The New Zealand dollar hit a four-year high against the Japanese yen yesterday, prompting concern from local exporters whose returns are getting eroded by the exchange rate.
The kiwi reached 71.33 after Japan's Liberal Democratic Party, which has promised to aggressively ease monetary policy, won a landslide election victory. By 5pm the New Zealand dollar had slipped back to be trading at 70.91.
Grant Rosewarne, chief executive of Marlborough-based New Zealand King Salmon, which sends around 20 per cent of its exports to Japan, said the firm had foreign exchange hedging cover, but that only partly offset the impact of the weakening yen.
" It [the exchange rate] is problematic for us - we're making low margins on our Japanese business. "
Currency strategists expect the yen to weaken further versus other currencies as the Liberal Democratic Party, led by former Prime Minister Shinzo Abe, carries out its pledge to print money and stimulate a faltering, deflation-wracked Japanese economy.