there are a few different stories but one main one we will focus on today is the bank of japan and if we will see the first rate hikes 2007 and a decision will be at 11:00 a.m. tokyo time. the longer it extends depends on the difference in policy changes. haidi: historically it has been really interesting looking at the timing. the later the decision comes, the more exciting it could be. we are watching the rba on rba decision day. we are not expecting any change or easing from them yet but let's get to the markets on what could be a momentous day for japanese markets. annabelle: it is the focus on what the boj does later in terms of the key rate.

there are a lot of different things and the messaging we get in the presser later this afternoon is it a one and done scenario or changing of the back and setting a new course for the direction of rates? the strength of the wage negotiation has been heralded by the government and economists and caught a lot of people by surprise and the question is if it trickles down to the smaller enterprises but today this is what we see the japanese yen holding steady and we expect it to stay like that ahead of the boj decision but equities a notch under pressure so far, they were benefiting from a weaker yen and we will see if that trend continues but lots of different areas and parts of the market that could benefit from the policy shift, banks, brokerages, small-cap stocks

some of the things we are tracking here. korea is coming online. the focus a bit of weakness coming through but we will be tracking tech stocks because we had tech news overnight, tesla saying they will raise the prices of some vehicles and news around apple integrating possibly some alphabet offerings into their iphone and the new nvidia chip that has been announced by this ceo. certainly saw big gains in big tech haidi overnight. haidi: no big gains or big losses when it comes to trading in the office -- in the equity session in australia and we are one hour into the session and energy and utilities, oil holding the gains and opec

supply cuts in focus so upside but we see a lot of caution exercised ahead of the rba and boj and this is the picture when it comes to australian bonds. we continue to watch to see if the tone changes later today and when it comes to the aussie dollar we are holding steady alongside the yen the biggest trigger could be how dovish the fed sounds later this week and the rba decision is not expected to fundamentally change direction of how we see the aussie trading given the continued pressure we see from prices and sustained weakness in the chinese economy as well as i mention brent crude trading just under $87 a barrel at the moment and look at treasuries, poised to move regardless of what the

fed does but potentially at risk in the wednesday meeting but the two year yield in particular is at a 2024 high and goldman sachs on the five year yield to the highest level so far this year and goldman is forecasting fewer fed rate cuts this year's that we see market implied odds of the june cut being repriced annabelle. annabelle: it is the biggest central thank focus but let's get to the boj decision coming up and stephen engle is outside the central bank in tokyo. so much anticipation but also so much that is being reported already in local media so is it any surprise perhaps that it would come today? >> the only surprise will potentially come in the press

conference later today when the governor meets the press and gives a rationale for whatever decisions they make which has been widely reported by media here sort of a foregone conclusion what we also reported yesterday in addition to this morning we got the report saying in addition to exiting the negative interest rate policy for the first time in 17 years they essentially will scrap the yield curve control as well as etf purchases and purchases of jay reit's which they have not done since 2022 and etf purchase program has been in place since 2000 10 so there is a significant change to the mechanisms for monetary policy that will usher in significant change here and a boost of confidence as well and clearly the governor has signaled this

was going to likely, at some point when we were last year here at the end of january we were thinking it would perhaps be april but again the wage negotiations really culminated with the results on friday which were much higher than expect that. essentially placed into the governor's narrative that he wanted to see a sustainable cycle of inflation backed by wage gains so clearly if the reporting of the nikkei and others is true at midday today we will get the decision to exit the negative interest rate policy with a likely hike in the short-term policy benchmark rate by about .1% to arrange of 0.1% and that again will be the first hike in 17 years so yes a fairly momentous day here in japan.

annabelle: -- haidi: let's bring in the senior market analyst at capital.com. do you think this part might be tenuous? >> i think it is particularly tenuous and it seems to me it could potentially be a policy mistake if the boj tightens policy from here but it is only fairly marginal, 10 basis points is not huge. it will be a timely change to yield curve control. we are not really seeing upward pressure on yields we saw last year in global market so it might be a more orderly transition to do it now but to settle on the evidence as we have received in the outlet we

saw a stable sustainable and virtuous cycle taking off in japanese economy that means inflation is -2% and this says to me there is either a policy mistake or perhaps incorrect economics on the basis or perhaps the boj wanted to hike rates to indicate they got the job done so at the moment we are lined up for a fairly significant policy change today but my sense is it is premature and could run contrary to japan's economic outcomes in the long run. haidi: you have been partaking in this rally in japan i do you think of the move removing the currency aspect will make meaningful change in weather we have seen the peak of the rally? >> most certainly. to peel it back we were talking a few months ago and the comment i made was the soft landing

