rising with polls suggesting the u.k. will stay in the european union. a 30% chance now of so-called brexit. china and india it may take a stake in russian to plug ant rosneft budget black hole ahead of the election. >> i'm watching the markets today. risk? what risk? in thel about the rally pound today at the core of these gains we are seeing in the asia-pacific. abovechange rate just 106. as you can see at the bottom of your screen, it has been pushing top endthe high end or of that range. i will flesh out everything for

you. i will be back more in a bit. nowe: bookmakers are weighing the chances of britain leaving the eu at 30% with the pound climbing is campaigning resumed after the murder of jo cox. leaders visited the sunday talk economicsle 10 nobel laureates wrote an open letter saying that britain is better off in the eu. tome minister david cameron questions on a bbc television special accusing leave campaigners of misleading the voters. a bloomberg tracker of six posters showed a sharp drop in the leave campaign since the murder of jo cox. support now averages 45%, with 42% in favor of brexit. apple facing a new legal hurdle in china, a patent violation on

some iphones in favor of a small local rival. beijing's intellectual property office is the iphone 6 and six plus infringe on the patent rights of a phone maker because 100 --larities to its see model. apple has filed an appeal, which means it's product can remain on the market. no date set for the hearing. vale haselling us that a view to sell a minority stake in iron ore assets, fetching as much as $7 billion. top producer joining glencore and anglo american and trying to pay down debt through asset sales. vale wants to raise $10 billion through 2017. last year it reported its first annual loss in 19 years. the brazilian joint venture between vale and bhp exploring restructuring loans.

this is after a disaster at its iron ore mine hurt cash flow. 19 people died when a tailings stand collapsed, flooding the area in toxic sludge. japan hosted a surprised -- posted a surprised trade deficit in may. economists had been expecting $670 million surplus, but instead we have seen a deficit of $380 million. we have brett miller here, bloomberg's japan and korea economy editor. besides the deficit, anything else standing out in this report? you mentioned, it is the eighth straight month of declines in may, so that is confirming exports have been week all year and the outlook continues to look weak. the threeble that

biggest regions, exports declined to the u.s., europe, and china. was 15%, the decline quite an indication of the weakness in emerging markets. china is forget that japan's biggest trading partner, so that's quite a hit. if we look at the individual industries, still exporters have suffered quite a lot, as did semiconductor makers, so if we look for to the rest of the year thinking about what the yen is doing, and the yen's getting stronger, the outlook for exports is weak. kuroda is giving a speech. will he say athing new about the economy? >> there is certainly always a chance. the governor speaking at one of the most prestigious universities in japan, so we can expect that the content of the speech will be quite broad here it will talk about the economy, monetary policy, but as always,

the president will be following the governor and is open to anything on the currency, anything on the outlook to monetary policy. we have brexit coming up at the end of the week, so anything that could touch on that in any way will be up a lot of interest. angie: there is a lot of speculation that if brexit does happen, it will be a safety haven play, driving up the yen. it could hit 100. ,r. yen, eisuke sakakibara expects intervention if it doesn't 100. is that the sentiment there? well, there has been a lot of talk in japan about whether the will be intervention or whether there won't. get so far is that japan is nervous about intervening by itself. will comeg does,, it after the brexit vote, and japan will be arguing for coordinated intervention with the g7, so nothing before friday. we will be watching after friday

to see whether markets move erratically on a possible brexit vote, and then the possibly of coordinated intervention. anything on its own could be futile for japan. angie: thank you so much for that. the u.k. referendum on so-called brexit will dominate the markets this week as we have discussed, but india will have to do with another looming departure. hasgovernor raghuram rajan announced he will not seek another term. we have more from mumbai. what is the mood like in premarket? mood is subdued. forwardseen rupee falling. we have also seen the equity futures retreat in singapore, index futures, so obvious markets are concerned about the impact that raghuram rajan's

exit will have. have politically criticized him, but you can't deny his major contributions to india here. in terms of his major contributions, if you go back to 2013, when raghuram rajan took charge of the central bank in september 2013, just days after the rupee had fallen to a record low. key thing for him was definitely to lift the currency and also to bring down the volatility given that volatility in the one-month implied volatility for the rupee was 22%, so the biggest contribution he has made is that he has lifted india's credibility for investors, helping cut down rupee strength by more than half, and by propelling

