i'm rishaad salamat and mrs. trending business. -- this is trending business. ♪ we will take you to tokyo this hour. the biggest rally in three months as the yen gets his strongest level in nearly two years. it is the end of the so-called brexit bounce. the referendum is too close to call with two days to go. he hopes britain will stay in the eu.

india relaxes rules to attract foreign investment. the change that is proof that they could spur growth. follow me on twitter. that is my handle. china and hong kong markets getting underway in 30 minutes or so. markets in malaysia are just about online. let's get a pulse of the action and find out who was wearing which hat. david: it is hard to gauge what it is at the moment. we are talking about 2.5% on thursday. with two to three days to go until the referendum, we are entering the championship round. there is a lot more reason to be cautious especially after this rally yesterday. mixed at the moment. in turn, you look at the

dollar-yen trading below 1.04 since about midnight local time. about the yen. 225,you look at the nikkei it is well off the lows of the session at the moment. volumes are quite thin which will exacerbate some of the moves we have seen, especially across emerging asia. have a look at dollar-yellen. n. 1.03, the high. what you want to watch is 103.5 5. that was the session low back on thursday. look at these levels. still very strong levels. 2014 -- even look at the short-term trend. eight straight days that the

dollar-yen has grind it lower -- grinded lower. that would be the lowest since 2011. we are getting to a point where people will talk about intervention. will it need to be a global effort? on hold at the moment, of course. that is what we are getting from analysts. pound, 147 at one point. a little more softer at the moment. threen lows -- a full u.s. cents. there is a function under bloomberg. it gives you the probability of a brexit based on betting odds. that is the index. you run that and you get a number which is at 25%, the chances of a brexit at the moment. that is a fairly low percentage

at this point. rishaad: david was mentioning the brexit which is a key concern for global investors. what would it mean for our part of the world? how much turmoil what a brexit cause for asian economies? julliett: this is the million-dollar question that everyone wants to know but it could be benign, according to a note by capital economics. a brexit would add most cause a gdp drop of about .2 of 1%. that is based on a worst-case scenario estimated by the national institute of economics and social research. they say exports to the u.s. presently account for .7 of 1% of asian country gdp's. 25% declinee was a in u.k. imports, worst-case scenario, that would not have

anything to do with regional gdp across asia. only a few economic scenarios -- economies in asia would see a noticeable effect on growth and they are cambodia, vietnam and hong kong which has strong trade ties to the u.k. everywhere else in asia would be limited, although it does remain a possibility of a sharp slowdown in china and what he thes a messy unwinding of bubbles in some countries. a separate note at capital economics published last week says china is well-placed in either brexit because china's capital account is largely closed. the national linkages between china and the rest of the world are fairly limited. the u.k. leading the union would be seen as mostly negative, according to one representative. let's hear what hong kong's richest man said. he was speaking exclusively to

angie lau. they don't leave. if brexit happens, it will be detrimental to the u.k. and it will have a negative impact on the whole of europe. but, it is not the end of the world either. the corollary is what if they remain? is that an impact? juliette: there has been concern about japanese bond yields. this is from bank of america and merrill lynch research. they say a record surge in foreign ownership could haunt the second-biggest debt market. this chart shows us the yields in japan, germany and the u.k. they get record lows at the chance of britain leaving. that is according to the number

crunch at the brexit probability index. it has been rising since mid-june. in tokyo strategist says if britain stays in the eu, we could see spikes in yields trigger some selling pressure. if we have a look at the impact of the yen, we know there has been funding cuts in japan that says any policy shifts of swapping dollars into yen to fund managers could trigger some affects to the markets. there are some hope that they will stay in the eu. experts tell us we should be watching for potential unwinding in jgb's and the japanese yen. rishaad: thank you. we will have a more detailed look throughout the course of the program. brexit is center stage at the moment. more of our

exclusive interview with the chairman and his take on the chinese slowdown in about a half-hour. let's look at the other stories we are watching, including the world's biggest supermarket chain trying to make a foray into the world's second-largest economy. we have that story and a roundup of others. >> i do. we will start first with -- the company says it is extremely disappointed that brings campaign used the company's name and logo. may launched legal action against the campaign. the logo was featured in a brexit video. nissan says it is not supporting any u.k. campaign. walmart is boosting its effort in the china market. stake worth at 5% about $1.5 billion.

