The New Zealand dollar continued to attract yield-related attention from Asia today, bettering yesterday's eight-year highs against the Japanese yen.
At 5pm the kiwi was buying 79.22 yen -- drifting back from an intraday high of 79.90, but still its highest close since November 1997.
Traders said the insatiable appetite for uridashis and eurokiwis -- New Zealand dollar denominated bonds sold to Japanese and European investors -- were the kiwi's saving grace against an otherwise shaky backdrop of record trade deficits and a weakening economic outlook.
"Until these dynamics give way, do not be surprised by the continuation of demand," Bank of New Zealand currency strategist Sue Trinh said.
The second largest uridashi on record -- valued at $1.18 billion -- was issued today.
In the year to date, monthly uridashi and eurokiwi issuance has been running at an annualised rate of $23.4 billion.
"If realised, this would be the highest rate on record," Ms Trinh said.
The New Zealand dollar also touched a three-and-a-half-month high against the euro of 0.5860 today, and a three week peak versus the Australian dollar -- drawing strength from weaker-than-expected Australian housing data.
Against the US dollar, the kiwi closed at US69.56c, compared with US69.24c at yesterday's local close.
The kiwi ignored local data showing a slight fall in employee confidence and the fourth consecutive monthly drop in the ANZ Bank's World Commodity Price Index in September.
The following are Reuters currency rates (5pm today and 5pm Tuesday):
NZ dlr US69.56c US69.24c
NZ dlr/Aust dlr A91.55c A90.79c
NZ dlr/euro 0.5825 0.5805
NZ dlr/yen 79.22 78.97
NZ dlr/stg 39.48p 39.42p
NZ TWI 70.86 70.55
Australian dollar US75.98c US76.28c
Euro/US dollar US1.1939 US1.1928
US dollar/yen 113.92 114.06
- NZPA
<EM>Currency</EM>: Yield demand for Kiwi continues
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