>> welcome to daybreak australia. markets have just come online. >> we are counting down to asia's major trading opens. the top stories this hour. asia set for a weaker open after another hot u.s. inflation report reinforces bets the fed will not be rushing to cut rates. >> oil hitting a high. energy markets kicking off a cyclical upswing. >> we hear exclusively from the u.s. ambassador to china nicholas burns about the bill to ban tiktok and curbing beijing's access to high-tech chips. >> the people's liberation army will take advantage of that technology to strengthen itself at the expense of the american military. we are not going to do that. we are not going to compromise

on national security and we are not going to negotiate. >> let's get to the friday fray as markets come online. looking like a mixed picture as we head into the final trading session of the week. a bit of weakness, quite apparent when it comes to the start of trading in sydney. the staggered start, a quarter of 1% lower in the first few minutes of trade. we are primed for a downbeat losses. weakening the case for any kind of eminent emergency for the fed to act quickly when it comes to interest rate cuts. it has been the consolidation of these inflation expectations repriced across bond markets and equity investors as well. we are seeing futures for australia, they had been flagged lower. . japan and hong kong are sitting softer now as well. 65, 77 is what we've seen the aussie trading. pretty range bound has been the trading action for the bloomberg dollar index over the past few sessions. certainly the repricing of ppi

and inflation expectations is laying part of that. taking a look at what's going to be a key day when it comes to japan. we are looking at the wage negotiations, the outcome of this wage report and how that's going to really potentially play into, is it going to be the end of a bull run with the bank of japan pivot that finally comes? does that come as early as next week? pricing is a bit all over the place. kiwi stocks down by 0.5% already in this morning session. if you look at japan certainly we have seen potentially sort of the upside to this market possibly reaching a bit of peak. at least when it comes to some of these key drivers of the segments that have been driving this rally. the likes of bank stocks in japan. >> the focus on what are we going to get out of the boj. this is the outlook we have for u.s. stocks. it really was the focus on data in the overnight session.

we had retail sales, they suggested a slowdown in consumer spending but it did seem the focus was on the ppi numbers. stronger-than-expected. we had signs of resilience as well coming through in the labor market. the message is the fed can take its time when it comes to cutting rates. bond yields jumping. we had the u.s. 10 year yield around 10 basis points hitting just under the 4.3% mark. we had oil as well a bit softer so far. it declined to its highest level -- it did climb to its highest level in the close yesterday. the iea will supply deficit over the course of this year. stocks weaker overnight and we are seeing that reflected in futures. particularly the tech heavy nasdaq. there's a lot of pressure on companies to be meeting high expectations when it comes to the tech sector. adobe is reflecting that. that's the after hours. the drop of more than 10%. it's given a week outlook for

sales in the current quarter and a lot of concerns around whether the sort of ai focused startups are going to be posing a competitive threat. it is that focus, earnings growth and momentum, to continue to propel the s&p 500 higher. >> let's get some views now from a client portfolio manager and investment specialist at affinity investment. i suppose the sort of existential question over the repricing of when we get some relief on rates from the fed, does that impact where we see the rally across the growth parts of the market? >> obviously that is always the case when you have rates repricing a higher value companies always come under pressure. i think the important thing to distinguish at the moment is just how many of those growth stocks particularly the -- driven stocks have an of earnings growth to propel them

and taking a closer look at each of those companies valuations and determine which ones are actually not looking as expensive as the others. it is interesting to note the company is cheaper than a year ago at the moment from a multiple perspective. that's going to be the important thing. there will be growth companies that will come under pressure. all of this propelling them has been the valuation expansion. but then also on the other hand, the ai beneficiaries we believe will continue to give you incredible earnings growth for the next few years. >> talk to me about some of the beneficiaries. even though we see still not that much, there are more opportunities and names and parts of the -- >> one of the things that has been really interesting is how fast the market is moving down that sort of ecosystem to the next derivative of beneficiaries in ai.

