NZD/JPY climbs to multi-week highs as risk appetite returns

The New Zealand dollar extended gains against the Japanese yen on Thursday, climbing to its highest level in over a month as risk appetite improved across global markets.

The NZD/JPY pair rose to 93.45, its strongest since late March, driven by a combination of factors including firming commodity prices and a weaker yen. The yen has been under pressure this week as Bank of Japan officials signaled continued accommodative monetary policy, while expectations for U.S. Federal Reserve rate cuts later this year supported broader risk sentiment.

New Zealand’s currency benefited from a rebound in dairy prices, a key export for the country, which have recently shown signs of stabilization after a prolonged downturn. The Reserve Bank of New Zealand’s hawkish stance on inflation has also underpinned the kiwi’s appeal among investors seeking higher-yielding assets.

Technical analysts noted that the pair has broken above key resistance levels, with the 93.00 mark now serving as a potential support level. The next resistance is seen around 94.00, a level last tested in early April.

The yen’s weakness was further exacerbated by a decline in Japanese government bond yields, which fell to multi-week lows amid persistent deflationary pressures in the domestic economy. Meanwhile, the U.S. dollar index remained relatively stable, providing limited headwinds to the NZD/JPY cross.

Market participants will be watching closely for any further signals from the RBNZ or BoJ, as well as upcoming U.S. economic data releases that could influence broader risk sentiment and the trajectory of the pair.

For now, the NZD/JPY cross remains supported by a constructive backdrop of rising commodity prices and a weaker yen, though volatility could increase if macroeconomic conditions shift unexpectedly.