it will take ownership of their online marketplace and sam's club will open a store on jd. sees 25% ofsays it global retail growth in the next 25 years. most of revenue comes from the u.s. seeing acould be production base in china. the city has emerged as the front runner in an investment that may be valued at $9 billion. other places actively trying to get investments. we are told a shanghai government owned company has signed a nonbinding mou with tesla. billion,invest $4.5 and putting of land for most of its shares. building its cars in china would allow tesla to avoid 25% import

taxes giving the vehicles and edge against other luxury rivals. overad: now, india is boarding rules on foreign directive investment with a range of measures intended to boost growth and bring more jobs. these are radical changes, that is with the government is saying. >> yeah, the government is saying these are sweeping changes. basic india is now the most open economy in the world when they comes to foreign investment. this is a pickup of modi's efforts to open up. when he became prime minister over two years ago. the timing of this round of reforms is two days after the governor announced his exit amid internal political pressure that has frazzled some global investors. some analysts say this could be the government effort to show it is committed to reform and mitigate any market fallout. the next question is how do they stack up? the biggest changes when it

comes to this raft of measures that airlines. some defense sectors up to 100%. foreign capping ownership of global airlines by foreign carriers has been left u untouched. it applies to trading of fruit products or traded in india, as well as airports. from a suitable companies -- pharmaceutical companies could be 4.5% as well. the other major overhaul was 30% over sourcing. this is most notably for apple. it had previously had to set up at least 30% of its components locally before setting up shop in india. there is a three-year grace. period which has been extended to five years when we are talking about products. if applied, this would be a

major win for tim cook who was in india last month who was pushing very hard to get into the smartphone market. it have to go through partners in india. getting the standalone black ships on the ground -- flagships on the ground would be crucial for apple where commands only 2% market share. what is notably missing is any realization of these local requirements, the multibrand retailers like walmart where millions of small shop owners are likely to purchase any changes to this area. it does seem modi is trying to balance international appeal with domestic popularity. looking at what was said at last week's bank of japan policy meeting. the next trouble spots are traders and why the referendum is not the only

threat to the markets. ♪

rishaad: the u.k. referendum is dominating global markets but on this side of the world have issues. for example, the tensions in the south china sea. theimplications -- here is deputy head of asia for research. thank you for joining us. the south china sea is a powder keg potentially. the thing is how where he should we be -- wary should we be? >> we don't think a major conflict is likely anytime soon. we think that is a remote possibility. however, the biggest risk for countries and companies that have assets going through the south china sea would be

unintended escalation as a result of conflicting claims by different countries such as china, vietnam, the philippines, malaysia and so on. rishaad: that is just it. could we get to weigh position where the sides become so polarized that doing business in one jurisdiction may mean that you cannot do business in another? anton: that has certainly been the case in the past whereby companies that have operations in china, but have displeased the chinese government have been threatened to have their access to the chinese market cut off. there is a possibility of that. there is also the other side of example,whereby, for actions by the chinese where theren 2014 was oil in the contested area led to protests by workers in

vietnam, not just against chinese companies, but companies that were thought to be chinese. rishaad: anton, when we look at the countries individually. as their administrations will make a big difference when it comes to china. let's look at the president. what difference that makes given his rhetoric on the campaign trail, what difference will he bring to the party compared to the outgoing president? then: i think president-elect has been worrying to a lot of business communities in the philippines. if you look at his key cabinet picks, we think back the main theme would be unity as opposed to change. differ to hisld

ministers. if we look at the budget secretary, he said he is happy to expand the budget deficit to 3% of gdp and continue infrastructure development. themes,ain economic we're likely to see continuity. of course, duterte is much more unpredictable compared to the current president. rishaad: indeed. the continuity argument, how does that fit with his declaration that he wants communists in his cabinet? anton: that, i think along with his policy on mining, those are the big two exceptions that we have to watch out for. talks, hepeople hold will restart formal peace talks with communists next month. he has appointed three leftist

politicians into his cabinet. difficult, will be even though duterte will have a greater chance then his predecessors to bring about peace with the communists -- it will be resisted by the more established political parties in the philippines just because the demands of the communists would impose on the philippines would be difficult to accept for a lot of those in the country. rishaad: let's moved to another country -- myanmar and their administration. ofhas an enormous amount influence. there was a lot of expectations. she is almost being set up to fail, isn't she? anton: i think she will have a rising through

the high expectations that the voters have placed on her, but so far, there has not been anything that suggests that she has made a big mistake or anything like that. she's managed to keep relationships with the military stable. that will be very important indicator to look out for, whether she can maintain a cordial relationship with the head of the armed forces. but, in terms of the general outlook, we think myanmar, if you go back to the beginning of trajectory is for economic and political revitalization. there will be issues in terms of how the military manages the relationship with the government, especially the president. rishaad: great talking to you, anton.

