The Japanese yen has weakened to its lowest level in seven weeks, hitting around 148 per USD, following strong US retail sales data and Federal Reserve comments suggesting a potential rate increase.

Investors are dismissing prospects of a change in Japan's monetary policy, partially due to damage from the New Year's Day earthquake.

Inflation within the country is also falling, which reduces pressure for the central bank to raise rates.

The market is awaiting Friday's inflation data and next week's policy decision from the Bank of Japan.