2012.10.1200:39:00UTC+00NZ Dollar Rises As Equities Advance

In the Asian session on Friday, the New Zealand dollar climbed against other major currencies as stocks gained after U.S. jobless claims declined and China agreed to hold talks with Japan on the island dispute.

Report released by the Labor Department on Thursday said initial jobless claims tumbled to 339,000 from the previous week's revised figure of 369,000. The drop surprised economists, who had expected jobless claims to edge up to 370,000 from the 367,000 originally reported for the previous month.

With the unexpected decrease, jobless claims fell to the lowest level since a matching number in the week ended February 16th, 2008.

China and Japan consented to hold bilateral talks to reduce tensions caused by the ongoing Senkaku/Diaoyu Islands dispute. The officials from both countries would hold vice-ministerial level discussions in the near future to solve the differences, reports said.

The kiwi hit a 2-day high of 0.8209 against the U.S. dollar with 0.825 seen as the next resistance level. The pair closed Thursday's deals at 0.8177.

The NZ dollar approached 64.42 against the yen, its highest level since October 9. The kiwi-yen pair is likely to test next upside target level at 65.00.

An index measuring tertiary industry activity in Japan was up a seasonally adjusted 0.4 percent on month in August, the Ministry of Economy, Trade and Industry, standing at 99.1.

That matched forecasts following the 0.8 percent contraction in July.

A separate report showed that an index measuring the prices of domestic corporate goods was up 0.3 percent on month in September, standing at 100.5.

That beat forecasts for an increase of 0.2 percent, which matched the August reading following a downward revision.

Against the aussie, the kiwi trimmed early losses and is now trading at 1.2532. The pair closed yesterday's deals at 1.2562.

The kiwi strengthened to 1.5781 per euro, reversing from a 4-day low of 1.5858. The kiwi is likely to break next upside target level at 1.57.

In the European session, Eurozone industrial production for August is due.

From the U.S., PPI for September and preliminary report of Reuters/University of Michigan's consumer sentiment index for October are slated for release in the New York morning session.