By Lisa Twaronite, MarketWatch TOKYO (MarketWatch) — The dollar bumped lower against major rivals Thursday, after a fresh reminder that the U.S. has sovereign debt woes of its own. The lately surging yen briefly tumbled in Asian afternoon trading, but its quick recovery quelled most talk that the Bank of Japan was intervening to stem the currency’s rise. Read related column on Japan intervention. Late Wednesday, rating agency Moody’s Investors Service said it placed the U.S. government’s Aaa bond rating on review for possible downgrade due to “a small but rising risk” of a short-lived default, as politicians wrangle about raising the U.S. debt ceiling. Read more on Moody’s. U.S. debt ceiling talks. The move weighed on dollar sentiment, even it though it was no surprise. Moody’s warned early last month that it would review the U.S. rating for a downgrade if there was no substantial progress by mid-July. “If the debt ceiling is raised in time, the rating is likely to be confirmed at Aaa and the outlook will either be stable or negative, depending on the scale of deficit reduction achieved during the debt-ceiling negotiations,” said strategists at Barclays Capital. The greenback was already under pressure after Federal Reserve Chairman Ben Bernanke suggested earlier Wednesday that additional stimulus measures, including several “untested” means, could be used to stimulate growth if the economy deteriorates further. Read more on possible Fed stimulus package. The dollar index DXY +0.30% , which measures the U.S. unit’s performance against a basket of six other major currencies, slipped to 74.981 from 75.213 in late North American trading Wednesday ahead of the Moody’s warning. The euro EURUSD +0.01% rose to $1.4202 from $1.4140 late Wednesday. See real-time currency quotes and tools. Against the yen, the dollar USDJPY +0.23% traded at ¥78.91, down from ¥78.99 late Wednesday. The euro EURJPY +0.26% traded at ¥111.97, up from ¥111.56 late Wednesday. In Asian afternoon trading, the dollar spiked as high as ¥79.60 and the euro jumped to ¥112.91, but both began dropping almost as rapidly as they ascended. Dow Jones Newswires cited two traders as saying the sudden move was not likely due to intervention. The sudden climb in the dollar briefly sent the Nikkei Stock Average JP:NIK -0.25% into positive territory before pulling back. The Australian dollar AUDUSD -0.30% slipped against its U.S. counterpart, buying $1.0721 compared with $1.0747. The dollar skidded against the British pound GBPUSD +0.05% , which bought $1.6127, up from $1.6101 late Wednesday. Lisa Twaronite is MarketWatch's Tokyo bureau chief.

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