Japan's manufacturing activity grew at the fastest pace in nearly eight years in January on stronger output and new orders, while cost pressures stayed elevated as firms continued to face supply chain delays.

World stocks climbed higher on Monday as investors digested new optimism from the U.S. Treasury's top economist that inflationary pressures should ease in 2022 due to weaker demand for goods, easing supply bottlenecks and a receding coronavirus pandemic.

Japan's top currency diplomat Masato Kanda said a weak yen brings both merits and demerits to the economy due to the country's changing export patterns and increasing reliance on imports.

BERLIN (Reuters) -German annual inflation slowed in January but was still higher than expected by analysts and well above the European Central Bank's price stability target of 2% for the euro zone as a whole, preliminary data showed on Monday.

Japan's jobless rate fell to 2.7% in December as employment posted the biggest monthly gain in nearly 36 years, government data showed on Tuesday.

World stocks staged a modest rebound on Monday as traders put aside concerns about interest rate rises and the crisis in Ukraine to dip back in, but global equities are still headed for their worst January since 2016 after a bruising month.