* Euro dips briefly vs dlr after Moody's cuts Greece
* Euro last up 0.3 percent at $1.4320
* Rise in U.S. yields, BOJ remarks support dlr/yen
* Eyes on U.S. final Q3 GDP, existing home sales
(Recasts, adds quotes, changes dateline prvs TOKYO)
By Tamawa Desai
LONDON, Dec 22 (Reuters) - The euro briefly trimmed gains against the dollar on Tuesday after U.S. ratings firm Moody's cut Greece's rating, while the greenback hit a two-month high against the yen as U.S. bond yields surged.
Concerns about the problems surrounding peripheral euro zone countries had weighed on the euro, and particularly Greece, whose sovereign debt rating was downgraded by Fitch Ratings and Standard & Poor's earlier this month.
But reaction was limited on Tuesday to the Moody's Investors Service decision.
"Moody's move was not a surprise given what Fitch and S&P had done. The next crucial step is for Greece to outline credible steps to deal with its deficit," said Lee Hardman, currency economist at Bank of Tokyo-Mitsubishi UFJ.
"This will continue to be a big structural negative for the euro that will remain in place over the medium term," he said.
The euro briefly dipped 20 ticks to around $1.4302 after Moody's announcement. By 0843 GMT, it had recovered to around $1.4320, close to levels seen just before the move.
Earlier, European Central Bank Governing Council member Athanasios Orphanides was quoted as saying there was no risk of a euro zone country defaulting on its debt but also that Greece should not expect other European Union countries to come to its rescue.
A rise in equity markets -- with European shares following Asia and Wall Street overnight -- also pressured the dollar. European shares were up 0.5 percent in early trade.
YEN FALLS
The yen fell to a 2-month low against the dollar during Asian hours, as expectations for stronger U.S. growth boosted U.S. Treasury yields and further widened the spread between short-term U.S. and Japanese government bond yields.
The spread between the yields on the U.S. two-year note and Japan's two-year bond has widened to about 70 basis points from 48 bps at the start of the month.
The yen was also pressured by speculation about possible further monetary easing after Bank of Japan Governor Masaaki Shirakawa said on Monday the BOJ was ready to act promptly to provide funds to beat deflation and would maintain the current "effective zero interest rates".
But on Tuesday, he said the economy would be destabilised if the central bank guided monetary policy based on short-term price movements alone, and expectations of prolonged monetary easing could lead to asset bubbles accelerating.
The dollar was up 0.1 percent at 91.31 yen after touching 91.49 yen on trading platform EBS, its strongest since late October.
But the upside was capped on Japanese exporter offers. There were also options-related offers around 91.50 yen, traders said.
The dollar index, a measure of its performance against six other major currencies, was down 0.2 percent at 77.866, off a high of more than three months at 78.144.
Traders will keep an eye on a final estimate of third quarter U.S. gross domestic product due at 1330 GMT, likely to confirm an annual 2.8 percent growth rate.
Of greater interest may be U.S. existing home sales for November at 1500 GMT. "The test is whether the dollar continues to capitalise on positive signals from the U.S. economy," Daragh Maher, deputy head of global FX at Calyon, said in a note.