- NZD/JPY renews intraday high, jumps 40 pips on RBNZ rate hike.
- RBNZ matches market forecasts of 50 bps rate lift by increasing benchmark rate to 4.75%.
- Yields grind near three-month high ahead of US Fed Minutes.
- Geopolitical risks emanating from China, Russia should be eyed for clear directions.
NZD/JPY bulls flirt with the 84.00 threshold, after cheering a jump to 84.22, as they reassess the Reserve Bank of New Zealand (RBNZ) headlines early Wednesday. Also challenging the pair buyers could be the recently sluggish Treasury bond yields.
RBNZ announced its 10th rate hike as the policymakers struggle to tame the inflation fears, cutting the benchmark rate by 0.50% to 4.75%. Following the RBNZ decision, the quarterly Rate Statement said, “There are early signs of lessening price pressures.” The same should have challenged the NZD/JPY bulls.
Other than the RBNZ, downbeat Japan data also favor the NZD/JPY bulls. That said, Reuters Tankan Manufacturing Index for Japan came in as -5.0 for February versus -6.0 in January. On the same line, Tankan Non-Manufacturing Index eased to 17 for the said month versus 20.0 prior.
On the other hand, the US 10-year and two-year treasury bond yields seesaw around the three-month highs marked the previous day as markets await the Federal Open Market Committee’s (FOMC) Monetary Policy Meeting Minutes. It’s worth noting that the strong US data and hawkish Fed bets propelled the US Treasury bond yields to a multi-day high the previous day.
Elsewhere, comments from US Secretary of State Antony Blinken and Russian President Vladimir Putin were the top catalysts that weigh on the market sentiment as both suggest further tension between Moscow and Kyiv, which also includes the West and China of late.
Above all, Japan’s wage talks and looming concerns over the Bank of Japan’s (BoJ) exit from the ultra-easy monetary policy, not to forget the risk-negative headlines, seem to keep the NZD/JPY bears hopeful.
Technical analysis
One-month-old descending resistance line guards immediate NZD/JPY upside near 84.25.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds above 1.0400 in quiet trading
EUR/USD trades in positive territory above 1.0400 in the American session on Friday. The absence of fundamental drivers and thin trading conditions on the holiday-shortened week make it difficult for the pair to gather directional momentum.
GBP/USD recovers above 1.2550 following earlier decline
GBP/USD regains its traction and trades above 1.2550 after declining toward 1.2500 earlier in the day. Nevertheless, the cautious market mood limits the pair's upside as trading volumes remain low following the Christmas break.
Gold declines below $2,620, erases weekly gains
Gold edges lower in the second half of the day and trades below $2,620, looking to end the week marginally lower. Although the cautious market mood helps XAU/USD hold its ground, growing expectations for a less-dovish Fed policy outlook caps the pair's upside.
Bitcoin misses Santa rally even as on-chain metrics show signs of price recovery
Bitcoin (BTC) price hovers around $97,000 on Friday, erasing most of the gains from earlier this week, as the largest cryptocurrency missed the so-called Santa Claus rally, the increase in prices prior to and immediately following Christmas Day.
2025 outlook: What is next for developed economies and currencies?
As the door closes in 2024, and while the year feels like it has passed in the blink of an eye, a lot has happened. If I had to summarise it all in four words, it would be: ‘a year of surprises’.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.