The New Zealand dollar climbed above 57 US cents for the first time in almost a month after the Bank of Japan hiked its benchmark rate to a 17-year high.
The kiwi rose to 57.05 US cents at 5pm in Auckland from 56.84 cents at 7am and 56.65 cents yesterday, and was little changed at 88.71 yen from 88.65 yen after Japan’s central bank raised the policy rate 25 basis points to 0.5%, a level not seen since 2008.
“Short NZ dollar positioning and technicals have been stretched, warning of a bullish reversal, and the NZ economic data pulse has improved of late,” Westpac NZ economists said in a note. “Similarly, the US dollar has been stretched to the upside, warning of a reversal lower. A bounce in NZD/USD would provide opportunities for importers to hedge.”
Meanwhile, US President Donald Trump raised the prospect of reaching a trade deal with China in an interview with Fox news, saying the threat of tariffs was “one very big power over China”.
New Zealand’s S&P/NZX 50 index was one of the few stock markets across Asia to decline on the day with investors buoyed by Trump’s comments on China and his preference for low interest rates. Australia’s S&P/ASX 200 index was up 0.4% in afternoon trading, while Japan’s Nikkei rose 0.3% and Hong Kong’s Hang Seng jumped 1.8%.
The NZX50 fell 35.37 points, or 0.3%, to 13,024.70, rounding out a 0.8% decline for the week. Turnover was a relatively light $75.5 million across the main board.
Creeping fears
Local exporters and firms exposed to the tariff regime were among those pacing the day’s decline. Steel & Tube Holdings fell 3.5% to 83 cents, fruit exporter Scales Corp declined 2.9% to $4.07, Scott Technology slipped 2.6% to $2.24, Vista Group International shed 2.5% to close the day at $3.16 and Fisher & Paykel Healthcare dropped 2.4% from a record to end the week at $38.39.
Lines company Vector led the benchmark index lower, falling 3% to $3.86 after reporting a 24% decline in new connections in the final six months of 2024 compared to a year earlier, with a dip in electricity distribution volumes in line with the warmer weather.
Spark New Zealand declined 1.5% to $2.90, with 1.5 million shares changing hands. Forsyth Barr analysts Aaron Ibbotson and Benjamin Crozier kept their underperform rating on the stock with a target price of $2.80, saying the telco’s continued loss of market share put its earnings guidance under pressure.
Synlait Milk surged 19% to 50 cents after saying it expects to return to profitability in the first half of the financial year.
The a2 Milk Co fell 0.3% to $6.51 while Fonterra Shareholders’ Fund units advanced 0.6% to $4.87.
Power to the people
Genesis Energy posted the biggest gain on the benchmark index, up 4.6% at $2.29 after the power company a decline in December quarter generation – largely in its thermal operations – and an increase in retail customer numbers. Manawa Energy slipped 0.7% to $5.66 after reporting lower generation volumes in the period.
Retailers had a mixed day with KMD Brands advancing 2.4% to 42.5 cents after reporting improving sales trends, even as group sales were down 2.5% in the five months through to the end of December.
Meanwhile, Michael Hill International fell 1.6% to 59 cents after reporting a 1% in first-half sales, with New Zealand the biggest drag.
Foley Wines rose 3.6% to 58 cents after Bill Foley returned to the board after an absence of almost two years.
Being AI was unchanged at 29.5 cents after saying it settled its defamation claim against Clare Capital, with the investment bank agreeing to pay $150,000 without admitting liability.
And departing Tower chief executive Blair Turnbull will take up the reins running fund manager Milford Asset Management in March. Milford chair Anthony Quirk noted Turnbull’s expertise in client-centric delivery and digital innovation as adding value to the financial services firm.
Reporting by Paul McBeth. Image from Curious News.
