The New Zealand dollar fell against the yen after North Korea fired a ballistic missile over Japan's northern island of Hokkaido, sapping risk appetite. News that a cattle disease had been detected on another three properties also weighed on the currency.

The kiwi was at 78.58 yen as at 5pm in Wellington versus 79.24 yen at 8 am and from 78.96 yen late yesterday. The yen - widely considered a safe haven - jumped to a four-month high against the US dollar in Asian trading. The kiwi was at 72.25 US cents from 72.38 US cents late yesterday.

"It's mostly North Korea but then the cattle disease headlines had an impact," said Westpac Banking Corp senior markets strategist Imre Speizer.

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The missile - the first Pyongyang has fired over Japan's main islands since 2009 - sparked a harsh response from Japanese Prime Minister Shinzo Abe. "This outrageous action of firing a missile over our country is an unprecedented, grave and serious threat that seriously damages peace and security in the region," he said, according to the Wall Street Journal. "We have firmly protested to North Korea."

Speizer said markets are now watching and waiting for any reaction out of the US. "It's not clear what they will do and until it looks like it will escalate the market will take the view that it's bad but things always calm down, or at least they have so far," he said.

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The kiwi also lost ground when the Ministry for Primary Industries said three new properties tested positive for the bacterial cattle disease Mycoplasma bovis, bringing the total number of infected farms to six. MPI has said Mycoplasma bovis is commonly found in cattle globally, including in Australia and it does not infect humans and presents no food safety risk. It is the first time it has been found in New Zealand.

The kiwi dollar fell to 60.32 euro cents from 60.70 cents yesterday. It slipped to 91.12 Australian cents from 91.17 cents and traded at 55.82 British pence from 56.18 pence. The kiwi fell to 4.7735 yuan from 4.8051 yuan.

The trade-weighted index fell to 75.66 from 75.86.

The two-year swap rate fell 2 basis points to 2.14 while the 10-year swaps fell 4 basis points to 3.08 per cent.