>> this is "bloomberg daybreak: asia." counting down to major market opens. it is a great day to be in tokyo because we just japan gdp figures coming out to, revised numbers for the fourth quarter telling us to japan managed to avoid a technical recession, so something interesting to note as we got down to the boj decision due just ahead they could be setting the stage for the boj to pivot away from easy policy settings. haidi: one more piece of the puzzle as you get the incremental drumbeat toward if the day, will they come out when what they get on the path to policy normalization? if you look at direction when it comes to upside buyers, jgb yield, decades are starting to build with additional momentum. we have the report boj is considering scrapping ycc, but

take a look at equities trending in the opposite direction. annabelle: that is right, you have got the stage set for u.s. stocks or japanese stocks by wall street. we had the slump into the close on friday, so a mixed jobs report coming out, but the expectations of the fed will be set by the arrest inflation print due tuesday they could show acceleration, certainly telling us is that i will -- powell unlikely to have the base case to turn firmly dovish. seeing both the topix and nikkei225 dropping more than 1% so far and we are tracking tech stocks in particular. there is the u.s. side and what is happening with the japanese yen, because you are strengthening again, it gains against the past four weeks, back below the 147 mark.

we had been trending around 150 for quite a period, but the numbers we are tracking today is all about japan escaping technical session in the latest period so gdp expanding annualized at 0.4% reversing a retreat that initially had to been reported, so something to keep an eye on. ramifications, what does this mean for the boj? could we see any sort of policy shift as soon as the march meeting. let shift to what we have about for korea, because we are taking a look at what is happening with trade numbers just coming out, seeing a deficit coming in it $1.26 billion and imports dropping more than 28%. exports is the one we should be keeping an eye on, and we saw that dropping again, 13.4% on the year.

korea really seen as a bellwether when it comes to export data and one of the first report given that we get early numbers coming through, certainly exports not a good number to see in contraction territory. we have seen it rising over the past period, but there are the export and trade numbers and weakness coming across of the equities landscape as well. haidi: weakness in australia as well after we saw stocks managing to end the week climbing the most in five weeks on the optimism when it comes to the rates outlook. we are seeing a down day in australia, sydney stocks off by 1.25%, but really just about every sector in the red, materials and energy leading those declines. aussie dollar, 66.23 is where we are trading when it comes to the aussie dollar and we are expecting to see more of a benefit when it comes to be does

of the u.s. dollar the last couple of sessions play out in asia particularly when it comes to the yen but some of the most china sensitive proxies like the aussie seeing weakness despite softness in the u.s. dollar. looking at oil, one of the biggest losers as we see sector wise in australia, brent trading under $82 per barrel. we have reports from opec and the international energy agency they could give clues on the demand outlook, multimarket reports that will be closely watched, but we saw the decline of over 1% for brent in the friday session caring for a possibility of more heated u.s. inflation than expected on tuesday also posing to be a key risk for monetary policy, so we are seeing quite a bit of caution. last week was the least volatile week since 2021 for oil as we

see juggling of supply and demand factors for traders. taking a look at treasuries, what we get out of the inflation number this week will feed into expectations when it comes to fed speak and expectations, u.s. cpi firmly in focus at this point as bond traders will be watching the next big move. we have fresh inflation data, and that will feed through to when the fed might start cutting rates, and it comes on the back of what was ultimately a confusing picture given by the jobs report on friday. our next guest says it was sectors when it comes to the equity markets will be supported by positive earnings revisions in the next 12 months. let's bring in a portfolio manager at tribeca it partners. you see more opportunities going forward? >> we think the equity market is

not doing good as many have suggested and we think the fundamentals of good particularly for some of the cyclical sectors. evaluations may be extract for growth names particularly ai and tech focus, but we think the majority is doing quite well. the latest reporting season is demonstrated that analysts were too conservative. it the earnings recession or consumer recession is not as bad as expected. we will see slowdown in consumer spending and corporate earnings, but the expectations are far more pessimistic than expected, so we think the next 12 months is looking pretty good. haidi: it is evaluations for some of the growth tech related names looking picky but the narrative is still strong. >> absolutely, i think the ai theme is real and as an investor you cannot ignore it. you may say it is too expensive but you have got to be there. in the u.s. the playground is enormous.

