Ella 
On Wednesday, NZD/JPY maintained its winning streak for the third consecutive trading day. NZD/JPY rose to around 92.20 after the Reserve Bank of New Zealand took a hawkish stance. The Reserve Bank of New Zealand decided to maintain the official cash rate (OCR) at 5.5% for the sixth consecutive meeting, as expected.
The Reserve Bank of New Zealand committee expressed confidence that maintaining the official cash rate at a restrictive level for the long term will bring consumer price inflation levels back to the target range of 1% to 3% by 2024. While headline inflation fell back to a two-and-a-half-year low of 4.7% in the fourth quarter of 2023, it remains well above target.
However, some economists view the decision as dovish, especially given that New Zealand has entered recession and consumer confidence has plummeted. Market sentiment suggests the Reserve Bank of New Zealand is likely to cut interest rates in August.
On the other hand, strong US inflation data and weak Japanese economic data may increase the probability that Japanese authorities will need to intervene in the foreign exchange market. However, Bank of Japan Governor Kazuo Ueda said the central bank would not change monetary policy just to respond to foreign exchange fluctuations.
