We previously saw that the recent ECB developments and the sharp rise in the front end of the Euro curve could market a pause on the EURCZK pair and lead to an increase in interests for going long the CZK against currencies with a more ‘dormant’ CB (i.e. BoJ).
CZKJPYbroke above its 5.40 resistance last week and is gradually approaching its key resistance at 5.4550, which was the high reached in February 2018 (when liquidity peaked in the EM world before Covid).
The aggressive tightening cycle run by the CNB could continue to support the CZK against JPY in the medium term
A break above 5.4550 would bring us to October 2008 highs.
On the downside, next support to watch below 5.40 stands at 5.3380.

Source: Bloomberg

Bullet EM Bullet Emerging Markets News Homepage

Yvan Berthoux

Bullet EM Bullet Emerging Markets News Homepage

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CZKJPY Approaching Key Resistance at 5.4550