TOKYO (Kyodo) -- The U.S. dollar briefly fell to a fresh four-month low of around 77.75 yen on Wednesday morning in Tokyo, weighed down by concerns over the possibility of a U.S. default and a credit rating downgrade. At noon, the dollar fetched 77.85-86 yen versus 77.82-92 yen in New York and 78.06-08 yen in Tokyo at 5 p.m. Tuesday. The euro traded at $1.4503-4505 and 112.92-93 yen against $1.4506-4516 and 112.95-113.05 yen in New York and $1.4501-4503 and 113.20-24 yen in Tokyo late Tuesday afternoon. The dollar came under selling pressure against the yen on concerns over the U.S. debt ceiling issue, briefly falling to its lowest level against the yen since March 17, against the previous four-month low of 77.83 yen in New York overnight. Dealers say market players took note of the possibility that even if a deal is struck and a default is averted, the U.S. long-term triple-A credit rating could be downgraded, depending on the contents of the country's fiscal rehabilitation plan. As the Aug. 2 deadline looms large for raising the statutory borrowing limit with no deal in sight, "The dollar will remain under selling pressure unless a deal is reached to solve" the issue, a dealer said. Masafumi Yamamoto, chief foreign exchange strategist at Barclays Bank in Tokyo, said in a note that given the likely delay in reaching a deal, the dollar could fall to the lower 77 yen range. A sense of caution has been growing among market players over possible yen-selling market intervention by Japan's monetary authorities as the yen's rapid appreciation eats into Japanese exporters' earnings. The euro remained relatively firm against the dollar and the yen as market players focused on the U.S. debt ceiling issue despite the lingering concerns over sovereign debt issues in the eurozone, dealers said.

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