foreign-exchange reserves in the abouty to a record high, 25% came during his term. apart from that, he got the government to agree on an inflation target for the first time in the central banks history, and apart from moving ahead in the sense that he also talked on topics beyond monetary policy, like calling on the administration to achieve fiscal discipline. and now he is stepping away from all of that as a result of a lot of really aggressive language in india. some of the big indian investors said? views are split because if you look at what has been said, they said the rupee has come under pressure because

exit,, som rajan's they believe india will take a hit because of that. if you look at what pimco and others have said, they said india's economic growth and attractive carry returns are good and have good promise, and india will do better with or without raghuram rajan. angie: we will leave it there. 's departure has dominated our discussions today on bloomberg television. in terms of the outperformance for the year, we still see value in the indian rupee against the forwards. rajan was a fantastic rbi governor.

he stabilize the rupee. >> the fundamental news is still broadly constructive and the ford curve is very steep. angie: the bank is not worried his replacement will stray from the path laid out by rajan. >> the fact the government has been with the rbi on this new macro policy management framework, particular the on monetary policy. it is now targeting inflation and trying to keep that new monetary policy framework intact. so we doubt that the government is going to put somebody else in a laxityo then takes you on macro stability management, so at this point in time, we are not concerned about this causing a big problem in the macro outlook. angie: we also spoke to the former japanese finance

minister, eisuke sakakibara, on the pressure on the japanese currency. he said the yen is headed to break the 100 mark. gradual appreciation of the currency is taking place, so i think that by the end of the year, it is quite likely that the yen would reach 100 or even break 100. if it breaks 100, the bank of japan intervention as possible. in order to intervene, you have to get agreement from the united states. at this level, i don't think the u.s. would agree. that's the word from asia. let's get back to the markets right now. we are seeing a rally across asia. 1.4%., a very good day, at these levels, we a race the losses from last week.

i want to point this out to our viewers. have a look at the rupee. when you talk about the credibility that mr. rajan brings, we talked about that spike in 2013 windy rupee -- when the rupee hit a record low. it has weakened since then, but since then it has been a fairly smooth ride up. a lot of that has to do with market weakness. have a look at these forwards right now on the dollar-rupee. i think it is very clear. these are the futures. point 50 and change, so right now we could be looking at the kleins of 7/10 of 1%. -- at declines of 7/10 of 1%. have a look at the nondeliverable forwards. you are looking all the way out

to one year from now, pushing toward 72 there, so 1% pop on dollar-rupee forwards. that will be something to watch when we get the spot rate out of india. bit of face time this monday, why not? a rally across asia markets, best day so far in four weeks. let's see how things go in japan after the lunch break. we do tend to get soft as during the lunch break in japan because it does tend to carry everything else on its shoulders. you can see a broad-based rally there. look at how the tpoix breaks down, almost every stock higher there. 94% of the stocks on the topix on the way up. it's all about the rally in the pound. have a look at the bond markets,

also pricing in -- pricing out the chances that britain does vote to leave the eu. yields on the way up, prices on the way down. angie: still ahead, what makes a green bond green, growing skepticism about issuances in china. odds of the brexit and how investors should prepare for this week's referendum. "asia edge" next on . ♪

>> it is 11:16 a.m. in hong kong. these of the stories making headlines. paul ryan has confirmed support for donald trump. republican unity is more important heading towards novembers election. a seniorhat as republican that he has a responsibility to prevent a democratic win, but will challenge trumpet the nominee does not stick to conservative principles.

