seven nations will keep selling the currency to curb its appreciation and help support Japan's economy.
The G-7 late last week agreed to
co-ordinate intervention to weaken the yen against both the greenback and the euro, after it reached post-World War II highs.
Traders looked to the need for Japanese investments abroad to be cashed up so that money could be brought home after the magnitude-9 earthquake. Reinsurance companies are also likely to need yen to pay out on policies held by Japanese insurers.
Both the Australian and New Zealand dollars strengthened as they followed the euro higher, Asian stocks rose, and Japan made progress in bringing a damaged nuclear power plant under control, boosting demand for higher-yielding assets.
Although financial markets in Japan were shut yesterday for a spring equinox holiday, the yen was 59.35 to the kiwi at 5pm, compared with 58.97 yesterday.
The NZ dollar last Friday initially jumped from around 57 but over the weekend edged to 58.97.
The kiwi also fell to €0.5173 at 5pm yesterday from €0.5184 at 5pm on Friday. It finished yesterday at US73.30c, up from US72.96c at the end of Friday, and at A73.27c, down a little on Friday's A73.36c.
The trade weighted index fell to 64.17 at 8am from 64.42 at 5pm on Friday but by 5pm yesterday had recovered to 64.37.
Data releases in this country are expected to provide some local direction for the kiwi: December quarter balance of payments figures are due out tomorrow, followed by gross domestic product on Thursday.
- NZPA
