The New Zealand dollar slipped against the yen as investors favoured the safe haven currency amid concern a decline in China's yuan which may signal growth in Asia's largest economy is slowing.
The kiwi slipped to 85.14 yen at 8am in Wellington from 85.42 yen at 5pm yesterday. The local currency was almost unchanged at 83.32 US cents from 83.33 cents yesterday.
China's yuan fell about 0.5 per cent against the US dollar yesterday, its biggest decline in more than three years, amid speculation China's central bank wants to end to the currency's steady appreciation and allow it to trade in a wider band. The yuan is more than 1 per cent weaker over the past week, raising concern it may hurt property developers who have borrowed in dollars, and contribute to a slowing in the property market.
"This sort of volatility is unheard of for the tightly-controlled currency and has analysts speculating that the People's Bank of China is attempting to shake out speculative activity," Bank of New Zealand currency strategist Raiko Shareef said in a note. "Whatever the reason, the JPY has benefitted from investors seeking relative safety."
Today, Finance Minister Bill English is expected to release details of the share market float of state-owned Genesis Energy at a speech to the Auckland Chamber of Commerce.
