TOKYO/LONDON (Reuters) -The dollar edged higher on Wednesday ahead of a key inflation report later in the day, while the yen remained near multi-decade lows, keeping traders on alert for signs Japanese authorities could intervene to prop up the currency.

The main market focus on Wednesday is U.S. consumer price inflation for March due at 1230 GMT, which traders have been eagerly awaiting for hints on the Federal Reserve's policy outlook.

The inflation data follows a strong jobs report last Friday that blew past forecasts, raising questions on how soon and how much the Fed will cut rates this year.

Ahead of the data, U.S. interest rate futures set the odds of the first cut occurring in June at about 50%, according to CME Group's FedWatch tool. The possibility of a hold has bumped up to 46%.

A solid inflation number could lead markets to price out a June cut, which could propel the dollar sharply higher, analysts said.

"A lot of forex traders are expecting to see higher readings again," said Ulrich Leuchtmann, head of FX and Commodity Research at Commerzbank.

"Then it would seem clear as daylight that there will be no quick Fed rate cuts".

But if last month's reading falls below 0.3%, that would lead to a reassessment of the U.S. inflation trend and could lead to major weakness in the dollar, he added.

The U.S. dollar index, which measures the greenback against six rivals, edged 0.02% higher to 104.1.

In Japan, no fresh warnings were issued as the yen remained close to its 34-year low versus the dollar ahead of the U.S. data.

Bank of Japan Governor Kazuo Ueda, however, brushed aside market speculation that the yen's sharp falls could force the central bank to raise interest rates.

The Japanese currency was flat at 151.83 per dollar.

Elsewhere, the kiwi was last up 0.12% at $0.60685, having briefly jumped to a three-week high of $0.60775 versus the dollar after the Reserve Bank of New Zealand kept rates on hold, as expected, but warned of persistent inflation.

The euro was steady at $1.0851, after jumping to a three week high against the dollar on Tuesday, with the European Central Bank meeting on Thursday fast approaching.