orion has rebuked the tycoon for doubting a federal judge of mexican descent and for threatening to ban muslims from entering america. join a rallypeople in okinawa, protesting the u.s. military presence on the island, speakers to mandate a review of the bilateral security agreement which sees okinawa posting the bulk of american forces in japan. anger after perceived crimes by u.s. personnel has grown after the rape and killing of a local woman in which an american contractor is a suspect. a former marine was arrested last month, but has not been charged. lebron james celebrating his most improbable feat to date, the cleveland cavaliers becoming the first team to recover from 3-1 down to win the nba. points ases scored 27 the cavaliers won their first championship, 93-89 at golden state, victories and decades of cleveland being in the sporting wilderness, night since 1964 as

cleveland claimed a major sports title. akron,james was born in ohio, 12 championships with the miami heat, but this is his first with the cleveland cavaliers. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. am.ne man iyvonne man angie: pollsters and bookmakers seeing a lower chance of britain leaving the eu, and that has helped the pound to rise against the dollar. our next guest also things the british will stay. he joins us now in the studio. this is a result of that tragic death of jo cox. >> possibly, partially, yes. it is. that they ares is more likely to remain. onlynk the probability was 35% to 40% that they were going to leave last week before that

happened anyway, but now that probability has gone down more to say about 20% to 25%. angie: still it is not certain. we saw a lot of fluctuation in the polls with the leave camp gaining momentum. there is still very much a lot of anger internally in britain. a lot, yes. the immigration issue is the key, as it is across the europe, and the main supporters have not done a good job at handling that. when i speak with friends in britain about getting doctors appointments or social housing, there is tremendous strain. so i don't think that if they stayed that the whole episode of the eu untangling is over, because as we know there are a lot of other things coming up in france, holland, and italy, but in the short term, i would expect a rally of private -- of 5% or 10%. angie: that's the thing. how much exposure to foreign investors have in the u k and europe. >> they own over half of the

ftse, but what would bounce the most are the banks. correlationtight with the pound, so what you would see is a big relief rally not justund and banks, a u.k. banks, but also the european banks. they have gone down a lot over the past two weeks over the idea that this would happen and that with throw into doubt the role of london and their business models would be under great scrutiny, so i would look for -- and you are right, angie -- you should never say never. i think they will stay. therefore, if i had a thousand dollars, i would take $500 today europeanmething, maybe banks, maybe just a ftse, and on friday, i would buy with the other 500. angie: so you are hedging with the other $500 if you have $1000. >> maybe they will leave in the

market will go down a lot. i did buy today, but i will get a better price on friday. the more likely scenario is they will stay and we will have a big pop up, and i would not want to be looking at the market this time next week, so, yeah. saw the volatility and all the safety haven currencies. that seems to be off today to the relief of the japanese with the strong yen. do think that is set to continue? >> the pound recovery? angie: the currency fluctuation we have been seeing with investors flooding into safety havens. >> i think it would unwind on the back of the british remaining. the markets have really priced in a lot of negativity in the , maybe- last two weeks 20% related to the fed. i would also throw in something about the u.s. election, but most of it is brexit, so that

volatility would dissipate. angie: stick with us. there is a lot more to talk about in asia, including china. thanks. coming up, russia mulls selling one of its corporate crown jewels to balance its budget. we will look at it when "asia edge" continues. ♪

♪ angie: welcome back. you are watching "asia edge". russia is considering selling part of rosneft to fund budget short falls. this could be rush's biggest privatization ever. >> it could be. expecting to raise at least $11 billion, selling 19.5%. this would be a record for russia. marking and india to be a part of this deal, but

india has publicly said they are interested in buying stakes, however there has been no comment on a joint deal, and this is what russia would like. on friday, the indian oil minister said there is no reason why they could not do a joint deal because china and india art not rivals. they have worked together in some joint ventures, so there is not necessarily any rivalry there, but no comment from either side officially. back inian president april did say they were looking for a strategic partner and looking to do the deal as soon as they find one. they need the money. angie: why is russia looking at asia specifically? their relationship with the u.s. and eu has not been great after the military incursion into ukraine.

onctions have been put russia, and that has affected his relationship with the eu and the u.s.. if you look at china and india, two countries out of three, the fastest-growing economies in asia, a kind of makes sense, right? russia is looking at china, boosting oil and gas supplies to china, and china is an important player for russia. india has not had a lot of involvement in russian strategy, oil and gas, but now india's economy is one of the fastest-growing, overtaking china, so naturally it makes sense to look there for growth, and india is poised to become -- for consumption to jump in the coming years. angie: thank you so much for that. we are looking forward to the afternoon business in tokyo, where we are seeing a weaker yen boost equities in japan. this despite exports falling

more than expected. we are also watching india has raghuram rajan says he will not extend his term, and watching the rupee. the latest after this break. ♪

