• NZD/USD depreciates as the New Zealand Dollar weakens amid cautious market sentiment.
• China imposed a ban on exports of certain rare earth elements and other items to Japan with potential military applications.
• The US Dollar stays steady as fragile data ahead of Friday’s jobs report keeps market sentiment cautious.

NZD/USD extends its losses for the third successive session, trading around 0.5750 during the European hours on Thursday. The pair weakens as the risk-sensitive New Zealand Dollar (NZD) falls amid cautious sentiment, driven by rising Japan–China tensions involving a key New Zealand trading partner.

Beijing banned exports of certain rare earth elements and other items to Japan with potential military uses. Relations have deteriorated sharply since Japanese Prime Minister Sanae Takaichi said a Chinese invasion of Taiwan would pose a threat to Japan’s survival and could prompt a military response from Tokyo, according to a CNN report.

After US forces captured Venezuelan President Nicolas Maduro and his wife in a daring operation, US President Donald Trump said the United States would “run” Venezuela until a safe transition can be established. Trump acknowledged, while speaking to The New York Times, uncertainty over how long direct oversight might be required.

The US Dollar (USD) remains steady as recent data point to a fragile US economic backdrop ahead of Friday’s crucial jobs report, tempering market sentiment. Traders will keep an eye on the US Initial Jobless Claims data later in the North American session. Attention will be shifted toward Friday’s US Nonfarm Payrolls (NFP) report, which is expected to show job gains of 55,000 in December, down from 64,000 in November.