In this work we analyse the impact of including a regional, high-resolution ocean model on simulated atmospheric climate in a coupled earth system model. The resolution of the regional, nested ocean model is approximately 0.2 degrees compared to the 1 degree resolution of the global ocean model within which it is embedded and this work complements previously published work on ocean circulation and marine heatwaves using the New Zealand Earth System Model, NZESM. After a discussion of the eddy-permitting capability of the nested ocean and its coupling to the overlaying atmosphere, we study the effects on air temperature, precipitation and evaporation, latent and sensible surface heat balances, zonal wind, the storm track and the effect on total cloud amount. Overall we find that the NZESM provides a better representation of regional atmospheric climate compared to its parent model - UKESM1 - although this improvement is not universal. For example, although the NZESM shows better agreement in surface air temperature within the nested ocean region, there is also some deterioration in the agreement  at high southern latitudes where the seasonal sea ice edge coincides with a transition from negative to positive correlation between air temperature and cloud amount. The lack of additional model tuning in the NZESM after the nested ocean model's inclusion largely accounts for the presence of these improvement-deterioration pairs with respect to observations.