KEY POINTS:
The New Zealand dollar held firm near a seven-week high against the greenback during trading today as the yen continued its fall.
At 5pm the kiwi was buying US70.57c, barely changed from US70.62c at 8am today but up on the US70.15c at yesterday's close.
Overnight the NZ dollar hit US70.68c, a seven-week high and just below its highest level since December 2005.
Against the yen, the kiwi was buying 85.41 at 5pm today from 84.10 24 hours earlier. The NZ dollar had edged down slightly on profit-taking after striking a year high of around 85.50 yen earlier in day.
BNZ currency strategist Danica Hampton said the kiwi's climb against the greenback overnight had been bolstered by solid demand for the NZ dollar cross with the yen.
While the Bank of Japan had lifted Japanese interest rates 25 basis points to 0.5 percent yesterday, any yen strength was swiftly negated by moderating comments from the bank's chairman.
Markets interpreted those comments as implicit approval for yen-funded carry trades, and market participants sold yen heavily against relatively high-yielding currencies such as the kiwi, Ms Hampton said.
Despite that, given the speed and magnitude of recent NZ dollar gains, particularly against the yen, euro and pound, the kiwi was starting to look overbought, and BNZ expected to see sellers active on rallies.
Against the aussie, the NZ dollar was little changed during the day, easing slightly from A89.25c at 8am to A89.18c. The trade weighted index was at 69.83 from 69.86.
The yen's fall took it to a record low against the euro during today, with the single European currency pushing to a high of 159.13 yen, the highest since the euro was launched in 1999 and up 1.3 percent for the year.
The greenback edged up to 121 yen a day after climbing nearly 1 percent against the Japanese currency.
Rates:
5pm today 5pm yesterday
NZ dlr/US dlr US70.57c US70.15c
NZ dlr/Aust dlr A89.18c A89.02c
NZ dlr/euro 0.5373 0.5337
NZ dlr/yen 85.41 84.10
NZ dlr/stg 36.12p 35.90p
NZ TWI 69.83 69.34
Australian dollar US79.13c US78.78c
Euro/US dollar 1.3134 1.3146
US dollar/yen 121.02 119.78
- NZPA