NZD/JPY is well bid as broader risk-on flows...>

KIWI: NZD/JPY is well bid as broader risk-on flows have gained further steam. As

we flagged in earlier bullets, the initial catalyst behind the move was a

successful early trial of Moderna's Covid-19 vaccine. The rate has punched

through yesterday's lows and continues to creep higher as we type, looking past

intensified U.S.-China sabre-rattling.

- NZD/USD trades at Y70.36, 32 pips higher on the day. Bulls look at the

Y70.71-72 zone, which capped gains on Jul 7, 9 & 13. A break above that area

would shift focus to the key near-term resistance, defined at Y71.67, which

represents the high of Jun 8. Bears look for a dip through yesterday's low of

Y69.82, before targeting the 200-DMA at Y68.74.

- PM Ardern noted that NZ is prepared for new community outbreaks of Covid-19.

If the disease re-emerges, the gov't would initially implement localised

restrictions rather than another nationwide lockdown. She downplayed any

imminent trans-Tasman travel bubble, citing a spike in infections in Australia.

- Nothing much on NZ docket today, with main focus in Japan on the upcoming BoJ

MonPol decision.