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MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
NZDJPY
NZD/JPY broke higher towards the end of last week. The pair pierced early Dec 2023 highs (just above 91.50), getting close to 91.90. We track near 91.80 in early trade today.
- The last time NZD/JPY was above 92.00 was back in 2015, see the chart below. Apr 2015 highs were just above 92.40.
- Relative yield differentials surged in favor of NZD, post ANZ's view change on Friday. Somewhat dovish rhetoric from the BoJ re the policy outlook post an end to NIRP also helped at the margin. A better global equity market tone, particularly in US equity markets towards the end of last week, also likely aided risk appetite (thereby reducing yen demand).
- The 2yr NZ-JP swap rate differential is back to +485bps. Note we started Feb around +440bps.
- Next litmus test will likely be tomorrow's 2yr inflation expectation data in NZ. Note though that RBNZ Governor Orr appears before parliament today.
- Per BBG "Orr will lead a team of RBNZ officials at presentations to parliament’s Finance and Expenditure Select Committee about the Financial Stability report from 1:30pm Wellington and the followed by the 2022-23 annual review."
- Note Governor also speaks later this week, early on Friday morning, on the monetary policy remain and 2% inflation.
Fig 1: NZD/JPY Back To 2015 Levels
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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