guy: japan's road ahead. the bank of japan still has room to ease monetary policy. bnp write-down. france's biggest bank will take a 900 million euro hit to its earnings. egypt decides. the new central bank governor puts pressure on ministers as a currency crunch threatens a fragile recovery. we will get a rate decision later today. welcome to "the pulse" live from

bloomberg's european headquarters in london. i'm guy johnson. it's the day before christmas. restricted trading for much of europe and the united states. we have shortened hours. u.s. markets close at 1:00 p.m. eastern time, 6:00 p.m. u.k. time. u.s. bond markets close an hour later. we have some trading. caroline hyde has all the details. caroline: relatively reserved map for us. cac 40 down 0.4%. ftse 100 up 0.1%. mixed picture after a significant rally yesterday. every industry group climbing on the stoxx 600 yesterday. we had a mixed trading day in asia as well. we saw australia and hong kong trade in the green.

as the day continued, we saw the nikkei turn lower. similar for south korean stocks and chinese stocks. shanghai closing down by 0.6%. cautious and low-volume trading this morning. let's look at asia. you were talking about that great interview with the top aides for the prime minister of japan. he's saying there is more to give. the bank of japan's minutes today painted a slightly different picture. we saw that they are holding fire on quantitative easing, many interpreting that qe isn't really needed. what they want to see is wage negotiations. maybe not so much optimism about qe to come. the nikkei down because the yen climbed. exporters were falling today. the dollar down by 0.4% against the yen.

substantial moves happening in japan. meanwhile, back to europe. which particular industries are doing well? today, services on the town. personal goods also going lower. year onceds of the again being leaders. the miners up the most. oil and gas up once again. interesting. check out copper. off by 0.5%. copper trading lower, but we've got oil trading up 0.75%. clearly, oil managing to muster a bit of an increase. on,stock to keep an eye plenty of speculation, post nl up 15% now. could the royal mail be eyeing this stock? currently at 3.75.

4 thank you -- guy: thank you, caroline. hief cabinet secretary huga told bloomberg that the boj still has options in pursuit of its inflation target. >> i'm not as a mistake at all. the bank of japan's unorthodox policies are working. at the last meeting, policymakers indicated they are ready to deal with any post fed liftoff situations. i think they still have policies they can pursue. guy: let's get more on the latest bank of japan minutes. let's go to tokyo, where joni snyder joins us. kuroda has been talking this morning. what did he have to say for himself? >> he talked about his unwavering determination to hit that 2% inflation price target.

he said it's not just about inflation. it's about growth. the economy here needs to see growth. it needs to see consumer spending go up and wage increases. thosesinesses to invest record profits back into the economy. he was talking about moving down that road. guy: in terms of the minutes, any surprises that came out? no real surprises, but it was interesting that wage increases seemed to the minds of the bank of japan board members at that meeting. they talked about closely watching the wage negotiations that have already begun in japan with labor unions and really trying to compel companies to put back some of their gains into the markets, and those record profits into wages. they are fearful that if

consumers don't start spending now, when oil prices go back up again and they have less disposable income, that would really hurt the economy. guy: we had one call, i think jpmorgan, talking about dollar-yen going back to 100. thank you very much indeed. joining us now in the studio, brandon brown. s mr. sy u make of suga's comments that the boj should do more? >> its monetary base is expanding. it is a tremendous amount of unconventional monetary expansion already in japan. guy: yet japan is not delivering inflation, investment, wage growth. at levels of extraordinary monetary stimulus and an incredibly weak

currency. >> it ebbs away. guy: [indiscernible] >> we need structural reform. what i think we are in danger of seeing in japan is, if you look at what they came out with last week on the boj, it said we were of companiesetf's expanding their business investment. central banks should not be in the business of rewarding companies for doing what the market is not forcing them to do. guy: have we reached the point where you can push on a piece of string, deliver monetary policy, but it is not going to have a meaningful impact on the economy? >> i think very much so. reached thes has end of the road in terms of the three arrows. the most important arrow is structural reform. guy: what lessons has abe

