tests other carmakers. on -- bmwres how shares fell. the, sharp drops as electronic maker says they will miss profit forecast. they consider and sell considering selling a stake in their operations. indonesia getting underway, here is david with a look at the markets. david: it is quiet out there. you have to look at the map. at a sharper than expected weekly loss. erased a lot of this. indonesia just getting underway.

philippines and india are closed. taiwan will be getting their first chance to react to the rate cut. data kong, trade trad yesterday. billion hong kong dollars. a mix as far as the individual markets are concerned. you look at this in the context of industry. property, autos seeing a bit of rebound today. engineering leading. down 1%. ship makers and shipping stock. what else? it is a bit flat. mixed when it comes to commodity prices although gold heading down.

point 04%. the fx market including the dollar index. we are seeing a lot of pressure on asian fx. yen, 120. 15. trading adweek levels. at week levels. prices fell for the first time in two years in japan. dropping 0.1% in august. let's go to rent miller. great to see you. we are back into this deflationary mindset. how can japan recover?

brent: the data is disappointing. governor kuroda says we should look beyond this. he said there could be a dip in prices. come inwe will see that and affect japanese inflation so we should be looking a little further into the future to see that washed out. next year, with price comparisons, the impact of energy cost should wash through somewhat. thingseconomists see differently. they a not quite as optimistic. you have to remember, the governor, it is his job to increase inflation expectations in japan. we get to the question of when will inflation increase? he have to look at how it has done so far. we are in two years into this policy and at zero.

the target is 2% inflation through next year. even when we look that far ahead, many economists are doubtful. the bank of japan running into headwinds from the global economy. not alone. in england, the bank of england has a two cent price target. it is also at zero. oblemsare global pr also affecting japan to read the steam. economy losing southeast asia, japan has many customers for exports. the data is bad for japan. it makes us look ahead to october. that is when two banking meetings will occur. the debate will rage until then in terms of stimulus. say the bankalysts

of japan may increase stimulus on october 3. we will take a more detailed look at the story later in the show. we want your opinion. be sure to include the hashtag. more stories we are watching for you today. here is a roundup. japan tobacco is an advanced talks to buy assets from reynolds. edward hand control -- it would hand control of the american spirit brand. it is not clear whether other brands are up for sale. the monopoly is bulking up on other businesses that can help it withstand the impact of shrinking population and stagnant smoking rates. investing to is boost the competitiveness of its tobacco business.

are closely watching the scandal at volkswagen. we understand volkswagen may be states in by u.s. connection with the federal investigation into the admission that 11 million vehicles used software to cheat. the states include california and texas. this investigation, spurred by the u.s. epa announcement september 18 that volkswagen installed deceptive software to make vehicles appear as if they passed emissions test. shares have fallen 31% and the u.s. justice department investigating. we understand it affects volkswagen's lead over toyota. be set to take over

some of the troubles at sharp's unit. that is because they have signed a letter of intent by a state. this is a deal that would give them control as the japanese company spends all the unit. they need to complete price negotiations. no guarantee that a final deal will happen. they are a supplier to apple. they are under financial pressure to reach a resolution after years of losses. yvonne: let's continue with that. more from tim in taipei. tell us more about that. as zeb said, they are sensing a lot of pressure at sharp. they have talked with foxconn for quite a few years. they signed a deal to buy 10%. that is not go through. they did not want to give over

management control, where is foxconn don't want to be financial investors that just invest money. they wanted to be part of the business and sharp was not keen on that. separately, he invested his own money into a business that makes displays for tv systems. that is the model that foxconn wants to follow in terms of doing a deal. sources have told me they want to make sure if they get involved with anything at sharp, especially the lcd business which makes smaller panels for smartphones, they want to make sure they get a chance to run the business. they don't want to just put money in. they want to be part of it. they feel they have the experience, the management experience. to make it operation run

smoothly and efficiently. important when you are trying to run an operation. ead of getting duelved, they are doing the diligence. specifically in the lcd business. that is the area foxconn thinks is valuable. that is what the companies are talking about. for sharp, that means money coming in. this business has been unprofitable. yesterday, we broke the news that they looked like they might not meet their guidance. sharp announced publicly, that is correct. they will not meet their first-half operating guidance. they need the money and the help to turn around. the two may be coming to a head and getting something done. yvonne: the pressure is on for this deal. joining us live in taipei.

