KEY POINTS:
The New Zealand dollar recovered yesterday after losing ground against the US dollar overnight, but was unable to match Monday's post-float high of US76.84c.
By 5pm, the kiwi was at US76.74c from US76.64c on Monday, while against the Aussie it rose to A90.50c from A90.27c.
The trade weighted index was at 74.60 from 74.52 late on Monday.
"It's had another reasonably perky day," Westpac currency strategist Michael Gordon said.
The kiwi traded a local range of US76.40c to US76.70c.
"The higher yield currencies started a little lower at the end of the US session but the kiwi in particular is creeping higher," Gordon said.
"One of the key drivers of the kiwi in recent days appears to be buying from Japanese investment trusts as they start receiving their summer bonuses.
"Given they have a pretty high appetite for high-return assets, then they'll inevitably devote a fair chunk of it to New Zealand dollars."
The yen jumped yesterday, pulling away from last week's 4 1/2-year low against the US dollar, after Japan's finance minister warned that markets should be aware of the risks of one-way bets against the Japanese currency.
The comments by Koji Omi echoed remarks by officials at Group of Seven meetings in the past year referring to carry trades - which have been inflating the New Zealand dollar - and suggested some concern about the pace of the yen's slide.
"I think they have purposely started to try to curb the yen's weakness," said Tomoko Fujii, head of economics and strategy for Bank of America in Tokyo.
"I think they are worried that the impact could be too big if they leave things alone and there is an unwinding of carry trades at some point."
- NZPA
