The Euro staged a modest rebound against the Japanese Yen on Wednesday, with EUR/JPY trading around 171.76 at the time of writing. Earlier in the session, the pair slid to a one-week low after weaker-than-expected German consumer sentiment figures briefly pressured the common currency.
Germany’s GfK Consumer Confidence Index for September dropped to –23.6, missing forecasts of –21.5 and falling below the previous –21.7. The survey underscored persistent weakness in household spending capacity and renewed concerns about the Eurozone’s fragile recovery prospects. Rising fears of job losses weighed heavily on consumer purchasing decisions, diminishing optimism for any near-term rebound.
Survey details showed income expectations retreating to their lowest level since March, while both the economic outlook and willingness to buy slumped to multi-month lows. GfK analyst Rolf Bürkl described sentiment as “firmly stuck in a summer slump,” with households growing more reluctant to commit to major purchases amid inflationary pressures and job insecurity.
From a technical perspective, EUR/JPY remains locked in a consolidation corridor between 171.00 and 173.00, a range that has capped movement since early August. The sideways price action reflects investor caution ahead of upcoming macroeconomic catalysts.
Traders will now turn their attention to Thursday’s release of Eurozone confidence indicators for August, covering both business and consumer sentiment, along with the European Central Bank’s latest monetary policy minutes. These data points could play a critical role in shaping expectations for the ECB’s policy trajectory.
On Friday, focus will shift to Japan, where a packed data docket includes Tokyo’s Consumer Price Index, the unemployment rate, industrial production, and retail sales. These releases will offer fresh insights into the strength of the Japanese economy and may prove pivotal for the Bank of Japan’s policy outlook, particularly as markets weigh the impact of inflation dynamics and labor market conditions on the central bank’s stance.
