♪ haidi: welcome to "daybreak: australia." i am haidi stroud-watts in sydney where markets have just come online. annabelle: i am annabelle droulers in hong kong and we are counting down to asia's major market opens and the top stories this hour. wall street shrugs of another harder than expected u.s. inflation reading, the data doing little to alter bets that the fed will cut rates this year. haidi: japan is set to unveil which negotiations. annabelle: australia's wine industry is cautiously optimistic amid reports that china has proposed lifting tariffs on the country's wine. kicking off with some breaking data, south korea releasing its jobless figures for the month of february. that reading has come in lower than what economists had been expecting. the reading is 2.6 %.

we are below the post-pandemic averageyear of 3.3% sort of seen as the national rate of unemployment at least by, our bloomberg economics team. importantly, the reading of 2.6% is below the average for economists and even the range and at 2.7% to three .1%, so it is undershooting all projections coming into this. broadly this shows the conditions in korea's labor market remain tight and it's a signal of resilience in the sector. certainly something that will keep the bank of korea, giving it a bit of leeway, i guess, to take its time for cutting any rates. haidi: yeah. as usual, we are back to focusing on these data points and how they feed through to central banks across the region. belle, to that point, take a look at how we are going into the start of trading here in sydney. looks like a pretty mixed

picture. some gains expected across the region. stocks coming online in a muted fashion. we saw pretty much sideways trading in the previous session, declines from the big iron ore players. trying to see if there is much of a recovery in this session as we did see iron ore kind of studying after planting on weak chinese demand. one of the sectors we are watching is treasury wine, on account of china's proposal to end the 220% tariffs on australian wine companies, proposing to lift those punitive tariffs on the sector. we will be watching for a reaction out of that. the aussie dollar is steady, we saw it firming after core u.s. cpi exceeding forecasts, harder than expected, putting into question the path where the fed goes from here. so the bloomberg dollar index

overnight, about 0.2%. we saw the dollar posting gains against pretty much and of its g10 counterparts. we are also watching for the bank of japan. this will be a bit of a test, belle in terms of what we see in yen trading today. waiting on that wage negotiations, the final piece of the rate puzzle as we get the final outcomes from those talks. annabelle: yes, we are hearing actually that within the bank of japan, policymakers are split on the direction they want to take. whatever we see a move in march or in april. certainly a lot of focus on those negotiations. looking here at u.s. futures, fairly study so far, but yesterday we saw stocks climbing to a fresh record. you mentioned, of course, that cpi reading, that was the main focus for investors. swaps starting to price in a near 70% chance that the fed is going to start easing in june,

pretty much because these numbers were not any big shock to traders. treasuries a bit lower in the session. oil as well, dipping actually ahead after that official report. opec saying that latest supply cut have stalled. it is really about whether countries can meet or whether they are exceeding their quota. iraq is one of those that have gone beyond their quota. futures just coming online here. it was that focus on the u.s. inflation reading, topping forecasts for a second month in february. the advance seems to reinforce the fed's cautious approach to cutting rates. let's bring in u.s. economy senior editor chris hansteen. chris, these numbers, do they breathe any real into the narrative that inflation is sticking in the u.s.? chris: for sure. you look at the core cpi at 0.4

percent in february, that is a monthly gain, the second straight month of 0.4 percent. 0.4% is totally inconsistent with the fed's to percent inflation target. and, in fact, that back to back 0.4% for gain in cpi was the hardest two month that we have seen since the spring of last year. so this is not the direction that the fed wants to see things going. if you look at also the super core cpi measure, services measure, something the federal reserve has been focused on for some time now, super court services also strips out housing costs as well as food and energy and goods. that came in at almost zero .5%, totally inconsistent with 2% inflation.

that said, there are those who argue that as we see the labor market start to soft and bit, and you remember the numbers we got last friday, average hourly earnings came in only at 0.1% on the month-by-month again, there are those saying that we will see a turn. it's just not here in these numbers yet. haidi: we have only got one more piece of data to go before the meeting. does this potentially change another outcome, but the signaling and some of the language might hear from the fed ? chris: as you say, there is no change in the decision expected. everybody expects no change in rates next wednesday. i think the focus will be on the new dot plot forecasts. march is when fed policymakers are due to update their projections for economic metrics , and, of course, the benchmark interest rate.

