- Yen stretches gains vs dollar, euro, pound
- Kiwi slides to lowest since May 2016
- RBNZ unexpectedly commits to keep interest rates at record lows
The yen was broadly higher on Thursday on trade tensions and on revelations the Bank of Japan is under pressure to move away from its accommodative policy, while the New Zealand dollar slid on a decidedly dovish policy stance by nation's central bank.
The dollar stretched overnight losses and was 0.15 percent lower at 110.78 yen JPY= its weakest in nine days.
A summary of opinions from the July 30-31 BOJ board meeting released on Wednesday showed that one member wanted to allow long-term yields to move in an even wider band than the range indicated by the central bank.
In order to makes its easy policy more sustainable, the BOJ had tweaked its yield-curve control (YCC) scheme -under which it guides long-term rates around zero percent- and decided to allow the yield to move about 20 basis points on either side of the target.
That came as markets have continued to speculate about the timing of an eventual exit from the BOJ's ultra easy policy stance. Some saw last week's policy tweak as a message of quiet surrender by the BOJ, an admission that it couldn't stoke inflation and walking back steps intended to do so.
"The yen-buying trend has been gathering pace since early August and the moves generated on the latest BOJ news added further momentum. The yen was already well supported, particularly by weakness in European peers such as the pound and euro," said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.
"As for the U.S.-Japan trade talks, it will receive attention, particularly how the tariffs on cars are discussed, but the bulk of the market focus remains squarely on trade issues between China and the United States."
Japan will try to avert steep tariffs on its car exports and fend off U.S. demands for a bilateral free trade agreement at talks on Thursday in Washington.
The New Zealand dollar fell about 1 percent at $0.6679 NZD=D3 , its lowest since May 30.
The kiwi tumbled after the Reserve Bank of New Zealand (RBNZ) unexpectedly committed to keep interest rates at record lows through to 2020 on disappointing economic activity, a dovish turn that caught markets off-guard.
RBNZ Governor Adrian Orr told Reuters in an interview that the central bank will need to make sure it is "blowing wind into sails" of the country's economy for some time yet.
Its antipodean peer the Australian dollar fared better, last trading down 0.1 percent at $0.7426 AUD=D3 .
The Aussie had risen for the past two sessions, supported in part as a recent retreat by the Chinese yuan stopped for the time being.
The pound slumped on Wednesday as investors ramped up bets on Britain leaving the European Union without an agreement with Brussels on their future relationship.
Sterling slipped to an 11-month low of 142.67 yen GBPJPY= after losing 0.8 percent overnight. It was little changed at $1.2879 GBP=D3 following a drop to $1.2854 the previous day, its lowest in a year.
The euro extended overnight losses to trade at 128.59 yen EURJPY= for a loss of 0.17 percent. The single currency was flat at $1.1607 EUR= after gaining about 0.1 percent on Wednesday.
The euro has fallen to a five-week low of $1.1530 on Monday, amid worries over Italy's spending and disappointing German data.
The Russian rouble RUBUTSTN=MCX retreated to its lowest since November 2016 overnight, weakening beyond the psychologically important 65 per dollar threshold, after Washington said it would impose fresh sanctions on Moscow.
