Australian and New Zealand bonds tumbled, boosting their benchmark 10-year yields to the highest in at least four months, as gains in Asian stocks sapped demand for the relative safety of government securities.
The so-called Aussie dollar rose against 14 of its 16 major counterparts after data showed the nation’s business confidence for December rebounded by the most in more than a decade. New Zealand’s currency, nicknamed the kiwi, gained, snapping a three-day drop against the greenback after the nation’s annual trade deficit unexpectedly narrowed.
“The bond yields in Australia and New Zealand jumped quite a bit,” said Joseph Capurso, a currency strategist in Sydney at Commonwealth Bank of Australia (CBA), the nation’s largest lender. “The global environment of higher bond yields, as well as a rise in equity markets, is providing some support to the Aussie and kiwi.”
Yields on Australia’s 10-year government bonds increased nine basis points to 3.5 percent at 4:53 p.m. in Sydney, after touching 3.51 percent, the most since Aug. 16. The comparable rate in New Zealand jumped 10 basis points, or 0.1 percentage point, to 3.66 percent, the highest since Sept. 19.
Australia’s dollar rose 0.4 percent to $1.0454 from the close yesterday when it touched $1.0385, the least since Jan. 2. It advanced 0.2 percent to 94.83 yen after earlier falling as much as 0.5 percent. New Zealand’s dollar climbed 0.3 percent to 83.68 U.S. cents and rallied 0.2 percent to 75.91 yen.
The MSCI Asia Pacific Index of shares climbed 0.8 percent.
National Australia Bank Ltd.’s confidence index, based on a survey of more than 500 companies, rose to 3 from minus 9, according to a report released today. The increase is the biggest improvement in sentiment since October 2001. The business conditions gauge, a measure of hiring, sales and profits, improved to minus 4 from a revised minus 6.
“It is likely that much of the change in sentiment was a result of improvements in financial and equity markets,” NAB Chief Economist Alan Oster said in the report. “Whether this feeling of relative optimism will be sustained into the New Year remains to be seen.”
In New Zealand, imports exceeded exports by NZ$1.21 billion ($1 billion) in 2012, compared with a revised NZ$1.39 billion shortfall in the year through November, the statistics office in Wellington said today. Economists expected a NZ$1.87 billion gap, according to the median of seven forecasts in a Bloomberg News survey.
Prime Minister John Key said New Zealand’s exchange rate is high and the outlook for economic growth remains strong. He spoke at the start of a parliament session today.
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