2013.03.2806:54:26UTC+00Kiwi, Aussie Dollars decline against Yen amid Italy, Cyprus issue

The  New Zealand and Australian dollars dropped for a second day versus the yen and sovereign bonds up as Italy’s incapacity to form a government and Cyprus’s bailout damped demand for riskier assets.

The Aussie also lose its power against the dollar as Chinese stocks dropped the most in three weeks. Both South Pacific nations count China as their largest trading partner. Monetary markets in countries including the Australia, U.S. and U.K. will be clossed tomorrow for Good Friday.

“The euro zone is like a factory of bad news and worry, so there’s always going to be a new product to buy,” said Sacha Tihanyi, a Hong Kong-based senior foreign-exchange strategist at Bank of Nova Scotia’s Scotiabank unit. “When equity markets soften as they did overnight, and in markets today we’ve got China taking a hit, we’re going to see Aussie and kiwi suffer a bit more.”

The Australian dollar declined 0.5 percent to 98.15 yen as of 4:41 p.m. in Sydney and dropped 0.2 percent to $1.0427. New Zealand’s currency gave up 0.3 percent to 78.76 yen and was move a little at 83.67 U.S. cents.

Australia’s 10-year bond yield moved down 10 basis points, or 0.1 percentage point, to 3.42 percent. The rate on similar- maturity securities in New Zealand conceding 10 basis points to 3.49 percent.

The Shanghai Composite Index (SHCOMP) of stocks sank 2.5 percent, the highest since March 4, as the administration calls that it will take steps this year to loosen state control over interest rates and the yuan. The broader MSCI Asia Pacific Index relinquished 0.8 percent.