During the RBNZ policy meeting held during Tokyo hours yesterday, the policy interest rate was cut by 0.5%, as expected, bringing it to 4.5%. Some in the market had anticipated a larger 0.75% cut, which led to NZD buying after the announcement. NZD/JPY hit a high of 89.88 yen but quickly faced selling pressure, pulling it back to pre-announcement levels around 89.20 yen, erasing the earlier gains.
Later, ahead of the US Thanksgiving holiday, further selling pushed NZD/JPY down to 88.85 yen. The RBNZ statement included dovish comments, such as suggesting that “if economic conditions go as forecasted, another rate cut will happen early next year”.
Amid strong selling in cross-yen currencies, NZD/JPY is expected to remain under pressure with limited upside potential.
NZD/JPY expected range: 89.40–88.60
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