The dollar was little changed on Tuesday, with investors cautious ahead of U.S. inflation data to be released on Wednesday, even as the yen hovered near multi-decade lows, keeping traders on alert for any possible action from Japan to prop up its currency.

Economists expect the headline U.S. consumer price index (CPI) to have gained 0.3% on a monthly basis, compared with a 0.4% rise in February, according to a Reuters poll. Core CPI is also expected to climb 0.3% for the month of March.

Ahead of the CPI report, the U.S. rate futures market has raised the odds of a June rate cut to 58%, up from 52% late on Monday, the CME's FedWatch tool showed.

For 2024, fed funds futures have priced in about 74 basis points (bps) in cuts, or about three rate decreases of 25 basis points (bps) each, data showed.

"The dollar hasn't really reacted much to the rise in Treasury yields," said Eugene Epstein, head of structured products for North America at Moneycorp in New Jersey.

He noted that since the beginning of the year, the benchmark 10-year yield has gained about 47 bps, but the dollar has only advanced by 2.5%.

"One of two things could happen in the near term: either the dollar strengthens to catch up with Treasury yields, or Treasury yields come back down. That discrepancy needs to narrow. And it's just matter of time before that gap narrows."

In afternoon trading, the dollar index, which tracks the currency against six major peers, was flat at 104.12.

The dollar has failed to make any headway despite a ton of hawkish signals from Fed officials last week and on Monday.

Dallas Fed President Lorie Logan, for instance, argued on Friday, after jobs data, against imminently easing monetary policy. Chicago Fed President Austan Goolsbee, on the other hand, said on Monday the Fed must weigh how much longer it can maintain its rate stance without damaging the economy.

U.S. interest rates aside, some analysts said geopolitical risk might increase demand for safe-haven assets, including the dollar.

Hopes of a ceasefire in Gaza diminished after Hamas said Israel's proposal that it received from Qatari and Egyptian mediators did not meet Palestinian factions' demands.

The dollar was flat to slightly lower against the yen at 151.755 yen, not far from a 34-year high of 151.975 yen hit last month, as Japanese officials continued trying to talk up the currency.

The threat of intervention has kept the dollar from breaching the closely watched 152 yen level.

"I kind of thought that with Japanese Prime Minister (Fumio) Kishida in the U.S. that the risk of intervention is very low because it would be embarrassing if Japan intervenes," said Marc Chandler, chief market strategist at Bannockburn Global Forex in New York.

Kishida is in the United States, along with Philippine President Ferdinand Marcos, Jr., for an economic and defense summit.

"The Fed has not yet cut interest rates, which means the Fed is more worried about inflation. But the strong dollar helps curb inflation. So if you have an ally (like Japan) selling dollars but you want a strong dollar, that could send conflicting messages," Chandler said.