Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


NZ dollar heads for 4.3% weekly gain vs. yen on BOJ printing

NZ dollar heads for 4.3% weekly gain vs. yen as BOJ floods markets with new money

By Paul McBeth

April 12 (BusinessDesk) - The New Zealand dollar is heading for a 4.3 percent weekly gain against the yen, adding to last week's 4.2 percent increase, as investors buy into the Japanese central bank's massive money-printing programme to revive the country's stagnant economy.

The kiwi increased to 85.75 yen at 5pm in Wellington from 85.58 yen yesterday, and hit a new five-year high 86.13 yen during the trading session. The local currency traded at 86.23 US cents at 5pm from 86.32 cents this morning and 85.92 cents yesterday.

New Zealand's currency has been one of the biggest benefactors of the Bank of Japan's goal to double its monetary base in a plan to rival the Federal Reserve, and raising inflation to an annual pace of 2 percent. That flood of new money has looked for assets that offer positive returns, and have underpinned gains in stock markets and risk-sensitive currencies such as the kiwi and Australian dollars.

"The market is going all the way pricing in the Bank of Japan achieving its target - it's hard to see the weakness in the yen continuing at this breakneck pace," said Mike Jones, currency strategist at Bank of New Zealand in Wellington. "The Aussie and the kiwi are probably the two bigger benefactors of the cash that's come out of Japan."

New Zealand's 10-year government bonds yielded 3.38 percent at 5pm in Wellington, almost 280 basis points more than their Japanese equivalent.

The kiwi is heading for a 2.3 percent weekly gain on a trade-weighted basis, with the yen driving much of those gains, and the trade-weighted index reached a new post-float high 79.39. The TWI was 79.15 at 5pm from 79.11 yesterday.

Those gains stemming from the yen weakness may abate next week as finance ministers central bank heads of the Group of 20 nations meet in Washington next week, and may discuss monetary policy action that's devaluing nations' currencies.

Still, Jones isn't convinced that will prompt a turnaround in the kiwi dollar, saying the relatively strong yields and improving economic data are attracting investor interest.

He scotched suggestions the Reserve Bank may consider intervening, saying "it would be regarded as a better level to get long on the kiwi." A long position is when an investor bets an asset will gain in value.

New Zealand's first quarter consumers price index is slated for release next week, and is expected to show a quarterly pace of 0.4 percent, and an annual pace of 0.9 percent, just short of the central bank's target band of between 1 percent and 3 percent.

The local currency was little changed at 65.72 euro cents from 65.79 cents yesterday, and traded at 56 British pence from 56.05 pence. It was almost unchanged at 81.67 Australian cents from 81.66 cents.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Strike: Lyttelton Port Workers Vote To Escalate Dispute

Members of the Rail and Maritime Transport Union (RMTU) at Lyttelton Port today voted to escalate their industrial action. Around 200 RMTU members have been operating an overtime ban since 17 December and today they endorsed a series of full withdrawals of labour at the port. More>>

ALSO:

Scoop Business: NZ Dollar Falls To 3-Year Low As Investors Favour Greenback

The New Zealand dollar fell to its lowest in more than three years as investors sold euro and bought US dollars, weakening other currencies against the greenback. More>>

ALSO:

Scoop Business: NZ Govt Operating Deficit Smaller Than Expected

The New Zealand’s government’s operating deficit was smaller than expected in the first five months of the financial year as a clampdown on expenditure managed to offset a shortfall in the tax-take from last month’s forecast. More>>

ALSO:

0.8 Percent Annually:
NZ Inflation Falls Below RBNZ's Target

New Zealand's annual pace of inflation slowed to below the Reserve Bank's target band in the final three months of the year, giving governor Graeme Wheeler more room to keep the benchmark interest rate lower for longer.More>>

ALSO:

NASA, NOAA: Find 2014 Warmest Year In Modern Record

Since 1880, Earth’s average surface temperature has warmed by about 1.4 degrees Fahrenheit (0.8 degrees Celsius), a trend that is largely driven by the increase in carbon dioxide and other human emissions into the planet’s atmosphere. The majority of that warming has occurred in the past three decades. More>>

ALSO:

Scoop Business: New Zealand’s Reserve Bank Named Central Bank Of The Year

The Reserve Bank of New Zealand’s efforts to stifle house price inflation by using new policy tools has seen the institution named Central Bank of the year by Central Banking Publications, a publisher specialising in global central banking practice. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news