at alphinity, we have exposure to the early enablers. we have a lot of exposure to the big five of the big seven. nvidia, microsoft, amazon, google, becoming the llm five. we also have exposure to the next step of beneficiaries. the companies that are really adopting ai. that is where there's a lot of focus currently on chatbots, llms, which companies can benefit from operation perspective and cost beneficiary. you have companies like airbnb talking around the ai chatbot that is going to act as an ai concierge for clients. we are looking at those things to companies to say how can they incorporate ai? the next step, moving towards of

the moment, is not just those cloud producers which is a big theme at the moment, but also i guess the data seems to suggest we are going to get enough properties for that and what's going to happen from electrification perspective? that is where the narrative is moving towards. to say how are you going to source enough power? will it be utilities? that's the next leg of growth in the ai trade. >> there's a lot of focus on japanese stocks. we had the big run up over the course of this year. that could be tested depending on whether we see any pivot from the boj next week. what are you expecting for that market? >> the general consensus view is we probably will get that pivot we have been waiting for for a long time. going into an era of away from

the negative interest rate new cost control definitely is going to be an interesting period for markets. year to date it has been if you look at australian terms, a majority of that has been driven by multiples higher. there's also been growth. it's going to be very important to distinguish between the companies that have the pricing power that can really sort of pushed through with higher costs particularly higher wages coming through. going into a period of positive inflation, higher inflation, away from where we've been the last decade or so, it's going to be very important to go company by company rather than just saying it is a market that is benefiting from china, not doing well. if you look at the current composition of the market, we

have concentration risk in the japanese markets. the top 10 stocks also contribute around 60% of year-to-date returns. similar to what you are seeing in other major markets but it's not the ai and -- narratives driving it. it's been more the banking perspective and other sectors driving that rally. more stocks, stock picking is going to be the order of the day, japan i think. >> you did mention their about china and japan sort of being a beneficiary from investors looking to take their money out of that market. how concerned are you by the geopolitical headlines? one of the ones overnight we are tracking is this potential tiktok band in the u.s.. who are the key winners out of that situation? >> it is very clear this time the tiktok ban has more of an

anti-china narrative to that. if you look at the reaction in the market, it has now moved to the senate in the u.s., we have not seen movement in potential beneficiaries. facebook, meta, even youtube, alphabet. the reason for that if you look at the actual revenues tiktok make out of the u.s., it is a smaller dollar terms. if you assume youtube and facebook picked all of that market share have half, it contributes to 2% revenue growth for facebook. 1% alphabet. it is still a very small revenue gainer for these tech names. there's a lot of water that still needs to flow under the bridge in this discussion. we've been through this the last year or two. let's see how quickly that

happens. do not front run the potential output. >> great to have you with us. speaking of tiktok, u.s. democratic and republican senators are resisting calls to fast-track the passage of a bill that would force tiktok's chinese owner to sell the app. the bill passed by the house this week demands bytedance divest in six weeks or shut down the platform. richard blumenthal says the deadline is too short. republican ted cruz wants a review that could tie it up for months. the senate intelligence committee chair told us he supports expediting the bill. >> they are attracting an enormous amount of personal data about americans. it knows what you like before you may know and that kind of personal data, the 107 million americans who are on for 90 minutes per day, if you do not think that is a security risk or you could be blackmailed at some

future time by agents of the chinese government, you do not understand the unfortunate real world we live in. >> the top u.s. diplomat to china has hit out against beijing's objections to a possible ban. ambassador nicholas byrne spoke with our chief north asia correspondent stephen engle. >> we have heard a number of complaints from the government in beijing this week about the american debate on tiktok. i find it supremely ironic. government officials here are using the x platform to criticize the united states. they do not give their own citizens the right to use x, instagram, facebook, google. it is ironic indeed the government is complaining about a process where they shut down access for 1.4 billion chinese to all of these platforms. every country has a duty and

responsibility to protect its national security. what the president has done over the last year and a half is to make it impossible for sensitive american technology, advanced semiconductors for ai purposes, to be sold to china. we know what will happen. the people's liberation army will take advantage of that technology to strengthen itself at the expense of the american military. we are not going to do that. we are not going to compromise national security and we are not going to negotiate. you can bet the government in beijing is taking similar measures. they have not allowed for most of the last 20 years the export of course sensitive national security applied chinese technology to the united states. every government and certainly our government has a right to take these decisive steps and that's what we are doing. i talked to a lot of businesses and we know about the foreign direct investment numbers, down to the lowest gain since 1993.