so last time around, back in december, they had penciled in three rate cuts for this year. the question is, will that come down at all? it would only take a couple of policymakers shifting their view for the medium dot to lose one of those three rate cuts. that will be the key focus next wednesday. haidi: u.s. economy senior editor chris anstey there. let's bring in sylvia jablonski ceo and cio at defiance etfs during this now. if anything this is another data point that tells us that the path to disinflation will not necessarily be a straight one. but if you look at some of the core things that had been a concern in january like shelter and rents, was there some reassuring part of this for the fed? sylvia: good evening and thank you for having me tonight. overall, this number was a bit hotter than the market expected,

but not overly hot. so while i agree with what -- a lot of what was said there, if you're thinking of 2%, and you get two months of 0.4% in a row, that is not reassuring, but if you look at inflation coming down, this is still a story of inflation coming down, right, not perfectly linear, but it is coming down to a level that the fed is more comfortable with it getting closer to or in line with fed expectations. i don't think the market reacted because i don't think a lot will change. we all sort of expect for there not to be any kind of rate cut at this moment. perhaps it happens in june. because that has not changed, it really want to change the market in the short term. haidi: in the meantime, what we have seen our things trickier when it comes to the equity rally, on friday particularly with that jobs number. there seems to be more of a hurdle in the fast money, at

least being liquidated from these major popular themes like nvidia, ai amtek. do you think that kind of theme is likely to continue? sylvia: i think it will continue, but it is not necessarily bad news. last couple of days prior to today, we have these stocks quickly reaching all-time highs. you have hedge funds and large institutions that have their algorithms running and at a certain level, you get these hits on the price and you unwind from the -- be unwind positions and take profits there. the group has been parabolic, but i think over time, the price will continue to study out and rise because this supercomputing and quantum computing trend is in its infancy. we are starting to see it now applied to different sectors, companies, different parts of the market. that will play out over time and i think the price increases at that point will the study out and rise a bit slower. in the short-term, sure, you

will see momentum trading around some of these things. annabelle: sylvia, for the ai trade, things like nvidia and amd, are they still the best way to play this, do you think,? sylvia: it's hard to argue that nvidia and amd are not the two leaders in semiconductors if you look at the expected growth around the ai trend. it comes in the form of data centers. we are talking a potential future number in the trillions of total adjustable market. those two companies are the leaders. so when they pulled back, i think investors who have fomo, even if they pulled back 900-2880, i think there is a psychological impact there. and when you see investors coming back in, they are buying on the dips. you can expand the trade out long-term. there are etfs out there that represent the quantum computing theme, that represent cloud computing and cybersecurity.

i think these areas of the market will give you access to companies that are small, mid, large cap and will give you a broader exposure, so you will see investors dabbling in those areas. annabelle: i want to get your views on some other stock picks. i know that eli lilly is one that you also preference. we we -- had an interview with the ceo and he was looking at the obesity market how they are looking to capitalize on that, looking to create an oral tablet in addition to an injectable device, and he also wants it to the market quicker. take a listen to what he had to say. >> it's not a protein. it is chemistry. . it is not in the injectable device which is so difficult to make, its a pressed tablet. the world is awash in those capacities, should the drug be successful, i think we will be able to tap into quite a bit more supply. which will be good for the u.s. but even better for places like brazil or mexico or china.

