Japanese consumer prices grow at the fastest pace since 2008 The Statistics Bureau of the Ministry of Internal Affairs and Communications in Japan reported the country’s core consumer price index (CPI), excluding fresh food, grew 0.9% y-o-y in October, recording the fifth consecutive monthly rise. The annual growth rate was the highest since November 2008. The CPI, excluding food and energy, advanced 0.3% y-o-y in October and grew at the fastest pace in 15 years. The bureau also revealed a 0.9% y-o-y gain in household spending in real terms for October, resulting from lower utility costs.

In response to questions raised by the Treasury Committee Chairman Andrew Tyrie, the Bank of England (BoE) Governor Mark Carney stated that the central bank does not possess the power to close down the government’s Help to Buy scheme. However, he added that BoE could present its recommendations on the scheme to the government. This statement has provided the much needed clarity amid the ongoing criticism of the continuance of the scheme.

Sayuri Shirai, a member on the policy board of Bank of Japan (BoJ), said that Japan may not be able to attain the 2% price target as currently expected; she said it could take more time than stated in the BoJ’s outlook report. Ms Shirai expressed concerns over subdued export levels that could deter firms from raising wages and incurring capital expenditure and (consequently) dim the prospects of continued economic recovery.

A survey by the Confederation of British Industry revealed that the overall optimism within the service sector, during the three months ended November, grew the fastest since the survey began in 1998. The optimism for business conditions in the consumer services segment was 33%, while that among the business and professional services was 47%. For the same period, 41% of consumer services companies and 28% of business and professional services firms reported an increase in the number of staff.

Today, Bank of Japan (BoJ) Governor Haruhiko Kuroda announced that the economy was gradually heading towards attaining the targeted 2% consumer price inflation. He noted an improvement in demand and supply conditions and increase in the inflation expectations. The inflation target was likely to be achieved in late FY2014 or early FY2015, he added.

European Central Bank (ECB) President Mario Draghi played down media talks of a likelihood of negative deposit rates. He stated the matter was discussed in the last monetary policy meeting, but there had been ‘no news’ since then. On 7th November, ECB had slashed its key interest rate by 25bps to 0.25%. After the decision, he had reiterated that the central bank was technically ready for almost zero deposit rates, if needed.

The purchasing managers’ index (PMI) in China stood at 50.4 in November, lower than the October reading of 50.9, according to preliminary results from the survey by HSBC and Markit Economics released today. The reading fell short of the market forecast of 50.8.

The Ministry of Finance reported that Japan’s merchandise trade deficit widened to ¥1.09trln in October from a downwardly revised deficit of ¥934.3bn in September. Exports grew 18.6% y-o-y to ¥6.10trln, after rising 11.5% in the prior month. Imports rose 26.1% y-o-y to ¥7.195trln, after increasing 16.5% in September.

The Commerce Ministry in China reported that the country registered US$8.42m of foreign direct investment (FDI) in October, up 1.24% y-o-y. The growth rate was lower than the 4.9% gain in September. FDI rose 5.77% to US$97.03bn from the beginning of the year until October.

According to a monthly survey by Rightmove, the average asking prices in the UK dipped 2.4% m-o-m in November, owing to the usual declining trend during the period before Christmas, after rising a robust 2.8% in October. On a y-o-y basis, prices were up 4% in November, following a 3.8% increase in the preceding month. Rightmove is optimistic about a further gain in prices in 2014, with a rise in demand for property and a decline in the count of available properties.

The Federal Reserve Bank of New York reported outstanding consumer debt in the US rose 1.1% q-o-q to US$11.28trln in Q3 2013, registering the largest quarterly increase since Q1 2008. Loans for mortgages, education, car purchases and credit cards increased during the period. Mortgage loans, forming the largest part of the debt, gained US$56bn, whereas the auto-loan balances rose US$31bn. The outstanding balance for education loans was US$33bn higher.

