The New Zealand dollar slid to its lowest in almost five months against the yen after the Bank of Japan quashed expectations of further stimulus measures which would have debased the Japanese currency.

The kiwi dropped to 75.11 yen at about 6am in Wellington, its lowest level since it touched 75.03 yen on Jan. 28. The local currency recently traded at 75.49 yen, down from 77.34 yen at the 5pm market close in Wellington yesterday.

Bank of Japan governor Haruhiko Kuroda yesterday held the nation's benchmark interest rate near zero, kept unchanged the bank's plan for a 60 trillion-yen to 70 trillion-yen increase in the monetary base, and failed to announce any new stimulus measures. Following the announcement at the end of a two-day meeting, the yen strengthened, the Nikkei 225 index dropped and the yield on Japanese 10-year government bonds rose.

"The Bank of Japan left rates unchanged as expected yesterday, but refrained from announcing any additional measures to stimulate the economy," Bank of New Zealand strategist Kymberly Martin said in a report. "The lack of additional stimulus resulted in some pull-back in broad global risk appetite."


Governor Kuroda had been widely expected to extend the maturity of loans to banks, Martin said.

The New Zealand dollar was little changed against the greenback as traders await a Reserve Bank of New Zealand decision on interest rates tomorrow. The kiwi recently bought 78.72 US cents from 78.80 cents at 5pm yesterday.

Governor Graeme Wheeler is expected to keep the benchmark rate at a record low 2.5 per cent as he juggles conflicting tensions between a higher kiwi and rising property prices.

The local currency dropped on a trade-weighted basis to 73.31 from 73.76 yesterday. It edged lower to 83.34 Australian cents from 83.69 cents yesterday, slipped to 59.11 euro cents from 59.33 cents, and declined to 50.30 British pence from 50.56 pence.