trade and despite the fact it seemed unlikely at times to get the level of disinflation globally we have seen that is what has occurred and as a result the nikkei has relied and now we see a situation where things are being more precarious and the depreciation in the yen is generated from international dynamics outside of japan of course the u.s. and soft landing resilient economic economy we are having their and again seems to be a slow process of disinflation but now we go back to domestic factors in japan with tighter policy that could restrict financial conditions and a level of complacency going into the meeting because if you look at rates markets it's a 50-50 split they will hike by 10 basis points. even though we have had this moving markets in japan the last three weeks they are seeing weakness coming through and the

u.s. dollar story and is not fully discounting again rates market so on the basis of that like i said i have been skeptical to start from the rally and wrong about that and now it looks like it is a potential inflection point because of the soft landing trade and because it is not fully priced into the market yet with a firmer yen will always lead to a weaker nikkei and it suggests that top is in the short term for japanese equities. annabelle: what about equities in the u.s.? you said you thought a soft landing was unlikely and it is now coming to fruition and we have changing expectations and around rate hikes and fewer rate cut priced positive for 2024 but then you have nvidia for instance announcing a new processor or chip overnight that could spell gains in tech. >> absolutely and again

reflecting on what we started i suppose we are getting to the end of the corner anyways is there are two things that drove the market higher and presented this big contradiction in the equity rally is that markets were simultaneously pricing in resilient growth and company earnings but at the same time pricing fairly significant rate cuts which indicate a much weaker economic environment in the year ahead or so and it would seem we are getting that kind of economic growth but markets are pricing out the rate cuts and equities have been surprisingly resilient despite that. i think the core concern going into the fed is policymakers and pop -- and market participants have underestimated where the neutral rate is for policy. and we are starting to see that reflected in rates markets across the world as well as a lift in bond yields to suggest

effectively that policy rates where they are now are not sufficiently restrictive and will therefore be some upside risk to rates going forward in order to bring inflation back to target knowing over the last six months or so there is some evidence that suggests it is around 3% so you add to the fact we have this dynamic that equities have rally despite the pricing out of rate cuts and really it has been driven by ai and the news and it means valuations are lofty intent at the moment and we have seen a pullback in the last few days and that could persist further especially of policymakers and market participants reassess when trades happened today. annabelle: in the last few minutes we have got an update on chinese developed boiler --

developer sign ocean who is seeing a for your loss ranging from 20 billion to 23 billion. how much further do we need to see property sector woes and how much is priced in on how does it play into your outlook for mainland equities? >> this is one of those timeframe questions because if you look short-term there is a fairly strong opportunity for traders in chinese equities in particular on the basis of depressed valuations and technical factors so a reversal of momentum and the selloff we saw in february which led the market to lows was driven by technical factors and a simmering panic around financial stability and financial outflows which to the president of policymakers they were able to curb successfully and take risk

out of market so we have seen a rally in chinese stocks but technical is fairly valuable and i do not think what markets get in china is that china remains focused on small term objectives things like decoupling and organizing economy and reestablishing trade relationships and what have you and they cannot be achieved if we start to see priming of the economy through easing monetary policy or fiscal policy which means at least one of those long-term objectives has to be achieved or abandoned before we see policy that will lead to a sustainable lift and regulatory risk removal in the chinese market so short-term technical evaluation is favorably -- is favorable. [indiscernible] annabelle: 15 minutes into trade

so far for tokyo but the focus this morning unlike groups that could stand to gain by a boj hike is the expectation by traders and economists a lot we are speaking to but these names could be among the beneficiaries if we do as i said see the higher rate today or an exit away from negative rates but let's change on because these are the tech names and we saw the magnificent seven around 2% and index we have at bloomberg overnight so twice the gains we saw for the nasdaq and we saw nvidia unveil a new processor so it is the successor to an earlier one that already sparked intrigue and the sales, a lot of focus on that name but today in the session so far big tech a little weaker haidi.

haidi: coming up, jpmorgan chase securities. but first, more on evergrande accused of falsely inflating revenue in the years leading up to their failure. details next. this is bloomberg. ♪

