Kiwi at four-year high against yen as more BOJ easing looms

The New Zealand dollar rose to a four-year high against the yen as Japan's currency weakened on expectations of more monetary easing when a new governor is appointed to the central bank.

The kiwi rose as high as 79.88 yen, and traded at 79.59 yen at 5pm in Wellington from 78.97 yen yesterday. It rose to 82.42 US cents from 82.11 cents yesterday.

Japan's yen weakened 0.5 percent to 96.51 per US dollar after Asian Development Bank president Haruhiko Kuroda, a front-runner for the Bank of Japan job, yesterday said he would consider buying derivatives if he was appointed governor.

Last week Mr Kuroda, who has been nominated for the governor's role, told policymakers the Bank of Japan's current monetary easing measures are "clearly insufficient" and that he is confident he could achieve a two percent inflation target in two years.

"The new guy is coming in and giving money to everybody, including his dog. There are lots of words but no action – we want to see him walk the walk," said Imre Speizer, market strategist at Westpac Banking in Auckland. "Everything gained against the yen, not just the kiwi."

Finance Minister Bill English today told reporters here the drought through much of the North Island would likely impact the government's books through a lower tax take, though he still expected to reach the operating surplus target in the 2014-15 year.

"The world is jumping on this drought story in the last couple of days," Mr Speizer said. "The kiwi is under the weather because of that."

New Zealand's Reserve Bank will review monetary policy on Thursday and is expected to keep the benchmark rate at 2.5 percent.

Local property prices rose 7.6 percent last month on increasing sales numbers, according to Real Estate Institute figures. Property market gains have been driven by a lack of supply in Auckland and as the Canterbury rebuild gets under way.

The kiwi fell to 80.16 Australian cents from 80.31 cents yesterday and increased to 63.27 euro cents from 63.15 cents. It advanced to 55.33 British pence from 55.04 pence yesterday.

The trade-weighted index rose to 76.08 from 75.88 yesterday.

(BusinessDesk)