Ella 
On Wednesday, NZD/JPY plunged to 91.84, recording a significant drop of 1%. The dovish tone of the Reserve Bank of New Zealand is the main reason for this trend, which is also one of the reasons why the New Zealand dollar became the weakest currency on Wednesday.
The Reserve Bank of New Zealand held interest rates steady at 5.5% and revised its outlook, lowering the probability of another 25 basis point rate hike from 75% to 40%. In addition, the Reserve Bank of New Zealand also lowered its near-term gross domestic product (GDP) growth forecast and slightly lowered its inflation forecast. However, the Reserve Bank of New Zealand expects inflation to return to the 1-3% target range in the third quarter of 2025, which means tight monetary policy will continue. In response, forecasts of weaker economic activity combined with expectations of fewer rate hikes pushed NZD/JPY lower.
