The New Zealand dollar rose against the yen as tensions over the Korean peninsula failed to rattle financial markets and measures of risk appetite improved.
The kiwi dollar rose to 76.39 yen as at 8am in Wellington from 76.05 yen late on Monday and from 76.19 yen last Thursday, before the four-day Easter holiday.
The local dollar slipped to US70.08c from 70.22c on Monday to be little changed from 70.02 cents last Thursday.
US stocks rose and the VIX fell to its lowest in almost a week as North Korea unsuccessfully launched a test missile over the weekend, as US vice president Mike Pence was arriving in the south for talks with South Korean acting president Hwang Kyo-ahn.
The US dollar gained from its overnight lows after US Treasury secretary Steven Mnuchin said a strong dollar was good for the US economy over the long term, comments that appeared to run counter to President Donald Trump's remark that the greenback was too strong.
"It has been somewhat of a rollercoaster ride over the past week or so, with risk sentiment, politics, and USD direction dominating, but familiar ranges have held," ANZ New Zealand senior economist Philip Borkin said in a note.
"A lack of retaliation for the failed North Korean missile helped buoy sentiment and a relief rally for equities."
The VIX is the Chicago Board Options Exchange Volatility Index, and is known as Wall Street's fear gauge.
With no local economic data scheduled for Tuesday, traders are looking ahead to the GlobalDairyTrade auction, amid expectations whole milk powder prices could rise 5 per cent, based on NZX dairy futures.
The greenback had been weaker on a US dollar index basis after measures of inflation for March printed more sluggish than expected.
The trade-weighted index slipped to 76.05 from 76.14.
The kiwi dollar fell to 4.8201 yuan from 4.8364 yuan on Monday as Chinese data showed retail sales and industrial production both came in stronger than expected in March from a year earlier.
The local dollar traded at 55.76 British pence from 56 pence late on Monday and fell to 65.85 euro cents from 66.12 cents.
