Australia, NZ dollars lose ground to yen; central bank chiefs due to speak

By Stella Qiu

SYDNEY, Dec 1 (Reuters) - The Aussie and kiwi lost ground to the yen on Monday as hawkish hints from the Bank of Japan chief lifted the Japanese currency, although against the U.S. dollar they mostly drifted, having ended November largely flat.

Traders are on alert as the chiefs of the Reserve Bank of New Zealand and Reserve Bank of Australia - Anna Breman and Michele Bullock - head to Parliament this week. They are expected to testify as markets have given up hope for further policy easing.

The Aussie fell 0.5% to 101.70 yen AUDJPY=R, while the kiwi dropped 0.6% to 89.01 yen NZD=D3 as BOJ Governor Kazuo Ueda flagged discussions about a rate increase at a policy meeting later this month, lifting the yen and bond yields.

Against the dollar, the Aussie AUD= was little changed at $0.6540 after ending November just where it started. The kiwi NZD= was flat at $0.5740, having had a wild November as it bounced back from a seven-month low of $0.5581 and ended the month 0.3% higher.

The two Antipodeans - often traded as proxies for global risk - were sold earlier in November as tech stocks slid on doubts about sky-high artificial intelligence valuations, though they managed to find support from higher local yields as interest rate expectations diverged from the U.S.

Breman started at RBNZ on Monday and is due to face Parliament on Tuesday after the central bank signalled it was done easing after cutting interest rates aggressively to kickstart a sluggish economy.

Swaps imply two rate hikes by the end of next year.

Across the Tasman Sea, Bullock will appear before Parliament on Wednesday and is likely to be quizzed about whether three rate cuts this year have gone too far to fuel a surge in inflation. Swaps imply a split chance of a rate rise by the end of next year.

Also due on Wednesday is Australia's gross domestic product data, where forecasts are centered on a quarterly rise of 0.7%. That suggests an annual expansion of 2.2%, picking up from the previous quarter's 1.8%, and is above the trend growth of 2%.

"The (economic) upswing is likely to gain greater momentum the longer it runs, which increases the likelihood it will become self-sustaining," said Pat Bustamante, a senior economist at Westpac.

A pick-up in private demand, helped by consumers, has been widely expected but much depends on whether there is enough capacity in the economy to cater to the demand and keep inflation in check.

Home prices jumped another 1% in November and data on Monday showed inventories fell 0.9% in the September quarter, suggesting a 0.3 percentage point drag on economic growth.