♪ >> welcome to daybreak australia. we are counting down to asia's market opens. >> and dime paul allen. an optimistic view of the u.s. jobs report, attention turning

to the inflation rate. haidi: the yen is the worst-performing g10 currency. paul: janet yellen getting ready to meet that pboc governor. haidi: how we are setting up for the brand-new trading week, we will see a rise across major markets in one hour or so. asian stocks set to see some gains. bonded traders seeing the test shift to the cpi rate. half a percent higher. one hour away from the start of the cash session and qe stocks are down. we will see some muted gains,

another day of gains. yen weakness benefiting export and trade related names. of course we are coming back from holidays, march cpi and ppi do this week which we know has been a sustained weakness trend. paul: let's look at u.s. futures, better at the moment by under a 10th of 1%. positive close on u.s. markets last week despite strong job numbers. our question is when will the u.s. two-year hit 5%.

crude oil coming off the boil. off by 1%, but we have a conversation about whether $100 a barrel is realistic. haidi: u.s. treasury secretary janet yellen says relations between washington and beijing are more stable. she will meet with the pboc governor before wrapping up her china visit on sunday. she sat down with the chinese premier. >> edged the world's two largest economies, we have a duty to responsibly manage our complex relationship into show leadership in addressing risking google channeling jesus. >> under the strategic guidance of the two presidents, china and

u.s. relationship is stabilizing and you are the first cabinet member to visit china and your visit has drawn a lot of attention in the society. haidi: let's bring in bloomberg's chris from beijing. on the one hand, tough berating from janet yellen on industrial overcapacity, but lighthearted and positive moments also. chris: if i have to sum this up i would say janet yellen started this out hitting the chinese over the head repeatedly on the industrial overcapacity issue, then she went in to a whole series of talks with the vice premier and premier league and there was no serious negative

blowback from the chinese side, which was surprising. they seem to like janet yellen. she is viewed as a scholar to them and seems to be warmly received everywhere she goes, even in the private meetings. official said there were no points where arguments got heated. we sometimes see that and we had commentary from the state agency that had a more caustically worded tone. that's a side channel, but directly with janet yellen they used kid gloves and continued the ceremonial parts of the visit. janet yellen was given a special

tour of the forbidden city in beijing, which is very rare, especial thing given to some vips that are visiting. so they're trying to keep the tone very positive despite the u.s. criticism. paul: you talk away janet yellen has been received in china. she has spent a lot of time building ties, but could this be her last visit? chris: it would be surprising if she came back again as treasury secretary. this term for the biden administration will end in january and she is unlikely to carry on as secretary, but that does not mean talks will stop. she will continue to talk to her counterparts. quite likely we will see a visit to the u.s. perhaps later this

year moshe is still secretary. staff level talks have become regular and intensive, those will continue. it is not like things are going to end after this trip. in saturday's meetings, they agreed to set in motion new talks focused on overcapacity, so motion is still moving forward on these issues. haidi: bloomberg's christopher miller there on janet yellen's trip to china. let's bring in lucy a. this is a relationship we are watching closely. what do you make of the fine balance that janet yellen has struck on this trip and is that the tone that will persist into november?

licia: basically the balance reflects the trade. inflation is sticky and we hear that pressures from china are everything but welcome. so janet yellen complaining, but i don't think she minds in the short run to have deflationary pressures plummeting. at the same time global competitiveness is at risk. that is a medium-term problem. tone reflects the contradiction. it is fine in the short run. haidi: sort of related, how much

stability will there be if there is a change in government? do you think u.s. china, the trajectory will stay the same? alicia: more volatility if donald trump wins the elections. it is clear that the medium-term issues related to china's increase in overcapacity, it's all about importing capacity. as i mentioned, much bigger problem, so the way a different administration might be more

hawkish and abrupt, it means there will be more volatility because of the response. china will try to retaliate and direction will remain the same. europe is all in. we had initial investigations, so it's not only the u.s.. paul: let's talk about the domestic picture. cpi's later, rising oil price, but we have a chart illustrating how important the fixing will be for the low end. what message are policymakers looking to send? >> strong data point in the