annabelle: there are a number of different weight loss drugs on the market now in development. what is it about eli lilly in particular that stands out to you? sylvia: i heard that interview. the amount of interest in these drugs is just kinda mind-boggling. but what interests me about eli lilly is sort of that, they are one of the two leaders in the forefront of weight loss drugs and they are working on r&d innovation. but also eli lilly is starting to have a lot of growth in diabetes medicine, obesity drugs. they didn't get clearance under alzheimer's trial but they are doing lots of research in that area. they have cancer drugs. i just think they have a wide menu of products that are really far along in the rnd process and can have some potential wins for them. it's not all about weight loss although that is clearly an area that is propelling the stock forward now. i think they are well-positioned overall in drugs and from

circles at this stage. haidi: we are getting close to november and politics is increasingly dominating the narrative. we are now getting reporting from a number of major u.s. networks that resident veteran has clinched the democratic nomination. msnbc and cnn reporting that with the win of the georgia democratic primary, donald trump is the presumptive nominee, also seeing reports that donald trump has won the republican primary in georgia as well. with this being set up as a repeat, how much volatility do you think the markets are setting up for, and potentially even upside given how we saw the rally. out in the last trump presidency -- how we saw the rally play out in the last trump presidency? sylvia: usually markets have a good year during a presidential election year. typically when the existing president is re-running for office.

there is that statistic. in this case, i think the market knows what you get with each one so there is no element of surprise. we will have to see how it all pans out. i don't think there will be a massive move in the market either way at this stage. but some areas of the market might be stressed, for example, if pres. trump: selected, there is some strain around the idea of tariffs and how that affects em trading and trading with china and things like this. if biden gets elected, perhaps it is better for things like electric cars. it's kind of the same old thing. but i don't think the market is going to be kind of super surprised in this election. haidi: sylvia jablonski, ceo and cio at defiance etfs. great to have you. one of the sectors we have been tracking closely it wine and winery-related stocks in australia. we are seeing a bit of upside in treasury wine, they had been up

3%. we are trading on highs, 10 month highs for treasury wine, a stock that had been battered since we saw the trade dispute and the punitive tariffs being announced three years ago. still down 30% since that time. australian vintners and winemakers say that china is poised to lift the tariffs on wine experts. this trade dispute nearing an end. both beijing and canberra have been seeking to improve ties and this referenced that plan and the proposal of china was referenced in treasury's wine's proposal. we are expecting the decision to come in the next few weeks. paul: and perhaps something that raises questions about the effectiveness of china's effort, but we will have more on that ahead. still coming up, results from japan's spurring wage negotiations are due ahead of the boj's monetary policy

decision next week. we will have that and more. this is bloomberg. ♪ but starting it eight months pregnant... 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.

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>> i think maybe the boj will move next week to increase the interest rate, with 70% probability. i think the financial markets expect 50%, but i think there probably would be higher than the consensus. because it doesn't mention the boj can get very important information to decide monetary policy on friday of this week, the result of the spring wage initiations. -- spring wage negotiations annabelle: . that was a former dear jay

policy board member, take a. any rate hike will likely depend on the wage negotiations. wednesday is among the heaviest day for announcements. our asia economy and government senior editor joins us from tokyo. what are we here so far,? we have had various companies or reports of companies with wage hikes coming through. early expecting to get a healthy period here? >> annabelle, at this point, it's all looking pretty good. as kiuchi-san said, the combination comes on wednesday when rango announces its report. we'll see a lot of unions announcing their results and that is a leading indicator of what we expect the final outcome to be. with anecdotal evidence, economists we surveyed over the

last week expect 4.1% gains on average. that would beat last year's raise. companies here and there are expecting results -- reporting results. softbank came out the other night and said it would go 5.5% on average for its employees. so everything is pointing to wage gains that would surpass those we achieved a here we go and a year ago that was already the biggest weight gain in decades. so it is looking pretty good on the wage front. haidi: 3% is the magic number we are hearing being bandied about as being enough. is there an assumption that the results will be solid enough to end that negative rate? brian: so that is the key point there, that threshold. i think if we get anything above 4%, it's kind of a strong signal to the boj to move ahead on rates, ending the negative rate.

