NZDJPY – Daily Chart
The price of NZDJPY is trading at support levels dating back to late 2022. That will be a key decider on the next path with a potential move to 75.24 if no buyers emerge.
The Kiwi dollar has slumped against the Japanese yen since 2024 as the Bank of Japan started to adopt a more hawkish tone on interest rates.
Wednesday brings further clarity on the interest rate differential between the kiwi dollar and the yen. A Reserve Bank of New Zealand interest rate decision arrives at 10am HKT with the central bank expected to cut rates by 25 basis points to 3.5%.
That will be followed at 2pm with a speech from Bank of Japan Governor Ueda.
The RBNZ is expected to make the 25bps cut on Wednesday, and that could also be followed by further cuts as traders see tariffs as a headwind to the country’s exports.
The central bank has already cut interest rates by 175 basis points since August last year, with the former Governor Adrian Orr leaving the door open for rate cuts in April and May.
At its February meeting, the central bank said that “there is a risk of increased trade barriers and broader geoeconomic fragmentation,” and “an increase in trade restrictions is likely to reduce economic activity in New Zealand”.
US President Donald Trump announced his long-awaited reciprocal tariffs 10% tariffs applied to New Zealand. The Pacific Nation does not intend to retaliate as their US imports are limited.
However, there is the risk that tariffs will hurt the economic growth of New Zealand’s main trading partners, including Australia and China. A more negative outlook on global growth could see the bank continue its bias toward rate cuts, with markets expecting the cash rate in New Zealand to reach 2.75%, compared to 3% a week ago.
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