u.s.. employment data. service ism, that's bad news and we know how it goes. they like to play with the fix, but on the other hand, this is what happened, a weak yuan helps china. it would be a yields to have a weak dollar that could weekend without being noticed against other partners, but the u.s. is not giving them that space, so the yen is strong while the push is not there. i don't think the yuan would

ever be strong again or have overcapacity. paul: in terms of overcapacity, we will have trade numbers later on this week. contracting at march. when do you see demand recovering? >> data was good, simply because there was a favorable base effects. now we have unfavorable in march. so we now the u.s. economy is growing fast. 2.8. european economy better than expected, india is growing fast. countries are worried about

dependence on china, so they're trying to diversify import. paul: chief economist, we will cover other issues in a moment, but investment into australia tumbled down to the second-most level in 18 years. direct investment slid to $898 million, a seven percent decline. alvin investment -- outbound investment jumped. haidi: israel pulls troops out of the southern gaza area as prime minister benjamin

netanyahu says the country is one step away from victory in its war. ai boom drove a 400% surge in japanese stock. we will hear from the ceo of towa shortly. this is bloomberg. ♪

>> let's look at the week ahead, big for central banks. reserve bank of new zealand will keep rates unchanged. singapore looks poised to hold.

in europe the hold could be the final one before it starts using and aside from central banks we will get the latest inflation reading. marge print could reveal modest slowdown. wall street banks are reporting earnings. bloomberg expecting modest results from jp morgan and citigroup. let's bring back chief aipac economist alicia. i believe alicia has taken a leave briefly. it is interesting looking back on those decisions, there's a whole heap of them. new zealand is in a recession, not doing anything. india with declining inflation not doing anything. you get the sense that they're

waiting for the central bank. haidi: rbnz was at the forefront of the cycle, so there is extra attention being paid. idiosyncrasies with the australian economy extends to new zealand. different picture when you look at the other economies, japan and china. not expecting massive policy shift as we get improvement in indicators, credit numbers and producer price inflation this week. on japan the expectation is they will take longer to get to the point where there is momentum. paul: currency is a big part of the story.

you get the sense maybe japan has bought breathing room. not a great deal of movement in the yen, around 150. interesting week to see if we get intervention. we've got alicia her era, chief aipac economist. we were discussing central-bank action and everyone is sitting on their hands. to what degree do domestic issues take a backseat? alicia: not enough to cut before the fed is the situation in and that is good news because if anyone were desperate, currencies would be hit like never before.

nobody wants to be the name to hammer on. closest is the yen because a hike would not be enough if they had not announced a path to reduce the balance sheet. janet yellen said 7 trillion a month. lending conditions will not change. the market did not buy it and there's not much pressure on the yen because intervention will happen. in between the central bank in those trades. other than that, u.s. will have higher inflation, so everyone is waiting for a good reason. currency depreciation.

haidi: in a lot of economy is where it has been wait and see, progress toward bringing down inflation has been glacial when i a lot of other indicators including labor market have been robust. are there underlying structural abnormalities that we are not seeing that would materialize in the coming months? alicia: inflation, yes, we understand there are structural shift that central banks cannot take into account now, but we know they are there. most important is the energy transition. we need to move toward green tech, costly in terms of a sickly transition costs. so that will take years and is

inflationary. we have many things happening. we do not understand the labor market. we had europe close to a recession last year and no unemployment to be found. things are clearly different. central banks cannot afford to change targets. they need to wait to show their strength, they can bring inflation down, that was their mandate. they do that, people will flirt with other numbers. maybe 3% in countries where they depend on the energy transition, this could be europe. basically it's not time to do that before they hit the 2% target. haidi: always great to have you with us, alicia, chief aipac

economist. more to come, this is bloomberg. ♪

♪ >> israel is pulling troops out of southern gaza as netanyahu says the end is close in the war. what intel do we have that this has progressed? >> not sure it is a turning point. that coincided with six months of the war. a technical point, these trips have been in the area for a long time, done what they could fighting militants. so i was just reading earlier,

newspapers saying northern gaza, when they pull out, hamas militants started to show up again so there is the elements of that. at this stage, withdrawing and talks going on about progressing a cease-fire, but it looks like more timing rather than anything strategic. paul: is there an imperative of are anticipating an attack? michael: when idea is trips are being -- troops are being shifted to the north because there will be retaliation for an embassy strike in syria. when it happens, no one knows.