if it is around the 3.8% range, that might be a little bit disappointing after all the talk and all the sort of speculation we have had in recent weeks. so, yeah, that's a big number. also remember, even after that three-point & that was the official tally a year ago, that came down a year later as the results of smaller companies which, little bit late, those were factored in. smaller companies have less capacity to raise wages. so really, these first results were mostly the big companies. and we will have to see what happens later with the smaller company input. , our asia economy and government senior editor brian fowler in tokyo. much more to come here on "daybreak: australia." this is bloomberg. ♪

haidi: take a look at some of the boy and trading in wine-related stocks. treasury wine is a maker of the penfolds brand. of the highs, but still trading at a 10-month high. we are still down 28% from that point despite the recent recovery. australian vintage also up 3.2 5%. we are hearing that china is proposing to lift tariffs. it signals that the trade dispute between canberra and beijing could be nearing its end. let's bring in ben westcott who joins us in canberra. we are hearing that treasury wine is making moves to potentially divert its stock back to what has been such a lucrative market. how did this come about after almost three years? ben: this all began about five

months ago when the chinese government announced it would be undertaking a five-month review into the wind tariffs, similar to those they had of the barley tariffs which eventually led to the lifting of restrictions on barley. the government was very hopeful for an announcement. this interim measure is not lifting. the ministry of commerce have not confirmed it themselves, but australia is saying it is welcoming the news of an interim announcement. essentially what happens now is that people in china will have the ability to comment on the potential decision to lift the sanctions. and if that comment is considered positive enough, then the sanctions will be lifted hopefully within the next few weeks. annabelle: it does seem that australia managed to ride out

these trade tensions with pretty much no public concessions to beijing. does that raise questions about the effectiveness of china's approach here? ben: the fact of the matter is that apart from the damage that has been done to the wine industry, and less damage to the barley industry, australia has more or less remained unscathed despite tens of billions of dollars of sanctions put on australian exports to china at the height of the poor relations during the covid-19 pandemic. on the surface, that will definitely lead other countries to be more willing to sit out any other trade disputes they personally may have with china if this sort of thing should happen in the future, but the reported thing to -- important thing to remember here is that at the end of the day, the biggest trade with china that china couldn't touch was iron ore.

china needed it desperately for its own post-pandemic revival, and osorio is more than happy to sell to china's most reliable supplier, and given that neither side could cut this trade in iron ore, these sanctions were always going to be less effective than they could have been. , our australian government reporter ben westcott in canberra. look at our broader australian assets trading in the first half an hour or so of trade. modest upside, 0.25%, after a pretty much sideways session in the previous session. also seeing a bit of firming for the aussie dollar, 0.6608 after the moves in the bloomberg dollar

>> it is kind of like when you take cookies out of the oven. they are cooling but they seem to be cooling really slowly.

>> this is a tight labor market and not generating the easing of conditions where i could say to you inflation is definitely going to go back to 2%. >> it is going down but it is going to take some time and that is ok. >> i do think things are moving in the right direction. >> our confidence to cut rates. >> so far think they want to cut and we expect to see that in the may or june timeframe. haidi: some bloomberg best reacting to the latest cpi data. our next guest says a path remits bumpy. fed officials will likely put the report in the notso good column at next week's fomc meeting. let's discuss this with lydia boussour. always great to have you at us. especially to pass through the components of the cpi print. i wanted to look at the so-called super core reading because this is the element perhaps fed officials would be most concerned. this chart is really not coming down fast enough.

if you look at the average monthly gain for super court services inflation, 02 point sent over the three years before the pandemic. at the moment we are more than double that, almost tell .5%. is this something the federal be concerned about and is it enough for them to change the communication at next week's meeting? lydia: i think this was an interesting item in the report this morning. we saw some cool down in super core inflation after the hot print in january of 0.8%. but it remains elevated and it does suggest there is lingering stickiness in inflation. i think the key take away from this morning's report is that we are still not there yet when it comes to the fed gaining that confidence they are looking for to start the easing cycle. and i do want to highlight as well that just looking at the

report we talked about super court. there was no moderation. still too high for comfort. also some moderation in shelter cost which is a key source of inflation as well. so we need to see services inflation and super core inflation come down further to see that easing cycle play out. haidi: it is interesting you talk about shelter costs because that was the biggest shop for. people in the january reading. if you look at this chart, it is reassuring that shelter, rent, has come down, suggesting it was some sampling tactics if you will that had an impact and we are starting to see that start to come down as a component. would that be reassuring or does this all add up to a picture that we are going to see potentially more volatility in this disinflationary path, even if we are still on that path? lydia: i think the cool down in

