A firm U.S. dollar had the yen locked near a fresh 34-year low on Tuesday, keeping investors on heightened intervention watch as they looked ahead to key U.S. inflation report and the Bank of Japan's rate decision this week.The yen remained pinned after hitting 154.85 yen on Monday, its lowest level since the mid-1990s, as the stark U.S.-Japan rate differentials came into focus again amid an easing in Iran-Israel tensions. It last hovered around 154.76 per dollar.Japan's central bank is expected to project inflation will stay around its 2% target for the next three years in new forecasts due on Friday, signalling its readiness to raise interest rates again this year from current near-zero levels.Yen weakness may force the central bank to "strike a more hawkish tone," which would bring forward expectations of another rate hike and support the yen, said Carol Kong, a currency strategist at Commonwealth Bank of Australia.Japan's Finance Minister Shunichi Suzuki, who has repeatedly warned against speculative currency moves in recent weeks, said on Tuesday that local authorities will work closely with overseas counterparts to deal with excessive volatility in the foreign exchange market.The dollar's strength has been broad-based, with gains edging toward 5% this year.