Nov. 22 (BusinessDesk) - The New Zealand dollar rose to a seven-month high against the yen after Japan’s trade deficit widened, stoking concern the world’s third-biggest economy is heading back into recession.
The kiwi rose as high as 67.13 yen, the highest since early April, from 66.50 yen yesterday. The local currency was little changed at 81.30 US cents while the trade-weighted index slipped to 73.13 from 73.19.
posted its fourth straight monthly trade deficit in October,
with a gap of 549 billion yen, compared to a forecast
deficit of 360 billion yen in a Dow Jones survey. The trade
deficit so far in 2012 has reached a record 5.3 trillion
yen. Exports to China, Japan’s biggest trading partner,
tumbled, sharpening interest
in today’s release of the China HSBC Flash Manufacturing PMI, which has been showing contraction.
The NZD/JPY extended its gains “as the extent of the financial quagmire of the world’s third largest economy is slowly unravelled,” Bancorp Treasury Services said in its morning note.
Trading may be subdued with US markets closed on Thursday for the Thanksgiving Day holiday.
The yen is also at a seven-month low against the greenback on speculation the main opposition LDP party will win power next month and make more concerted efforts to weaken the currency. Japan is New Zealand’s fourth-biggest export market after Australia, China and the US.
The kiwi dollar fell to 78.40 Australian cents from 78.48 cents and weakened to 63.40 euro cents from 63.75 cents. It fell to 50.99 British pence from 51.06 pence.