there is hesitation not only because the economy is weak but because of the myriad different national security and opacity of such policy, especially coming out of the national people's congress, we did not get a lot of clarity on policy. we do know, you were in the 60 minutes interview where you did talk about u.s. companies who have seen raids and have seen arrests of u.s. citizens. can you elaborate on the threat and the pall the has been cast over the investment business and americans doing business in china? >> this is a question central to the u.s.-china relationship. we have a 575 billion dollars two-way trade relationship. china is the third largest trade partner of the united states. there are thousands of companies doing business here. there's the problem. they are hearing conflicting signals. some senior chinese government officials say private sector investment is welcome.

but these companies are also hearing a different message, whether it is raids against american companies of last march and april, whether it is the opacity of the counterespionage law where espionage is defined in such a general way that normal activities in any other country of the world, the collection of data, could be construed as espionage. we see american firms backing away or at least being very cautious about investing money here. they are not sure where the lines are. the voices they are hearing from the government in china about national security, they are the strongest and loudest voices right now. >> that was the u.s. ambassador to china speaking with our chief north asia correspondent yuri steven mnuchin is targeting a purchase of tiktok from its chinese parent company a day after house lawmakers passed a bipartisan bill that would ban the social media app from the u.s.. the former u.s. treasury secretary told cnbc he has

spoken to potential co-investors about acquiring tiktok but declined to give specifics. >> coming up, analysis on japan's labor market with recruitment firm michael page. we discuss how ongoing wage negotiations could impact the appetite for employment later this hour. first, oil prices in focus after the international energy agency warns of a supply deficit throughout the year. that's next. and this is bloomberg. ♪

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it opposes activist proposals on dividends and share buybacks. we can get to the nps in just a moment but first start is off with, what exactly is these demands that of been put forward and why is this vote so important today? >> samsung c&t has been a classic case of the current discount. it is a holding company of the samsung group. it has a huge stake in several samsung companies. even though those listed companies saw share prices rise for the past several years, the shareholders at c&t have been frustrated because samsung c&t share prices have not been reflecting the surge in this key asset. that is why the activist shareholders came in asking the company to pay higher dividend and 500 billion won of share

buybacks so the company would be able to narrow the gap between its market capital and its asset value. and narrow the discount. but we are watching the shareholder vote for several reasons. the system most important since 2014 merger of samsung cmt, and shale that was opposed by minority shareholders and companies like elliott, since then the samsung j wiley family was able to control a huge majority of samsung c&t. today we are seeing the lee family and the samsung c&t board and management asking shareholders to accept smaller dividends because the company wants to save some money for future investment. this vote comes as south korea's government is pushing for cooperative reforms and asking companies to improve the shareholder returns. that is the reason why a lot of shareholders and investors are watching this case as a test to south korea's commitment in

cooperative reform. >> it is a little bit befuddling in terms of why there would be opposition to a proposal aiming to return more value. >> the argument from the samsung c&t board which has been asking shareholders to vote against the proposal for higher dividend is that they want to save money for future investment to secure a future growth engine. that was the argument that was debunked by some of the proxy advisory firms such as iss, which criticized samsung c&t 's argument saying it was thin, light on details, and giving the progress of growth without much detail given the future investment plan. what we need to watch is the role of the national pension service, which has the 7% stake

in samsung c&t and said last night it's going to support the board suggestion for a smaller payout. and no buyback. the decision to vote against a shareholder proposal is going to give more weight to the skeptics of south korea's commitment in cooperative reform push. nps is south korea's largest stockmarket investor with more than $700 billion in assets so its role is going to be important in how much push it is going to make to companies to pay higher dividends and improve shareholder returns was going to be watched. now here we have nps voting against a shareholder proposal supporting the company board decision despite the recommendation from proxy advisory firms to vote for the shareholder proposals. >> much more to come on daybreak australia. this is bloomberg. ♪