>> this is hopper. hopper changed the world. this is blackrock -- this is blackwell. annabelle: the nvidia ceo showing off the firm's new ships. -- chips. the blackwell is the successor to the hopper. let's bring in our analyst who believes the new ships will dry -- chips will draw more business. there is so much competition in the space. you have the h 100 but also the likes of amd, alphabet, amazon,

intel. how much further is this one ahead of the pack? >> significantly widens an already wide performance gap nvidia has versus their peers. they are trying to divert [indiscernible] and this time the company comes up with one that is two and a half times better. higher memory. it results in significant performance a lead versus what is available today in the market. haidi: how does the technology help transition more simple ai tasks into what we see as the next generation of the tech? >> essentially it allows you to

get the same kind of performance or workload with significantly less power, which is a bottleneck right now preventing large metals to get larger and larger and become more efficient. haidi: let's get the latest when it comes to china's property crisis. evergrande is accused of falsely inflating revenue by more than $78 billion in the two years leading up to this ultimate failure. let's bring in john lou in beijing. >> it is a shockingly large number, to give you some context, evergrande is accused

of inflating the 2019 revenue by 214 billion u.n.. that accounted for half the revenue in 2019 and led to an exaggeration of profit by 63%. in 2020 the company is excused of exaggerating revenue by almost 80% of the revenue that year and exaggerated the profit that year by 87% so it gives you a sense of how large the alleged fraud was. csrc puts the blame on the founder, saying he directed those around him to do this and recognize sales prematurely. there is no criminal charge against him yet but that might be the next thing. haidi: as you say it is that

focus when we see any criminal charges but i am curious given the liquidation process how does such an inflation of earnings impact that? >> as part of the allegations announced overnight the csrc says the company sold bonds using the inflated revenue numbers as part of the marketing for the assets so obviously that throws into question the legal status of the bonds. i am not a lawyer, i think these will go through a lot of detailed discussions between lawyers and courts. i think if anything it is clear it makes this much more complicated for the creditors. haidi: we are three years into the property downturn and still seeing negative headlines.

will there be one developer that is the backbreaking element? we see progress about reforms of policy trying to steer out of this. >> i think the fundamental issue is people not buying homes. a stockpile of inventory that developers, they have found it difficult to sell their properties and if they do not have money coming in they will find it difficult to pay off their debt coming due and that will continue causing repercussions in the marketplace and probably a too depressing current prices which will likely discourage additional buying of homes so it is a cycle that as of now it is hard to see a way out of it easily. haidi: john they are in beijing

and you can get a roundup of the stories you need to know in daybreak. bloomberg's the drivers find it -- subscribers find it on dayb . you can get details on our bloomberg anywhere app. get news on the assets and industries you care about. this is bloomberg. ♪ chances of a plane crash -- 1 in 11 million.

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>> very big day in japan and we are tracking the bank stocks because they are mostly moving to the upside. the headline is what we discussed this weekend earlier, the bank of japan looks set to

raise interest rates for the first time since 2007 so financials bank stocks like that environment and we are seeing gains today. brokerages another group of stocks that could benefit from more volatility in market so today we see them fairly mixed in the session, so much focus on the boj meeting today and what we get after in the presser from the governor but you can turn to your bloomberg for more on that on tliv for commentary and analysis

>> range bound trading characterizing the first hour of trade asia markets on rba decision day we are expected the

boj hike later today potentially also letting go of the etf buying program and this could be a watershed moment for the japanese yen and the nikkei 225 a little softer by half a percent and there are concerns with the additional help of the weaker yen the record selling rally for the nikkei 225 and topics could potentially be at risk. kospi up by 1% and not much action trading in australia ahead of the rba decision and leadership in the market when it comes to oil related place some refiners and energy names gaining by about 1% on the back of elevated crude prices on kiwi stocks looking flat but the bay news is boj set to increase interest rates for the first time since 2007 when the meeting concludes in a few hours and potentially curve control program let's head back to steve

in tokyo our next guest. >> it might be cliché, but it is a momentous day outside the boj as according to reports we will likely see an exit from the negative interest rate policy and potentially other moves including scrapping the yield curve control and essentially scrapping the mechanisms of future etf purchases. to dig into this more let's bring in our next guest from j.p. morgan securities. you also worked at the boj for 15 years on the governor was your professor in college. so how momentous is this and how should investors position themselves? >> yes, i think that especially after the strong outcome that

was announced friday, [indiscernible] stock purchase etf is increasing and for removing negative rates there is an expectation from the market that bank of japan will return to the previous system where they set that policy rate interest rate for excess reserves 0.1 so that is to control the short-term rate and for moving yc see the amount of purchase amount of gdp by boj would be in focus. >> what will it be? it will be the benchmark from here on out. >> i would say ¥5 trillion. this is slightly below the ¥6

trillion. 5 trillion looks a little bit tightening policy but this is in line with reduced option about so from j.p. morgan view the 5 trillion yen would be the threshold to show boj hawkishness or dovishness. >> so you felt it was time to scrap the yc see? >> yes and 10 year is hovering around 0.7% so even removing it at this point will not bring big changes in the yield curve of japan gbp and if i could make a comment on etf bank of japan will likely to announce the scope of the new purchase of etf, since 2021 actually they originally stopped purchase of

