The Japanese yen lost ground against its major counterparts in the European session on Tuesday, as concerns over a U.S. hedge fund default receded and investors focused on prospects for a swift recovery, led by vaccine rollout programs and fiscal stimulus.

President Joe Biden is set to outline his infrastructure spending plan on Wednesday in Pittsburgh.

The economic package worth about $3 billion will be split into two parts, with the first one focused primarily on transportation and other infrastructure.

Investors shrugged off the fallout from the collapse of Archegos Capital, helping lift banking stocks.

Data from the Ministry of Economy, Trade and Industry showed that Japan retail sales fell 1.5 percent on year in February - coming in at 11.628 trillion yen.

That beat forecasts for a decline of 2.8 percent following the 2.4 percent drop in the previous month.

Data from the Ministry of Internal Affairs and Communications showed that Japan jobless rate came in at a seasonally adjusted 2.9 percent in February.

That was unchanged from the January reading and was below forecasts for 3.0 percent.

The yen weakened to near 2-week lows of 87.65 against the loonie and 151.94 against the pound, reversing from its early highs of 87.12 and 150.96, respectively. The next likely support for the yen is seen around 89.00 against the loonie and 154.00 against the pound.

The yen depreciated to 1-week lows of 117.13 against the franc and 129.54 against the euro, after rising to 116.80 and 129.08, respectively in early deals. If the yen falls further, it may test support around 120.5 against the franc and 131.5 against the euro.

The Japanese yen slid to more than a 1-year low of 110.31 against the greenback, from a high of 109.73 seen at 5:00 pm ET. The yen is likely to challenge support around the 112.00 level. The yen reached 1-week lows of 77.36 against the kiwi and 84.29 against the aussie in the Asian session and held steady thereafter. The yen had ended Monday's trading at 76.81 against the kiwi and 83.75 against the aussie.

Looking ahead, at 8.00 am ET, Destatis is scheduled to issue Germany's flash consumer prices for March.

Federal Housing finance agency's house price index and S&P/Case-Shiller home price index for January and consumer confidence index for March will be featured in the New York session.