those sectors is a buy on the pullback. at the same time it will pick up some of the cheaper sectors where earnings will be upgraded valuation will grow in the next 12 months. haidi: last day of the mpc -- npc. the press conference has been scrapped. is that worrying french in investor in that we did not get much details as to how they plan to support the 5% target. >> it is somewhat disappointing and that is why you see offshore investors selling china whereas domestically it does seem the commentary is in confidence domestically for the domestic consumer. we did not see big stimulus but the expectations were low for that. investors will look forward to more details about rate cuts which signifies and what else is to come through.

at this point there is negativity about the upcoming quarterly result for chinese companies because of a tough stance on financials and the like, so we will probably see more losses and what the government is doing and serve -- in terms of the equity market. it is in line with expectations. annabelle: what do you think investors will be most focused on? the earnings story or do we get rate cuts indicated as you say? will that be something that a bronze if not a pick up at least upping the selling? >> of course, i think the chinese market is very attractive and the economy is recovering very slowly. the rate cut will come as indicated, budget is really about the consumer having more confidence. we saw a glimpse of it at the chinese you -- new year travel

stats. as investors looking into china, the evaluations are very attractive, and as the consumer recovers i think more confidence will return to the market. annabelle: which sectors are you looking at a particular then? >> for that market you absolutely want to focus on services, travel, services, because the next few years there will be huge catch up in some of the lost spending. consumers want to spend and traveled around, and that is an area where you want to focus a lot of attention. i think these will benefit the surrounding markets. markets like australia and the like. haidi: so those of the proxies he will be playing when it comes to the australian market? >> absolutely, yeah. haidi: in terms of the property

sector do you see that is being an impediment to market sentiment improving? >> in terms of the property sector, china is important because it is where the local individual consumer will be focused on. it was tough getting worse and a lot of negative headlines will be out of the way and there will be enough support for that space. we think net-net the fact that the chinese market has been very strong -- not strong, they are improving for some time i think the confidence is returning, and property is important. here in australia lr property market is picking up strongly as well given the traveling and immigration stats and the like in the shortage of the build in australia, the pipeline is looking strong for the sector. every market is quite unique where it stands. annabelle: that was a portfolio

manager at rebecca partners, and we are just minutes into the session and there are some notable losses coming through the session. every sector is in the red, but i.t. is among sectors most underperforming so far. what is driving that, weakness that came through. at the likes of nvidia and other tech stocks dropping, nvidia down by 5%. we have got valuation sitting around the two decade high, a bit of profit-taking coming into it, brother uncertainty for the direction of markets, but you see the weakness coming through for tech stocks far. softbank down more than 4% at this point and that is the biggest decline since november. there is another name we are tracking and this is one moving to the upside, the japanese pharma company eisai.

eli lilly, a competitive company listed in the u.s., it's alzheimer's disease drug is facing further delays in gaining u.s. approvals. regulators want to hold a hearing to see how safe that therapy is, so this is a negative overall for dementia pavements -- payments, but eisai is getting on the back of the delay for its competitor eli lilly. that is one of the other stocks we are focusing on. haidi: i have it expects of the fed and the ecb to start cutting rates in june. we will be headed back to beijing as china's national people's congress draws to a close today with a fresh growth

target and a warning about property speculation. this is bloomberg. ♪

haidi: the national people's congress reps have been beijing in a few hours with perhaps more emphasis on what leaders did not do rather than what they did. stephen engle is there with us and as you said earlier more of a whimper than a abng to -- a bang to the npc conclusion. >> it was just seven days

compared to 10 days and even two weeks and there will not be a press conference at the conclusion of the national people's congress. much as been made about that out the premiere would not be addressing the media, so we cannot get clarification. they are fairly scripted and the playbook is pretty well-known, but at least we get to put questions to the premier to get clarification on the policy that he gave us a week ago and the work report. the work report was truncated last monday, just under one hour. an interesting point, for the first time since 2019 li qiang omitted the very common phrase that housing is to be lived in, but speculated on. that is something chinese party officials have been talking

about consistently since 2016 as kind of a precursor to we have been seeing is the crackdown on speculation and over leveraging in the property market. he left that out. in a press conference yesterday by the minister of housing and urban and rural development, he said we must adhere to the belief that housing is for living in, not speculation. at the end they gave new life to that sentence that they have been uttering since 2016 to hammer home the point that they are not going to ease up on their crackdown on the property sector, and it is a topic that was not really mentioned to much other than seeking high-quality development. they did not talk a lot about the problems in the property sector, which are huge to say the least.