iran sponsors hamas and hezbollah. it could be a proxy, we don't know how that's going to work. haidi: what are we hearing about u.s. allies? michael: there is a group of democrats who called for the u.s. to stop weapons supplies. that is the nuclear option for the u.s. to express displeasure. our brand coming into the scenario complicates that because this is a different sort of situation, so we are seeing a debate, whether the democrats who said we should stop arms deliveries, others are saying we cannot leave israel defenseless. a bit of discussion, but it seems like it will keep progressing.

paul: still to come, japanese yen worst-performing g10 currency. trading at 151 as we remain on intervention watch. a broad look at fx markets in just a moment, this is bloomberg. ♪ not all caitlin clark's are the same. caitlin clark, city planner. just like not all internet providers are the same, don't settle. get real deal speed, reliability and power with xfinity. she shoots from here? that's kinda my thing. get the real deal with xfinity internet today, and get fast speeds and a reliable connection to all your devices in the home —even when everyone is online.

♪ heidi: looking at the japanese yen, worst-performing g10 currency. we have japan cash earnings crossing. when you look at wages, a little softer than expectations.

full-time hey is better than excitation. in line with consensus with cash earnings falling 1.3%, a little softer than expectations so watching those clearly as so much of the drive toward wage gains has been pushing the boj to shifts gears. weakness in the yen has upheld domestically. worst-performing g10 currency and divergence could gap further. let's bring in michael wilson. the prime minister has been warning against a slide in the yen, excessive moves. where can i go from here? >> i think i keep using the word

fundamentals and the other one is excessive, too much of one and not enough of the others. moves have not been excessive, they have not entered the market with good reason. if they dilute the criteria, the market will buy the dip. for me, u.s.-backed drop so solid right now that it merits current levels given the differentials but for now we could see 152 before u.s. cpi on the back of the jobs print on friday. they can job own and raise intensity of the language, but they have played one of their

aces and we have to defend a level, which never works out well for central banks. i think it is going to be a gradual grind even when we had a little bit of a shakeout, power driven or whatever, maintaining three rate cuts. dollar-yen was well bought into. so lows are getting higher and starting to firm up, so it will be above 152 before the end of the week. paul: today's yuan fixing shaping up to be interesting as we got the chinese currency weakening. do you expect policymakers to draw a line in the sand? michael: they will tread

carefully, they know the domestic economy, the pmi is encouraging. that's a good thing, but that is a slow burn defense so i think today's fix, you add on 2% and if they could get away it would be below 725, they would consider that a result in their favor through 720, there were substantial options strikes and i think it's about two and a half billion rolling off between now and thursday some quite chunky on wednesday. there are pools of liquidity

that the market has tomorrow up, so that might be the q for the pboc to put on a strong fix because they know if they do a week one, it is tacit approval and they do not want to start that narrative, so for today's purposes, i will acknowledge that the macro backdrop has diverged against the yuan vis-a-vis the dollar and their own numbers but at the same time, they will try to not cause too much drama or be to overt. haidi: fx and rates reporter michael wilson.

