Markets turned to the safe-haven yen on jitters about the prospect of fresh elections after the anti-establishment 5-Star and League parties in Italy abandoned plans to form a government.
According to Reuters, investors are concerned any could be seen as a quasi-referendum over Italy's role in the European Union and eurozone.
"There's some volatility in the yen, but that's because of the overall risk profile in the market. The yen picks up, along with the volatility," said Sheldon Slabbert, a trader at CMC Markets.
The kiwi also continued to benefit from the weaker euro, trading at 59.60 euro cents from 59.30 cents late yesterday. Slabbert said, however, the euro's fall may be "potentially overplayed" as investors are largely used to the Italian political scene.
Otherwise, the kiwi is sticking to very tight ranges. Domestically, Slabbert said the markets will be watching for the Reserve Bank's financial stability report tomorrow, particularly if it hints at a further loosening of the loan-to-value restrictions, which would be a de facto rate cut, and for any commentary around the dairy sector.
The kiwi increased to 92.00 Australian cents from 91.74 cents yesterday. It traded at 4.4452 yuan from 4.4424 yuan and at 52.05 British pence from 52.11 pence.
The trade-weighted index was little changed at 72.91 from 72.86.
