Exchange Rate Calculator

The exchange rate between the New Zealand Dollar (NZD) and the Japanese Yen (JPY) has experienced notable fluctuations over the past few months, influenced by a combination of economic indicators, central bank policies, and global market sentiments. This report provides an in-depth analysis of the recent trends, underlying factors, and potential future movements of the NZD/JPY currency pair.

Recent Performance and Trends

As of March 17, 2025, the NZD/JPY exchange rate stood at 86.25, marking a 1.15% increase from the previous market day but a 4.93% decline compared to the same period in the previous year. This downward trajectory reflects a broader trend observed over the past year, characterized by periods of volatility and intermittent recoveries.

In early March 2025, the pair experienced a significant drop, reaching a seven-month low of 83.15. This decline was attributed to increased selling pressure and a prevailing bearish sentiment in the market. Despite a subsequent recovery, the pair faced resistance at key technical levels, indicating a persistent downtrend.

Technical Analysis

Technical indicators have provided mixed signals regarding the NZD/JPY pair. On March 17, 2025, the Relative Strength Index (RSI) was at 72.525, suggesting overbought conditions and potential for a corrective pullback. The Moving Average Convergence Divergence (MACD) indicated a positive momentum, while the Average Directional Index (ADX) at 60.24 pointed to a strong trend.

Moving averages further supported a bullish outlook, with the pair trading above the 20, 50, 100, and 200-day Simple Moving Averages (SMAs). However, the presence of overbought conditions and resistance at higher levels suggested caution among traders.

Fundamental Factors Influencing the Pair

Several fundamental factors have influenced the NZD/JPY exchange rate:

1. Global Economic Sentiment: Periods of risk aversion in global markets have bolstered the JPY, a traditional safe-haven currency, leading to downward pressure on the NZD/JPY pair.

2. Central Bank Policies: The Reserve Bank of New Zealand (RBNZ) has maintained a relatively hawkish stance, while the Bank of Japan (BoJ) has shown signs of adjusting its ultra-loose monetary policy. Speculation about potential changes in the BoJ's yield curve control policy has strengthened the JPY.

3. Economic Data: New Zealand's economic data has been mixed, with signs of slowing growth in key sectors such as housing and exports. The country's reliance on commodity exports, particularly to China, has made it vulnerable to fluctuations in global demand.

Future Outlook

Forecasts suggest a potential appreciation of the NZD/JPY pair in the coming months. Projections indicate that the exchange rate could rise to 89.2159 in three months, representing a 4.11% increase from the current level. This optimistic outlook is based on expectations of economic growth in New Zealand, stable central bank policies, and potential weakening of the JPY due to risk-on sentiment.

However, several risks could impact this forecast:

• Global Economic Uncertainty: Ongoing geopolitical tensions and potential changes in international trade regulations could influence investor sentiment and currency movements.

• Central Bank Policy Shifts: Unexpected changes in monetary policies by the RBNZ or BoJ could lead to increased volatility in the NZD/JPY pair.

• Commodity Price Fluctuations: As New Zealand's economy is heavily reliant on commodity exports, any significant changes in commodity prices could affect the NZD's strength.

Conclusion

The NZD/JPY exchange rate has exhibited volatility over the past few months, influenced by a complex interplay of technical indicators, fundamental factors, and global economic conditions. While forecasts suggest potential appreciation in the near term, traders and investors should remain vigilant, considering the various risks and uncertainties that could impact the currency pair's performance.