* Dollar index steadies after bounce from 3-year lows
* Eyes on Fed minutes and U.S. debt auctions
* Dollar/yen may consolidate after recent slide -trader
SINGAPORE, Feb 21 (Reuters) - The dollar steadied against a basket of currencies on Wednesday, having pulled up from three-year lows set last week as traders shaved off some of the bearish bets against the U.S. currency.
The dollar index last stood at 89.686, up 1.6 percent from Friday's three-year low of 88.251.
Against the yen, the greenback edged up 0.1 percent to 107.41 yen, having bounced from a 15-month low of 105.545 yen set on Friday.
Market participants attributed the dollar's bounce over the past few sessions to short-covering after speculative trades pushed it close to 105 yen.
"It's mainly a positioning clean-up in my view," said Tareck Horchani, head of sales trading in Asia Pacific for Saxo Markets in Singapore.
Against the yen, the dollar will probably consolidate after its recent selloff and may have some room to head higher in the near term, Horchani said.
Some market players were recently buying dollar/yen put options to position for dollar weakness, and the market now appears "well covered" against downside risks in the U.S. currency, he said.
The yen showed subdued reaction to comments from Japan's top currency diplomat, Masatsugu Asakawa, who was quoted by the Nikkei newspaper as saying that yen's recent moves were "one-sided".
The U.S. currency has weakened against the yen and other major currencies in recent months, with the positive impetus from rising U.S. interest rates offset by a barrage of bearish factors, including worries that the United States could pursue a weaker dollar policy.
Mounting worries about the U.S. budget deficit, which some say could balloon to more than $1 trillion in 2019 amid a government spending splurge and large corporate tax cuts, have also undermined the greenback.
The euro held steady at $1.2340, having retreated from a three-year high of $1.2556 set on Friday.
Later on Wednesday, investors will turn their attention to the minutes of the U.S. Federal Reserve's last policy meeting held in late January.
A hawkish tone to the minutes could prompt markets to price in the risk of a faster pace of U.S. interest rate hikes and help lift the dollar further, said Saxo Markets' Horchani.
"Positioning in EM (emerging markets) is quite strong, it's quite big. We could get a bigger dollar rally against EM," Horchani said, referring to emerging market currencies.
Traders also watching this week's large U.S. government debt auctions for clues to international investors' appetite for U.S. assets.
Some of the U.S. government's short-term borrowing costs rose to their highest level in more than nine years on Tuesday as it raised $179 billion in the Treasury securities market to fund spending and make debt payments.
Tuesday's auctions made up more than half of the $258 billion in Treasury debt supply scheduled for sale this week, which include a $35 billion five-year note sale on Wednesday and $29 billion seven-year note auction on Thursday. (Reporting by Masayuki Kitano Additional reporting by Tokyo bureau Editing by Shri Navaratnam)