>> what we changed in this month's report following the decision by opec plus to extend cuts through the second quarter and then the announcement they would only gradually unwind them once the market conditions warrant, we decided to hold them in place until the group announces or confirms they will indeed unwind the cut. based on our own balances we do show some room for the group to increase production later in the year. >> that was the iea head of oil industry and market division on why they are now forecasting a supply deficit for global markets this year instead of the surplus that was previously expected. that's been one of the key dynamics we've seen in oil markets coming through. there is that focus on the

supply shortage at least in the shorter term. that's been one of the key factors behind that move we have seen in the move in crude. we saw wti futures surpassing the $80 level, psychological level we track. the short-term driver, supply cuts. . we've had the focus on opec-plus expanding those perhaps until the end of the year but longer-term as the perspective concerns around producers are not meeting those, output has risen. there are still question marks over demand from china. >> the china pace is massive not just for oil but across really so many of these metals and industrial commodities. the reaction when it comes to copper and iron ore continuing to languish into this friday's session as well. take a look at what we've been hearing from macquarie when it comes to their expectations of how the energy market is going to play out in the second half.

they are talking about commodities more generally entering what they call a fresh cyclical upswing. marcus garvey leading this team of mccrory group analysts saying they see a tighter picture when it comes to supply along with a more broad upturn in terms of growth across the global economy. whether or not that is poorly impacted by a softer recovery in china, it's interesting because they have lifted the majority of their commodity prices for 2024 from between 5% to 10%. brent at $83 per barrel in the fourth quarter. >> certainly anyone who said investing in iron ore names in australia will be grateful to hear that. you have that

>> take a look at one of the currencies in focus. fluctuations in the end, it's been on a wild ride. we heard from the japanese news service that the boj is poised to end its negative rates regime as early as next week. we saw the yen surrendering the advance as traders seem to lack conviction around what we could get from the boj. let's bring in garfield reynolds. perfect timing to have you back with us of course. to talk all things bank of japan. are we fatigued of boj expectations and speculation? what's going to drive the end? the boj were the fed? >> part of what's going on is that in what should not be a surprise really, the u.s. economy is proving again far more resilient, inflation is proving stickier. if the jump in treasury yields we saw overnight, the idea was

this year was supposed to bring a narrowing of the diversions between the fed and the boj -- divergence between the fed and the boj because the fed was going to cut rates quite rapidly and before the boj moved area the boj was going to slowly move toward ending negative rates and then consider whether it would go higher. instead we have a situation where the expectation for fed easing has been pushed back and pushed back. now we have people apprehensive that the fed might raise its dot plots and say instead of three rate cuts for this year as the base case, it might be two. that's kind of overwhelmed whatever the boj might do. if that apprehension does play out, if we did, say, a boj that is remain cautious, and the fed that is actually my only cut

twice, that's likely to be the driver for the yen. >> i'm taking a look on the markets live blog at the commentary coming through, the impact the boj decision is going to have. you have some saying it could have a subdued effect on the end. some saying it would be largely irrelevant for treasuries. james crombie saying it could be a negative for u.s. corporate bonds. where are we going to feel the fallout? how much has been priced in as well? >> one of the concerns is if you look at the two central banks and the track record the last few years, the bank of japan has been far more capable of shocking markets at the time of its decisions. then the fed has been. powell is very keen to telegraph moves going in. even if the fed does shift its dot plots, that's likely to be accompanied by powell saying

look, if things develop the way we are going, we could still end up doing more than is on the dot plots. that's their base case after all. last year the fed ended up veering from its base case by the end of the year. so you might get a hawkish. followed by a dovish powell. the bank of japan is facing a far more challenging set of circumstances. it needs to end these extraordinary things, negative rates and yield curve control. perhaps it carries out an immaculate exit from those things. but there is every chance even if the boj does not do anything on tuesday, the communication leave open the door to concerns it might allow yields to soar or it could even be yields do actually jump in the wake of a boj notice. because of what it says about