learned? >> it is difficult to see what lessons have been learned in europe. in europe, we have a very divergent path between germany on the one hand and the other european countries. draghi is determined to go ahead. guy: are they comparable? people talk about europe turning into japan. are they comparable? can we draw conclusions from one to the other? >> i would argue very much with the conventional diagnosis of what's gone wrong in japan, inflation being the problem, when there hasn't been deflation. there has been price stability. if you look at japanese economic performance, there's only been a five-year period during which japan underperformed its peers in the oecd. there is a myth about japan. draghi quotes that myth as much

as bernanke and yellen, but it is a myth. guy: jpmorgan says we could see the yen below 100 to the dollar. what was the impact be? >> you have to see what lies behind that, whether they again goes to 140 or 100 will be determined by what happens on global stock markets and asset markets. if we have a powerful recovery in u.s. markets and global asset markets are very frothy, the yen could go to 140 as capital pulls out of japan. if we see a set price deflation, u.s. stock market falling, more problems in junk bond markets, yen could be headed towards 100. i would fully expect the boj in that situation of asset price deflation to be doubling up its monetary expansion, which means any yen rebound would be fairly short-lived. guy: stay with us. we need to talk about the u.s. stock market. here's what else is on our

radar. contrarianking two calls, one that the yen will go towards 100, secondly that it won't have a meaningful impact on the world's third largest economy. the view clashes with the consensus among analysts for the yen. heading forork is the largest weekly gain in more than two months after u.s. inventories declined last week, the biggest loss since june. the number of drilling rigs fell. the european central bank is to modify the way it conducts some qe purchases yes year -- next year. eurozone central banks will use reverse auctions to for some bond investors to bid against each other in the sale of securities to the ecb. bnp paribas is writing down part of the goodwill related to its

italian unit. the move will result in a reduction of portfolio earnings around 900 million euros. the bank has maintained plans to pay out dividends. int, winners are losers 2015. from the rout in commodity shares to the stocks you never heard of but wish you bought. we will talk about all that in just a moment. ♪

guy: welcome back. you are watching "the pulse ." we live on bloomberg tv. egypt's central bank is due to make a call on interest rates today. the decision has been delayed in order for the governor to meet with top government ministers. egypt's economy is facing a foreign exchange crunch. alex joins us now, bloomberg's middle east editor. why was this delayed, first of all? this is meant to the a normally independent central bank. why do we have a delay? >> the central bank is independent under law. we have the delay because the governor -- they should have said they cannot achieve the price stability mandate without the full commitment of the government on areas that include

fiscal consolidation, balanced payment out turns, and urgent structural economic reform. the council includes the prime minister, the central bank governor, keith economy ministers, and outside experts. last thursday. all eyes are on today's decision, which will be the first rate decision for the new governor. for any move, either raising unchanged,eping them there are also statements that will follow. big thing everybody's waiting to find out is what happens to the egyptian pound and whether we see a devaluation. >> this is definitely the biggest risk facing the egyptian economy. stable, theywhile are down 50% compared to 2010

levels. economists and investors are calling for a devaluation. that is not simple in the case of egypt. it is facing inflation of double digits. the country is struggling to recover from political turmoil. devalue, they get the inflation, but not necessarily the dollars that will come as a result of that. what the government is doing is holding talks with saudi arabia for more aid. we are told there will be talks with the uae and kuwait for more aid. one economist puts it that the fate of the egyptian pound depends on the amount of external financing egypt can mobilize. guy: great work. thank you very much indeed. now, oil in new york is heading for its largest weekly gain in more than two months. a tough year for the sector.

nejra cehic is here. she is looking at the best and worst performers of 2015. nero bank it will -- as a: it will come surprise. the bloomberg commodity index down 25% so far this year, heading for its worst year since the financial crisis. if we look at individual commodities, some interesting things have come up. the best performer this year is cocoa. up 12% in spot prices. worst performer is nickel. we know that metals have been coming under pressure. guy: any recovery for commodities next year? >> i suspect the family week picture to continue, given the chinese situation. guy: and is it kind of a game of two halves in that the first half of the year is poor, but we

start to see maybe recovery, or is it uniformly grim? >> nothing going to be uniformly grim, but i don't see a lot of cheer. guy: what else are you watching? let's talk about the stocks. nejra: if we look globally, the best-performing index has been venezuela, up 277%. you might struggle to get your money back out. inflation is over 100%. worst-performing has been ukraine, down 55% for obvious reasons. looking at european stocks, best-performing stock, it is called fingerprint cards. 1342. this is a swedish maker of biometric technology. demand has been growing for its products. what i find interesting is only one analyst follows it and even that analyst doesn't recommend buying the stock.

