NZD/JPY drops as BOJ surprises with bond buying cut

• The NZD/JPY dips in Tokyo as BOJ cuts bond purchasing.
• RBNZ has a positive outlook, but numbers remain muted.

The Kiwi has once again resumed its slide against the Yen, currently testing the waters around the 77.60 level.

The NZD/JPY came into the overnight session looking for a leg up after steadily declining on Tuesday's trading, but an improvement in ANZ Business Confidence (-19.0 vs. prev. -37.8) and Activity Outlook (20.4%, prev. 15.6%) did little to improve the pair's standing, and a surprise cut in Bank of Japan (BOJ) bond purchases sent the pair lower as the Yen jumps in Tokyo trading.

With nothing but low-tier data scheduled for the NZD until Building Permits figures drop on Thursday at 21:45 GMT, the pair can expect to be driven by general market sentiment. The New Zealand economy has been stuck in neutral, and despite a positive outlook from the Reserve Bank of New Zealand (RBNZ), signs of improving economic activity have yet to materialize in a meaningful way in the data.

The BOJ slashed their bond buying today, picking up 70 billion Yen worth of long-dated government bonds versus the previous 80 billion Yen purchase, and despite the BOJ's constant warnings that the central bank is nowhere near ready to begin tapering their easing programs, the Yen still found plenty of buyers on the news, sending the Japanese currency higher across the board.

NZD/JPY Technicals

The pair is stuck continuing February's slide, and a break down further will see NZD/JPY trading into almost three-month lows. H4 candles show a steady decline still pricing into the charts, lower highs applying pressure to price action, while support thins from 77.30, and resistance piling up from 77.80 to 78.11.