SYDNEY/WELLINGTON: The Australian and New Zealand dollars fell for a seventh straight session versus the yen on Friday as a sell-off in global stocks sent investors to safe-haven assets, leaving both currencies with deep weekly losses.
The yen, a favoured currency at times of heightened risk aversion, gained broadly as worries over European bank debt clouded an already bleak economic outlook.
The jump in the currency in turn slammed Japanese shares down more than 5 percent and added to risk aversion globally.
The Aussie slipped to 79.51 yen, having plumbed on Thursday its lowest in four years at 77.57.
It was on track to repeat last week's decline of 3.6 percent.
The Aussie has now lost 7 yen in just two weeks and risks a retreat to the June 2012 trough of 74.42 yen.
The kiwi skidded to 74.91 yen, nearing a six-month trough of 73.19 touched on Thursday. It has slumped 3.3 percent so far this week.
The Aussie fared better on the US dollar around 71 cents , having bounced off an overnight trough of $0.6984.
It has gained 0.5 percent this week as the US dollar was undermined by falling Treasury yields and speculation the Federal Reserve would not be able to hike rates this year.
Resistance was found at $0.7153, while a break of $0.6973 could open the way to retracement to a seven-year trough of $0.6827.
Australia's central bank governor told lawmakers there was scope to cut interest rates further if necessary, though he still expects moderate economic growth at home.
Markets imply a 70 percent chance of an easing to 1.75 percent by mid-year. The spread between 10- and 3-year cash bonds narrowed to its smallest in 10 months at 64 basis points.
The New Zealand dollar slipped after four days of gains. The Kiwi edged down to $0.6674 after topping out at $0.6740.
The currency has been underpinned against the US dollar by relatively high domestic rates.
"The decline in global interest rates is serving to increase NZ's interest rate differential," said Kymberly Martin, senior market strategist at BNZ in a research note.
"NZ's positive growth differential also likely appears more appealing with each data disappointment offshore."
New Zealand government bonds gained, sending yields 2 basis points lower along most of the curve.
Australian government bond futures were a touch softer, with the three-year bond contract off 2 ticks at 98.270.
The 10-year contract shed one tick to 97.6200, while the 20-year contract was half a tick higher at 97.1000.
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