what it plans to do, how it plans to do, or because it does not say enough the tail risks are much more for the boj. perhaps this week does not bring anything. but there is the outside chance if something is going to shock markets in the coming week is more likely to be boj than the fed. the fed has control of where the yen is going, but the boj could upset everybody's apple card's. >> that was bloomberg's garfield reynolds. a lot of the direction or the focus for the boj next week is going to come down to the results of these wage negotiations. today we are going to be getting group results coming through. we have been reporting across the week some preliminary numbers and it does seem like it's going to be strong here. nomura has been crunching the numbers. the aggregate way tech is going to be 5.1%. higher than last year which was 3.8%.

which was already the largest gain we had seen in 30 years. 5.1% would be a significant jump. the base case is for around 3.6%. already employers have excepted 90% of way tech demands. big focus on those numbers, those results. they are due from rainbow, the largest union group. they are going to be reporting around 4 p.m. or just after this afternoon. in tokyo. let's get more perspective on japan's employment and hiring seen. joining us from tokyo is managing director at michael page japan. i'm interested because as i said, over the course of this week we have been reporting these company by company and some wage gains have been as high as 15%. does that square with what you are seeing in the market at the moment? >> it certainly does. positive sentiment coming through in the market as a result of those wage increases.

we have been in an environment for a long time where we have seen cost-of-living, and the average person working in a role sees their organization is actually agreeing to these wage increases, it sends a positive sentiment into the market. as people look out into that market as well they will be seeing other organizations doing this thing. a really positive thing for us in the market. >> what markets are seeing the best gains? which work is most in demand at the moment? >> there are a few sectors in demand. the technology sector, there's been quite a lot of investment over the last couple of years. the entire sector i would say is massively understaffed, areas like software development, network engineering. specialist areas like cybersecurity and ai and the like. the aging population here in

japan is putting strain on the health care sector. that's another sector where we are seeing high demand for people. that's where there is also required some upscaling in the market as well -- upskilling in the market as well. >> i suppose here you would say the vibe, right? sentiment, confidence. are you feeling there has been a significant change? >> i always like talking about the vibe. i would say the vibe would be one of cautious optimism. all these things happening at the moment seem to be balancing each other. there is no question we are definitely still involved in a war for talent in the japan market. the demand for skilled workers outstrips the supply. that i do not see changing no matter what decision comes from the boj.

because that has been that way for quite a long time. we are not at historic highs but we are not at historic lows. one of stability and cautious optimism would be the vibe. >> are you seeing much diversions within different sectors and -- divergence within different sectors and industries? >> when you say divergence -- >> between different sectors and industries when it comes to hiring and confidence. >> the confidence is coming from sectors where they are able to find the workers in the market. organizations taking an approach to ensuring they are the aged workers are having opportunities and making use of that part of the workforce, but also foreign workers in japan. that's another area where the government and organizations have worked hard to try and increase that.

i think there are about 2 million foreign workers in the economy in japan at the moment, basically doubled over the last 10 years. that's an area where you can see organizations taking approaches to bring those people on board. have a really positive impact. >> i'm sure a lot of our viewers are curious, when it comes to the financial sector, bank ers pay, the gap between japan and other asian countries, is that starting to narrow a little bit? >> i would certainly say that is the case. the financial services sector in japan is not at the heights it was back in the 80's. what we have generally seen over the last number of years was a lot of organizations off shoring people in that sector. it does not have the same luster as it has had in previous

iterations. i certainly would agree with that sentiment. >> great to have you with us. toby truscott at michael page japan. one of the other stories we are following, bloomberg intelligence says finance professionals in india are in line for higher salary hikes than those in hong kong and singapore. pay packets in india could rise 10% compared with 4% in the financial hubs. julius baer and dbs are among the company ramping up their headcount to tap into india's economic boom as china's growth slows. >> taking a look how markets are tracking so far, you are seeing the drop coming through from the asx 200. we can get to those big laggards in a moment but broadly we are setting up for quite a bit of weakness in the session. nikkei futures, the contract in singapore coming online. you are seeing that drop being reflected here. it does track the u.s. session as well. stronger-than-expected ppi

