The dollar held relatively steady and the yen pared gains on Wednesday after Merrill Lynch third quarter losses were deeper than original estimates but not as bad as many traders had feared immediately before the release.

The U.S. investment bank reported its first quarterly loss in six years but the $7.9 billion write-downs caused by the recent financial market turmoil were broadly in line with what U.S. press reports overnight had indicated and therefore not as bad as some had feared.

The dollar index held relatively steady at 77.65 from levels just before the results, the euro pared losses against the yen to 162.70 yen from around 162.35 yen, and the dollar edged up around 15 ticks to 114.30 yen.

The dollar was still up slightly on the day and the yen stronger across the board, with rising risk aversion encouraging investors to cut local market risk positions and switch back to dollars, as well as unwinding yen-funded carry trades.