The New Zealand dollar touched its lowest level against the Japanese yen in more than three years after the Bank of Japan failed to add further stimulus following a two-day meeting, sparking renewed interest in the yen.
The kiwi hit 72.28 yen overnight, the lowest level since January 2013, and was trading at 73.44 yen at 8am in Wellington, from 73.75 yen at 5pm yesterday. The local currency slipped to 70.40 US cents from 70.76 cents yesterday.
The Japanese yen soared and the country's 10-year bond yields touched historic lows after the Bank of Japan yesterday refrained from adding any additional stimulus despite weak inflation. The decision comes amid uncertainty about the global outlook after the Federal Reserve pulled back its expectations for future rate hikes over coming years and as Britain heads into a vote next week on whether to leave the European Union.
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