EUR/JPY rangebound as focus turns to Eurozone sentiment and Japan CPI

• EUR/JPY rebounds modestly after dipping to a one-week low earlier in the day.
• German GfK Consumer Confidence (Sep) fell for the third straight month, undershooting
• Focus shifts to Eurozone sentiment surveys on Thursday and a heavy Japanese data docket on Friday.

The Euro (EUR) recovers some lost ground against the Japanese Yen (JPY) on Wednesday, with EUR/JPY trading near 171.76 at the time of writing. The cross had slipped to a one-week low earlier in the day after disappointing German Consumer Confidence data briefly pressured the single currency.

The GfK Consumer Confidence Survey for September dropped to -23.6, undershooting expectations of -21.5 and below the prior -21.7. The report highlighted persistent weakness in household spending power and reinforced concerns about the Eurozone's fragile economy, as rising fears of job losses weighed on purchase decisions and dampened hopes of a robust recovery.

Details of the survey showed that income expectations had fallen sharply to their weakest level since March, while both the economic outlook and willingness to buy had declined to multi-month lows. According to GfK analyst Rolf Bürkl, sentiment is "definitely in the summer slump," with consumers increasingly hesitant to make major purchases amid job insecurity and lingering inflation concerns.

Technically, EUR/JPY remains confined between 171.00 and 173.00, a corridor that has capped price action since early August. The consolidation reflects investor hesitation ahead of key macro events.

Looking ahead, Thursday brings the release of Eurozone sentiment indicators for August, including measures of business and consumer confidence, alongside the European Central Bank (ECB) monetary policy accounts (minutes), which could shape expectations for the central bank's next steps.

On Friday, attention shifts to Japan, where a busy data calendar includes Tokyo Consumer Price Index (CPI), Unemployment Rate, Industrial Production, and Retail Sales. These reports will provide crucial signals on the strength of Japan's economy and could shape expectations for the Bank of Japan's (BoJ) monetary policy outlook, particularly as markets assess how rising prices and labor market trends might influence the central bank's stance.