WELLINGTON/SYDNEY: The Australian and New Zealand dollars were on the defensive against the yen early on Monday on expectations that a massive earthquake and tsunami in Japan will prompt repatriation of funds back to the country.
* The Australian dollar slumped to a near three-week low of 81.91 yen after the tremor hit before gradually recouping most losses to trade at 82.76 in early trade.
* The NZ dollar nosedived to a six-month low of 60.26 yen, before bouncing back to 60.62. It was trading at 61.12 yen before the quake struck.
* Traders say exporters are likely to treat any dips below 60 yen with caution until Japanese customer positions are better understood, with the kiwi/yen pair expected to trade between 59.80/61.50 yen range.
* The yen has soared broadly on safety bid after a 8.9 magnitude earthquake hit Japan on Friday with more than 10,000 feared dead . The currency could rise further if insurers scramble to raise cash by selling their foreign assets. US dollar/yen hovers around 81.86 yen early.
* Both the Aussie and the kiwi higher against the US dollar, benefiting from the retreating dollar/yen, with short-covering also pushing the currencies up.
* Aussie around $1.0144, after shedding nearly two cents to $0.9969 after the disaster in Japan. It is seen supported at $0.9966 with resistance at $1.0189.
* The NZ dollar fared better at $0.7428 , having bounced from a near six-month low of $0.7322 last week. Kiwi seen capped at $0.7482 for now, with support at $0.7327.
* Euro received a fillip following an agreement by EU leaders to bolder a bailout fund.
* Wall Street higher, but oil prices fell. The CRB commodity index dipped 0.7 percent, while copper prices steady and gold prices firm.
* Kiwi has outperformed the Aussie which has seen the cross rate backtrack to NZ$1.3635 , from last week's 19-year peak of NZ$1.3794.
* The Reserve Bank of NZ's slashing of its benchmark rate by 50 basis points to 2.5 percent as a one-off emergency measure after the Christchurch earthquake, has cleared the air and leaves further rate action off the agenda.
* The Reserve Bank of Australia (RBA) still more likely to be the first to raise rates, though markets imply little chance of a move until the third quarter
* NZ government bonds firmer, while US Treasury debt prices dropped on fears that Japanese insurers may need to sell bonds to pay for damages .
* Australian bond futures rise with the three-year contract up 0.047 points to 95.02 and the 10-year contract up 0.02 points to 94.530.
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