Singapore, June 16 (Reuters) - The dollar held steady near a 10-day low on Tuesday as the deal to end Iran's war boosted risk appetite, while the yen fluctuated near 160 to the dollar after Japan's central bank raised interest rates in a widely expected move to curb conflict-related inflation risks.

US President Donald Trump said a preliminary agreement had been signed between the United States and Iran to end the war in the Middle East. Details have not yet been released, but this did not prevent global markets from welcoming the news and causing oil prices to fall.

Investors' attention this week is focused on a series of central bank meetings, including those of the Bank of England and the Federal Reserve (the US central bank), scheduled for the coming days to assess whether the end of the conflict came too late to alleviate concerns about near-term inflation.

The Bank of Japan raised interest rates on Tuesday to their highest level in 31 years, as widely expected and little surprise to markets. However, market analysts noted the seven-to-one vote, suggesting some uncertainty about the timing of the next rate hike.

The yen settled at 160.23 to the dollar, hovering near the 160 threshold that has traders wary of another wave of Japanese government intervention, as the Middle East deal is unlikely to provide relief for the tumbling yen.

The Australian dollar fell 0.3 percent to $0.705 after the Reserve Bank of Australia left interest rates unchanged in a unanimous decision following three consecutive increases, even as inflation continued to rise.

The agreement between the United States and Iran would extend the fragile ceasefire declared in April for another 60 days and allow the reopening of the Strait of Hormuz, which Tehran has effectively closed since the United States and Israel launched a war against Iran in February.

The euro settled at $1.159, slightly below its 10-day high of $1.1622 reached on Monday. The pound was last trading at $1.3413 on Tuesday.

The dollar index, which measures the performance of the US currency against six other currencies, stood at 99.66. The index has risen two percent since the conflict first erupted at the end of February in a volatile reaction to the fragile ceasefire and regular tit-for-tat attacks.

Tony Sycamore, a market analyst at IG, said, "While energy markets have moved quickly to assess the immediate risks of a prolonged supply disruption, the road back to normal flows is still far from easy."

Questions about the return of the supply chain to normal are likely to keep investors on edge, with continued uncertainty about the short-term path of inflation and interest rates.

ING analysts said the market reaction was faster than the reality on the ground, and could change depending on the prospects of reaching an agreement.