Yen Trades Flat as Markets Eye Federal Reserve's Interest Rate Decision

The Japanese Yen (JPY) has been trading flat against the US Dollar (USD) at around 163.75 during the Asian session on Tuesday, with investors taking a wait-and-see approach ahead of the Federal Reserve's monetary policy announcement on Wednesday.

The USD/JPY pair is struggling to find direction as traders have sidelined their positions in anticipation of the Fed's move.

According to the CME FedWatch tool, there's a 62% chance that the Fed will leave interest rates unchanged at between 3.50%-3.75%, while also showing a strong possibility of an interest rate hike in September.

Market participants are eager to know how long US inflation will remain above the central bank's 2% target, but Chairman Kevin Warsh has clarified that there won't be any guidance on the interest rate outlook in the monetary policy statement and press conference.