The Australian and New Zealand dollars were targetting multi-month highs on Tuesday, as investors piled back into risky assets on easing recession fears and a less aggressive Federal Reserve, while inflows from the Japanese yen also helped.

The Aussie was standing tall at $0.7040, after surging 0.9% overnight to break past the resistance level of 70 cents, driven by a tech rally on Wall Street. It is now eyeing the five-month peak of $0.7064 hit just last week.

The kiwi was hovering at $0.6505, just a touch below the seven-month high of $0.6530 also struck last week.

Since the start of the year, markets have leaped ahead, driven by China's faster-than-expected reopening, signs that inflation have eased and less aggressive tightening from major central banks.

The strong gains in the Aussie this year had led analysts at the National Australia Bank to revise up its forecast and expect the currency could hit $0.71 by the end of the first quarter and $0.74 by the end of the year.

"Any significant deterioration in risk sentiment represents a downside risk to AUD and one source of volatility," they said in a note, adding that the Reserve Bank of Australia is unlikely to be a major influence on the currency if it delivers the two more 25 basis point hikes as expected.

Yen selling also helped the Aussie and the kiwi recover in the past few sessions. The Australian dollar advanced 1.1% to 91.85 yen, while the kiwi also jumped 0.8% to 84.7 yen, strongest since late December.

A private survey on Tuesday added to signs that inflation has likely peaked in Australia.

Markets are still inclined to think the central bank will raise its 3.1% cash rate by another quarter point, but they have also priced in a 40% chance it will pause, given that interest rates have climbed by 300 basis points since May. (Editing by Jacqueline Wong)