annabelle: huge and something that will be persisting for a couple of years, but property is tied closely to consumer confidence in something policymakers could take some hard and is we have seen cpi rising. >> it is front-page news in the china business new paper -- newspaper today. we are still in deflation on the factory gate on hill so prices, -- wholesale prices but cpi did you break the pattern. up 0.7%. the consensus estimate was 0.3 percent, so better-than-expected. february and january are always aberrations on these numbers simply because of the lunar new year holiday, and we had a record travel, record spending,

not per capita spending but overall spending. it record a box office receipts, so there were good indicators coming out of the two week travel period in february that was to those numbers. we have to see whether that will carry over, and traditionally it does not carry over. it is front-page news here because it shows an ending of the trend of deflation, but it is not a harbinger that things will be better going forward because consumer confidence is still weak here. annabelle: that was stephen engle. we have the greatest bloomberg markets live poll survey still suggesting a lot of investors are concerned about china's economic and financial problems despite beijing targeting the growth of around 5% for the course of this year. the poll also found 30% of

respondents do not have any exposure to china whatsoever with another 20% planning to pull back over the coming 12 months. here is what some of our guests have been saying about the problems facing the world's second-biggest economy. >> our view is one should not invest in china. >> i do not think it is an investable per se. >> declines will continue to play. >> be very careful if you are investing in china. >> we think the economy will continue to slow down for the next 10 years. >> the biggest risk is policy may become complacency. >> it is not clear with the overall general direction of the overall general direction of policy will be long-term. >> china has passed the stage where they want to throw a lot of money and build a lot of leverage. >> the leadership of the economic parties are completely different. >> it is difficult to restore market confidence. >> the sentiment is really bad.

there is no hope. >> it will be a challenge to bring investors back to china. annabelle: let's bring in charlotte yang. when you stack up what came out of the npc and put it again structural, cyclical problems in china a economy, it seems like there was not any catalyst year to do have any market rebound. >> that is what we see from the mliv poll survey with 235 respondents as well as the professional investing community. when the restive they plan to increase their china as a position in the next 12 months, -- say they plan to increase or decrease. even though the chinese equity market is better rebounding they have not been able to give

investors enough confidence and you have 75% survey responders said they are very concerned about the economy as well as the market spilling into the rest of the world. this underscores global investors concerns about the size and importance of china's economy in the absence of strong stimulus and slow economic recovery that will make it vulnerable especially to economies that rely on china as a key exporter destination. another thing that stood out as we have more than half of the respondents say the key results from the national people's congress will be irrelevant for the equity market. given that this comes from going forward it will be hard to find a way to improve market sentiment on a broader level. haidi: there are concerns who

see chip edification -- japanification of markets, right? >> a great number of respondents say they see a sizable risk of the china equity market of falling to the extended sump we saw in the japanese market in the 1990's. even though the growth target was ambitious there was a big gap, how do you achieve gdp? the weakening target could create elevated volatility for the market, and because of the slow earnings recovery and lack of stimulus from the macro side is why some investors might be concerned for the equity market in china.

haidi: you can get a roundup of the stories you need to get your day going into day going in today's edition of daybreak. dayb on your terminal. customize your settings you get the news on the industries and assets of that you care about. this is bloomberg. ♪

annabelle: you were watching "bloomberg daybreak: asia." taking a look at political stories, president biden has warned israel against invading the city of rafah in southern gaza cease-fire talks remained deadlocked. washington, d.c. has been helping true -- hoping for a breakthrough before ramadan.

