SYDNEY/WELLINGTON: The Australian and New Zealand dollars firmed on Thursday and climbed on the yen as hopes for an easing in China briefly lifted sentiment, though investors remain cautious ahead of a key Spanish debt auction.
The Aussie at $1.0360, from $1.0348 in NY. It briefly touched $1.0388 after China state media reports Beijing to ease "at appropriate time". The vague timing deflates initial hopes of an immediate cut to banks' reserve requirements.
The New Zealand dollar up at around $0.8170/75 from its late New York level of $0.8146.
Antipodeans seen marking time ahead of a key Spanish bond auction later on Thursday that could inflame, or calm, concerns about sovereign debt stability in Europe.
If the Spanish auction goes reasonably well, there might be a large relief rally, while poor results would be bad news for risk assets.
For now, Aussie looks well supported just above $1.0300.
The Aussie and the kiwi regain ground on the yen, having run into a bout of profit-taking overnight. Aussie at 84.43 yen, approaching this week's high of 84.72. It's been a volatile week for the pair with demand from Japanese importers in Asia trade underpinning the Aussie recovery from a steep fall to 82.82 on Tuesday.
The kiwi inches up to 66.19 yen, not far from a high of 66.94 offshore.
* New Zealand first quarter inflation printed in line with expectations with a rise of 0.5 percent on the previous quarter, and the annual rate easing a shade to 1.6 pct.
Kiwi unmoved by the inflation data. Near term support seen at around $0.8150 with $0.8200/05 the first hurdle ahead of more significant barrier around the 55 day moving average at $0.8253.
Inflation numbers sustain views the Reserve Bank of New Zealand will issue another dovish statement at next week's review, and that it will likely hold its cash rate at a record low 2.5 percent until late this year and possibly into early 2013.
Data showed Australia's international merchandise imports climbed 11 pct to A$22 bln in March. Such a steep rise is likely to make it hard for the trade balance to return to surplus, after a surprise deficit in February, and suggests net exports will be a big drag on GDP growth in Q1.
However, a 21 pct jump in capital goods imports does point to strong business investment, particularly in resources.
Australian debt futures gain, with the three-year contract up 0.04 points to 96.810, while the 10-year contract 0.05 points higher to 96.240.
New Zealand bank bills ignore inflation numbers, while government bond prices a touch firmer in line with US Treasuries.