Investing.com - The dollar rose to more than four-year highs against the other major currencies on Tuesday, as the yen remained under pressure after ratings agency Moody’s downgraded Japan's sovereign debt rating and as investors remained cautious ahead of the European Central Bank's policy meeting this week.

USD/JPY hit a fresh seven-year peak of 119.29, before falling back to 119.14, up 0.63% for the day.

The yen remained under pressure after Moody’s downgraded Japan's sovereign debt rating by one notch to A1, citing “heightened uncertainty” over Japan’s ability to cut its fiscal deficit following a decision by Prime Minister Shinzo Abe to delay a planned sales tax hike.

The yen has weakened broadly since the Bank of Japan unexpectedly expanded its stimulus program in late October. In contrast, the Fed wound up its asset purchase program in October and is weighing whether or not the economy is strong enough to start raising interest rates next year.