USD/JPY advances beyond 104.00 as Wall Street looks to open sharply lower
|- USD/JPY rose to a fresh 8-day high on Wednesday.
- US Dollar Index extends daily rally ahead of FOMC's policy announcements.
- Wall Street looks to start the day deep in the negative territory.
The USD/JPY pair gained traction during the European trading hours and touched its highest level since January 19 at 104.03. As of writing, the pair was up 0.38% on a daily basis at 104.00.
Eyes on US stocks, FOMC
The broad-based USD strength is allowing USD/JPY to preserve its bullish momentum. The US Dollar Index, which tracks the greenback's performance against a basket of six major currencies, rose to a weekly top at 90.62 on Wednesday as safe-haven flows provided a boost to the safe-haven USD.
Confirming the risk-averse market environment, the S&P 500 Futures are losing more than 1%. Wall Street's main indexes are poised to start the day deep in the negative territory and the USD is likely to continue to outperform its rivals in the second half of the day.
The data published by the US Census Bureau showed on Wednesday that Durable Goods Orders in December rose by 0.2% and missed the market expectation for an increase of 0.9%. Nevertheless, investors largely ignored this report as they remain focused on the FOMC's policy announcements at 19:00 GMT.
Market participants don't expect the US Federal Reserve to make any changes to its monetary policy. However, FOMC Chairman Jerome Powell could hint at possible changes to the amount and duration of asset purchases and ramp up the volatility in the late American session.
Technical levels to watch for
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