The Australian and New Zealand dollars reversed sharp losses against the yen in volatile trade on Monday as markets worry that Japanese officials will intervene to weaken the currency in the wake of Friday's massive earthquake and tsunami.
The yen had initially gained on expectations of repatriation flows, but then lost steam after the Bank of Japan offered to inject a record $183 billion into the banking system and on speculation it may ease its ultra-loose monetary policy further to calm markets. All these saw the Australian dollar recover to 82.71 yen from a 1-1/2 month low near 81.56. The New Zealand dollar climbed back to 60.70 yen, having earlier plumbed six-month lows around 59.50.
The moves reflected a rebound in dollar/yen, which jumped to 82.08 yen from near record lows. Against the greenback, the Aussie fell to $1.0074 from $1.0149 late in New York on Friday. The kiwi slid to $0.7392 from New York's $0.7429. Immediate support for the Aussie is seen at the 55-day moving average around $1.0052. The euro rose to A$1.3824, well off Friday's low around A$1.3670. It last traded at NZ$1.8831, up from Friday's low around NZ$1.8590. The Aussie was little changed against the kiwi at NZ$1.3637, having risen as high as NZ$1.3722.