we're doing everything we can to give you the best experience possible. because we should fit into your life. not the other way around. anchor: japan's road ahead. the bank still has room to ease monetary policy. for fourth euro hit quarter earnings. and egypt decides. the central bank mr. which -- minister puts pressure. good morning. welcome to "countdown." it is the day before christmas. happy christmas eve. well trading is to be restricted, we have shortened

trading hours in ireland, france, spain. meanwhile, others are closed. a quiet day for many. in germany, taken the day off. u.s., stock markets close at one :00 p.m.. u.s. bond markets close an hour later than that. here's a check at what is moving at the moment. asia, clinging onto gains when you look at the asia pacific. currently, 5100. trickling downwards. u.s. futures, similarly in the red. that is after some stellar gains yesterday. rose single industry group yesterday. a santa claus rally. hong kong andw australia close in the green. let's get to news. the bank of japan has policy

options. the governor speaking days after the central bank announced and would not expand its stimulus target. >> there is no mistake. japan is headed in the right direction with wages and the labor markets continuing to show improvement. i think a virtuous circle has finally begun. the stock market will follow the meaningful improvement of the economy. with the effort the government is making, i am not worried about what the market does. rja: the governor has reiterated what he calls the unwavering determination to get inflation to 2%. that comes after an announcement wages tonce ways is -- rise. oil in the u.s. headed to a gain. that after the biggest loss since june.

-- it will result in the reduction of fourth-quarter earnings of 900 million euros. hasce's biggest bank maintained its plan to pay out dividends. caroline: thank you. the bank of japan has said it does not intend to expand its stimulus program. top aides abe's thinks still has options. >> i am not pessimistic at all. the bank of japan unorthodox policies are working. policymakers indicated a are ready to deal with any post fed liftoff situations. i think they still have policies they can pursue. let's get to tokyo

where james is standing by. thank you for joining us. amidsthas been talking, the minutes. what exactly did he have to say? the yen strengthening on the back of it. james: governor kuroda was speaking today. was what he and the bank have been saying. he wants businesses to raise wages. increase investment in the country. by doing so, that will generate inflation. said the bank has a lot of easingneeds, to increase if necessary. they were determined to reach 2%. stance on howis he is speaking about monetary policy.

he didn't raise expectations for an increase in stimulus in the new year. trackd ac inflation is on but companies can do more to assist the banks. >> probably why the yen is strengthening. underneath this? they have been tweaking quantitative easing that they have not been upping it in any way. james: the minutes were for the november meeting. there wasn't really a discussion about the tweaks that happened the last week. what came out of the minutes, there was an expectation give raiseeed to wages to their workers. when the labor unions came out it was lowernds, than the boj and government

hoped they would expect. 2%the end, unions ask for a wage hike. of ongotiations are sort the disappointing end of the scale for the government and boj. they are putting pressure on companies, using the bully raise to say, you need to wages. so people can feel more confident. the results will finish in about march. the boj is focusing on that to see hell inflation will work out in the new year. seem -- ifnly if we we see more dramatic falls in oil,. fx and us, the cohead of rates research. thank you for joining us. japan. we were just hearing quantitative easing, not expected any time soon.

what is your view? are we expecting the yen to continue on the pattern? , it offersrspective symmetric risk rewards. there is limited downside and significant weakness. in many ways, this is the right point of time where the market will be questioning the bank of japan, weaker yen setup up we have experienced over the past few years. genuine shift a in the way the policy is being communicated. a belief in japan that quantitative easing as it has been laid out, it will not lead inflation higher. economic developments may actually not really be requiring further easing. markets doubt. from our perspective, dollar yen

is inconsistent with 2% inflation. more consistent with something below inflation targets. it is unlikely the japanese authorities will tolerate a stronger yen. that is the symmetry in terms of how much you can lose on that trade. the upside, dollar yen, if the data, particularly inflation, does not pick up meaningfully, there may be room for higher dollar yen. caroline: the consensus seems to be about 125. a little weakening but not much. jpmorgan saying, we could see 110. >> in many ways we are going to see consensus shift lower and lower. until wage negotiations have been finalized. from our perspective, we are looking at 113. of both consensus. if you are looking at the risk

reward, you could see a weaker yen. >> where do we see further weakness? it seems to become a emerging markets are where we are going to see volatility. >> it is not going to be as big of a story as much as a regional story. dollar asia will move higher. policies ease. -- thislationary isinflationary- d forces move out. >> more pain. >> pain or relief. from a weaker currency. many countries are hit by the terms of trade. australia, south africa, brazil.

we don'ther hand, think there is much downside in the euro. broad a dollar strength, the story is becoming more nuanced than it used to be. >> you are not expecting more ecb qe. economics department does not expect more ecb qe. currency, wet the are in a different setup. the euro lower. more, expectations are more in line with quantitative easing. if you look at the skew of risks, with data holding up in europe. softer side in the u.s., there may even be room for flattening. it is not some gradual increase.