thank you. another story we are following. the winning formula behind the best-performing cities in china. that is on bloomberg.com. oming up later, the leaders of the two biggest economies have a dinner date. what is on the table for discussion. and it don't forget the indian prime minister is also making deals stateside. previewing his trip to silicon valley. ♪

yvonne: the chinese president has made tech one of the themes of his visit. his visit by meeting with mark zuckerberg and bill gates. he is interested in developing a

high level dialogue mechanism on cyber security. the indian prime minister modi will pay a visit to silicon valley this weekend. can he create the same kind of buzz? joining us as a guest. thank you for having us on this show. you talk about india. in siliconders valley. that has mushroomed and exploded. how come we have not seen that back home? why not? guest: we have been investing their 10 years. we have seen the market slowly move. the challenge is enabling infrastructure. these skills have not existed yet. as a market has not had the base. now if you look at it, you saw a

smaller user base. today, we have the second largest. they are the second child in the ecosystem. we have been watching what happens in the u.s. and china. now, as we understood those markets, we have the chance to build to scale. we have seen some of this. we invested in a company six years ago. focusedrted as an emea -- started as an indian focused company. seeinge now -- we are margins, enabling elements. the brain drain that went to the u.s.. we are on the cusp of it.

nadella's ofatya microsoft, i'm going to see this? guest: we are seeing these type of people understand how to build businesses to scale. the largest retail company in india is an e-commerce company. india historically has been fragmented. whether you look at languages, we have a company which addresses multilingual content. they have tons of users. that a fragmented country has never have the chance to build businesses to scale. enabling that. countries will emerge and a distal -- digital world. yvonne: no indian prime minister has been to california in three decades. you think he will be successful

bringing in some investment for india? guest: we raised our fonda during some of the toughest times in 2013, 2014. he would meet investors, it was not necessarily the best place. modi has done a phenomenal job of changing sentiment. it will strengthen the idea that he believes technology is an important enabler. hopefully he will take the idea that enabling failure is important to read the valley and the u.s. has done a great job that encourages and enables businesses to start and fail. if he can bring that sentiment that with him and leave everyone with a sense that digital technology driven businesses are going to be the future, which he he will beear, successful. yvonne: india is one of the

biggest power players. 50% of startups founded by indians but they only make up 6% of the area's population. >> i mentioned fragmentation. ae largest apparel company is brand with 1% market share. the largest in the u.s. has a 13% market share. you apply this fragmentation, you realize an e-commerce company is the largest channel for distribution. the opportunity we are looking at is branded driven. you cannot just own distribution, you can build the friends of the future. software is organizing india. we have a chance to build brands that will be the future. yvonne: we pursue your insight.

appreciate your insight. these are the stories making headlines. they have ordered a review of safety after at least 717 people were killed in a crowd rush near mecca. almost 900 others were injured in the stamp ede. the ages, genders, and nationalities of the dead are not yet clear, but iran said 95 citizens died. a cranes ago, collapsed, killing 109 people. as parte woman wanted of a bribery investigation has been repatriated from the u.s. she is the wife of a -- she is the second person

sent back to china by the u.s. as beijing launched a campaign to return suspects in economic crimes. the u.s. does not have a formal extradition treaty with china. the philippine government says the abduction of three foreigners in a resort is an isolated case. the military is coordinating the hot. two canadian men, a norwegian man, and a filipino woman at gunpoint. authorities got the upper hand over rebels and other armed groups. live inp next, we are theal or for an update on events shutting schools and raising alarms for businesses and health. ♪

air-qualityapore's has been getting worse as indonesia continues to battle fires. what is the latest? haslinda: the pollution index has dropped slightly. the error considered very unhealthy instead of hazardous. anything above 300 is hazardous.

