TOKYO - The dollar consolidated on Wednesday ahead of a key inflation report later in the day, while the yen remained a whisker away from what markets believe to be the line in the sand for Japanese authorities to intervene.

The kiwi, meanwhile, briefly jumped to a three-week high after the Reserve Bank of New Zealand kept rates on hold, as expected, but warned of persistent inflation.

The main market focus on Wednesday is U.S. consumer price inflation for March, which traders have been eagerly awaiting for hints on the Fed'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 central bank will cut rates this year.

Futures traders reduced bets to the lowest level since October, around 60 basis points in rate cuts this year, LSEG data showed on Monday, amid evidence of continued strength in the U.S. economy.

Ahead of the data, U.S. interest rate futures set the odds of the first cut occurring in June at about 60%, up from 51% on Monday, according to CME Group's FedWatch tool, although the possibility of a hold has bumped up to 40%.

A solid CPI number will likely have markets pricing out a June cut, which could see the dollar rising sharply, said Carol Kong, a currency strategist at Commonwealth Bank of Australia.

"A strong core CPI of 0.3% (month-to-month) or above will likely break the case for a June rate cut because there are two more CPI readings ahead of the meeting which are likely not sufficient to show a pattern of slowing inflation."

On the other hand, even if the data comes in below expectations, June bets will probably remain little changed as hurdles remain, meaning the dollar may only dip modestly, she said.

On the yen, Wednesday's CPI data will be "a big test for Japanese authorities," Kong added.

The U.S. dollar index, which measures the greenback against six rivals, held firm at 104.12.

The yen remained close to its 34-year low versus the dollar ahead of the data, as Bank of Japan Governor Kazuo Ueda brushed aside market speculation that the yen's sharp falls could force the central bank to raise interest rates.

The Japanese currency was mostly flat at 151.74 per dollar .

Elsewhere, the Reserve Bank of New Zealand held the cash rate steady at 5.5% on Wednesday, as it reiterated that its previous rate hikes had helped slow the economy and constrain price rises but inflation remained above its target.

The kiwi climbed as high as $0.6077 versus the U.S. dollar, its strongest since March 21, before flattening at $0.60595.

The Australian dollar fell 0.15% to $0.662.

The offshore yuan edged up to a little over a two-week high against the dollar of 7.2361, as U.S. Treasury yields eased. Traders were also eyeing China economic reports including inflation and trade data due later this week.

It was last at 7.2383 per dollar.

The euro was steady at $1.0852, as the European Central Bank meeting on Thursday fast approaches. The ECB is also expected to hold rates this week, although traders betting the central bank will start cutting in June will be looking for signals from policymakers.

Sterling was $1.2671, down 0.04% on the day.

In cryptocurrencies, bitcoin last rose 0.33% to $69,366.00.

(Reporting by Brigid Riley; Editing by Stephen Coates and Jacqueline Wong)