NZ dollar rises as yen spurned by investors

The New Zealand dollar rose strongly today as investors purchased a range of currencies against the yen.

The NZ dollar was US77.16c at 4.30pm from US76.75c at 8am and US76.77c at 5pm yesterday.

For the first time in eight weeks the New Zealand dollar topped US77.20c. It fell from that level but was again attacking it.

"There is no real news. The theme that characterised the market in last few days is continuing and that is buying of yen crosses on the expectation that the yen is going to continue to weaken," said Mike Jones, strategist at BNZ.

"Carry trade sentiment is starting to grip markets and the feeling is Japan is going to keep interest rates low for a long time.

"It is not a New Zealand dollar specific story," he said.

The New Zealand dollar rose to 65.85 yen at 4.30pm from 65.11 yen at 8am and 64.74 yen at 5pm yesterday. The NZ dollar was last at these levels in March 2010.

The Australian dollar rose above 88.07 yen, its highest since September 2008.

The yen fell as the Bank of Japan met on Wednesday and investors speculated there will be a further loosening of policy to support the economy.

The NZ dollar was at 0.5412 euro ay 4.30pm from 0.5405 euro at 5pm yesterday.

The trade weighted index was at 67.64 from 67.34 yesterday.

- NZPA