USD/JPY: Approaches multi-week high near 109.10 ahead of Fed meeting, Biden speech

• USD/JPY is looking optimistic ahead of the FOMC meeting.

• US Treasury yields underpin demand for the greenback.

• Investors shy away from the safe-haven yen on improved risk sentiments.

The USD/JPY pair extends its previous two session gains and continues to march higher in the European session on April 28. The pair peaked at 109.08, the level last seen on April 14. 

At the time of writing, USD/JPY is trading at 109.05, up 0.34% on the day.

The US dollar index (DXY), which tracks the movement of the greenback against the majors, is gaining traction. After making a low of 90.89, the index touched highs of 91.11. The move is sponsored by momentum in the US 10-year yield, which rose to 1.65% from 1.62% with gains of more than 1%. This, in turn, aggravates demand for the dollar as an attractive asset among investors and hence is exerting pressure on the Japanese yen.

Upbeat US economic data continues to strengthen investors risk appetite, thus helping to gain a stronghold for the greenback. US CB Consumer Confidence data rose to 121.7 in April from 109  in March, beating market expectations that stood at 113. 

On the other hand, Japanese policymakers kept short-term key rates unchanged at -0.1%, as widely expected on Tuesday, and cut its consumer inflation forecast to 0.1% from earlier predictions of 0.5%. Retail Sales increased by 5.2% on a yearly basis in March. However, the concerns of lower inflation expectations, and thus the lower interest rates, overshadowed the good sales number. As said, the Japanese government is ready to impose strict measures and limit many businesses from operating to curb the rising coronavirus infections in the continent. Investors are now reluctant to place safe bets on the yen.

As for now, the focus shifts to the FOMC meeting and Fed Press Conference later in the day. Investors eagerly await the events to unfold to gauge market sentiments for some meaningful trading opportunities.