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TOKYO, May 31 (Reuters) The dollar won a respite in Asia on Wednesday after falling sharply the previous day after data showed that US consumer confidence hit a three-month low in May.

The currency failed to maintain its brief bounce on Tuesday after President George W. Bush nominated Goldman Sachs Chairman Henry Paulson for Treasury secretary, prompting some traders to think that the dollar would stay vulnerable.

The dollar initially rose on the announcement due to thinking in the market that a Treasury chief from Wall Street would likely want to keep the dollar strong.

''The dollar's failure to rise on positive factors yesterday seems to indicate that sentiment for the dollar is very weak,'' said Takehiko Jimbo, forex manager at Mitsubishi UFJ Trust and Banking.

In early Tokyo trade, the dollar was at 112.30 yen, up slightly from 112.15 yen in late U.S. trade.

Tokyo traders said that month-end selling of the yen by Japanese mutual funds meant the yen would likely be capped on Wednesday.

The euro edged down to $1.2860. The European currency was little changed at 144.35 yen.

The dollar fell about 1 percent against the euro on Tuesday.

It extended losses after the Conference Board reported its index of U.S. consumer confidence fell in May to a three-month low of 103.2, although that topped expectations for 101.1.

Some traders also suspected that the U.S. currency policy might not drastically change after Paulson takes the reins of the Treasury Department.

''No matter who heads the Treasury, that won't change the fact that the G7 and the IMF have an intention to lower the dollar to fix global imbalances,'' said Jimbo at Mitsubishi Trust.

Finance ministers from the Group of Seven countries last month called on developing Asian countries to let their currencies appreciate in order to help fix ''global imbalances'' -- code for the huge U.S. trade deficit and surpluses in Asian nations such as China.

Reuters VJ VP0600