>> the stories making headlines around the world. the senate has voted down a series of measures intended to prevent terrorist suspects from buying guns. two of the defeated proposals were offered by republicans and two by democrats but none reached the threshold to go forward. some republicans say they are working on a new effort. gunman identified himself as an islamic soldier in a 911 call during his attack in orlando, according to transcripts. sectionslly edited where he pledge allegiance to the leader of the islamic state. the justice department issued the entire transcript but will not release audio recordings as respect to the 49 people killed. the united nations has released $15 million from its emergency response fund to civilians displaced by fighting in iraq.

baghdad claimed to have liberated the city, although there is still violent clashes. thousands of people have managed to escape of the human estimates there are as many as 50,000 civilians still in the city. global news 24 hours a day, powered by more than 2600 journalists and analysts. this is bloomberg. rishaad: up next, more on the deal that offers walmart the chance to a fresh char start in china. ♪

rishaad: you are with trending business. walmart looks to reshape its operations in china and picking up a 5% stake in jd.com. walmart hoping the deal will run $1.5 billion and will give itself a fresh start in the market.

we have more. >> with walmart buying the chinese online retailer jd.com, it is a case of if you can't beat them, join them. they had a tough time getting into china's online retail space so they are selling its own e-tailer to jd.com and buying a 5% stake in china's number two retailer. it is valued at $1.5 billion with 145 million shares. this will add $.16 to $.19 to its eps. with wall mart already having an already established foothold and a space on jd.com for sam's club. as for jd.com, it gets expanded access to online grocery sales. it focuses on selling to female shoppers in cities like beijing and shanghai. if you go to the website, the

main thing it pushes are imported products, fresh vegetables, and cosmetics. since walmart bought it, growth has slowed as it tried to reorganize and that has led to where we are today. it is announcing a sale. in february, the ceo admitted they had been in a transition phase since acquiring full ownership last july. he said walmart needs to succeed in china. he predicts 25% of all global retail growth will come from the world's most populous country in the next five years. china is not a nice to have, but a neat to have and jd.com is a purchase in the right direction. rishaad: we will take a break, but coming up, hong kong's richest man speaking to bloomberg and tells us why the future is bright. we are going to get the markets open in hong kong. there are suggestions it will be

pretty much flat. we are seeing if yesterday's rally could stir some headway when it comes to equity trading. we have the opening numbers for shanghai and hong kong right after this. ♪

rishaad: a look at our top stories. a strengthening yen is weighing japanese shares.r remain camp, 42% and the leave camp, 44%.

an easing of local sourcing a relaxing of fdi restrictions. india.s in taking over walmart, with a store opening on jd.com. believe thismbers is producing underlying inflation. the central bank's april minutes are released as the imf falls short of its economic target. let's see what is going on at the moment. the reserve bank of australia releases the june meetings. sayingeing what they are

at the moment, talking about this june policy of consistence with inflation. the aussi dollar is slightly higher against its american counterpart. let's have a look at what else is going on in the market. indeed, it is that open in shanghai. david? david: everything we have seen over the last three hours will consolidate the market. the equity markets are looking like this. you have hong kong and china and then you have manilla. the equity markets are pretty much in the green. look at these different indicators. so, whether it is oil. you look atollar, the bond market.

europe to asia. this means the last 30 minutes of that integral things to the japanese session. the dollar-yen is at the 1.04 level. that said, a few things we are watching. i just had it up. let me see. china, we are looking at several changes when it comes down to the recommendations. out, cutesearch coming to neutral.

