The Australian and New Zealand dollars reached the highest levels in more than four years versus the yen amid speculation the Bank of Japan (8301) will expand monetary easing, boosting the allure of higher yielding assets.
The so-called Aussie was supported as investors pared bets the Reserve Bank of Australia will cut interest rates next month. The nation’s bonds dropped, sending the 10-year yield to a 10-month high after shares in New York advanced. The New Zealand dollar declined against the greenback before U.S. data forecast to show an increase in retail sales. Asian Development Bank President Haruhiko Kuroda said yesterday the BOJ will consider buying derivatives if he’s confirmed as governor.
“The suggestion that Kuroda may ease policy before the April 4 meeting has given the yen a push lower” against the crosses including the Aussie and kiwi currencies, said Michael Turner, a fixed-income strategist in Sydney at Royal Bank of Canada. “Expectations for rate cuts in Australia are falling, and as long as the data keeps printing OK, that’ll keep yields grinding higher.”
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