1. What drives the pair?
One of the important fundamental factors driving the pair is safe haven versus yield search. We must remember though, that New Zealand is not a high risk country! This is why we can see NZDJPY going up sometimes in spite of JPY currency index going up too. Both countries are 'far' from the rest of the world and both are 'isolated' as they are 100% insular. Although initial reactions to events like Brexit make JPY or CHF appreciate against everything, after the first moments NZD and similar currencies also go up, as they give better yield while not being affected that much by general pains of economy and politics.
Let's see relevant data for both countries when it comes to trading the pair:
  • New Zealand
  1. Politics: Constitutional monarchy with parliamentary democracy. Constitution is not codified. British monarch is the head of state.
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