SYDNEY/WELLINGTON, Feb 3 (Reuters) - The Australian and New Zealand dollars struggled against the yen on Wednesday after sliding crude oil prices fuelled risk aversion and sent investors scurrying to safe-haven assets such as government bonds.
The Aussie dropped further to 83.87 yen AUDJPY=R , having skidded nearly 2 percent on Tuesday. The kiwi also nursed losses at 78.13 NZDJPY=R , having fallen 1.3 percent in the last session.
Much of the weakness came after a sharp fall in oil prices returned the focus back to global growth concerns.
The Antipodean currencies suffered from a large unwinding in carry trades where investors borrow at low rates such as the yen to buy higher-yielding assets like the Aussie and kiwi.
The Australian dollar AUD=D4 also fell to $0.7014, having shed more than a cent from Tuesday's peak. Support was found at $0.6950, a break of which could see a retracement to the seven-year low of $0.6827 touched mid-January.
The New Zealand dollar NZD=D4 , however, stood tall against its U.S. peer following a strong jobs report. was back at $0.6533, from a low of $0.6462 and pulling away from a four-month trough touched in January.
"The astonishing plunge in the unemployment rate in the fourth quarter of last year, to a six-year low of 5.3 percent from 6.0 percent, decreases the chances that the Reserve Bank of New Zealand (RBNZ) will reduce interest rates further," said Paul Dales, chief economist of Australia and New Zealand at Capital Economics.
Yet RBNZ Governor Graeme Wheeler clearly left the door open to more easing in a speech on Wednesday, warning that "most of the risks facing the economy are downside ones." the risks was weakness in dairy earnings, with prices for milk power diving 10.2 percent at the GlobalDairyTrade auction held on Tuesday. Dairy is New Zealand's largest export earner.
New Zealand government bonds 0#NZTSY= jumped in line with a global rally in safe-haven assets, sending yields 7 basis points lower at the long end of the curve.
Australian government bond futures rose to near four-month peaks, with the three-year bond contract YTTc1 up 4 ticks at 98.180. The 10-year contract YTCc1 jumped 7 ticks to 97.4500, while the 20-year contract YXXc1 was steady at 96.9300. (Editing by Shri Navaratnam)