shelter costs, rent in particular which was the key force of shelter inflation in january, was encouraging. i think we need to see more disinflation in housing. when you look at shelter inflation we are running slightly below 6%. we are down from 8%. but you want to see shelter inflation converging towards 4% to get headline and core inflation in the 2%, 2.5% range. we still have more ground to cover but there is more inflation in the pipeline and we know that looking at some of the private sector rent inflation measures. i do think this will be part of the story of more inflation happening later this year. annabelle: how would that disinflation happen in housing in particular? it is not easy to bring new supply onto the market. what are you seeing in

particular? lydia: in terms of the housing inflation in the cpi, looking at cpi rent in particular, some of that disinflation has already happened and is gradually filtering into that core cpi sheltering measure. and so what we are likely to see in the coming months is continued disinflation that continues to filter into the cpi inflation measure just by the way the cpi measure is calculated. so some of that disinflation in sheltering is already baked in and we should continue to see that downward momentum in inflation. and more generally i would highlight that not only housing disinflation should play a role in bringing inflation lower but if you take a broader look at the whole inflation picture, we are today in an environment where pricing power has come down significantly. where companies have less room to pass on these higher costs

onto the consumer. we are also looking at an environment where consumer demand is cooling and where the labor market is rebalancing and where wage growth should continue to moderate. and all of these factors should keep inflation on that downward trend. what the latest few months of data has showed is that we have seen slower progress. so the fed will want to see more good inflation data before starting the easing process. annabelle: one of the most read stories this morning is the citadel founder saying that the fed those in -- the fed does need to move slowly. markets are pricing in around three cuts this year, seeing around 100 basis points of cuts. is that the right pace of reduction, do you think? lydia: i think the fed is going to be well-positioned to start

cutting interest rates. fed chair jay powell mentioned we are not too far from that confidence and we are expecting to see that disinflation trend resuming in the coming months. and that should lead to the fed easing monetary policy. it is not going to be a fast process. you are going to proceed very carefully. but we expect to see rate cuts this year as inflation continues to come down. and the fed really wants to balance the risk of keeping interest rates too high for too long and risking some damage to the economy and potentially a deeper economic slowdown. or a recession. haidi: the jobs numbers on friday was also quite perplexing for the market. we saw that pretty immediate reaction. i wonder how you are seeing this being conveyed through the strength of the u.s. consumer?

are there any concerns at this point? lydia: yeah, the labor market showed continued resilience. i think the february report came as sending some reassuring signal. payrolls remain quite solid. but on these -- but at the same time we saw softening beneath the headline print. we get more rebalancing and further easing in wage growth. we saw downward revision to the prior month's numbers. we saw the unemployment rate starting to move higher to 3.9%. and we saw easing in wage growth. overall we have a labor market that is gradually rebalancing. companies are still hiring. that should continue to put a floor under income growth of consumers. so we should continue to see that positive momentum in real disposable income for the consumer. looking at the overall consumer picture we are expecting to see

continued positive momentum in consumer spending, looking at the numbers in the first quarter we have consumer spending on track to grow. an overall economic growth on track to grow as well. so the dynamics in the economy remain quite encouraging. annabelle: lydia boussour, senior economist at ey. let's get to morning calls ahead of the asian trading day because he inflation print, certainly a number that was not a shock to traders on wall street. we saw stocks climbing to a fresh record. despite that morgan stanley's michael wilson sees no reason to upgrade his outlook on u.s. equities. he is sticking with his year-end forecast of 4500 for the benchmark s&p 500 index. that is roughly 8% short of the average year-end called wall street strategists tracked by bloomberg. wilson's says broader earnings growth is what is missing for him. >> exuberance is pretty hybrid

it does not have to end in tears. leverage is not always bad. but we have a situation where people are reaching for risk because there is fomo. we're more cautious than some of our peers. a lot of folks have raised price target based on higher multiples and we are not willing to do that. annabelle: the citadel founder ken griffin says the fed should move slowly in lowering interest rates. griffin says pausing and changing back to higher rates quickly would be the most devastating course of action. he thinks rate cuts would be slower than expected. last week we heard fed chair jay powell san policymakers are nearing the confidence needed to start lowering rates. haidi: a few interesting calls out there and it shows how precarious perhaps expectations are as to how central banks are going to proceed from here. and a lot of focus when it comes

