The 2011 New Zealand Open champion Brad Kennedy from Queensland fired a superb 9-under 62 at Millbrook Resort to lead on 16-under the cards after two rounds.
He holds a one shot advantage over New Zealander Ben Campbell who followed his first round course record 61 at the par-71 Millbrook Resort with a 5-under 67 on the par-72 The Hills in the morning.
Fellow Kiwi, Michael Hendry, who flew in the day before the tournament from the World Golf Championship event in Mexico, fired a 6-under 65 at Millbrook Resort to move to 13-under alone in third place.
Kennedy and Hendry, who both play on the Japan Golf Tour, were paired over the first two rounds, producing a spectacular 31 birdies between them with just two dropped shots.
"It was awesome. It's nice to play like that. I had a good rhythm going into the back nine," said Kennedy, who bagged 10 birdies with one dropped shot in his round. "The greens are just pure here so they are great to putt on. It is good having a playing partner rolling putts in as well. It allows both of us to start rolling."
Hendry was equally pleased with his play.
"I made the most of my round today. It was a day when I could have easily only had even par but I was able to capitalise on the good shots that I had," he said. "It's great going out there and everyone in the crowd is supporting you because you are a Kiwi."
Nonchalant Australian Deyen Lawson and compatriot Dimitrios Papadatos, the 2014 champion, moved into a share of fourth place with Korea's Sung-Jae Im, who shot 64 at the Hills to match his 66 at Millbrook Resort on the first day. Lawson shot a five-under par 66 with some adventure, mixing six birdies and an eagle with a bogey and double bogey.
"I am looking forward to going back to Millbrook tomorrow in contention. I have some great memories there. I had definitely the best win of my career here so I'm looking forward to giving it another shake this year."
Australian James Nitties enjoyed his second straight round of 66 to move to 11-under par and alone in seventh place.
Defending champion Matthew Griffin (AUS) remained in contention with a 67 at Millbrook Resort to share eighth position on 10-under with compatriot Callan O'Reilly, with seven birdies in his 64, and Kiwi professional Brad Shilton, who shot 69 at Millbrook Resort in the morning.
"I am surprised. I'm feeling really good, a lot better than I thought I would at this stage," said Griffin, who like Hendry arrived late from Mexico. "I have flown in the day before a tournament only once before and I actually won that one, so hopefully I can repeat that."
Eight players share 11th place including Young-Han Song (KOR), the lowest world ranked player this week at number 78, compatriot Dongmin Lee, Thailand's Gunn Charoenkul, Australian Matthew Guyatt, Andrew Dodt, Callan O'Reilly and 2015 champion Jordan Zunic and Kiwis Josh Geary and Daniel Pearce.
The cut came at a remarkable four-under par for the top 60 professionals and ties, which was a reflection on the outstanding condition of both courses, and the superb weather.
Big Kiwi hope Ryan Fox made a late birdie with his one-under par 70 at The Hills to edge safely through on five-under par.