the u.s. will continue to lead international efforts to get humanitarian assistance into gaza and pushes for more rounds to deliver a. australia will scrap import tariffs on a wide range of consumer goods in july in a bid to ease business because and household expenses. new tariffs will be abolished on goods including washing machines, toothbrushes, and pens. it will save $27 million per year in compliance costs. india has signed a free-trade pact with four european countries. the deal with non-eu countries including switzerland and norway it has been 16 years in the making. india gets private sector investment commitments for european securing easy access to markets and products. the biden administration is said to be weighing sanctions on

several chinese tech companies including a chipmaker. at the commerce department is considering adding see xmt -- c xmt and five other entities. cxmt competes with micron, samsung, and sk hynix. aberdeen discusses its rates outlook at a wide expects of the fed and ecb to start cutting in june. it senior economist's joining us to discuss the outlook for the boj. we will have more ahead. this is bloomberg. ♪

haidi: a lot of risk aversion in

the early part of the monday morning session in asia, a sea of red, nikkei225 off by over 2% , quite a lot of fluctuating expectations out of the bank of japan. revised gdp data suggesting the economy of what a recession just a week for the bank of japan meeting, and that will be one of those additional data points and play as we get into further expectations, possibly also softer by .5 of 1%. downside in australia. this is the biggest intraday decline we have seen an australian stocks in about a month especially being led by grow sectors including the likes of energy as well as miners the biggest laggards down by 2% apiece. the kiwi following the region.

dollar weakness-yen strength story continues to play out as well as kgb yields heading toward highs. asian stocks in particular as we continue to see -- watch the narrative when it comes to nvidia and some of the regulations that we are seeing. we did see in the past week nvidia seeing the biggest drop since august, but some profit taking after almost 20% six-day gain there. sk hynix one of the biggest lures down by 3.6%. annabelle: that is one of the big sectors we are tracking, but on the echo front it is the big watch on japan's gdp because we have the revision going to or for the fourth quarter numbers earlier that did represent quarterly contraction into positive growth and avoiding a technical recession, so that

outcome could support the case for the boj to end its negative interest rate policy this month or the next as well. let's bring in our japan economy editor paul jackson. we had it in negative territory for preliminary readings and it was reversed for the one that came out this morning. what was it that created such a difference in the preliminary and final readings? >> it is a common pattern we see in gdp data coming out of japan is after preliminary figures are released we get a survey of capital spending by companies and the spending figures the ministry of finance released were very positive in terms of business spending, so that suggest companies are more upbeat than previously thought and spending a lot more, so i think economists expected we would flip back into positive growth in the last quarter, and

for is central bank if you are trying to pave the way for an interest rate hike and you want to move, it is a lot better look for you if the economy is growing at the time rather than contracting. i think the history books would look pretty challenging for mr. ueda if he races rates while the economy is contracting and things did not go well, so it is the kind of thing you want to avoid as a central banker. annabelle: i also went to want to understand first because the reading came in at 0.4%, but the consensus from the survey had to bend 0.1% expansion, so why was it weaker than what economists had been expecting? i think they overplayed revised figures. there are signs of concerning weakness in the economy, and

that is the private consumption. inflation has been eating into household purchasing power, and we are still seeing that happening. the bank of japan is saying it is looking for a positive growth cycle where inflation is feeding wages and improved consumption, so at the moment there is not a great deal of evidence we have got the improved consumption because the private consumer spending has been falling for the last three quarters. haidi: the demand side does look wobbly and i wonder when it comes to spring wages rise demands, will they be strong enough to give the via jake conviction that they want to see? >> look, i think the boj is not going to be derailed from going ahead with this rate hike this month or next month, and what we

saw with last week's average demands released by the top union federation is that wages will come in strong. that result is due friday. most unions are filing waste yields on wednesday. figures will be collected and come in on friday. i think we will see a big number , and that combined with this gdp figure, i think we have got plenty there to justify a possible move in march, but still not a done deal. lle: that was paul jackson there in tokyo this morning, and let's get more on the outlook of boj and bring in our next guest, luca bartholomew. perhaps of the stage could be said for the boj to pivot or change policy settings as early

as this month. what is your view? >> every meeting is to live. that is the key message when it comes to the bank of japan to. a lot will depend on what the shinto looks like on friday. it would not have been a good luck had the bank of japan tightened when it turned out the economy was still in recession. with the recession to being revised away maybe that makes much more live, but does it matter massively whether it is march or april or even later than that? no, the direction of travel is clear that tightening is coming and the bank of japan is a standout compared to other developed market central banks. annabelle: there are a few different levers you could pull on. where are they more likely to focus shifting their policy settings on first? >> i think it will be a simultaneous move, negative interest rate and yield curve