The BoE stated that the jobless rate was likely to reach the threshold of 7% by Q3 2015. BoE had earlier predicted it would reach the threshold only by the end of 2016.

Bank of Japan (BoJ)’s board member, Ryuzo Miyao, stated that the economy was exhibiting a moderate recovery. However, the downside risks to recovery seemed to outweigh the upside ones, after he said that he was somewhat ‘more mindful of downside risks’. The volatility in emerging economies, which are suffering from structural issues and ongoing US fiscal problems, could hamper global recovery, he added.

Today, the Ministry of Economy, Trade and Industry reported that the gauge of tertiary sector activity in Japan edged down to 100.1 in September, declining 0.2% m-o-m on a seasonally adjusted, after a 0.7% rise in August. The reading was contrary to the expected gain of 0.2%.

Today, the Ministry of Finance in Japan reported the country’s current account surplus rose to ¥587.3bn in September, significantly higher than the market forecast of ¥400.8bn and up from a surplus of ¥161.5bn in August. The surplus registered a 14.3% y-o-y increase in September and was at the highest level since April. Trade balance displayed a ¥874.8bn deficit, following a ¥885.9bn deficit in August. On a y-o-y basis, exports expanded 12% to ¥5.7trln and imports increased 18.2% to ¥6.6trln. Separately, the Cabinet office reported Japan’s current economic conditions index declined to 51.8 in October from 52.8 in September, while the outlook for the future economic situation rose to 54.5 from 54.2.

China reported a trade surplus of US$31.1bn in October vis-à-vis US$15.2bn in September. Exports grew 5.6% during the month, after contracting 0.3% in September. Exports to the US improved 8.1% in October, whereas those to the European Union increased 12.7%. Imports expanded 7.6% in October. Consequently, China’s total trade surplus for the ten months this year (Jan–Oct) is US$200.5bn.

Tokyo’s office vacancy rate fell to 7.56% in October, the lowest level in more than four years, from 7.90% in September. In October, average office rents in Tokyo’s five central wards stood at ¥16,237 (US$165) per tsubo, a standard measure of property area in Japan. One tsubo is equivalent to 3.3 square metres or 35.5 square feet.

Shop prices in the UK decreased 0.5% in October after dropping 0.2% in September. Data from the British Retail Consortium revealed non-food prices as the factor for the persistent deflation. Non-food reported prices declined 2.4% in October. The clothing and footwear category witnessed the maximum decline, with prices easing 10.7% in October. Food inflation slowed to 2.7% in October from 2.9% in September.

The micro-blogging company Twitter has increased its estimate of shares’ value by 25%. It now says they will sell for between $23-25 (about £15) a share on Monday, from a previous target of $17-20. Demand for the shares has been so heavy the company is ending the offer a day early. The estimate values the seven-year old company, which currently has 218 million monthly users but has yet to make a profit, at up to $13.6bn. Twitter made a loss of $69m in the first six months of 2013, on revenues of $254m. It is selling 70 million shares, which thanks to the revised share price valuation will raise up to $2bn.

Staying in the European Union is worth between 4-5% of UK annual output and “overwhelmingly” best for business – but reforms are needed, the CBI says. Ahead of its national conference, the business group said research found EU membership is worth £62-78bn to the UK. It calls for barriers to e-commerce to be removed by the EU, for it to become more outward-looking and for a “re-focus” in the work of EU commissioners. It also wants to see a permanent opt-out from the Working Time Directive. The CBI report, compiled after questioning its members, also said business wanted a moratorium on legislation which could be made at national level.

China’s official purchasing managers’ index (PMI) advanced to 51.4 in October, reaching an 18-month high, from 51.1 in the prior month. The output index climbed to 54.4 from 52.9. The new orders index inched down to 52.5 in October from 52.8 in September and the new export orders index slid to 50.4 from 50.7. Separately, the survey by Markit Economics and HSBC revealed the PMI reading for China rose to 50.9 in October, up from 50.2 in September, consistent with preliminary estimates.