NZ dollar falls vs. yen before BOJ, rises against greenback

Thursday 4th April 2013

The New Zealand dollar fell against the yen before the Bank of Japan's meeting today as traders trimmed short positions in the Japanese currency to guard against the central bank under-delivering on monetary easing.

The kiwi fell to 78.15 yen from 78.57 yen at 5pm in Wellington yesterday. The currency rose to 84.19 US cents from 84.02 cents.

The BOJ is expected to boost monthly bond purchases by about 50 percent to 5.2 trillion yen at the conclusion of its two-day meeting though there are concerns new Governor Haruhiko Kuroda may struggle with his own board to get as bold a move as he would want to weaken the yen and end deflation.

"As we head into the meeting investors are pretty keen to take profit on shorts and run into the meeting square," said Mike Jones, a strategist at Bank of New Zealand. "If the BOJ delivers and eases boldly, every man and his dog will be rushing to put those shorts back on."

A short position is a bet a currency is going to decline.

The greenback fell broadly and stocks weakened in the US after ADP Research Institute data showed companies added 158,000 workers in March, missing estimates and raising concern the key non-farm payrolls data due on Friday in the US will also be weaker than expected.

The trade-weighted index eased to 77.15 from 77.18 and the kiwi edged up to 80.45 Australian cents from 80.36 cents.

It fell to 55.55 British pence from 55.69 pence and fell to 65.51 euro cents from 65.60 cents.

BusinessDesk.co.nz

Comments from our readers

No comments yet