The Australian and New Zealand dollars jumped against the yen on Friday as risk appetite got a boost after North Korean leader Kim Jong Un offered to stop nuclear and missile testing and to meet with his US counterpart. Kim has committed to "denuclearization" and to suspending nuclear or missile tests and extended an invitation to hold the first-ever US-North Korea summit, marking a potentially dramatic breakthrough in the North Korea nuclear standoff.
The Australian dollar climbed 0.6 percent on the safe harbour yen. For the week, the Aussie is now up 1.3 percent, snapping six consecutive weekly declines since January 19. The New Zealand dollar also added 0.6 percent against the yen and was set for a 1.4 percent rise this week following losses since early-February.
The antipodean countries are open economies exposed to global growth and commodity prices, and their currencies tend to rally when risk appetite improves. Against the dollar, the antipodeans were a tad weaker. The Aussie eased 0.1 percent to $0.7779 but was still up a touch for the week. The kiwi slipped to $0.7253 for its third straight session of losses. The currency is barely changed on the week.
Australian government bond futures were mixed, with the three-year bond contract down 3 ticks to 97.865 and the 10-year contract flat at 97.2100. "We think the move in the yen is reflecting a risk positive sentiment following the news that President Trump will be meeting Kim Jong Un. That is also being seen in the equities market which have opened firm this morning," said Rodrigo Catril, senior forex stratgist at National Australia Bank.
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