NZ dollar at two-week high vs yen

The New Zealand dollar rose to a two-week high against the yen, which fell broadly as the resignation of Japanese Prime Minister Yukio Hatoyama raised concerns about the outlook for the currency, given that his likely successor has said in the past he wanted a weaker yen.

The kiwi also edged above its peaks of recent days against the euro to reach a fortnight high against the European currency, and after a bumpy night rose against the US dollar but ended the overnight session lower against the Australian currency.

By 8am the NZ dollar was near its highs at 62.83 yen, 0.5570 euro and US68.21c, from levels at 5pm yesterday of 61.55 yen, 0.5521 euro and US67.42c.

The yen hit a two-week low against the greenback after Hatoyama and his deputy resigned to try to boost the ruling party's faltering fortunes in an election next month.

BNZ strategist Mike Jones said the NZ dollar remained firmly in consolidation mode, having spent most of the night tracking a range between US67.30c and US68.20c.

He expected the kiwi to remain well supported in coming months, with one of the reasons being "lofty" commodity prices as indicated by yesterday's ANZ index which showed commodity export prices up a further 2.5 per cent in May.

Overall, world prices for New Zealand export commodities are 54.5 per cent above year-ago levels and, even with a stronger kiwi currency, NZ dollar prices are up 30 per cent over the same period.

Along with the impetus from rising commodity prices, a cautious improvement in rise appetite supported the NZ dollar overnight, amid a buoyant night in US equity markets, Jones said.

Against the Australian dollar, the kiwi fell to A81c at the local open from A81.24c at 5pm, while the trade weighted index rose to 66.40 at 8am from 65.83 at 5pm.

- NZPA