numbers coming out. we sought resilience in the labor market. that just tells us the fed can afford to take it's time when it comes to cutting rates. that is the prevailing sentiment. then you are adding into it those concerns you are seeing reflected in iron ore prices. that is why the materials sector is dropping so much in australia. let's take a look at the miners in particular. weakness across the board in the session, the likes of fortescue, rio, bhp as well all dropping. iron ore prices we just had that contract online in singapore the last 10 minutes or so. it is further weakness. we are down on that commodity for several days now in a row. it is very close at this point to the $100 a ton. compare that with where we were a few weeks ago around $110. it has been quite a steep drop. weaker for a third straight

session. concerns also playing into that around china's property sector. >> blackstone says real estate prices have bottomed and there is a great opportunity to buy assets at beaten-down prices. jonathan gray told us exclusively why investors need to move fast. >> as investors it is interesting. one of the things i worry about is that we wait too long, particularly in the sectors where there has been a bigger decline in value and people are more cautious. we had a meeting this week with our growth equity team. we were talking about the opportunities in that space, a lot of investors are cautious. commercial real estate, which i'm sure we will talk about. the sentiment has gotten quite negative. the fundamentals feel like they are bottoming. as investors sometimes one of the risks is you miss it by being overly cautious. now is a good time before rates come down.

>> move on what? do you have an allocated capital you want to try and get in as soon as you think? >> there is no specific, we have a budget to spend this much. it is just more directional. in fixed income, the spreads in a lot of asset classes are still wide by historic standards, base rates are high. that is a good area. being a capital solution provider today, helping people get liquidity makes sense. people who need to deleverage, working with banks and getting them capital relief, and then in sectors where we have high conviction in digital infrastructure, green energy, life sciences, leaning in. it is broad-based and specifically on real estate definitely in europe, the sentiment is so negative, try to move faster. >> that was the blackstone president and coo jonathan graves speaking to bloomberg's francine lacqua.

of course as we have been discussing, the focus today for japan is going to be on the results of the union wage negotiations. the labor union negotiations around salary gains in japan. the indication is we are going to see strong numbers based on the individual companies, we had reporting across the course of this week. now we are hearing from the finance minister suzuki who has been speaking in tokyo. so far he is saying they have seen strong pay hike move in the wage talks as something they are closely tracking. the boj is very closely tracking it because it's going to play very closely into their decision of whether to exit negative policy settings next week. suzuki again saying he thinks this year's wage hikes are likely to outpace last year's. around 3.8% last year. the government of course going to continue efforts to sustain wage momentum. there has been criticism and pressure on the government to do more to help with cost-of-living pressures. but suzuki saying he's going to

refrain from commenting on the boj policy meeting next week. again reiterating the call that japan is not experiencing deflation. we will have more ahead. this is bloomberg. ♪ get help reaching your goals with j.p. morgan wealth plan, a digital money coach in the chase mobile® app. use it to set and track your goals, big and small... and see how changes you make today... could help put them within reach. from your first big move to retiring poolside - and the other goals along the way. wealth plan can help get you there. ♪ j.p. morgan wealth management.

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says channels of communication between the country's militaries are starting to open. let's get more from our exclusive interview as the ambassador ways in on u.s. alliances in the asia-pacific and beijing's increased military spending. >> the two presidents, biden and xi, agreed we would begin again serious high-level communication between our militaries. >> is beginning to happen and it is critical because our militaries are operating in close proximity to each other. chairman -- our new chairman of the joint chiefs, chairman brown, has had a discussion with his chinese counterpart. we hope secretary austen will be able to talk to his counterpart in the coming weeks or months. then we hope there will be conversations on a tactical level between our militaries. this is common sense because you want to drive down the possibility of any kind of

accident or misunderstanding. between our air forces are our navies. >> china increase the military budget by 7.2%. the biggest increase in five years. are you concerned by that? how should we read that? >> we are concerned that the pla is not transparent about how the money is being spent. the issue of china's nuclear weapons build up they are not transparent. that's the problem. the u.s. has been a principal military actor in the indo pacific since the close of the second world war. what we've been doing an president biden has had a lot of success, is to build up our alliances with japan, the republic of korea, the philippines, thailand, australia. we created aukus and we have the quad with india designed to protect the democratic countries in this region. and protect international law in places like the taiwan strait and the south china sea.

