Aussie & Kiwi Soar on Japan's FX Intervention

The Australian and New Zealand dollars have held onto recent gains after Japan intervened in foreign exchange markets to boost the yen, sending shockwaves through global currency trading. The Aussie and kiwi currencies both rose to multi-week highs on Friday, with the Aussie climbing 1.1% overnight to a six-week top of $0.7033 and the kiwi jumping 1.5% to a two-month high of $0.5882.

Market analysts point out that this reprieve comes at a timely moment for Aussie bulls, who had been struggling after a benign inflation report led investors to abandon bets for a near-term interest rate hike. The break of key resistance levels now opens the way for further gains, with support seen at $0.6922 for the Aussie and the May high of $0.5993 within reach for the kiwi.

Despite this positive development, both currencies lost ground to the yen, with the Aussie down as much as 2.7% at one stage before partly rebounding. This left the Aussie off 1.3% for the week and well below its recent peak of 114.66 yen.