Dollar tops US76c in late trade

The local unit has been supported by expectations of Japanese stimulus measures.

The Australian dollar was higher Tuesday amid speculation that Japan might soon roll out stimulus measures to lift growth in the flagging economy.

At 5.37pm GMT, the Australian dollar was trading at US76.20 compared with US75.32 late on Monday.

The Nikkei Stock Average closed 2.5 per cent higher on Tuesday. The benchmark index rose 4.0 per cent Monday, the biggest daily-percentage gain since March 2, as the ruling-coalition’s victory in Japan’s upper-house election Sunday stoked speculation of more fiscal assistance for the economy.

Rodrigo Catril, currency strategist at National Australia Bank, said the chatter about Japan was fanned by reports that said the country’s prime minister was holding talks with former US Federal Reserve Chairman Ben Bernanke.

Earlier, the National Australia Bank’s business survey for June provided a positive update on business conditions and business confidence, despite the survey being conducted from June 24 to 30, immediately following the Brexit referendum result and ahead of the Federal Election.

The business conditions index rose 2 points to +12 points, which is well above the long run average of +1 for this series.

“This confirms that the non-mining sectors are benefiting from low interest rates and a sharply lower currency,” said Andrew Hanlan, chief economist at Westpac.

Business confidence rose 3 points to +6, fully reversing a dip in May.

The Reserve Bank of Australia looks closely at the NAB survey to assess the health of businesses. The strong results might deter an interest rate cut at the RBA’s next policy meeting in August.

- Dow Jones newswires