Market News

By Rocky Swift

TOKYO, March 18 (Reuters) - The dollar held losses on Wednesday as a glimmer of risk appetite came back to markets ahead of a slate of key central bank decisions.

The yen rallied from levels that conjured concerns of intervention in markets by Tokyo ahead of Japanese Prime Minister Sanae Takaichi's meeting in Washington with President Donald Trump. The euro was stable after two days of gains ahead of the European Central Bank's meeting later in the day.

The greenback has gained as the only remaining haven currency during the Middle East crisis that is now in its third week. Overnight, Tehran confirmed Iran's security chief Ali Larijani was killed by Israel, the most senior figure targeted since the U.S.-Israeli war's first day.

"Volatility has settled largely due to relatively benign price action in energy markets overnight. But the risks haven't diminished at all," said Kyle Rodda, a senior analyst at capital.com. "If anything, it could cause a rapid risk-on move in the markets, it's the U.S. seemingly wresting control of the Strait from the Iranians."

The dollar index, which measures the greenback against a basket of currencies, traded at 99.56 after a two-day decline. The euro was little changed at $1.1538.

The yen strengthened 0.06% to 158.91 per dollar. Sterling held steady to $1.3353.