• USD/JPY remains flat-lined near 152.00 as traders are uncertain about the US presidential election outcome.
• The Fed is expected to cut interest rates by 25 bps on Thursday.
• Investors await BoJ minutes to get fresh cues about when the central bank will hike interest rates again.

The USD/JPY pair trades sideways near 152.00 in the North American session on Tuesday. The asset remains sideways as investors have been sidelined with the United States (US) presidential elections underway. Ahead of the completion of the voting process, traders expect fierce competition between former President Donald Trump and Democratic contender Kamala Harris.

The pair will be guided by market expectations for the US election outcome, which will be influenced by exit polls. According to analysts at TD Securities, “A Red Wave (favoring Republicans) would kick-start a sizeable USD rally. It would rekindle memories of US Exceptionalism, anchored by tariffs, tax cuts, deregulation, and negative impacts on the outlook for EZ and China."

At the time of writing, the US Dollar slumps, with the US Dollar Index (DXY) declining to 103.70. This week, investors will also focus on the Federal Reserve’s (Fed) monetary policy decision, which will be announced on Thursday.

According to the CME FedWatch tool, traders have priced an interest rate reduction by 25 basis points (bps) to 4.50%-4.75%. This will be the second straight interest rate cut, however, the size of rate cut will be smaller as risks of an economic downturn have diminished lately. In September, the Fed reduced its interest rates by 50 bps.