this is the developing story. rated buy at icbc. we are watching the casinos that. for that june.t we will see expectations lower than -- it will be revenue lower the next citations. ons.ower that expectati so, that is just something to keep in mind over the next few weeks. july typically not

the best months. rishaad: an abenomics reload, saying japan is falling shy. now, is theoined imf saying that abe has failed? >> the deputy head of the imf said this was a very serious and bad situation and they have had a lot of success. at the same time, they said they don't be the government reaching their targets for debt reduction, for growth in the economy, and they don't see the bank of japan raging at the inflation target within the timeframe they have set out. they need to refocus or redouble their efforts, one, to set more

realistic timeframe's for debt, growth, and inflation. but also, to do more to achieve those realistic target. rishaad: what has the imf done to focus on this? call yesterday was that they should focus on the increasing income of workers. they are basically saying, focus on the third arrow of the three arrows of abenomics. fiscal stimulus and monetary stimulus, they have a place still, but they should only be same as support in implementing the structural reforms he promised. fullhanging how the time versus part time contracts work. he is there and seeing a 3%

increase for the public per year. hopefully getting money and more people's pockets will result in more growth and more spending as a result of that. the government is saying, focus on wages. that will lead to the growth and the inflation the government is looking for. rishaad: james, thank you for th at. thete to remain in european union could be quite a likely lose their here. about? this all rallying.s have been >> that is right. eventually we have seen this record surge in foreign ownership of japanese government bonds. you can see this tory on the bloomberg. foreign investors have been

straightg these for 23 months, the longest stretch since the securities association started compiling this data. in may, they purchased $16 billion. that was after we saw a record high level of foreign investment into bonds. this chart goes back to 2011 and we can see this growing foreign presence of investors. the ownership of bonds has been only on the increase since 2011. at the end of the march quarter, ownership made up 1/10 of the market. they might actually pull the trigger and i could prevent local investors from selling as well and cause a rapid selloff. let's have a look at this chart

as well, which also shows the wrecks it as played out by the bond market. concerns as brexit played out by the bond market. the white line here is the japanese yield. bondseld of the 10 year have been falling faster. we are starting to see the likelihood of a brexit increase, particularly as we started to see that coming through in the latter part of june. this is according to the brexit campaign poll. basically, this surge in foreign ownership of jgbs could come back to haunt the debt market. eu,ritten does stay in the we could see some sparks in th ere.

this could trigger selling in the bonds. also, i want to show you the impact of the yen. research says this could trigger shockwaves to the market. of course, we are hoping britain will remain in the eu in terms of the pound and equities. but watch for a potential unwinding in jgb's. rishaad: thank you very much. de, that he were ma says they were "without merit." they received letters from a group of investors. they are questioning if arora has a conflict of interest. this is really coming off the back of a widening equity

market. the fuel-efficient the scandal forced mitsubishi motors to hault production. mitsubishi motors will submit new test results later today. production is expected to resume next month. the company will forecast its inrst full year loss eight years. shares in the indian division amidbeen this re suspended allegations of fraud. it was halted at the end of may. say it is a victim of fraud by the employees. and so, the profit is halted. recent economic data show

china's economy is stabilizing, even amid concerns about rising debt. manys richest man owns asset in china from ports to retail. we spoke to him with his first interview in four years. he says he remains full of optimism. [speaking foreign language]

reporter: but recently, you faced criticisms from some publications in mainland china, accusing you of diversifying away from china at a time of slowing growth. is this true? ka-shing speaking foreign-language]

reporter: there are a lot of chinese companies who are looking overseas to acquired businesses, but they keep getting shut down by regulators, including yourself. what is the impact for chinese companies in the future? how do they fix this? ka-shing speaking foreign-language]

reporter: is this frustrating? [li ka-shing speaking chinese} rishaad: well, that is a lot

with li ka-shing, his views on the hot topics in hong kong. we are going to be talking to the chief executive, and the head of the company in hong kong. ♪

approved a new share class. all eight members of the board will make it widely expected decision.

we get the latest from san francisco. facebook at a shareholder meeting on monday, a couple of controversial proposals were approved. this will allow all board members to be elected for another term. this will include peter thiel, who was involved in a controversial lawsuit. another thing they approved was a change to the stock structure that would ensure mark zuckerberg can retain control of the company, even if he sells some of his shares or they are given away. they were also some interesting questions at the meeting. oke of them about onwhen facebo is going to get into china. >> we said our mission is to connect everyone in the world, and china is certainly part of the world. we are learning and studying about the chinese market. reporter: of course, facebook

does have a business catering to chinese exporters, though the app has been blocked there since 2009. next, we will discuss the brexit and the big picture in asia. ♪

>> from our studios in new york city, this is "charlie rose." charlie: we begin this evening with the conflict in syria. 51 officials signed an internal memo. calls for targeted military strikes against the assad regime. a strategy of diplomacy cannot noteed if damascus is pressured. secretary of state john kerry has advocated a more aggressive approach to syria and president obama has thus far resisted