The New Zealand dollar fell to a two-week low against the yen as investors pared back expectations the Bank of Japan will soon introduce more stimulus.
The kiwi fell as low as 88 yen this morning, and was trading at 88.15 yen at 8am from 88.86 yen at 5pm yesterday. The local currency benefited from a weaker greenback, touching a week-high of 86.81 US cents, and was trading at 86.71 cents at 8am from 86.31 cents yesterday.
The Japanese currency was the best performer overnight after the nation's central bank surprised some investors by not adding extra stimulus following a two-day policy meeting. Governor Haruhiko Kuroda signalled there was no need for additional stimulus to escape deflation and signalled confidence that the world's third-largest economy would recover from the impact of this month's sales tax rise.
"Governor Kuroda suggested the economy would be resilient to the increased sales tax introduced at the beginning of April. However, the bank stands ready to ease further if necessary, which we suspect may occur later in the year," Kymberly Martin, senior market strategist at Bank of New Zealand, said in a note. "The fact that it did not announce any measures this time will have surprised some, helping add to the strengthening tone in the Japanese yen."
In New Zealand today, data is released on electronic card transactions for March at 10:45am. Tonight, the Federal Reserve releases the minutes from its last meeting and data will be published on the UK and German trade balances.