>> markets returning to risk on as chances of britain leaving the eu diminish, sending the pound higher. bookmakers putting at the chances of a brexit at 30%. oil is also gaining and the yen weaker after data showed japanese exports falling more than expected in may. the rupee set to fall following raghuram rajan's decision not to seek an extension to his term. the currency is asia's second-worst performer after the yuan. since taking office, the former

imf chief economist help to strengthen the rupee. vladimir putin considering selling stakes in rosneft to china and india as he struggles to hit spending targets. moscow once to raise $11 billion from 20% of rosneft. it would cover budget short falls and strengthen ties with asia. those are the headlines from bloomberg news. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. let's get the latest on the markets. get this waiting to initial quote on the spot rate .n india we should see that higher than 67 to the dollar. yes, we are seeing a rally today.

it also could be an element of short covering. as we move towards the vote on thursday, traders are expecting the same thing, expect liquidity and spreads to widen and volatility to spike. you put those three things together and that's what you would get when you take a look at dollar-pound. in fact, goldman sachs out with to have aling clients .ook at some key crossers that is something to watch closely as well. equity markets doing this, japan coming out of a lunch break, fairly stellar morning session in japan, 2.2%, so we have given back some of those gains in tokyo. australia seems to be one of the out performers, as with south korea. we are starting to get some more red here.

you look across asset classes, oil, sovereign bond markets, it is still showing you risk appetite does main robust this monday morning. more now on the looming departure of raghuram rajan. he has announced he will not seek a second term. what does this mean for india? >> i think it is pretty significant. reformercognized as a and widely respected on the global stage. he did very good work in india. he brought through the new inflation mandate, new rbi policy, leading the drive to clean up the bankss balance sheets. he was doing a lot of good work,

recognized as a reformer, and emerging voice on the global stage, and it's quite a blow for him and policy credibility. angie: some would say he was pushed out. out,if he was not pushed he was insulted despite what many regard, including foreign investors, say was a great job. >> certainly. constantly criticizing him, leaning on social media to expressed opposition to what he was trying to do. he himself was always having to factionsattle various of the administration, and at the end that's why he's not going to stay around. the underlying tone was that he faced too much criticism. that's where the dent to in his credibility is. that's almost like another indictment on what many say is india's weakness, it's intransigence when it comes to politics, so what happens next?

we know he is stepping down and going back to academia. >> that point of intransigence is the key point. finds to go out there and someone who is just incredible as rajan, who can command the gravitas and respect of the local base. that will be very difficult. you may not be in a hurry to return to india when you see , so itppened to rajan means he will probably have lean back on someone in the bureaucratic world, maybe choose a candidate who would be less prone to make big political statements, and then that begs the question if they will get someone who will stand up and do the right thing for the economy or central bank rather than politically. that is the problem for primus to modi now. angie: is it enough to derail the india story? >> it could certainly done damage it -- damage it.

the inflation mandate, the new rbi board, that should continue, even when he moves on. appomattox --ng apparatus and whether the political will will he thereby his successor. it is too early to tell whether the wider prime minister modi project of india, but in the near term, i think it's fair to consider it a significant blow at the very least. angie: absolutely. watching the story closely. thank you so much for that. >> checking other headlines this morning. alibaba unit is planning to buy thailand toin become a key player in financial services. ant financial once the option to

smallse by 30% and offer loans. reported the struggling steelmaker arrium five mins before the election. primus or tumble will provide $36 million in machinery. prime minister turnbull described it as a no regrets investment that will improve profitability and create 2000 jobs. said to be trod from the hang seng family of indexes because their high shareholding concentration has prompted wide swings in the stock. they had been flagged by the securities regulator, both seeing enormous swings, rising as much as 65%.

shares are down 64% this year compared to the 5% decline in the hang seng index. you thought msci was hard to please, china may have a tougher time winning over the compilers of global bond indexes. we have more on this. china has made some progress here when it comes to bond markets. the question is, is it enough? you are fair, yes, right, china has taken major steps towards better levels of accessibility, essentially got rid of the quotas on its interbank bond market, which is the third biggest bond market in the world. if you want to bring this story , bring up the top china stories. this may not be enough when it comes china wanting to get its domestic nodes added to global bond indices compounded by the likes of citigroup, j deported, barclays, etc..