etf so the market impacts should be minimal and i believe bank of japan will not fit that market, they will sell their holdings and stop new purchase and announce the decision of what they will do with their holdings, 70 trillion etf holding. >> so that is significant, if they say they will not be selling, they will hold it. it should give good indication to support for the market >>. of course. bank of japan, they will have to work with other policymakers and the market estimate is that they pass their holding to outsider management at some point in the future so it is too early but they can say they make use of etf dividends from holding etf

to interest payment for excess reserves in new normalized [indiscernible] >> what kind of guidance are you giving investors? how should they position their portfolios given the return to normalization? >> first we want to emphasize this policy normalization is not just tightening policy, it is a process of good structure changes in economy so even though there is a short-term adjustment, especially from the stopping of etf purchase that would lead to higher volatility and could lead to a lower index, it shows some adjustment cannot be ruled out but having said so the more important thing here is macro data supports this changes. first quarter we saw strong investment and january good wage

data so this event should be seen as a positive factor for japan by index. >> in your report yesterday you highlighted the fact that between march 11 and 15 you met with investors in the home-court as does hong kong and singapore and some were considering taking profits from gains in equity markets. will that be a short-term phenomenon or do they see some things you just highlighted, that this is a long term change and there will still be gains in equity market? >> a few investors in asia [indiscernible] they face risk of -- not only in japan [inaudible] so of course going forward there

will be a time when investors will face that similar situations but we have to remember that in japan, they have specific structure positive changes now underway so i would like to say a structure is a very reason we see constructively on japan and now we are now calling for it is time to look at especially consumption related stocks set specific goals because of the strong wage it will likely be followed by other increases and that will be followed by increase of private consumption so that should benefit that domestic sector and the earnings is good but stop performance was very poor so there is a gap between stock performance and fundamentals. >> so you believe this is a

virtuous cycle of inflation back by wage gains that will have lasting effects as long as they do not withdraw stimulus to fast? what do you hope to hear from the governor later today? he probably will not telegraph any future hikes. >> no. [laughter] he will make very dovish remarks at briefing. and even after making some changes in policies it is a way looking back whenever they make the policy changes they will cover with dovish limits and they make sure of these that evolution of economic changes, especially private consumption is a key risk here. we have not seen that strong private consumption yet so i think for the bank of japan to

ensure the recovery in consumptions that they cannot be [indiscernible] >> the yen has not moved much because of the consideration that a lot of funds in the u.s. will not necessarily flood back in because it is not a huge hike by the boj, still a gap on yields but do you see the yen still appreciating modestly in the next year? >> so the market has priced in moving negative rates wall street and we see $149-yen right now so policy rate change is very slow so that should bring a relatively limited impact on currency and then the market already priced into the market so i think that any policy changes announcement today will not bring a big changes on the

currency market. >> thank you so much for your time and we will be watching everything very closely today, sometime around midday we will get the raid's decision, it is pretty much big in that it will be a hike into the negative interest rate policy here in japan the first time in 17 date just 17 years and we will be right here freezing outside the boj. haidi: you will be warmed up by the excitement if we finally see a move by the boj. we will keep bringing you the rate decision as it happens. instant analysis with former officials at the central bank will be coming up. this is bloomberg. ♪

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>> take a look how assets in australia are trading on rba decision day, not much movement when it comes to the broader equity sessions flat at the moment as we expect the rba to keep cash rate for a third consecutive meeting that 12 year high being held despite weakness and we see some leaders, bhp is one when it comes to trading in

australia and oil majors in energy related stocks higher and we are watching some miners resuming the retreat of filed civil -- a volatile start to the week. futures falling toward the $103 level in trading in singapore and the aussie dollar and change 6550 two and a broad view would it comes to the aussie and the yen and a big move will have to wait until we get signaling from the fed later this week but the rba expected to stand pat today as the economy shows signs of slowing when it comes to trends in the market and let's bring in our economics reporter. what are your expectations? >> rba is expected to stand pat, 4.35%, a 12 year high. the big question is if they keep

the tightening bias. last statement they added a clause that said further interest rates cannot be [indiscernible] and it would be easy to drop that clause and rba is -- rba is not known to make changes from meeting to meeting the data has been weeks since the last meeting so they want to signal to the market they are ready to raise interest rates when other central banks have signaled they are at the end of the timing section -- timing cycle so i think rba is the only central bank that is still has that hawkish bias intact. annabelle: how much of that bias is down to what we see in the property sector there? >> that is a big consideration so we have seen house prices go up over 2023 with raised

