TOKYO, April 23 Reuters A firm dollar had the yen locked near a fresh 34year low on Tuesday, keeping investors on heightened intervention watch as they looked ahead to key U.S. inflation report and the Bank of Japan39;s rate decision this week.

The Japanese currency remained pinned after hitting 154.85 yen on Monday, its lowest level since 1990, as the stark U.S.Japan rate differentials came into focus again amid an easing in IranIsrael tensions.

Traders have been keeping a wary eye as the yen slips towards 155.00, a level considered by many participants as the new trigger for intervention by Japanese authorities.

Japan39;s finance minister on Tuesday said last week39;s meeting with his U.S. and South Korean counterparts has laid the groundwork for Tokyo to act against excessive yen moves, issuing the strongest warning yet on the chance of intervention.

The yen was last up marginally at 154.74 per dollar, buoyed by authorities39; latest comments.

However, there are doubts about whether Tokyo will act so close to the Bank of Japan39;s BOJ twoday policy meeting that starts on Thursday.

The BOJ is expected to project inflation will stay around its 2 target for the next three years in new forecasts, signalling its readiness to raise interest rates again this year from current nearzero 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…