SYDNEY/WELLINGTON: The Australian and New Zealand dollars scaled eight-month peaks against the yen on Thursday on expectations of more policy action in Japan, while encouraging Chinese manufacturing data saw the Aussie reach a session high.
HSBC's China flash Manufacturing Purchasing Managers Index (PMI) rose to a 13-mth high of 50.4 in November, a sign the pace of growth in Australia's single biggest export market has revived after seven quarters of slowdown.
Aussie hits $1.0401, up from a pre-data level of $1.0385. It last trades at $1.0393, up 0.3 pct on the day.
Talk of good offers around $1.0400 appear to have capped its upside for now. Support seen around $1.0315, a 200-DMA and a lower Bollinger band.
Kiwi is up 0.2 pct on the day at $0.8162, having touched a session high of $0.8167, recovering from a trough of $0.8112 hit on Wednesday.
Antipodeans scale fresh multi-month highs against the yen with the Aussie powering up to 85.78 yen, its highest since early April. Last at 85.69.
It has pierced a heavy zone of barriers just under 85.00 yen and could test this year's peak of 88.62 set in March.
Likewise, the kiwi jumps to 67.37 yen, its strongest since mid-April. Last at 67.25. Both currencies show a gain of nearly 2 percent vs yen so far this week.
Yen has been falling sharply since last week after elections were called in Japan, with the opposition leader, who is expected to win, pushing the Bank of Japan for more aggressive monetary stimulus.
Japanese interest rates have been chained near zero for over a decade, making Australia's cash rate of 3.25 percent and New Zealand's 2.5 percent more appealing.
Australian government bond futures well off a one-month peak hit on Monday. The three-year contract is off 0.06 points at 97.320 and the 10-year contract 0.065 points lower at 96.820.
NZ government bonds dip, nudging yields around 5 basis points higher across the longer end of the curve.