The Australian and New Zealand dollars gained against the yen on Tuesday as fears of a US-China trade war abated as reports of quiet negotiations between the two countries revived risk appetite. The Australian dollar rose for a second straight day to 81.70 yen after hitting a near 16-month trough last week.
The New Zealand dollar bounced to 77.03 yen, the highest since March 16 and well above a November 2016 low of 75.54 touched on Friday. The currencies rallied as investors hoped the world's two biggest economies will achieve a suitable compromise on trade, despite threats of tariffs on US imports by President Donald Trump.
Against the US dollar, the antipodean currencies were a shade weaker following a sturdy rebound overnight. The Aussie held at $0.7731, down 0.25 percent and the kiwi eased 0.15 percent to $0.7287.
New Zealand government bonds eased a tad, sending yields about half a tick higher at the long-end of the curve. Australian government bond futures were mixed, with the three-year bond contract off half a tick at 97.8400 and the 10-year contract up by a smilar amount at 97.3300.
China's Premier Li Keqiang pledged on Monday to maintain trade negotiations and ease access to American businesses. That followed a report in the Wall Street Journal that Treasury Secretary Mnuchin was considering a visit to Beijing to begin talks. In addition, a number of countries including South Korea won an exemption from Trump's tariffs on steel and aluminium.
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