KEY POINTS:
The New Zealand dollar closed virtually unchanged against the greenback today but climbed to three week highs against the Japanese yen and Australian dollar.
The Japanese currency fell against the greenback and the euro as investors conceded a possible interest rate hike by the Bank of Japan was unlikely to curb selling of the Japanese currency.
At 5pm today, the kiwi was buying 84.10 yen from 83.80 at 5pm yesterday. Early today it peaked at a three-week high above 84.30 after rising strongly between 10.30pm and midnight.
While investors are divided on whether the Bank of Japan will lift borrowing costs to a decade-high of 0.5 percent, they increasingly agree the yen will remain popular to fund the carry trade.
That involves investors borrowing in Japan where rates are low, then selling the yen and buy higher-yielding currencies, including the NZ dollar.
Meanwhile, against the US dollar the kiwi traded in a narrow range closing at US70.15c against US70.05c yesterday.
ANZ bank said the NZ dollar received support overnight from the offshore investment community and model traders.
Helping to keep the kiwi supported were comments from the Russian central bank which had stated an interest in diversifying its foreign currency reserve portfolio, and the NZ dollar was a currency it showed interest in, ANZ said.
With the NZ dollar buying above US70c and above A89c, export competitiveness overall would be further eroded, which was expected to show in economic data as the year progressed.
Against the Australian dollar, the kiwi hit an overnight peak at a three-week high of A89.28c about 7.45am. It closed on A89.02c from A89.08c at 5pm yesterday.
The trade weighted index closed up at 69.34 from 69.21.
Rates:
5pm today 5pm yesterday
NZ dlr/US dlr US70.15c US70.05c
NZ dlr/Aust dlr A89.02c A89.08c
NZ dlr/euro 0.5337 0.5318
NZ dlr/yen 84.10 83.80
NZ dlr/stg 35.90p 35.81p
NZ TWI 69.34 69.21
Australian dollar US78.78c US78.69c
Euro/US dollar 1.3146 1.3174
US dollar/yen 119.78 119.61
- NZPA