whether it continues its gains is under question. the worst performer has been anglo-american. it has been fighting for that position with glencore. it has been really struggling. we've seen it cut jobs, cut the dividend. guy: the wooden spoon. is there any way in which u.s. stocks go up next year? i struggle to see that they are going to produce significant returns. the big question everybody is trying to figure out. there is a nervousness regarding whether you should belong europe. >> there are strong headwinds for the u.s.. we let frothy levels in silicon valley. that looks quite fragile. secondly, we've got a very big political risk. the first three months of the year, we will know whether trump is going to be leading the

republicans probably to a catastrophic defeat or whether there's going to be another candidate and a prospect of serious political change. that's going to be a big uncertainty. guy: if you were to pick a number, is it plus 5%, -5%? think we are talking about -20% or -30 present. the reason for saying that is what is going on in the high-yield credit market. the high-yield credit market which deflated considerably in importantths is very to a whole range of u.s. economic activity and to the market. a lot of financial arbitrage going on in the private equity sector is for venture capital. they all feed off this high-yield credit market. i think that's a key vulnerability. it could have a very big effect. guy: thank you indeed, brendan

brown. nejra che pitch. we look at the 10 best restaurants opening in london. ♪

guy: welcome back. you are watching "the pulse." we are live on bloomberg tv. let's get the bloomberg business flash. nejra: the bank of japan still

has policy options to continue its unprecedented monetary easing, so says the chief cabinet secretary. suga was speaking just days after the central bank announced it wouldn't expand its main stimulus target. >> there's no mistake. japan is heading in the right direction. with wages and the labor market continuing to show improvement, i think a virtuous circle has begun and the stock market will follow the meaningful improvement of the economy. with the effort the government is making, i'm not worried about what the market does. nejra: the bank of japan governor has reiterated what he called the thanks unwavering determination to get inflation to 2%. that came as minutes from the november meeting showed its wants wages to rise. oil in new york is headed for the largest weekly gain in more than two months after u.s. inventories declined by almost 6

million barrels last week and the number of drilling rigs fell. that is your bloomberg first word news. guy: thank you very much indeed. 2015 hasn't been a stellar year for restaurants in london. new establishments have opened in record numbers. many lack originality. or so says bloomberg's chief food critic. why such a bad year? >> a lot of copycat places. more and more barbecue places and burger places. they are still coming. what did you like? >> a place called hoppers in lankanhich is a siri south indian restaurant. fantastically done. guy: the refurbished came back. you like that one and you order

the same thing every time apparently. >> it is my favorite place. opened, it had a fantastic new look with a big bar in the center. the food is better and the crowd is good. guy: what happens next year? >> there's a couple big openings. the main one is jason asked him. he's opening a japanese place. there's a chinese hot pot place opening in soho on january 4 that should be very good. how does london compare with other global cities? >> i think munden is getting better and better. the big debate is between london and new york. i spent time in new york this year. it is fantastic for restaurants. london, with all these openings, is going gangbusters. guy: richard, thank you very much indeed. enjoy lunch. up next, the year ahead.

sam grobart investigates the companies, technologies, and industries set to make an impact in 2016. that's it for "the pulse." see you in "surveillance" in half an hour. ♪

sam: every year around november or december, many journalists will get an assignment that makes them feel -- >> gulp. >> oh boy. sam: a little nervous. >> shoot, man, you are putting me on the spot. sam: they will be asked to write a story about what will happen in the coming year. >> the worst thing journalists can do is try and predict the future. >> i don't think anyone has made an accurate prediction once. >> there is an excellent chance that i am going to be wrong. sam: predicting the future is a tough job, but you know what they say about tough jobs. some schmuck's got to go out and do it. >> i'm standing in front of a jet engine. sam: we thought about the latest