By Cecile Lefort and Rebecca Howard
SYDNEY/WELLINGTON, April 11 (Reuters) - The Australian and New Zealand dollars edged up on Monday, helped by a rally in commodities, but gains were muted by a rising yen.
The Australian dollar rose to $0.7566, having slipped 1.6 percent last week in the second-largest weekly loss this year.
It has dropped around two cents since touching a nine-month peak of $0.7723 late March with much of the retreat due to a steep rise in the yen.
Many investors were caught by surprise last week when short-covering rippled through all the yen crosses with the Aussie losing nearly 5 percent. It traded at 81.43 yen, not far from a one-month low of 80.64.
Likewise, the New Zealand dollar stood at 73.45 yen, having touched 73.16 last week, a level unseen since August last year.
The Aussie and kiwi dollars have shed between 7 and 10 percent against the yen this year, although according to ANZ Bank, purchases of Australian dollar assets in February were the largest since July 2015.
"The continued easing of monetary policy in Japan over the last quarter, which has driven domestic yields to record lows, has increased the flow of Japanese investment money to foreign markets," it said.
Indeed, Australian government 2-year bond yields of 1.8 percent compare with a cost of 0.2 percent in similar Japanese securities.
The New Zealand dollar NZD=D4 rose 0.2 percent to $0.6811, from a low of $0.6773 touched on Friday, benefiting from improving oil prices.
It fell 1.6 percent last week.
Looking ahead, ANZ Bank said the main focus this week will be on China data, which kicked off with a benign reading on consumer price inflation on Monday. ECONCN
New Zealand government bonds 0#NZTSY= eased, sending yields around 3 basis points higher across the curve.
Australian government bond futures were quiet near one-month highs, with the three-year bond contract YTTc1 steady at 98.210. The 10-year contract YTCc1 dropped half a tick lower at 97.5950, while the 20-year contract YXXc1 eased 1 tick to 97.0100. (Editing by Sam Holmes)