SYDNEY: The Australian and New Zealand dollars were on the back foot on Wednesday as markets took a slightly more dovish view about domestic interest rates, while worrying that the outlook for US easing could take a hawkish turn.

Yet, both found buyers against the yen as investors wagered the Bank of Japan would keep overall policy accommodative for some time despite having finally ended negative rates.

That left the Aussie struggling at $0.6522, after losing 0.4% on Tuesday, though that was off a two-week low of $0.6504. In contrast, it touched a three-week high on the yen at 98.65, having gained 0.7% overnight.

The kiwi dollar looked more vulnerable at $0.6040, having slid 0.5% the previous session to its lowest in almost four months at $0.6034. The next major support level was down around $0.6000.