a number of asian currencies trading close to year to date lows including weakness in the you wine, the taiwan dollar as well. 25 minutes away from the start of cash trading and the open in tokyo. futures are looking softer, seeing expectations of solid gains following wall street higher after the jobs print suggest robustness for the u.s. economy. new zealand is up, big week for central banks in asia, the be ok and more broadly, the ecb amongst the philippines. thailand i should mention, u.s. futures looking just modest to the upside. paul: breaking news on the

terminal relates to a real estate development company that develops apartments, they have filed a petition. more evidence that there is trouble in the property sector. we will keep our eyes on that story and get you more details. wall street thanks are jostling for business as the fastest growing pool of retirement ends its overseas attraction. adam: you cannot overstate how lucrative this business is for

banks. if you think about pension funds in australia from every employer, that number is going up as every year goes by, mandatory payments go up. increasing pool of capital that is investing overseas and what that means for the banks is they provide infrastructure to hedge currency risk and other things that they need to do with overseas exposure through swaps and derivatives. although some can be done in house, the majority has to be outsourced so if you're talking about a few billion of assets overseas, that is hundreds of thousand dollars worth of fees. the long-term structural growth of pensions in australia is

something banks want to tap into and what you're seeing is the latest example of making money. haidi: how are we seeing the long-term outlook for pensions? adam: most recent editing -- estimates are talking about three actually and dollars at the moment growing to beyond 13 trillion by 20 40's. so clearly, long-term structural growth that looks impeded because the forecasting suggests what you will have is smaller on closing were getting swallowed of and you will end up with a smaller number of mega funds controlling more assets. so if you are a bank looking to do work for australian supers or trusts, the big guys assets are

going up. the australian markets, public and private, have been swallowed up. so they're looking for each incremental dollar in europe, asia and u.s.. that requires huge amounts of hedging and risk exposure control. paul: finance editor adam,m we will get mor when we speak to australian super ce though 10:30 a.m. sydney time, 8:30 a.m. hong kong. still to come our interview with the chipmaking company towa for their outlook after shares have surged thanks to the ai boom. this is bloomberg. ♪

♪ paul: time now for japan ahead. tsmc you looking to reach 60% procurement by 2030. the ceo of that with prime minister kishida. we will get japan's account in february in a few minutes.

haidi: weakness in the yen, it is the worst-performing currency in the g10 space and jawboning up to the prime minister talking about undesirability of excessive moves. 151 is where we are at 152 is where we have seen the level. futures looking positive even as we saw asian stocks posting tech. positive sessions coming out of japan as investors turned, this is directionally pushing the topix to a point where they have shown poor timing.

paul: ai driven boom has helped to drive 400% shares surge. the ceo told us how the company plans to strengthen its position. >> what is important is we have technology that other companies do not have. there are two major methods of ceiling. transfer and compression. the compression method is required for high-end chips and we develop the first model in 2009. we see no competitors in this technology. >> you own this market. you create 60% of the chip ceiling machines.

do you have plans to further that market share? >> we develop products based on how much customers like us. we link this to a large contribution to profits. we have a strong desire to have 100% control of the molding process, but we see low price products which leads to price competition and will squeeze profits. you have to focus on the high-end market. we should specialize in this area. we occupy more than 90% and want to maintain this opposition. >> there is huge demand for ai chips, what is your plan to increase output? >> we have been working toward a 10 year vision by 2032. production capacity is 70 or ¥75

billion and we would like to build structure in the next fiscal year. >> your shares are up four times over the past year. do you see this as a good opportunity to capitalize on those gains, investing and boosting production? >> we are very grateful and happy. rise in stock price equals market capitalization. we needed to make a considerable investment to achieve ¥100 billion in sales. stock price has made it easier for us and i'm truly grateful for that. >> which sectors and regions look attractive and how much would you want to invest? >> it cannot be m&a in the true sense. any opportunity, we will focus on this. >> you made a deal with a south

korean chipmaker. do you expect korean business to be as big as sales in china? >> in ai devices we expect sk and samsung to make a large investment and believe the market will grow. chinese market still large and it adds different dimension. china has its own way of doing things. korea, samsung and sk have their own original ways, so we do not think of them in the same way. >> what does japan need to stay ahead in the world? >> manufacturing companies develop products that are unrivaled, that will surprise other companies and please customers. we would like to expand our business based on this concept. haidi: president and ceo speaking with bloomberg. asia's earnings shifts to

consumer giants. fast retail, let's bring in garth allen in tokyo. so what are we expecting when it comes to the bellwether for consumer and fashion retail? it is the start of earnings in japan and retailers will get a report. we have fast retailing in the second quarter, looking pretty solid, the consensus is increase in earnings in second quarter, operations are strong so we are waiting to see what they show us. paul: similar dilemma, fast retailing faces rising inflation in japan.

