USD/JPY Steady Ahead of Fed Decision as Traders Eye BoJ Tone

The USD/JPY pair remains steady near 155.25 ahead of the US Federal Reserve's interest rate decision on Wednesday.

Traders are cautious and preferring to wait on the sidelines due to uncertainty about the outcome, although a hike in rates is widely expected to combat stubbornly high inflation.

The US central bank is likely to raise its short-term interest rate for the first time in three years, bolstering expectations that the Fed will take action to control inflation.

Analysts at Scotiabank note that the upcoming Bank of Japan decision on Friday will be more about tone and guidance rather than a headline move, with the central bank's stance on future rate hikes being key.