these hurdles by and large are the same types of issues identified by msci. there are unresolved tax issues as well. there has been a lot of global enthusiasm when it comes to bond issues. more or less in line with the appetite we have seen for equities in terms of that 66% jump in that same time for chinese stocks. pacific investment management says that bond investors even more so than stock investors are more likely to be driven by these technicalities and will want to know how they can get their money in and out. scrapping all the entry requirements does get investors excited, but it's the ability to concernt is of greater when we see markets going through volatility and stress. the question is what exactly is at stake. pay heed to hsbc, 100 $50

billion worth is what is at stake. they see that as the amount and terms of government debt that china could raise thanks to the inclusion and these major global bond indices comparing to estimates of between $30 billion for msci inclusion. all of this coming at a crucial use that china could extra funding. beijing is looking to attract inflows given that it has record bond issuance, weaker currency, and a trillion dollars of capital outflows. saying thats outflows situation could worsen given that we have had that rebuttal from msci. the question then is what is the likelihood of getting the green light for bonds. jpmorgan has placed chinese bond markets on review. barclays said in march that it is monitoring the situation. the other thing to keep in mind is that the catalyst could be the yuan sdr inclusion.

chinese government bond yields are 200 basis points above the u.s. treasury counterparts. yield withfor passive inflows may be and not to compel global central banks to encourage investors to get into chinese sovereigns. angie: thanks. china has overtaken the u.s. is the world's largest issuer of green bonds, but all may not be as it seems. the inclusion of some coal projects suggest that china may not be as green as it appears. green bond market, first, what is this about? the green bond market is a relatively new phenomenon with only four years of history. chinese institutions only started to sell green bonds late last year, and this year, they

are already the world's biggest issuer with $8.8 billion of issuance, one third of the total global issuance. the u.s. ranks number two with about $2 billion of issuance, and a number of european nations such as the netherlands, germany, and sweden, they also rank high as take green bond issuers because of the regions higher awareness and social responsibility. includehy would china in green bonds? that seems contradictory to the goal. that is true. china has a different energy structure compared to many other nations. accounts for 70% of energy reserves in china, for chinese regulators of government, the encouragement of clean use of coal still makes sense, but

global investors pointed out that this conflicts with a lot of global standards for green bonds as well as environmental friendly investment mandates from some investors. angie: no doubt that is true. has china been selling a lot of green bonds in the international markets? >> not that many. 2-3 so far. most are sold domestically, action more than 95%. foreign investors do not really participate in the domestic markets. analysts saying that it's issuers want to sell its bonds to international investors in overseas markets may have to adopt international standards otherwise it will be a hard sell. that again.an say ok, thank you so much for that. outng up, we will find about pessimism around china and why it is overdone. ♪

>> 11:44 a.m. in hong kong. ses are the stories making headlines around the world. disaster in falluja. citizens flee as falluja is free. the iraq he army has declared and liberated. the united nations says more than 80,000 people have floods as the operation began last month, 10,000 in the past three days. the northern city of mosul is the only northern area under isis control. iran has agreed to buy 100 planes from boeing, the first deal in the country since u.s. engines were lifted in january. it follows iran's $27 billion agreement to buy 118 planes from airbus. a licensell needs from the u.s. treasury for the deal to go through. iran says more details will be

revealed. home prices rose and fewer cities in china last month, prices climbed and 60 cities in may compared with 65 in april. growth in average new home prices also slowed for the first time since october. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. welcome back. we talked about the property prices, new homes at least, in china. it seems to be coming off the highs we saw last month in terms of recovery. is this a sign of concern? i just heard you say 60 out of 70 cities, the prices are going up. >> not as many as before.