not too far off. singapore has taken steps to ensure the welfare of its people. sports facilities are shut. public advised to stay indoors. grassroots organizations will get out masks to needy and vulnerable people. -- we areto a public bracing for more days of hades. not helping. haze.: more days of what is being done to fight the forest fires in indonesia? haslinda: there has been no solution. we have had this problem for years and years but here we are again, reading in unhealthy air. part of the problem is

implementation of the laws. ill tomust be political wel take action. a minister says, he is shocked by the reaction of some indonesian officials. there is a disregard for the haze and the health it is having on everyone. the problem stems from farmers burning land to clear it. they use a method called/and burn. it is a legal. that has to stop. yvonne: stay indoors. great to see you. haslinda live from singapore. just one match in the rugby world cup. and the defending champions, new zealand, over howard net --

overpowered them india. mibia. one of only two teams in the tournament. -- two african teams in the tournament. i have time, they led 34-6. the two time world champions were just too strong for a name ibian team. the all blacks are sitting pretty at the top with matches yet to georgia and tonga come. a big match over the weekend. none bigger than the blockbuster when host england meets their rivals. wales. in hongat 3:00 a.m. kong. are back in action against uruguay. scotland takes on the american eagles.

ireland it looks to make it two in a row when they face romania. let's take a look at how markets are trending in the asian pacific. quiet day so far. hong kong, 13.5 points down. shanghai composite flat as well. next, guest who is coming to dinner? xi and obama discuss major issues over a meal. ♪

yvonne: the top stories this hour. janet yellen says a rate rise is possible for this year. expect to increase rates by the end of the year, followed by tightening at a gradual pace. the state of the world economy is unlikely to sway the decision. monitoring we are developments abroad but we do not anticipate the effect of these on the economy will prove

to be large enough to have a significant effect on the path of the policy. initial jump,e an asian shares are following. arean and taiwanese stocks the biggest losers so far. the benchmark is headed for the longest streak of decline since 2008. hold and bonds heading in the opposite direction. closing in on a detail to take control of sharp's lcd business. guarantee a final deal will be reached. they are under financial pressure to reach a resolution for the business. after years of negotiations, sharp said it would miss its first half profit forecast. japan entering into their lunch right.

-- break. looking pretty flat. david: we started higher. we are now flat on the nikkei. that being said, when you take a look, volumes are light. a lot of markets will be closed. some reopened tuesday and wednesday. a week in the chinese mainland, leading to a drop of a volume. usual. than managedsome people have to take an early flight out. let's take a look at some of these movers. we have been following these stocks. interesting.

getting an uplift, i believe. here we go. morgan stanley raising the rate. cash call, in hong kong. similar story for galaxy entertainment. a buy rating from brokerages. let's take a look at japan. upping its profit forecast. what do we have here? 8.6%. that is the profit forecast. you are looking at a down market . getting an upgrade from the more a. -- namura.

upgraded to buy. inflation in japan. if you strip out the effective energy prices, this is perhaps what the boj governor alluded to. energy and that bumps up the inflation rate to 0.7%. that is your call. 70,500, roughly. 17,500, roughly. he yvonne: japan is not the only country struggling to boost prices. the bank of korea may lower its inflation goal.

aging population is slowing economic growth and has made it harder for policymakers to push isis into their target range. japan, -- back in abean, prime minister is working on support. he laid out new parts of his economics plan. we have the details from tokyo. isabel, good morning. tell us about this new focus and reboot. isabel: good morning. e was minister ab reappointed to another three years ruling term. what he has done is lay out a further three arrows. the first is economic growth, he is aiming for an economy of ¥600 trillion. he is trying to create a society

more friendly for raising children. the third arrow is social security. haltim of doing this is to the slide in the japanese population which has been going on for a long time. there is currently a population of 127 million people. he wants to halt the number two 100 million people. taken thishas opportunity to focus on the slide. why now? isabel: the demographic issue has been a problem for a long time. one reason he is focusing on this is it gets him the opportunity to air policies which are popular. he is pushing through defense bills which have given him a long, hot summer of discontent. demonstrations outside his residence.