to what we are expecting from the bank of japan as well. here in the first 40 minutes or so of trading in australian we have seen the asx two higher gains. we are seeing some outperformance in these thematic names. australian vintage, some of the winery names are doing particularly well today. as we see these expectations build that the most three year long punitive tariffs on australian wines from china might be eased in the coming weeks. we are seeing broad downside when it comes to trading in kiwi stocks. singapore nikkei futures setting up for a pretty firm open in japan as expectations continue to rise on what we see from the bank of japan. the accumulation of data from these wage negotiations will really be key in terms of whether negative rates will be ended sooner rather than later. also watching the yen as well. is this major yen rally finally

underway or do we see a bit of a trap with the bank of japan as well as more signaling from the fed in their meeting next week? more ahead here on daybreak australia. this is bloomberg. ♪ okay y'all we got ten orders coming in... big orders! starting a business is never easy, but starting it eight months pregnant... 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: this is south korea's top financial regulator saying

they are determined to boost the value of listed companies as they look to create a financial system that encourages firms to rely on equities to raise capital. for more let's bring in asian stocks reporter from seoul. this was a really great interview you had with the financial services commission vice chair. that was i believe the first time ever he sat down for an interview, at least with bloomberg. a lot of lines came from it. what were the key messages from that interview? >> sure. this was has first ever interview since he became the vice chairman of the south korean financial services commission in 2022. he told us about why the south korean government is so committed in ending the stock market korean discount because the south korean government sees ending the stock market discount and boosting the evaluation of listed companies as a way to

solve a lot of economic problems that the asian economy is facing. such as aging population and slowing growth. there is a huge economic rationale behind the government's big push to end the korea discount. so he said if this program becomes successful, citizens will be able to create their wealth through equities, which would help the aging society. and the companies would be able to raise the capital from the stock market more efficiently which would also help the slowing economy. south korea has one of the fastest aging societies and its growth is really slowing. so you can understand there is a great economic rationale behind this. he also gave a first look into some incentives that the south

korean government is going to unveil in order to push local listed companies to enhance their value. that will include easing tax on dividend income, which will be seen as a big incentive to the companies. haidi: there was the blanket ban on short selling announced in november. did we get any kind of indication as to how that is going and when it might potentially be lifted? youkyung: mr. kim spent a lot of time telling us about has rationale behind the shortselling, and also what the government is going to review before considering ending the shortselling ban. one of the things that the government will look at is they want to improve this current shortselling activities monetary system so that they want to make sure that we have some kind of system in place so that each

company can see that they have enough outstanding balance of borrowed shares before they short any stocks. so we can understand that the south korean government is going to implement a system within each individual companies before they do the shortselling so that they want to reduce potential illegal shortselling trades that could happen. this is the kind of system the south korean government wants to see completed before they determine think shortselling at the end of june. another thing he also mentioned is that they will also look at financial market conditions at the time. although he said the likelihood of the markets is very low, marking -- market conditions is another thing they will look at before the end the restriction on shortselling and south korea. haidi: our asian stocks reporter

was some insights from the vice chair. from korea to japan. the bank of japan's lack of exchange traded fund buying is speculating the financial bank will stop purchasing ets to make the stock market healthier pretty our senior asia reporter is with us. why did the boj reframe -- refrain from buying etf's? >> the boj's lack of action monday basically fed into speculation the boj is thinking of pausing next week. we have been talking about the likelihood of ending interest rates. that is one thing. in the boj option on etf's suggests the bank of japan may finally end its etf purchase problem which was introduced more than 10 years ago.