>> the property market is healthy in china, and that is a good thing. in stringent to healthy, and too is -- in shinjin healthy, and now that is coming down. it is a bit too far too fast, but that is usually the case in china. china, is ition in as bad as some forecasters are saying it is? >> i don't think it is. the property market is one thing we can talk about. it is hard to have a recession in china with a good property market, but you can also talk about how the money supply and credit growth a robust. you can talk about how the evaluations are cheap and how the industrial inventories are bottoming out. there are lots of good stories hare market that we

never hear about. on the other hand, you have strange things happening in hong kong, south china sea, this apple business. who is this person of authority or interest, so it is a very opaque thing. china ishose reasons, guilty until proven innocent by the market. >> you are saying by china, sell india. in light of what we have heard , is this one rajan person who changes how you plan your portfolio? the person behind the bank recapitalization, which is the main reason we should be interested in india again.

his rbi was the one pushing through that recapitalization, particularly in the state banks. i think this is a clear case of office politics. i'm sure he was told to leave. he said in that land of the blind, the man with one eye is king. i was waiting for the government's reaction. they could've listened and said he is right, but it is the opposite. >> what does it tell you about prime minister modi's administration? some progressive members of his cabinet were unable to protect raghuram rajan. >> i don't have the insight into that. i'd a know what or who was behind it. >> it sends a message that one of our columnist said is

rewarding loyalty and the status quo over competence. >> yes, i think the short answer is yes. >> we still have potential for high growth, high carry. is there still potential? >> yes. we have always been structurally long india for that reason. it is the story of a big and young population and well-run companies, so that does not change. engines, one is the consumer, and that will always be there. is investments, and investments have been operating at 25% capacity nonperforming loans and the banks, the bureaucracy, and having such a good person leave is undoubtably going to dilute the power of that investment story. office politics in india, brexit possible in europe, but what about the u.s.? what kind of risk is at play there? >> binary, trump versus clinton.

weirder overalking the past couple of weeks. he is a end up that great president, but there is a huge unknown there. i think it's more likely to be with hillaryeven there is a big unknown, left wing or right wing. we don't know how far to the left she will have to go to get bernie sanders backing. so if she does have to go far to the left, we could be looking at a white house that is antagonistic with congress and cannot get a lot done. the first time that politics covers you are view of u.s. equity markets more than ever before? more than ever before, because i think that donald trump and hillary clinton thing is very important, but beyond that, just to finish my thought, it could be as well that she is

not left wing. there are rumors of a coalition between her and chuck schumer in the senate and paul ryan in the congress, and if that came to pass and ended up being a pro-business hillary administration in terms of tax ,eform, health care, energy infrastructure, then that would be very bullish for the u.s. stock markets. i do think it is a year where politics are especially important, more than usual. >> good to see you. thank you for visiting us in hong kong. tightens hisdb tightenssia --najib his grip on asia. that is next. ♪

angie: welcome back.

.ou are watching "asia edge" our southeast asia correspondent joins us right now. expected.idely the results are significant. >> a closely watched election. it is an indication of whether najib's standing has been affected by the 1mdb scandal. it looks like it hasn't. minister andrime party are intact. rural farmers form the back own

of najib's support. in a twitter posting, najib says he is grateful to the people for putting their faith in the ruling coalition again. s didn't spare effort in the lead up to the polls. made daily investors trips, shook hands with voters, and other rice necessities to those in need. the results speak for themselves. angie: is it fair to say that the opposition is losing ground here? >> what disarray. politicalbeen infighting within the opposition from the very start. the squabbles over leadership, policies, clashed on whether or not to implement the islamic penal code.

e big hav differences, so the ruling coalition took advantage of that, capitalize on that, and the young voters who would have voted for the opposition just did not cast their vote. what ever headway they had, they lost it. angie: thank you so much for that. markets middlerg east coming up at the top of the hour. standing by in dubai. >> i have a $170 billion deal for you. we scooped that story. what does the deal mean? where will the job cuts come from? we will have the fx prism and all your risks this week.

back to you. angie: that is it for this edition of "asia edge". ♪

it is all about the currencies. the rupee has weekend on the imminent up archer of the r.b.i. governor -- departure of the r.b.i. governor. the pound is rising as brexit chances fade. >> exports decline for an eighth consecutive month. the stronger yen has seen a slump. dhabi stocks climbed for the most in 18 months as two of the biggest banks confirmed