interest rates so the housing market is basically very heavily driven by the huge population growth we have seen in recent months but also we have a heavy supply shortfall and they have come together to drive house prices to record highs so the reserve bank will be very mindful of not further feeling that but also want to make sure investment happens when they cut rates so it is a big policy market there. >> geopolitically we have the foreign minister landing in australia. is there relaxation when it comes to a trade relationship and how that impacts the economy? >> yes so even when relations are not very good we still were

sending a lot to china. high budget position is strong. government has signaled we have another second consecutive [indiscernible] but it hurts our economy and country a lot more if there are more chinese tourists and students because they spend more in the economy so and we have seen that number is still not fully back to pre-covid levels so if relationships improve and we start seeing more international students and tourists in our country it would definitely help the economy. annabelle: looking at how markets are so far on the session, the focus is on japan and the can down to the boj rate decision and what could be the

first hike since 2007 but this is the outlook for japanese equities in the session today, looking fairly mixed but tilted to the downside. stocks of rallied in -- on part of that has been predicated on dovish boj policies of questions of if we will see the rally extending if we see a hike today. in the lead is the energy space. overnight the story was around oil as it holds on its gains and that is the focus coming down to the supply dynamics in the market here so that is what we see for japanese equities because you said to heading through the morning session. we will have more ahead. this is bloomberg. ♪

>> energy stocks showing leadership across the sector. competition on such a major day of central-bank decisions. brent crude holding under the $87 level, holding the gain as we see the continued drone attacks in ukraine. to supply cuts in focus.

the highest close since late october on friday. 600,000 barrels of russia's capacity being knocked out by the strikes. jpmorgan chase saying that number is about 900,000 barrels and the impact on geopolitical developments very much at play when it comes to trading in crude markets and natural gas upside 8/10 of 1%. u.s. gas futures rose. forecast coming through indicating more potential for a late season bump in demand and gas as a heating fuel. stocks higher than the five-year average. energy names trading a little higher in this session as well. and the latest when it comes to geopolitical headlines, a

commodity trader talking about ukrainian drone strikes at knocking out 600,000 barrels of russia oil with hitting multiple plants and russia sending diesel and gas prices higher. president biden warns israel's prime minister that a major ground operation in roscoe would be a mistake. he spoke with him by phone for the first time since february where they agreed to talk in washington about israel's plans. the white house says the u.s. expects israel to hold off any ground invasion of rafah until the talks happen later this week. >> in hong kong the new security bill is moving closer to being passed by the legislative council as the government seeks to fast-track laws giving authorities wide tools to

minimize deficit -- minimize dissent. let's bring in rebecca choong wilkins. this is being called one of the most significant pieces of criminal law legislation since the 1997 hanover. what do we expect today? >> it has been fast tracked and that has been the defining feature of the process in which this has happened. if we see it fully past today it will have happened in less than 50 days since first introduced. today we expect a second reading. it will kick off this morning at 9:00 today and then it will move into the third reading and then if all goes as expected the bill will pass. it has been very fast. today is another opportunity for lawmakers in the legislative

council to give feedback and discuss some elements of the bill. but i cannot stress how quickly this has happened. typically this process would take months, sometimes a bill with this complexity would take years before going through all those procedures. >> what has been the response from the business community? >> i think to some extent some elements of article 23 have been a lived reality given the similarities in some parts between 23 and the beijing national security law already being passed and businesses had already gotten used to. i think there is an element of frustration among some members of business community that hong kong is still talking about national security. that is drawing scrutiny and some criticism from other governments and other parts of

the world because of the geopolitics of the dynamic. if you think back to the american chamber of commerce survey, two thirds of respondents said they want the u.s. and hong kong government to both move on and stop talking about national security. that was the top reason they said would help improve ties between the u.s. and hong kong. >> do we know why there is the rush? >> we do not know explicitly but i think there are two dynamics we can point to. first, it appears various delegates at the national people's congress appeared to rush home to come back and try to speed this through so it looks like there was some direct of perhaps from beijing to get it done.

and the other element is the business community. i think there is a desire for hong kong to move on and get on with the business of being an international financial center. whether they like it or not. article 23 has drawn scrutiny and criticism over hong kong and not necessarily put it in the best light so i think there is a desire to get the ball rolling with other economic priorities. >> we will track them beating as a kicks off in a couple of minutes but that is it from daybreak asia and our markets coverage also continues.

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david: happy tuesday, welcome to the show. you are watching the china show. i'm david ingles. yvonne: caution in the markets as investors await the interest rate decisions in japan and

australia.