caroline: you are going to be staying with us. meanwhile, we are looking at more winners and losers. what about commodities, stocks and currencies? will have the best and worst performers of 2015 after the break.

caroline: 7:13 here in london. shortened trading days. let's talk commodities, winners and losers. for itsew york, cutting largest weekly gain in two years -- months. but a tough year for the sector. equities, asset classes. give us a broad picture of the asset classes. lost?won, and nejra: bonds looking to outperform stocks. waslast time this happened 2001-2002. if you put your money in bonds, you would have done quite well, i guess where you put them. looking at the global, broad market of bonds. sovereign, corporate, developed,

and emerging. that outperformed compared to stocks. sufferedyou would have most is if you had put your money into commodities. the commodity index, heading for the worst year since 2008. caroline: let's limited to sovereign debt. to sovereign debt. the yield went screening lower. becometart to see yields positive? when we look at global bond yields, when it comes to european bonds, there's quite a bit of negativity priced in. the only way of reconciling what the equity market, bond market, and currency -- pricing. if you expect a prolonged disinflationary environment. time, growth

negative -- in most of our calculations, whether you look at inflation, all metrics are quite suppressed for europe. risk, want to hedge your intermediate to long maturities yielded their weight from our perspective. on tone: let's move commodity. you said that was the worst performing class. where there are that weathered the storm's? a: if you are looking at returns and spot prices, cocoa was the best performer. 12% in terms of price. looking at the worst, nickel. returns. also spot prices. we know metals have performed is

badly in general. looking at the london metal exchange, everything has not performed well. largely over the concerns about the slowdown in china. neatly onto the best and worst stocks. the worst, anglo-american, down 73%. it has been fighting for that position before. theou say, because of travels best trials miners facing the best performer, you might not have heard of it. fingerprint cards. up 1300%. this year. this is a swedish company that makes biometric technology. it has been getting more popular. just onelowed by analyst and even the analyst doesn't recommend buying the shares.

maybe you have one that one already. perspective where you should be putting equities. given what wegly, have discussed, we think european stocks are probably the most underpriced. pricing,ptions, market is one of a prolonged cycle. there is ongoing expansion. time, come for the first we would like stocks on hedge. >> are there industries you would stay away from? >> we don't think the export sector is of particular interest.

the openness of the european economy. , one of thetors biggest negative intruders to growth. very good opportunities. caroline: the euro stock index up four times as much. smaller stocks have over performed those that have provided a drag. is that the way to go in 2016? >> based on the risk and reward, in the u.s., you are having a series of hits that affect small caps. the strong dollar. prices.y, lower oil wider credit spreads contaminating credit of lower quality.

you have seen quite a big slowdown in the rate of expansion of credit. particularly non-bank markets. with credit below be minus. it is not affecting the overall economy. sheet. balance that is why we like them less than the large caps. caroline: thank you very much. great breakdown of everything you should and should not have been in. after delaying the announcement, make's central bank set to a crucial decision. next. ♪

caroline: welcome back. a festive chris's this -- christmas even morning. shortened trading day on the 5100. welcome to all those at their ready for the trading day before you run home. many in this is closing. ndices closed.

the decision has been delayed. egypt's economy facing a foreign-currency crunch. what do we expect from this decision? the delay. is that substantial? the sign of a big announcement? >> first of all, as far as we know, we will have a decision today unlike last week. there is uncertainty over the outcome. whether the central bank will keep rates unchanged or raise them. it is interesting. it is the first decision by the governor. it is an unusual step. he delayed the meeting, saying the central bank achieve its price stability mandate without the commitment from the government on areas including fiscal consolidation. balance of payment. form is a council that

includes the prime minister, governor, as well as outside experts. they met last week. a statement will come out in terms of any guidance coming forward. caroline: interesting. a key contributor to this program. speculation. a fascinating thing. devaluing the dollar. kazakhstan, doing the same. countries affected by the commodities slowdown in particular. going to see the egyptians devalue their pound as well? pressure fornder different reasons. foreign currency reserves have stabilized but are down 50% compared to 2010 levels. as the struggle -- country

continues to recover from political turmoil. the exchange rate is overvalued. calling forthey are this. the question is, are they going to do that? a simple fix? if the answer is no, egypt has double-digit inflation and significant political risk. no guarantee a large devaluation would bring in the dollars immediately. the government is in talks to attract fresh aid. we are told it will be with the uae and kuwait. depends on the pound the money they can mobilize. >> you will keep it a of it all. thank you very much. up next, a special. exclusiveny's

interview with the rbs ceo. clinging toutures 0.1%. ♪

manny: the royal bank of scotland has undergone restructuring since being bailed out in 2008. i spoke exclusively with the ceo, ross mcewan. the future of the bank. great to have you with us. let's talk about the u.k. economy. osborne. he said, we have our mojo back. commerce,ambers of they say you are doing great.