he is looking for a way to clawback the public approval. term as a his second leader of the ruling party, he wants to look ahead to his legacy. be able to look back and see himself who helped stop the fall in the japanese population. trying to fight back and gain popularity for himself as well. what is likely to be the reaction from investors and the public? isbel: the reaction so far where are the details? a growthl to set target of ¥600 trillion, but how exactly he going to do it or when is he going to achieve it? nothing about the growth strategy that has been won all his three arrows until this point are made from the voter point of view, they want to hear more details as well. i think they will be reluctant to come back and support him eseil they can see how th

policies are going to benefit them. he is headed to become the longest-serving prime minister since the 1970's because he has very few rivals. atis in a safe position point. yvonne: thank you so much. the chinese president xi jinping is in washington for the more formal part of his visit. prhas been meeting with esident obama. a more intimate meal before the main ceremonies. reporter: president obama likes to meet with leaders in private settings like this. especially before the formalities of a state visit. i believe 10:30 p.m., they are still behind closed doors.

they have probably discussed cyber security, some of the issues they are concerned about. the south china sea. maybe they are talking football. pointsway the talking they have to stick to, get the cameras out of the room, and talk face to face, man to man. cyber security is at the top of the list. we have heard from the deputy national security advisor, ben rhodes, saying the amount of progress the two sides are going to get on cyber security issues and their difference could be determined by how well this closed-door dinner goes tonight. and what kind of announcement could be seen tomorrow. already, the chinese halted the working group level dialogue of last year after the u.s. indicted five officials on

allegations of hacking korea china said, ok, you are going to do this, we are going to walk away. we have already heard from a foreign ministry spokesman saying they are not going to restart the talks. it will be interesting to see how much progress. of obama officials have raised the possibility of issuing sanctions if not enough progress is made. is a new survey showing there are new concerns domestically at home. what are people worried about? stephen: there is the difference between the bilateral issues and domestic issues. this is the queue research center. 84% of the respondents of chinese adults surveyed between april and may say corrupt officials are their number one concern. air pollution, water pollution. having lived in china, yes. the gap between the rich and poor, i am already poor.

yvonne: interesting to number one, corrupt officials. stephen: it is right at the root of discontent in chinese society. jan: let's check on some other stories we are following. a rogue trader has inflicted losses in the biofuels business. the company says the actions were discovered earlier this year. nidera's ceo says they have closed all deals linked to the issue. the follow from the biggest corporate scandal in brazil is a widening. the contractor is being linked to the petrobras corruption inquiry for the first time. a former executive has testified somebody claiming to be a trans ocean employee bribed him to win contracts. has treated to the

brazilian rating cut. bmw may be caught up in the emissionsn scandal -- scandal. a diesel version of the x three exceeded european levels. bmw has denied the root or. there is no suggestion the volkswagen rival has done anything illegal. hans nichols went to visit the place where more than half the inhabitants work for the same company, volkswagen. cons: it is a little town -- hans: it is a little town on a wide waterway, built for one company.

volkswagen. with an average income of 92,000 euros per person, it is one of the richest cities in europe. the company employs 70,000 of the 125,000 inhabitants. that is why the scandal is more than just a passing headline. build by the knot sees in the 1930's to make the original peoples car, the factory is the biggest in europe with its own power plant. the company owns and brands the local soccer club, which won the coveted award this year. the art museum was opened in 1994 and financed the volkswagen foundation. acreain attraction is a 28 theme park they built for 400 million euros. with the unemployment rate below the german average, the question is whether this main entrance will continue to be a two-way street or just be an exit for

workers driving volkswagens. hans nichols. it could still, be this year. how the market are seeing janet yellen's comments on the fed hike. ♪

>> these are the stories making headlines around the world. pope francis had a rousing welcome in new york. the streets of manhattan as francis was driven to st. patrick's cathedral where he led evening prayers. earlier, the pope urged lawmakers to embrace lawmakers, fight climate change, and abolish the death penalty.

