Scoop has an Ethical Paywall
Work smarter with a Pro licence Learn More

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

 

NZD falls vs yen on low Bank of Japan stimulus

Friday 29 July 2016 05:17 PM

NZ dollar falls vs yen as Bank of Japan delivers less stimulus than expected

By Jonathan Underhill

July 29 (BusinessDesk) - The New Zealand dollar fell against the yen after the Bank of Japan announced additional monetary stimulus measures that were more modest than some in the market were expecting, driving up its currency.

The kiwi fell to a three-week low of 73.10 yen and was at 73.33 yen at 5pm in Wellington, from 74.45 yen late yesterday, after the Bank of Japan kept its policy rate at -0.1 percent while almost doubling its target for purchases of exchange-traded funds. The currency traded at 70.88 US cents, down from 71.11 cents yesterday. The kiwi is heading for a 1.1 percent weekly gain.

Speculation had grown about the size of the BOJ's stimulus measures, including cutting its policy rate more deeply negative, after the government yesterday unveiled a larger-than-expected 28 trillion yen fiscal package. But the BOJ's statement shows a clear determination to keep rates on hold, with a 7-2 majority vote, disappointing those in the market expecting greater efforts to revive Japan's economy and drive inflation back up to a target of 2 percent.

"The Bank of Japan has got a history of disappointing the market," said Tim Kelleher, head of institutional foreign exchange sales at ASB Bank. "The market probably got a bit carried away."

Running through to the close of trading in New York on Friday, the kiwi may be underpinned by demand from fund managers making month-end adjustments to their portfolios, Kelleher said.

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

The trade-weighted index fell to 75.74 from 76.02 late yesterday. New Zealand's two-year swap rate fell about 2 basis points to 2 percent, near a record low, and 10-year swaps fell 3 basis points to 2.41 percent.

The local currency slipped to 94.21 Australian cents from 94.42 cents yesterday and fell to 4.7135 Chinese yuan from 4.7366 yuan. It dropped to 63.95 euro cents from 64.25 cents yesterday and decreased to 53.77 British pence from 53.93 pence.

(BusinessDesk)


© Scoop Media

Advertisement - scroll to continue reading
 
 
 
Business Headlines | Sci-Tech Headlines

 
GenPro: General Practices Begin Issuing Clause 14 Notices

GenPro has been copied into a rising number of Clause 14 notices issued since the NZNO lodged its Primary Practice Pay Equity Claim against General Practice employers in December 2023.More

SPADA: Screen Industry Unites For Streaming Platform Regulation & Intellectual Property Protections

In an unprecedented international collaboration, representatives of screen producing organisations from around the world have released a joint statement.More

 
 
 
 
 
 
 
 
 
 
 
 

Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.