* Dollar hits 5-mth low on index, 2-mth low vs yen
* S&P warning on UK's triple-A rating knocks US assets
* Japan's Yosano says not thinking about intervention
* DXY index on track for biggest weekly drop in 2 months
By Rika Otsuka
TOKYO, May 22 (Reuters) - The dollar slid to a five-month low against a basket of major currencies on Friday after a warning that Britain's triple-A credit rating could be cut stoked worries the debt of the world's reserve currency may face the same fate.
Standard & Poor's said on Thursday it could downgrade Britain's triple-A credit rating, a move that initially hit the pound but then sparked broad selling of U.S. stocks and bonds on fears that record U.S. deficits could lead to the same warning.
After hitting five-month lows in the past three days, the dollar index was on track for its biggest weekly fall since the Federal Reserve launched its large-scale purchases of U.S. Treasuries in late March, which slammed the reserve currency on worries the move could cause an effective devaluation.
Minutes of the Fed's last policy meeting this week showed officials said they may need to boost such buying of Treasuries.
"S&P gave a clear criteria that a country whose government debt burden is approaching 100 percent of GDP could have its rating downgraded. That prompted investors to think they should not be so optimistic about the credit rating on the United States," said Hideki Amikura, deputy general manager of forex trading at Nomura Trust and Banking.
Moody's Investors Service on Thursday said it is comfortable with its triple-A sovereign rating on the United States, but the rating was not guaranteed forever.
The dollar's broad slide took it to a two-month low against the yen after Japanese Finance Minister Kaoru Yosano said on Friday the country is not thinking about intervention in the currency market.
The remarks came as market players have started to suspect that Japanese officials may consider intervening to prevent further yen strength.
The yen's surge to 13-1/2-year peaks against the dollar earlier this year dealt a heavy blow to the country's big exporters, but Japan has refrained from intervention.
The dollar index, a gauge of the greenback's performance against six major currencies, fell as low as 80.210, its lowest since December and near the 50 percent retracement of its one-year rally through March this year.
The dollar slipped 0.2 percent from late U.S. trade to 94.15 yen after hitting a low of 93.86 yen on trading platform EBS, the lowest since December. Dollar buying from Japanese importers helped limit losses, traders said.
Market players said the dollar is likely to test the low of 93.55 reached in March, which was hit when the dollar plunged on the Fed's adoption of quantitative easing. If that level is broken, the dollar may test the 13-1/2-year low near 87.10.
The euro was up 0.2 percent at $1.3916 but pulled back from a five-month high high of $1.3957 on EBS as speculators covered short dollar positions ahead of a U.S. three-day weekend.
Sterling was little changed on the day at $1.5850 after rising as high as $1.5898, its strongest since early November. Despite the S&P statement, the pound is up 4.5 percent on the week, as traders have come to think that Britain is only one of many nations facing deep fiscal problems.
U.S. financial markets will be closed on Monday for Memorial Day holiday, while British markets will also be shut for a bank holiday.
DOLLAR'S WOES MOUNT
As investors rushed into the safe-haven greenback during the slide in global stock markets, the dollar index hit a three-year peak in March.
But as stocks have rallied since then, the dollar has taken a hit as investors have shifted funds into higher-yielding currencies and emerging market assets on hopes that the worst of the severe global economic crisis is over.
That slide has accelerated as a number of key currencies have crossed the 200-day moving average against the dollar, including the euro and pound. A cross of the 200-day moving average tends to coincide with turning points in the dollar.
The perceived threat to the United States' top triple-A rating has given the dollar another blow this week.
"Now it is worries about the United States that are weighing on the dollar," said a forex trader at a big Japanese trust bank.
Bill Gross, the co-chief investment officer at bond fund giant PIMCO, warned that the United States will eventually lose its top credit rating.
The fate of troubled U.S. auto giant General Motors Corp is set to reemerge as a market focus. The Washington Post said on Thursday the Obama administration is preparing to steer GM into bankruptcy next week.
But a source familiar with the situation said the U.S. Treasury Department has no plans to push GM into a bankruptcy filing next week and the outcome of GM's restructuring efforts may not be known until a June 1 deadline.
"If the situation with GM worsens, it will spark a stock sell-off that would trigger more dollar selling against the yen," said Tohru Sasaki, chief FX strategist at JP Morgan in Tokyo. (Additional reporting by Satomi Noguchi; Editing by Edwina Gibbs)