it is still not clear in the market exactly what the boj is going to do. some people say the boj can just stop buying without officially saying so because that is what they have been doing after all. the boj reduce the amount of etf purchasing in recent years without saying anything. officially they say they can buy up to ¥12 trillion a year. so that is possible. some other people think the boj will officially say the problem is over. we still need to look at what the boj is going to do but markets are clearly looking at the boj's next steps. annabelle: if the boj were to hold scales cap -- full-scale scrap this program, what would be the implications for the stock market. hideyuki: yesterday the nikkei underperformed the regional

markets and clearly that was because of the shock from the boj. but looking at the longer term implications i think it is a good thing. because if you think financial markets are more efficient at allocating resources than the government then obviously it is a good thing for the government or markets to decide what is best for the economy. and the bank of japan as a result of its massive buying over the past 10 years or so is now holding more than 7% of japanese stocks. that is really a huge amount. especially the boj has bought nikkei-linked etf's, which means it has more than a 7% stake in companies like fast retailing. many people think this is

exactly why those shares have very high valuations. that has driven up equity of those shares. the absence of the boj is probably a good thing for many investors. haidi: yeah, a lot of criticism it has damaged the ability to efficiently allocate capital. will the boj ever sell? hideyuki: exactly. that is a very interesting question. i can say at the moment, virtually no one expects the boj to sell any of its holdings anytime soon. once the boj says it is considering selling, that will cause a huge shock to the market. so that is not something any policymakers in japan are contemplating. that said, if the boj does end its stock purchasing program, i think debate will gather

momentum about what to do with the boj's massive imposing of stocks. but at the moment no one has any clear answer to that question and it is most likely that the boj will just stick to what has without selling. and that the moment they can afford to do that because they have huge unrealized gains on their stocks. annabelle: that was hideyuki sano from tokyo. bloomberg users can interact with the charts shown using gtv . browse recent charts featured on bloomberg to catch up on key analysis and save charts for future reference. more ahead. this is bloomberg. ♪

annabelle: taking a look at the latest stories on the corporate front. simon cooper, who was front runner to replace bill winters, is leaving the bank as part of a broader tree management shuffle. he has led become more -- he has led the banking division for eight years. according to a statement he is exiting to pursue other interests. sources have said the bank plans to strip out a series of regional reporting lines in the division, which could lead to several executives losing their jobs.

china vanke is said to be in talks with banks on a debt swap that would help the developer stay of off its first-ever bond default. a source says they are considering a plan to swap bond holdings worth tens of billions of yuan into secured debt. the firm's cash crunch has become a major focus for investors trying to gauge how much help beijing and its banks will provide. shares of coinbase slipping in after hours after the crypto exchange unveiled plans to offer $1 billion in convertible sing notes to repay existing debt. the firm says notes maturing in 2030 will be sold through a private offering to institutional investors. the notes can be converted into cash, coinbase shares, or a combination of both. haidi: take a look at how we are seeing the fx side of things pass through the mixed u.s. cpi report.

leaning towards a little harder than expected across some components and therefore potentially downsizing expectations from the fed ahead of next week's meeting. certainly expectations when it comes to communication, not much of an impact in terms of actual expectations they will make a policy change. the bloomberg dollar index pretty flat. we saw the dollar firming somewhat after the core cpi -- exceeded forecast. the question is what happens with the yen. we have had signs of a big yen rally underway but could this potentially be another trap? the answers will be found in that bank of japan meeting kicking off march 19 and we are getting the wage numbers ahead of that. this is bloomberg. ♪ this is our future, ma. godaddy airo. creates a logo, website, even social posts... in minutes! -how? -a.i. (impressed) ay i like it! who wants to come see the future?! get your business online in minutes with godaddy airo

>> we are counting down to asia's major market opens. a lot of different focus points of the session. u.s. inflation of course but also what is happening in japan and the big watch on wage negotiations and any pay bumps. what sort of reporting are be going to get later today? haidi: too close to call. some of this data could take a while to be brought together but we are looking for a number around 3.8% or 4% in terms of the wage gains. i don't want to say it but if that disappoints we could see a pretty massive reaction in these markets. annabelle: absolutely. we have just seen so much agitation for the boj to shift its policy settings as sunak next week --as soon as next week. we have seen the yen strength coming through. it has been higher for four straight weeks against the greenback. today fairly steady, but still trading around the 147 mark.