The New Zealand dollar gained against the yen as upbeat investor confidence dimmed demand for the relative safety of Japan's currency and held its own against a stronger greenback ahead of tomorrow's interest rate review.

The kiwi rose to 78.45 yen as at 8am in Wellington from 78.17 yen yesterday and traded at 68.95 US cents from 69.02 cents.

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A calming in geopolitical tensions has seen investors regain confidence as electoral and military uncertainty abates, although commodity prices with weak iron ore particularly weak. The Chicago Board Options Exchange's volatility index, known as Wall Street's 'fear gauge', was near a 25-year low yesterday and was recently at 9.94, while stocks on Wall Street were mixed with the tech-heavy Nasdaq Composite up 0.3 per cent the Standard & Poor's 500 index dipping 0.1 per cent.

That's weighed on the yen, with Bank of Japan governor Haruhiko Kuroda telling politicians he has no plans to pull back on monetary easing, while the Federal Reserve is poised to keep raising interest rates and shrinking its massively expanded balance sheet. New Zealand's Reserve Bank will review policy tomorrow, and while governor Graeme Wheeler isn't expected to shift the official cash rate from 1.75 per cent, economists are tipping he may bring forward projected increases.

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"The positive risk sentiment environment is also not helpful for the yen. The VIX index closed at its lowest level since December 1993 yesterday," Bank of New Zealand currency strategist Jason Wong said in a note. "With the NZD showing some modest outperformance on the crosses over recent days, some hot money might be lightening up on short NZD positions ahead of Thursday's MPS."

Local data today include accommodation and electronic card spending.

The kiwi held recent gains against its trans-Tasman counterpart, trading at 93.87 Australian cents from 93.80 cents yesterday after the federal government's budget announced plans for a major infrastructure spend driving larger deficits in the short-term, before moving to surplus in 2020/21. Weak consumer spending data yesterday weighed on the Australian dollar as investors now expect the Reserve Bank of Australia will keep the target cash rate at 1.5 per cent for the foreseeable future.

The local currency slipped to 4.7617 Chinese yuan from 4.7662 yuan ahead of Chinese inflation data.

The kiwi increased to 63.36 euro cents from 63.11 cents yesterday and traded at 53.26 British pence from 53.28 pence. The trade-weighted index was at 75.43 from 75.36 yesterday.