WELLINGTON (Dow Jones)--The New Zealand dollar was higher late Thursday but remained in a tight range as the market digested news of higher costs for repairing damage caused by the 7.0-magnitude quake in New Zealand's second-largest city of Christchurch. Chris Hunter, a dealer at Custom House, a Western Union Company, said he was surprised the kiwi didn't track the Australian dollar higher after Australia's job market added a higher-than-expected 30,900 jobs in August, driving the unemployment rate down to 5.1%. The Australian dollar rose on the data, climbing by half a U.S. cent to a four-month high of US$0.9235. "I wonder if there isn't still perhaps a little bit of nervousness in the market," as people calculate the true cost of the Christchurch earthquake, said Hunter. Late Wednesday, New Zealand's Treasury Secretary John Whitehead estimated the cost would now be NZ$4 billion, double the original estimate of NZ$2 billion. Earlier Thursday, Finance Minister Bill English said the cost is of the earthquake will be manageable as long as the government keeps a tight rein on its finances. He said the bulk of the NZ$4 million bill will be met by the Earthquake Commission, a government-owned entity funded by insurance premiums, and by private insurers. "It is too early to estimate the exact cost to government--but the prime minister has indicated he expects it to be in the hundreds of millions." ANZ Bank senior economist Khoon Goh said Thursday the government's balance sheet has enough capacity to absorb the shock, but the return to surplus will likely be pushed out a bit. In August, the finance minister said while the New Zealand economy was growing, it is still looking at five more years of deficits. English said Thursday "given that the exact costs are fairly unquantifiable, at this point in time they would not change our estimation of when we reach surplus." Government bonds ended slightly weaker at the short end while swap rates rose slightly, largely tracking moves in offshore markets. The government's bond tender met with firm demand, in particular at the long end. The government issued a total of NZ$350 million paper, of which NZ$200 million were May 2021 bonds. "There is still plenty of demand out there," a local bond trader said. -By Rebecca Howard, Dow Jones Newswires; 64-4-471-5990; rebecca.howard@dowjones.com

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