>> we are hearing the biden administration is exerting pressure on allies like the netherlands, japan germany, and south korea, to further the curbs of other parties into china. how does that not expand that pressure and actually bifurcate the relationship further? >> we have been clear we had here to a -- adhere to a small yard, high fence strategy. these are common sense actions by the united states. any american government would have to take this action given the competition we have underway. in the military sphere, between the people's liberation army and the united states. i don't think there's an american alive who would say we should sell advanced technology to the pla. the president's acting for defense here and we are not

going to compromise on this. these are the actions the government has to take to protect in the 21st century when technology is at the heart of international politics. some of it has to be regulated. >> that was the u.s. ambassador to china. nicholas burns with our chief north asia correspondent stephen engle. let's get to other geopolitical stories we are tracking now. the biden administration has sanctioned two israeli settlements in the west bank and called on israel to end violence against palestinians there. it's the second time since february the administration has imposed sanctions on israeli settlers. u.s. senate majority leader chuck schumer has broken with official policy calling for israel to hold elections. the leader of yemen's who the rebels says the group will expand -- houthi rebels says the group will expand attacks on israeli ships.

saying it will not stop until the war in gaza ends. a ship broker said see traffic using the cape of good hope route is up 85% since december due to the houthi attacks in the red sea. you can see past interviews and our interactive tv function tv . you can also dive into any of the securities functions we talk about plus become part of the conversation by sending us instant messages during our shows. this is for bloomberg subscribers only area check it out at tv . ♪

>> japanese indie videogame studio pocket pair has found success with its game palworld after partnering with xbox. we talked about the philosophy behind the hit which fans describe as pokemon i with guns. >> pocket pair has always loved creating games that are fun for everyone to play together. we think cute but aggressive is one of the examples of fun games for cute characters armed with guns go through different situations. i looked at rimworld as reference for my ideas. >> your game is on xbox.

how did you create this relationship with microsoft? will we see palworld on ps5? >> our partnership started when they approached us to add our game to game pass. it was a natural progression of our relationship when we were asked if we would be interested adding palworld, too. ps5 would be another option for it. a final discussion -- >> are you going to be hiring people or m&a activity? what's next? >> we plan to expand our team in the future, but we are and will remain an indie game studio. big-budget aaa games are not for us. instead of large-scale investment we want to gradually scale up taking stock of the situation and making multiple fun games like palworld that

will become world-class names. >> the pocket pair ceo speaking to bloomberg. taking a look at how we are tracking, not particularly well when it comes to sentiment in australia. we are seeing downside of about 1.2%. that is about a three or four week low for the aussie markets and really we are seeing a broad-based selloff today, but the biggest laggard remaining materials and mining as we continue to see downside when it comes to iron ore down almost 10% this week. the worst week for iron ore since may. it's also on track for a six straight day of declines. we are also watching japanese assets as we get into the delivery of the key wages report this afternoon. what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh

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haidi: this is daybreak: asia. we are counting down to asia's major market opens. annabelle: 4:15 p.m. in tokyo is when we get the results of the union group negotiations around japanese salaries and what that means finally for the boj meeting next week. haidi: individually we all care about pay increases but i wonder, has there ever been so scrutiny over a collective set of data on wage increases? but yes, that will have deep ramifications for signaling what we expect out of the bank of japan. the other side of the equation is the fed. arguably that has potentially more impact. annabelle: that's right. perhaps the bigger driver could be what jay powell will be doing next week, what signaling we get from that press conference pretty but this is what we are seeing for japanese markets as

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