The Australian and New Zealand dollars advanced versus the yen after the Bank of Japan expanded stimulus measures, boosting demand for higher-yielding assets.
New Zealand’s currency, nicknamed the kiwi, touched a more than four-month high against the yen after the BOJ added 10 trillion yen ($126 billion) to its 45 trillion-yen fund that buys assets including government debt. Gains in the so-called Aussie were limited before tomorrow’s release of a European purchasing managers’ index and a similar gauge of Chinese factory output by HSBC Holdings Plc and Markit Economics.
The BOJ decision “is a broad positive for risk appetite, including the Aussie and kiwi,” said Thomas Harr, head of Asia local markets strategy at Standard Chartered Plc in Singapore. “The bias over the coming months is definitely higher.”
The Australian dollar gained 0.4 percent to 82.73 yen as of 5:06 p.m. in Sydney. It was at $1.0465 from $1.0457 yesterday, when it slid to $1.0410, the lowest since Sept. 11. New Zealand’s dollar advanced to 65.71 yen, the most since April 30, before trading at 65.54, 0.5 percent above yesterday’s close. It rose 0.2 percent to 82.91 U.S. cents.
Australia’s 10-year note yield rose 2 basis points, or 0.02 percentage point, to 3.35 percent.
Five of 21 analysts surveyed by Bloomberg News had predicted today’s BOJ easing, while 11 forecast the action by October.
New Zealand’s dollar also strengthened after the statistics bureau said today the nation’s current-account shortfall was 4.9 percent of gross domestic product in the year ended June 30, compared with a revised 4.5 percent in the 12 months through March. The gap was the widest since June 2009, though narrower than the 5.2 percent median forecast in a Bloomberg survey of nine economists.
Prime Minister John Key said the New Zealand government is taking a number of steps to help take pressure off the “relatively high” local currency, including a return to fiscal surplus. Currency intervention wouldn’t help lower the New Zealand dollar, he said in response to questions in Parliament today.
Standard & Poor’s affirmed Australia’s AAA long-term sovereign credit rating, citing the country’s “ample fiscal and monetary policy flexibility, economic resilience, public policy stability and a financial sector that appears to be sound,” according to a statement today. The nation also holds the top score from Moody’s Investors Service and Fitch Ratings.
The Aussie has fallen 2.6 percent in the past month, the worst performance after the U.S. dollar among the 10 developed-nation currencies tracked by Bloomberg Correlation-Weighted Indexes. The kiwi dropped 0.1 percent.
A euro-zone composite index for manufacturing and services industries was probably at 46.6 this month, little changed from the August reading of 46.3 in August, according to the median estimate of economists surveyed by Bloomberg News. Markit will release the figure tomorrow.
A separate gauge by Markit and HSBC for manufacturing in China, Australia’s largest trading partner, is also due for release tomorrow. The index, which is based on a poll of purchasing managers in the industry, was at 47.6 last month. For both measures, a reading below 50 indicates contraction.
“For the China HSBC PMI and the euro-zone PMIs out this week, I think there’s still some downside risk,” said Joseph Capurso, a strategist at Commonwealth Bank of Australia in Sydney. “Global drivers are going to still push the Aussie down.”