control lifted at the same time. i do not think there is any particular need to be clever around the sequencing of that. there had been some speculation that yield curve control would be the first thing to go. perhaps that was more distorted, and the bank of japan has been backing away from that for much of the last year or so, but at this point they are quite happy to live yield curve control and negative interest rates at the same time. haidi: what is not clear in terms of the direction of travel with china? did you learn much given that there seems to be less transparency as to how they plan to hit around 5%? >> that target does seem very ambitious to say the least, and it is not obvious how it is going to be hit. we are looking at growth much closer to four point 5% than 5% given significant headwinds from the property sector, lack of interest in unleashing biggest

stimulus wanting to hold the line on de-risking, so we will continue to see incremental easing. that clear lesson is more aggressive stimulus is not coming, and for now the growth target is pretty unachievable. haidi: is the economy or asset prices facing an inevitable japanificaiton in china or is there an opportunity to live from the deflationary demand cycle? >> something like a 30 year battle with disinflation, deflation, and then hated by the phrase japanification is strong interests are overdone. when japan fell into its deflation trap it was already

are rich, very well developed economy. china is not at that stage of its development, there is plenty of low hanging fruit when it comes to catch-up growth and development. it has a number of important drivers of growth, both traditional once about moving people into higher productivity sectors, but also more forward-looking modern drivers of growth around the green transition, the technology sector, and on top of that policy makers have learned an important lesson from the japanification experience. while big stimulus is not happening, i do nothing policy will be so weak that it allows of the economy to fall into a deep deflationary trap. haidi: u.s. inflation numbers are one of the big numbers we're looking ahead to this week, but how do you think that number is going to stack up against the jobs report we had on friday in terms of the outlook for the fed? >> january was a big inflation

month across cpi, ppi, pce, all of those measures that reignited concerns about the last mile on inflation, and my sense is the employment report on friday, the payroll report helped ease some of those concerns. my take is to it is a pretty good report from the perspective of the fed with the economy taking a long but underlying wage growth easing somewhat and i think this week's report will confirm the story that while there will be bumps on the road on inflation that we should not be concerned about aggressive pickup and inflation, the underlying inflation dynamics are going in the right direction. annabelle: it has been interesting to track with all of the global central banks, but that sort of race between the

fed, ecb who will be cutting first. markets are aligned on when we will see any sort of reduction? >> it has been quite a horse race over the last couple of months. i think we are broadly aligned with the markets where they have got in terms of a june start about the ecb and fed. while they will be cutting on the same time, they will be doing so for rather different reasons. they european central bank will be easing policy for a straightforward reason that growth is extremely weak. the euro zone as avoided a technical recession by the skin of its teeth, but the underlying health of the economy is extremely weak, and that is doing the job of getting rid of inflation. whereas the fed is cutting much more from a position of strength that the u.s. economy continues

to be solid. we have had this strong supply-side environment which has allowed growth to be strong inflation to fall for much of last year, so the fed can be taking its foot off the brake even as growth stay solid. haidi: luke, great to have you with us. coming up with asia's earning spotlight shifting to an of, we will be discussing how apple's china woes could impact those results. this is bloomberg. ♪

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haidi: a company is headlining the busy asia earnings we. shares fell in china quite sharply in the first six weeks of the year. let's bring in our specialists. apple has a number of woes and clenching sales in china is one of the big ones. >> we are seeing the company operated inside the tech sector,

so the company has faced challenges as apple saw iphone sales in china have dropped 24% over the first six weeks of the year, and also the company saw an 18% slip in sales for the first two months of the year, so this is concerning because hon hai gets half of the revenue from apple. it will be the one to watch over the coming week. annabelle: it is not just hon hai, you have got cathay pacific, battery maker ctl on the docket as well, so what are we expecting from those companies? >> we are expecting cathay pacific to extend annual growth and profit as they continue to recover from the pandemic. the carrier will also benefit from pent up passenger demand

