- Kiwi slumping, Yen climbing as risk-off statements combine with dovish comments from the RBNZ.
- The NZD's technical correction looks to be over quickly.
The NZD/JPY is knocking lower in Wednesday's early Asia session, backing into 76.50 following headlines from the Reserve Bank of New Zealand's (RBNZ) McDermott.
The Kiwi is steeply off of its recent high of 77.50 against the Yen, but risk aversion is creeping back into markets after US President Donald Trump poured water on investor hopes that US-China relations had improved significantly recently when the two nations agreed to put any further tariffs "on hold" while they continue trade negotiations.
On the Kiwi side, the Reserve Bank of New Zealand's (RBNZ) note on 'unconventional monetary policy' left traders scratching their heads and the NZD spiked briefly early in the Asia session, while the RBNZ's McDermott sent the Kiwi floundering with comments on planning for another crisis and failing to walk back the central bank's earlier comments about hitting a negative cash rate.
NZD/JPY levels to watch
The Kiwi has priced in a new technical swing high against the Yen at 77.50, a steep tumble from the last marked high in April at 79.60, and if the bearish correction fails to break through the current low at 75.60 then a bullish recovery could take over and send the pair into the 200-day SMA, currently at 78.60.
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