a south korean lawmaker has warned north korea they will pay a price if they conduct another nuclear test or launch a long-range rocket. a manus they are both to security as well as a potential unification partner. korea said they are prepared to use nuclear weapons against u.s. at any time. a picasso back on display in paris after disappearing for more than a decade. the painting was reportedly stolen in 2001 from the archives in the french capital. it eventually turned up in a fedex depot in new jersey in december. an investigation is still underway. has confirmed the fed remains on track to type rate. let's ask our guests what this means for the region.

joining us is mike mccarthy, a chief strategist. great to see you. did you see any stark in the speech janet yellen made on today versus friday? what has changed? mike: the market reacting could be a key driver. dismay at the border level. i'm not privy to ward meetings but my guess is the meeting surprised the feds. they are tempting to be transparent and demonstrate they are responsive to conditions. unfortunately, what they did is put a lot of concern in front of investors. uncertainty.d that had the effect of not only increasing volatility but widening sentiment. none of that is intended. today, they are returning toward

certainty, trying to give markets and analysts more comfort that the fed is sticking to their path and will deliver on the guidance it has given. yvonne: we're getting clarity here. but if you take a look at the market reaction, it is interesting. we saw a potential relief rally but things have tapered off. how do you read that? mike: it is the difference between the traders and analysts. tartedaders looked and buying the markets. because of that increased certainty. but economists and analysts said, there will not be enough data. given the responsive stance, they simply do not have enough numbers dropping between now and the october meeting to justify moving in light of the statement.

as the analyst abuse dreads -- analyst view spreads, the markets started to receive. the reserve bank of australia, some saying they may need to cut rates. saying we need a confidence boost. it may not be enough to lower the rate of joblessness. mike: the chief economist at one there leading banks said would be two rate cuts next year. it is not surprising. we have a divergence of opinion around what will happen with rates in australia. we were all expecting an interest rate increase. uncertainty has been created. forest area, the key aspect is growth in china. australia, the key aspect is growth in china.

the numbers could change the scenario completely. i don't think the reserve bank of australia knows what the next move will be. well we are always interested to hear the opinions, i don't think it will change significantly. yvonne: what are you telling your investors? butgs haven't changed much some saying the selloff in china may be over. getting the implications, given that the fed chair says it is going to happen this year? mike: the markets have a focus on the heavy side of the industry. those are the areas that are suffering. the broader economy is showing stronger sides. that is an aspect of chair yellen is trying to show. concernsy do have

about the global economy, their concerns are not a sign we are looking at a deterioration. they are trying to edge the markets away from that thatpretation of statement. he yvonne: mike mccarthy joining us. i appreciate your insight. thank you so much. next, 2015 still an option. janet yellen talks about the timing of the rise.

what is trending more, janet yellen or iphone? >> it depends if you are an intellectual or you like a nice gift. let's start with janet yellen. janet yellen, the federal

reserve chairman. to get this out of the way, there were concerns about her health at that speech. you can read about that on twitter and websites. we want to focus on the substance of what she said. a lot of people talking about it right now. she clearly indicated she expects a rate hike in 2015. some of her fellow central bankers are commenting as well. he said, waiting to hear from yellen. it was quite a long speech in fact. brookings institution, which we know is top-flight, has great data on the janet yellen dashboard. shery: also trending, iphones. the launch of the success and --

6s and 6s plus. just an upgrade from last year's model. is that an ipad she is holding? i have no idea. this is happening today. people excited about that. one person tweeting, today, the released was ribbon they posted a funny video. here is what you can do with it. it you can use it as a nepad. you can put your glass on top of it as a coaster. it is just a phone. people are dying because they do not have clean water. i repeat, it is just a phone. that, that is our social media. -- yvonne: stay tuned for a jet edge -- asia edge.

the guest, the head of research at hsbc. edge" up next. happy friday. ♪

>> i am al hunt. >> i am phil mattingly. tonight, washington is taking over. the student has become the teacher. but first, the pope. a guy that americans clearly love spoke to people that most people hate. pope francis spoke to congress. like a