with china opening up last year. passengers have been steadily rising throughout the year as well, so there will be some advantages over that, and cathay pacific is expected to resume paying dividends in 2024, so what investors may be keeping an outlook for risk as follows. for ctl, we are expecting to see profit rise for 2023 as the company continues to benefit from its new energy business. in the long run the battery maker should be able to bring price competition thanks to its scale and cost advantage and they are able to capture growth in china as well. haidi: we are also watching simpson -- samsonite earnings. >> with potential plans, it

increases the likelihood they may see smaller scale gains in the greater china region as compared to by the regents as well, but in terms of its earnings, we are expecting to see a jump in revenue as they benefit from a resurgence in travel demand. annabelle: that was our breaking news earning specialist there. haidi: the latest corporate headlines, lubricants learn to read it -- reddit and investors are looking to raise $740 million in its initial public offering. it is seeking a valuation of as much as $6.5 billion. reddit has been working towards a listing since its initial filing in 2021. saudi aramco is raising its dividend to help the government plug profit.

payout will be up 66% since 2021. at the world's biggest oil exporter provides much of the saudi government income via generous dividends. morehead -- more ahead on "bloomberg daybreak: asia." this is bloomberg. ♪ that's a different story. i couldn't slow down. we were starting a business from the ground up. people were showing up left and right. and so did our business needs the chase ink card made it easy. when you go for something big like this, your kids see that. and they believe they can do the same. earn unlimited 1.5% cash back on every purchase with the chase ink business unlimited card. make more of what's yours.

annabelle: we are heading through the morning session so far, and one group of stocks standing up to the downside of the tech names and ones link to the chip sector in particular. seeing the drop coming across sk hynix, softbank seeing quite a bit of weakness. it does track the wall street session because we had a decline coming through for nvidia, down around 5.6% to the friday close. a little bit of profit taking because you had a big run-up over the past five sessions, you were still up 10%, and when you take a look at the gains over the past year you are looking at upside of 280%. there is a key investor that is missed out on that and that is that they would because she sold nvidia holdings ahead of the

giant rally. we ask the art investment etf ceo whether she regrets that decision. >> we rode it most of the way up, but i will tell you what we did. as a portfolio manager, it is not one action, what it causes in terms of another action. last year we sold in the flagship nvidia and put it into coinbase. coinbase is up at least as much as nvidia, and it is much less well understood. the whole crypto asset movement, bitcoin is a new asset class, is not well understood or

completely accepted, so we prefer to go where others are not traveling as much, and as we were moving out of nvidia were saying, ok, regulators are trying to crush coinbase, and we were buying it on every date. nvidia happen to be one of the sources for the purchase, so it is not just what we do on the sell side. it is what we do on the buy side that you need to look at it, and we hold it in the more specialized funds but we have been taking profit there for reasons i just described. >> coinbase is a 620% which compares with the 530% gain in nvidia. is there anything in the nvidia story that would make you rethink the name and what you to become more aggressive on it. >> if the price came down a lot we would. >> what is split do it?

>> that would not change anything. split adjusted than the price. if you look at our portfolio, what we are trying to capitalize on our the next stages of the ai revolution. what we are seeing in the gpu side of things is nvidia, all praise, unbelievable company, execution, vision, and it is not over. it will last a long time, but there will be many other companies benefiting from ai. the productivity lived alone it be massive, the most massive productivity lived in history we believe, so this ai revolution will be broad-based and is going to benefit a lot of companies. on the gpu side of course we

have and -- amd as competition, but there was a lot of other surreptitious competition out there. you have tesla that has designed its own chip, ai chip for more specialized autonomous driver opportunity, and i think you will see a lot of companies developing more specialized chips. we know that nvidia will segment the market, so just think a lot of the assumptions for nvidia that this is nvidia's market and its alone are changing. haidi: cathie wood speaking to carol massar. take a look at some of the stocks we are watching with the markets open and hong kong and

across mainland china. watching chip and ai names, nvidia and other tech names fell amid significant profit taking. seeing reaction among relevant names in japan and korea. retail and fashion related sectors also in focus that reported fourth-quarter earnings that exceeded expectations, so watching for some of those suppliers and relevant names and hong kong and mainland china sessions as well. we will get more analysis on the 2024 npc session. that is it for "bloomberg daybreak: asia." markets coverage continues with the start of trading in hong kong, shanghai, and shenzhen. ♪

>> you are watching the china show. i am yvonne man. the top stories this one.