FXStreet (Mumbai) – The NZD/JPY pair dropped more than 2% after the Reserve Bank of New Zealand (RBNZ) surprised markets by announcing a 25 basis point rate cut.
NZD/JPY at 4-month low
The pair tumbled from 88.85 to hit a four month low of 86.02 as the RBNZ cut rates 25bp to 3.25%. That was the first cut since March 2011. Moreover, investment banks expected more rate cuts in the near future. As per Economists at ANZ, “The RBNZ’s 90-day projections imply another cut before the end of the year.”
Meanwhile, a slight uptick in the USD/JPY pair helped restrict losses in the NZD/JPY cross at 86.02. It remains to be seen if the pair manages to sustain above the same post the release of US monthly advance retail sales later today.
NZD/JPY Technical Levels
The pair currently trades at 86.36. The immediate support is seen at 86.00, under which losses could be extended to 84.74. On the flip side, a break above 87.85 could push the pair higher to 89.00 levels.
(Market News Provided by FXstreet)