By Tina Morrison
The New Zealand dollar fell to its lowest level against the yen in more than three months as investors favoured the safe haven Japanese currency amid concerns about a slowing Chinese economy and weak commodity prices.
The kiwi touched 77.44 yen, its lowest level since October 5 last year, and was trading at 77.89 yen at 8am in Wellington, from 78.45 yen at 5pm on Thursday. The local currency edged lower to 66.22 US cents from 66.37 cents.
Investors have been piling into safe-haven assets such as the yen as concerns mount about the extent of a slowdown in China after weaker-than-expected data on the manufacturing and services industries, a slump in the country's stock market and devaluation of the yuan.
Oil prices rebounded from plunges earlier in the day, when Brent crude sank more than 6 per cent to an almost 12-year low of $US32.16.
"Yen is the safe haven currency. All the yen crosses have weakened," said OMF's Mark Johnson. "The two main drivers are China and oil. The China growth story is the elephant in the room."
He said there was support for the kiwi at about 75 yen, meaning there was potential for the cross to fall further.
"It's like trying to catch a falling knife," he said.
The lack of local data following the Christmas and New Year holiday period meant the kiwi was being driven by offshore events, he said.
Australian monthly retail sales data is scheduled for release on Friday, while later the focus will be on the key US nonfarm payrolls report which is expected to show the world's largest economy added about 200,000 jobs in December, following the 211,000 jobs added in November.
The New Zealand dollar advanced to 94.55 Australian cents, from 94.16 cents,declined to 4.3656 yuan from 4.3744 yuan, slipped to 60.74 euro cents from 61.35 cents, and was little changed at 45.35 British pence from 45.37 pence. The trade-weighted index slipped to 72.93 from 73.01.