The Japanese yen strengthened against its major counterparts on Tuesday, amid growing concerns over debt crisis in the eurozone and Standard & Poor’s downgrade of US debt outlook to negative on Monday.

USD/JPY fell 0.22 percent to 82.48 during early European trading, as risk aversion boosted the demand for yen.

EUR/JPY was little changed at 117.63, after hitting 116.48 on Tuesday, the lowest level since March 30 this year.

S&P on Monday had cut its outlook on the US from ‘stable’ to ‘negative’ citing nation’s very large budget deficit and rising indebtedness.

According to the rating agency, the US total government deficit fluctuated between 2 percent and 5 percent of gross domestic product (GDP) from 2003 to 2008. However, it has ballooned to more than 11 percent in 2009 and has yet to recover, S&P noted.

However, the rating agency affirmed its ‘AAA’ rating on the US saying that the economy is flexible and highly diversified.

“A downgrade is not imminent, so treat the statement instead as a keen reminder of what's at stake. This goes beyond the debt limit debate, towards the long-term fiscal position of the US,” said a note from RBC Capital Markets on Tuesday.

While one might suppose that such a move is USD negative, it need be so, if it sparks serious concerted movement in Washington toward getting the US fiscal house in order, RBC said.

The yen also gained strength against the single currency, as concerns grew over a possible debt default by Greece.

Meanwhile, the Australian dollar and New Zealand dollar fell against the US dollar, as falling stocks, escalating euro debt woes and a credit warning for US debt sparked a wave of risk aversion.

AUD/USD fell to 1.0467 in Asian trading, from a high of 1.0572 on Monday. NZD/USD slipped to 0.7845, from 0.7904 in New York.

MSCI's index of Asia-Pacific stocks slipped 1.1 pct dragged down by falls in energy and materials. Asian stocks slid as investors took profits on risks of Greece debt restructuring and concerns over long-term rating of US debt.