how enthusiastic cap they've been in passing off cuts and what are they doing in international markets? garth: seven i is reporting on wednesday and they've been doing so much restructuring in their supermarket business, the chain they have announced they're going to close stores in tokyo. they've been cutting staff so were watching to see if they give guidance as to how restructuring will impact earnings. full year. >> all right, gareth allen in tokyo. another story, current holdings is boosting its health care business to reach more than $3 million in sales. the president says they will shore up acquisitions and look

for new ones in north america. they want the health business to make up 12% of total sales by the end of the decade. >> your interest in the health science building -- business to address the major health issues that have emerged as major problems in society. since biotechnology is our strength we are starting a full-fledged business in establishing a foundation for growth. in order for this to become our third pillar we need to increase sales fall strength investments. we are at the stage where we can drive the business forward. we are aiming for health science to account for 20% of global sales by achieving organic growth and m&a. paul: breaking news out of

japan, current account numbers for february. strong set of numbers, ¥2.6 billion surplus, more than one year japan has been running a current account surplus, from overseas rates staying high. this boosted japan's foreign bond holdings. the client from what we were expecting. estimate was for more than that. and they be weaker yen, higher oil prices could way on japan's current account, but a blowout month in february. at less than the market anticipated. you can catch japan ahead monday at 8:40 am in tokyo, 7:40 p.m. on sunday. subscribers can watch us live on the terminal. this is bloomberg.

♪ you know what's brilliant? boring. think about it. boring is the unsung catalyst for bold. what straps bold to a rocket and hurtles it into space? boring does. boring makes vacations happen, early retirements possible, and startups start up. because it's smart, dependable, and steady. all words you want from your bank. for nearly 160 years, pnc bank has been brilliantly boring so you can be happily fulfilled... which is pretty un-boring

if you think about it. starting a business is never easy, but starting it 8 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. ♪ paul: let's get a check of commodities. oil is one to watch. prices are strong, brent crude

above $90. opec-plus maintaining curbs and mexico cutting exports. venezuela is a potential new target for sanctions demand starts to ramp up. giving up gains now, iron sliding well below, resuming downward trajectory. gold is interesting. record highs at the moment and a lot of confusion. analysts scratching their head trying to work out where the demand is coming from. stackers are out in force with

the etf base is showing a lot of outflows. discussion on what is driving the gold story. haidi: miners will be invoke -- in focus. of qantas is one to watch, offering up more access to rewards for members. ansell seeking to raise 400 million australian dollars. traders turn bullish on oil. we could see respite for asian currencies when it comes to the dollar and broad weakness.

extending recent declines ahead of the central bank decision, we're getting decisions from singapore and in the next hour, mng investments telling us they are seeing opportunities in india and japan. talking to mark delaney from australian super. ♪ x-optimized portfolio. at creative planning, our money managers and specialists work together to make sure your portfolio and wealth are managed in a tax-efficient manner. it's what you keep that really matters. why not give your wealth a second look? book your free meeting today at creativeplanning.com. creative planning -- a richer way to wealth.

♪ haidi: counting down to asia's market opens. big week for central banks because the rv and said including bank of korea,

thailand and singapore. when it comes to ecb, not looking at confirmation of the pivot. paul: holding off to see what the fed does, conditions have been ripe for easing, but there was an inflation battle. got a market open to look at. haidi: cpi will be major, but let's get into the start of trading, stocks coming online. where we are sitting for the nikkei 225 and the positivity and a second consecutive week of weakness, not the case when it comes to the unstoppable equity rally.