SINGAPORE, April 3 Reuters The dollar index held near its highest level in over four months on Wednesday, pinning the yen close to its lowest its decades, though the increased threat of currency intervention by Tokyo capped further declines in the Japanese currency.

The euro was steady at 1.0766 as was the pound at 1.2571, leaving the dollar index , which tracks the unit against six peers, flat on the day at 104.82, having crept above 105 on Tuesday.

Euro zone inflation data is due later in the day, but with data from the biggest economies already released and broadly in line with expectations of a continuing slowdown, it is unlikely to have a major impact on the common currency.

The Japanese yen was last at 151.7 per dollar, little recovered from last week39;s slump to 34year lows of 151.975, as the Bank of Japan39;s historic policy shift only served to underscore its outlier status.

While the BOJ raised rates for the first time in 17 years, its policymakers39; commitment to go slow on further increases have hammered the yen especially given the stillwide JapanU.S. yield gap.

Japanese officials have carried on with their efforts to talk up the currency for days, with the threat of an intervention presenting stiff resistance for the U.S. dollar.

It certainly seems like the market is very fearful of the 152 yen per dollar level, said Jane Foley, head of FX strategy at Rabobank.

She said she was also watching to see whether geopolitical tensions would have an…