* Rising US yields pushes dollar/yen to near 2-month high
* Moody's cut of Greece ratings weighs on euro earlier
* U.S. economy expands 2.2 pct in Q3, weaker than expected (Updates prices, adds comment, changes byline, changes dateline, previous LONDON)
By Wanfeng Zhou
NEW YORK, Dec 22 (Reuters) - The dollar was stronger against the yen on Tuesday, sticking close to a near two-month high hit earlier as U.S. bond yields rose on expectations for U.S. economic growth.
The greenback, however, trimmed gains versus the yen and slipped against the euro after a sharper-than-expected downward revision to U.S. third quarter gross domestic product offset news of a cut of Greece debt ratings.
Solid figures on the U.S. job market and retail sales earlier this month helped push U.S. Treasury yields higher and had further widened the spread between short-term U.S. and Japanese government bond yields, providing an impetus for traders to bid up the dollar against the yen.
Meanwhile in Japan, Bank of Japan Governor Masaaki Shirakawa said on Monday the bank will maintain its current "effective zero interest rates" and is ready to act promptly fight deflation.
"There's some focus yesterday on the potential for the use of quantitative easing in Japan in order to fight deflation and that pushed dollar/yen higher. Technically we already started to move higher and that just added fuel to the fire," said Camilla Sutton, senior currency strategist at Scotia Capital in Toronto.
In early trading, the dollar was up 0.3 percent at 91.41
yen
The euro last traded up 0.2 percent on the day at $1.4307
Concerns about the problems surrounding peripheral euro zone countries had weighed on the euro, and particularly Greece, whose sovereign debt rating already had been downgraded by Fitch Ratings and Standard & Poor's.
"The 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 U.S. economy grew at a much slower pace than initially thought in the third quarter. The Commerce Department's final estimate showed the economy grew at a 2.2 percent annual rate instead of the 2.8 percent pace it reported last month. Analysts polled by Reuters had forecast the report to show GDP unrevised at a 2.8 percent. See [ID:nN21231124]
Later in the session, investors will review data on U.S. existing home sales for November at 10 am (1500 GMT). (Additional reporting by Tamawa Desai in London; Editing by Chizu Nomiyama )