BOJ Rate Hike Bets Weigh Heavily on Mexican Peso/Yen Pair

The Mexican peso/yen pair is expected to trade in a range of 8.90-9.25 yen over the coming week, with a sluggish recovery bias.

This forecast comes despite the recent price action, which saw the pair rise to a high of 9.442 yen before breaking below several moving averages and falling to 9.002 yen this week.

The underlying strength of the peso as a high-yielding currency remains intact, but expectations of additional Bank of Japan rate hikes and wariness over currency intervention are lifting the yen.

The key focus is whether the pair can hold the 200-day moving average near 9.07 yen; if it breaks below this level, further downward pressure on the peso/yen pair could ensue.