Average home prices in the UK increased 0.5% m-o-m in September, the highest since May 2007, as per data compiled by Hometrack. On y-o-y basis, home prices rose 2.4%.

As per data from the Internal Affairs Ministry released on Friday, Japan’s core consumer inflation stood at 0.8% in August, marking the third straight month of increase and the highest level since November 2008. The rise was mainly due to high energy prices and a weaker yen. The Bank of Japan is targeting to achieve 2% inflation in two years’ time.

The International Monetary Fund (IMF) disbursed the next €770m (US$1bn) aid tranche to Ireland. The agency said Ireland’s economy had been performing in line with expectations so far this year. As per the note, the country is projected to grow during the second half of the year.

In an interview on Canada’s CTV television, Japanese Prime Minister Shinzo Abe said his country’s economy is on a solid growth and recovery path. Abe mentioned that his government would draft a sound and robust set of measures to support and promote this growth path. Abe has pledged to defeat deflation and spur economic growth in Japan using the so-called three arrows of fiscal stimulus, monetary easing and structural reforms.

ECB President Mario Draghi said the central bank was prepared to consider a further round of long-term refinancing operation (LTRO), if necessary, to avert a surge in short-term interest rates, and maintain inflation within the medium-term target. He added that deposit outflows from distressed countries had reversed and market access for banks had broadly improved.

German Chancellor Angela Merkel, party leader of the Christian Democratic Union (CDU), won a third term after an overwhelming election victory on Sunday. The CDU bloc took about 41.5% of the vote, beating the main opposition Social Democrats (SPD), which won about 26%. Merkel’s current coalition partners, the Free Democrats, won 4.8%.

Erkki Liikanen, a council member in the European Central Bank (ECB) and Governor of Bank of Finland, said on Friday interest rates would be maintained at the current or lower levels for an extended period of time.

Japan’s exports rose 14.7% in the year to August, the fastest growth since August 2010, as per data from the Ministry of Finance. Imports grew 16% on higher demand for fossil fuels after the country decided to shut down its nuclear power plants. As a result, the trade deficit stood at ¥960.3bn (US$9.7bn) for August.

New house prices in 69 of 70 cities in China marked an upward shift from last year, the National Bureau of Statistics reported today. In Beijing, prices jumped 14.9% y-o-y in August, after rising 14.1% in July. In Shanghai, prices surged 15.4% y-o-y vis-à-vis 13.7% in July. Overall, prices advanced 8.3% y-o-y in August (7.5% y-o-y in July), recording the eighth successive monthly gain.

Foreign direct investment (FDI) in China increased 0.6% y-o-y to US$8.38bn in August, after surging 24.1% y-o-y in July, according to the Ministry of Commerce. The reading fell short of the market expectation of 12.5% y-o-y. Between January and August, China’s FDI grew a modest 6.4% y-o-y to US$79.8bn.

The UK is nowhere near a house-price bubble, as per a statement by the Deputy Prime Minister, Nick Clegg. He mentioned Bank of England (BoE) and the government have tools to prevent one and ensure it does not reoccur. The government runs a scheme “Help to Buy” to enable cash-strapped buyers to purchase a home with a deposit of as little as 5%.

As per Akira Amari, Japanese Economics Minister, the government may consider a reduction in the corporate tax rate as part of a stimulus package. Lawmakers could reduce the rate next fiscal year to offset the impact of a planned increase in the sales tax (effective April 2014). As per KPMG’s website, the corporate tax rate stands at 38% in Japan.

Machinery orders increased 6.5% y-o-y in July after rising 4.9% in June, as per the Cabinet Office’s data released this morning. However, the reading was lower than the market expectations of a 7.6% increase. Core machinery orders were unexpectedly flat in July following a 2.7% decrease in June. Machinery orders are widely regarded as a leading indicator of corporate capital investments.

The sentiment among large manufacturing firms in Japan reached a four-year high of 15.2 in Q3 2013 from 5 in Q2 2013, data from the Ministry of Finance and the Economic and Social Research Institute revealed today. For the fourth quarter, the gauge of expectations was revised downwards to 13.5 from previously estimated 15.8. The sentiment index for all major firms advanced to 12 in Q3 2013 from 5.9 in the preceding quarter. The corresponding outlook for the next quarter stood at 9.8.

Failure to increase the sales tax may result in a sell-off in Japan, as per Kozo Yamamoto, a tax panel member of the ruling Liberal Democratic Party (LDP). Mr. Yamamoto mentioned in case the sales tax is not increased to 8% from 5% by April 2014 (as scheduled), foreign investors may offload their Japanese assets. He also called for an extra spending package of US$40-50bn to offset the tax increase.

In August, Chinese exports expanded 7.2% y-o-y, whereas imports rose 7%, resulting in a trade surplus of approximately US$28bn, the General Administration of Customs stated yesterday. In July, exports increased 5.1%, while imports improved 10.9%. Trade figures indicated major improvement in exports to ASEAN nations during the month. Exports to the US grew 6.1% in August vis-à-vis 5.3% in July.

Japan’s leading economic indicator, a gauge of future economic activity, advanced to 107.8 in July from 107.2 in June, the flash reading released by Cabinet Office revealed today. The coincident economic index, a gauge of present economic conditions, moved up to 106.4 from 105.5. The lagging indicator, a measure of past performance, rose to 111.2 from 110.6 during the same period.

Today, Bank of Japan (BoJ) announced it would continue to expand the monetary base at the same pace, adding ¥60-70trln annually. The central bank also stated country’s economy is showing moderate recovery and expected the trend to continue going forward.

HSBC and Markit Economics revealed today that China’s Purchasing Managers’ Index (PMI) for services advanced to a five-month high of 52.8 in August from 51.3 in July. The composite index, inclusive of both manufacturing and services, rose to 51.8 from 49.5.

According to data from the British Retail Consortium (BRC), retail sales in the UK increased 1.8% y-o-y in August on a like-for-like basis. However, the reading was below the market expectation of a 2.4% rise. In July, sales had grown 2.2%. Total sales gained 3.6% in August.

As per data released by HSBC and Markit Economics, the final reading for China’s Purchasing Managers’ Index (PMI) stood at 50.1, up from 47.7 in July, matching the flash reading released earlier. New export orders declined, but strengthening domestic demand led to an increase in total new orders. Separately, China’s official PMI also rose to 51 in August from 50.3 the previous month after the new orders index advanced to 52.4 from 50.6 during the same period.