The Statistics Bureau reported core consumer prices (including oil products, but excluding fresh food) rose 0.7% y-o-y in July, the highest since November 2008. Core consumer prices were up 0.4% y-o-y in June 2013. Bank of Japan is targeting an inflation rate of 2% in two years.

The Japanese Ministry of Economy, Trade and Industry revealed today that on a seasonally adjusted basis, retail sales declined 1.8% m-o-m in July after edging down 0.2% m-o-m in June. On y-o-y basis, the sales dipped 0.3% after advancing 1.6% in June.

As per Xinhua News Agency, China’s Communist Party will hold the third Plenary Session of the 18th CPC Central Committee this November. Third plenums have traditionally been used as agenda-setting conferences at which the leadership maps out major policies for the country’s reform agenda.

For the three months ended August, the UK service sector saw a 20% surge in volumes, the highest since 2007, survey by the Confederation of British Industry (CBI) revealed today. The confidence index recorded a positive reading of 28%. The service industry also anticipated further growth in the remaining course of the year.

As per data released by the Ministry of Commerce, China’s foreign direct investment (FDI) totalled US$9.4bn in July, an increase of 24.1% y-o-y; however, it declined 53% from last month. From January to July, China’s FDI aggregated US$71.4bn, marking a rise of 7.1% y-o-y. During the seven- month period, FDI from the US and the Eurozone grew 11.4% and 16.7%, respectively.

According to data released by Markit Economics and HSBC today, preliminary reading for China’s purchasing managers’ index (PMI) came in at 50.1 in August, up from 47.7 in July, outperforming market expectations. The manufacturing output index rose to 50.6 from 48. New orders rebounded after a decline last month even as new export orders continued to fall.

Hong Kong’s inflation rate rose to 6.9% y-o-y in July, reaching its highest level in two years, following a reading of 4.1% in June, the Census and Statistics Department stated today. The actual inflation figure was significantly higher than market expectations. This rise was mainly ascribed to a lower base for comparison due to the government’s one-off property relief measures in July 2012. Excluding the effect of these payments, consumer prices advanced 4.2% after climbing 4% in the previous month. Housing (15.1%) and utilities (9.3%) were the main contributors to the sharp increase in prices.

US banks should hold regulatory capital beyond their own internal targets to better prepare for periods of market stress, according to a study by Federal Reserve. Banks had considerably improved their regulatory capital planning in recent years, but need to do more to enhance their practices, the study indicated. The Fed did not cite any banks by name.

The Confederation of British Industry (CBI) increased its growth forecast for UK to 1.2% from the earlier estimate of 1% for the current year. It also revised the growth figure for 2014 to 2.3% from 2%. As per CBI, the upward revision was mainly due to higher disposable income and domestic demand.

Holdings of foreign central banks in US securities decreased by US$2.7bn to US$3.3trln in the week ended 14th August on signs that the Fed would soon cut back its stimulus programme, the US Treasury Department reported yesterday. The banks’ holdings of Treasury debt fell by US$5.2bn to US$2.9trln. China and Japan reduced their Treasury holdings to US$1.28trln and US$1.08trln, respectively. The two countries registered net Treasury outflows of about US$40bn. China and Japan are the biggest foreign holders of US Treasuries.

The eurozone has emerged from recession after a record 18 months of economic contraction. The bloc’s GDP grew by 0.3% in the second quarter of 2013, slightly ahead of forecasts, the Eurostat agency said. The growth was widely expected after the German economy rose 0.7% between April and June. However, the overall figure masks the mixed economic fortunes among the countries that make up the 17-country eurozone area. Germany and France both posted stronger-than-expected growth, expanding 0.7% and 0.5% respectively. Portugal, among the smallest and the weakest eurozone economies, showed the fastest growth, at 1.1%. The country was one of three that had to take a multi-billion-euro bailout.

France’s GDP increased 0.5% in Q2 2013, after contracting 0.2% in the previous quarter, as per official data released this morning. The GDP figure surpassed economists’ expectations and marked the highest quarterly rise since President Francois Hollande joined the office in May 2012.

As per data released by the Cabinet Office today, Japan’s core machine orders fell 2.7% to ¥777.4bn in June on a seasonally-adjusted basis. Orders had advanced 10.5% in May. On y-o-y basis, orders grew 4.9% in June after a 16.5% jump the previous month.

As per data released by Cabinet Office today, preliminary reading for Japan’s Q2 2013 GDP growth stood at 0.6% after advancing 0.9% in the previous quarter. The figure came below market expectations. On y-o-y basis, real GDP was up 2.6%, following a revised reading of 3.8%.

As per the data released by the National Bureau of Statistics today, China’s industrial output climbed 9.7% in July after rising 8.9% in June, beating market expectations. Retail sales jumped 13.2% following a 13.3% increase in the previous month.

China’s exports climbed 5.1% y-o-y in July, after falling 3.1% the previous month, data from the General Administration of Customs revealed today. Imports surged 10.9% in July, following a 0.7% dip in June. The trade data came significantly above market expectations, highlighting strong recovery in external as well as domestic demand. The country’s trade surplus narrowed to US$17.8bn from US$27.1bn during the same period.

The central bank could further reduce interest rates depending upon the outlook for inflation, Peter Praet, member of the European Central Bank (ECB)’s Executive Board, stated yesterday. Praet further stated the forward guidance issued previously was based on ECB’s outlook for the economy and added further stability to the money markets.

Today the Reserve Bank of Australia (RBA) cut the overnight cash-rate target by 25 basis points to a record low of 2.5%. Lowering of benchmark interest rate, the eighth cut since late 2011, was in line with market expectations. With lower borrowing costs, the RBA is seeking ways to boost the non-mining sector that struggled with an elevated currency.

The Purchasing Managers’ Index (PMI) for China’s service sector remained at 51.3, unchanged from previous month, the data released by HSBC showed today. However, the composite PMI including both manufacturing and services declined to 49.5 in July from 49.8 in June. As per the official data, service sector PMI rose to 54.1 from 53.9, whereas the manufacturing PMI advanced to 50.3 from 50.1 in last month.

Japan’s monetary base grew 38% y-o-y to ¥170.4trln in July following a rise of 36% in June, the Bank of Japan reported today. Adjusted monetary base advanced 37.1% to ¥168.9trln, while the current account balance surged 116.4% to ¥82.4trln.

Growth in China’s manufacturing sector picked up slightly in July, as per data released by the National Bureau of Statistics. China’s official manufacturing purchasing managers index (PMI) stood at 50.3 in July vis-à-vis 50.1 in June. A sub-index of the official survey, measuring new orders for Chinese manufacturers, also inched up to 50.6 in July from 50.4 in June. Meanwhile, a separate PMI survey by HSBC Markit indicated Chinese factory activity shrank for the third straight month to 47.7 in July from 48.2 in June. PMI readings above 50 indicate expansion.