Asian shares edged higher on Tuesday as investors eagerly awaited a crucial U.S. inflation report that could significantly impact the Federal Reserve's policy outlook. The fragile yen also flirted with 33-year lows, placing it back in the intervention zone.

MSCI's broadest index of Asia-Pacific shares outside Japan was 0.23% higher, set for its second consecutive day of gains. Meanwhile, the Japanese yen was at 151.71 per dollar in Asian hours, after hitting a one-year low of 151.92 on Monday, just shy of a fresh 33-year low if it falls below last year's trough of 151.94.

Japanese Finance Minister Shunichi Suzuki reiterated on Tuesday that the government would take necessary steps to respond to currency movements, expressing his concerns about excessive swings.

Investors are eagerly awaiting the U.S. inflation report, scheduled to be released later in the day. Federal Reserve Chair Jerome Powell and other policymakers have expressed uncertainty regarding whether interest rates are sufficient to control inflation.

According to economists polled by Reuters, headline U.S. consumer price inflation is expected to have slowed to 3.3% in October, down from 3.7% in September. The core inflation rate, which excludes volatile components, is anticipated to remain unchanged at 4.1%.

Anderson Alves, a trader with ActivTrades, stated, "This data holds significant sway over the Federal Reserve's future policy direction. A miss, particularly in the less volatile core inflation component, might lead traders to believe the Fed may abstain from further interest rate hikes. Conversely, a beat could prompt a noticeable repricing on the short-term U.S. interest curve."

China shares showed marginal losses, with the blue-chip CSI 300 Index down 0.19%, while Hong Kong's Hang Seng Index rose 0.09% ahead of a summit between leaders from the world's two largest economies, scheduled for later this week.

Benchmark 10-year Treasury yields eased slightly to 4.630%, from Monday's one-week peak of 4.696%.

Despite Moody's recent move to lower the U.S. AAA credit rating outlook from "stable" to "negative" on Friday, markets have mostly remained unaffected. Fitch's downgrade of the U.S.'s top credit rating in August also seemingly had a limited impact.

Market participants closely monitor the yen's decline, speculating whether Japanese authorities will intervene. The upcoming U.S. inflation data is anticipated to be the likely trigger for the next significant move.

Japan's last intervention in the currency market occurred in October last year when they sold dollars and purchased yen. However, intervention data released last month indicated that further such actions had been avoided since then.

So far this year, the yen has depreciated by approximately 14% against the dollar.

The yen experienced a brief jump against the dollar in New York hours on Monday following the year-to-date low. Analysts attributed this movement to a flurry of trading in options that will be expiring this week.

"In a way, market participants are doing the Ministry of Finance's job for them as markets start second-guessing the price action behind any sudden decline in dollar/yen," said one analyst.

The dollar index, which measures the U.S. currency against six major rivals, rose 0.057% to 105.69. The index is poised to end its three-month winning streak in November, with a decline of 1%.

Oil prices saw a slight increase after an OPEC report indicated strong market fundamentals. U.S. crude rose 0.27% to $78.47 per barrel, while Brent was up 0.25% on the day, trading at $82.73.