NZ dollar firm, eyes 69 U.S. cents again; debt soft

* NZ dollar higher with move through key resistance eyed

* Investors looking to Japan election on Sunday.

WELLINGTON, Aug 28 - The New Zealand dollar <NZD=> found support on Friday from firmer stock markets and improved investor sentiment about a global recovery, and may break through a key resistance level in coming days.

The currency was back towards the top of recent ranges after a volatile past day in which it had made two attempts to break through resistance to an 11-month high and plumbed a one-week low in between.

"The kiwi is solid as a rock, like all other currencies against the marshmallow U.S. dollar," said ANZ-National senior dealer Alex Sinton.

Sinton said the kiwi remained poised for another possible assault this week to break through the $0.69 level, despite having failed four times this week to achieve it.

"It may not stay up, but certainly crossing it and spiking up and then coming back off perhaps," he said, adding that around $0.6920 was the technical barrier for any rally.

The kiwi was trading at $0.6864/68 in late local trading against $0.6790/95 on Thursday.

Sinton added that a long weekend in Britain and Japan's general election on Sunday, where a win for the main opposition Democratic Party is being factored in, may spark some position squaring.

The kiwi was firmer against the yen <NZDJPY=R>, but retreated against the Aussie <NZDAUD=R> as investors looked towards next week's Australian central bank meeting and the prospect it may adopt a more explicit tightening bias.

A trickle of second tier local data didn't bother the market. New house building consents rose 5 percent in July, while the level of household borrowing also rose slightly. See [ID:nWEL000975] and [ID:nWEL515099]

Next week's local calendar is dominated by the National Bank of NZ's closely followed business outlook survey.

New Zealand government bonds were softer following general strength in stocks, which reduced debt's safe haven appeal. The yield on the benchmark NZ 10-year bond <NZ10YT=RR> was 3 basis points higher at 5.69 percent.