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MEXICO: MXNJPY Declines 1.15% Following Tokyo Inflation Data

MEXICO
EM BulletMexicoBulletEmerging Market NewsNorth America
  • A quick refresh of the MXNJPY chart, and the highlighted wedge break earlier in the week. Overnight 1% weakness for the cross has been driven by the Japanese yen leg, with the higher-than-expected Tokyo CPI print for November leading the currency higher.
  • The regional print is a leading indicator for the national figure that follows in three weeks time, likely adding further pressure to the split pricing at the BoJ's December decision. We note that it's the upcoming Tankan survey that we see as key for the BoJ's bias into the December decision.
  • Volatility for the Mexican peso has remained high this week, with ongoing discussions between Trump and the Mexican government driving peso sentiment. However, given the expectation for BOJ rate hikes and yesterday’s Banxico minutes cementing a more dovish consensus within the committee, a further narrowing of yield differentials could weigh further on MXNJPY.
  • Downside targets for the MXNJPY move are well established, namely the 2024 lows at 6.9908. Below here the March 2023 low at 6.7911 and Dec 2022 low at 6.5885 are notable chart points should the trend extend. Resistance moves down to 7.5281, the 20-day EMA.
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  • A quick refresh of the MXNJPY chart, and the highlighted wedge break earlier in the week. Overnight 1% weakness for the cross has been driven by the Japanese yen leg, with the higher-than-expected Tokyo CPI print for November leading the currency higher.
  • The regional print is a leading indicator for the national figure that follows in three weeks time, likely adding further pressure to the split pricing at the BoJ's December decision. We note that it's the upcoming Tankan survey that we see as key for the BoJ's bias into the December decision.
  • Volatility for the Mexican peso has remained high this week, with ongoing discussions between Trump and the Mexican government driving peso sentiment. However, given the expectation for BOJ rate hikes and yesterday’s Banxico minutes cementing a more dovish consensus within the committee, a further narrowing of yield differentials could weigh further on MXNJPY.
  • Downside targets for the MXNJPY move are well established, namely the 2024 lows at 6.9908. Below here the March 2023 low at 6.7911 and Dec 2022 low at 6.5885 are notable chart points should the trend extend. Resistance moves down to 7.5281, the 20-day EMA.