if the constraint requires 'Y' or 'N', do you seriously expect it to be a varying length column?
why not just CHAR(1)?
It just happens that in Oracle, a VARCHAR2(1) and a CHAR(1) are identical in storage, performance and behaviour, unlike VARCHAR2(n) and CHAR(n) for any n > 1. Therefore, normal practice is to use VARCHAR2 for all n rather than change to CHAR when n = 1 just because you can. I never use CHAR at all.