♪ >> good morning. you are watching "on the move". we are counting down to the european open. caroline is in germany. tokyo drift, japan mrs. growth estimates as it battles a strong en. what will it take to revive japanese growth? data,ial week for u.k. what does the brexit economy look like? a take over proposal from rankin

, will the double down? >> watching the ftse 100 on the back of that m&a news. look how we trade ahead of the market open. france, italy, bank holiday. markets are open, but we could see light volume. stoxx above the 200 day moving average, can we see sustained gains after the post-brexit? aboute will be talking italy and france as well. will be throwing water balloons at each other today. we do have markets expecting light volume. let me walk you through the morning gmm. japan and focus. the front end of the japanese curve, more dismal data coming

through. from a currency point of view, the markets look calm. the japanese yen not doing much. here is bloomberg first word news. >> thank you. grew less than forecast to the end of june, gdp expanded by 0.2% and the second quarter, less than the median estimate of economist for 0.7%. the data comes as business spending contracted for a second straight quarter, and exporters struggled with the resurgent yen. the european from union could be delayed until late 2019. the sunday times and says new departments may not be ready to start negotiations as early as predicted. the paper also reported that the brexit and international trade ministries are still regarding

staff, making unlikely that article 50 will be invoked until later last year. london properties taking longer despite price drops. we speak to the right move director at 9:30 a.m. u.k. time. two terminals at jfk airport where he evacuated after initial reports that shots were fired. that allhas tweeted terminals have been searched and cleared and no shots were fired. the affected terminals are resuming operations according to police. the leader of lebanon's hezbollah group has cited donald trump inciting president obama has created islamic state. he is the latest to praise the

republican nominee. his remarks revive a claim that donald trump play down as being sarcastic. this is bloomberg. >> thank you very much. side of the your globe, japan's economy grew less than forecast through june 30 by 0.2% only. business spending contracted for a second straight quarter. exporters struggled with a resurgent yen. we are live in tokyo. the sluggishness, a lot to do with a lack of investment it seems. >> that's right. private spending did rise, but a big fall in capital investment by companies. that is showing that there isn't much export demand, and companies are responding to

that. there isn't much domestic demand, so it is logical that companies would not be increasing investment. a 19% increasee in the yen versus the dollar this year, you're seeing exports hit in particular, is there yet more reason building for something dramatic in september and terms of the policy review? well, i mean, the bank of --, buts always said there is a lot of expectation that they would do something because inflation is so low. you saw the domestic deflator declining. it is either below zero or is zero,g down going towards so if you don't think about the currency, the thing the boj says they are targeting, 2%, is not where it should be.

based on that alone, you'd think they have to come out and do something to achieve that. obviously that will have some effect on the fx, but there is an expectation that the policy review will come with a package of new measures or extra easing of some kind. we will wrap it there. thank you very much. let's welcome our guest. how do the authorities persuade japanese companies to invest? >> it is back to that precious third arrow. negative rates don't seem to get those cash piles down. fiscal policy does not seem to do it. root andhey need a branch overhaul of the corporate sector to encourage money to move, from big companies down supply chain the

smaller companies. i am sympathetic to that idea of why copies would invest in increasing capacity and eight soggy market. is a structural reason for them not spending money, but at the end of the day , if demand is not there, that is a self fulfilling story. >> i'm not sure it is obvious how monetary policy helps. demand, getting the fact obama the bond market, fiscal expansion to put demand into kickstart it, is vital in japan. it is probably the model for the rest of the world before we are done, but that is where we will end up, another big fiscal push. if you don't get the structural reforms at the same time, it is a sugar rush. >> monetary policy failing to

in any way.the fx the japanese yen is your second-best performer in terms of major currencies behind the brazilian currency, up 19%. is there any hope for the exporters? not in the short term. they need help from elsewhere. if the federal reserve were tighten monetary policy, with ,uch low bond yields elsewhere a place where people were looking to move money into high-yielding assets, that would help. i don't think the yen can get much stronger in the current environment. own are struggling on their to get their interest rates low enough to make anybody else look more attractive of the major economies because rates are so low elsewhere.

a chance toey had come in with aggressive monetary easing a few months ago, and they decided not to partly because they are still damaged by the failure of the easing at the end of january. guy: two quick questions. japanese equities, heavily owned by the boj. where does that go? have we reached the limit of that? a good start to affect liquidity. >> i think there is a limit. we are not at the limit, but we are getting closer and closer. guy: they own half the market. view this as quasi-nationalization, we will have another privatization round and 50 your time. guy: 20 years, 10 years, 30 years question mark >> how long is a piece of string. intoill get more and more de facto public hands and we will see where it takes us.

i am not sure there is an alternative. the central bank owning more and more of zero or negatively gilding bonds are allowing the room for fiscal expansion, it looks more sensible at this stage. where the rest of the world goes, you say we are pushing against negative rates at the moment, is there any move in terms of the bond market, are we going to see more asset purchases on the bond side? think we are in a process except instead we need much more aggressive fiscal policy action everywhere. investors lacking that, if you like, and that since the flows of money going into bond funds by retail investors or investors generally, i think it makes that

-- supports that moved to some degree. we will have very low bond yields that will encourage governments to issue more really long dated debt, and use it to finance some things that boost a manned and infrastructure pretty much everywhere as the next stage of this fight against slow growth. it from the rest of the world, japan is interesting as the first country and the one that is belatedly trying the most things to see where can go, and worryingly is struggling most of all with how to do it. guy: more to come with you. up next, the brexit economy, hedge funds file on the sterling shorts as we get the first official data covering post-brexit. then, the market open. we cover closely what happens

next with william hill. later, back to tokyo. an economist thanks abenomics has failed. this is bloomberg. ♪

♪ caroline: 15 minutes to market open. green, clinging to the but a beautiful day in berlin. germany-based in sunshine -- d in sunshine.

>> first-half profit more than doubled as the higher gold price boosted revenue and it weaker rand lowered cost. they reported adjusted earnings of $159 million. it also maintained full-year forecast for output, costs, and spending. shares in sharp have continued to climb in tokyo after foxconn completed the purchase of a stake in the company. the deal was approved in april, but delayed by chinese antitrust proceedings. sharp shares have risen by a third and the past two days. a beginner has won approval to buy out his property unit for $4.4 billion, according to people with knowledge of the matter. the approval clears the way for hong kong's biggest ever privatization deal and could see a relocating to mainland china,

--re companies are firing fetching higher valuations. kkr making a play. the private equity firm is studying a potential proposal to buy entertainment one. no final decision has been made, but entertainment one has party rejected an offer from itv. that is your bloomberg business flash. guy: that is what dominates my television at home. i don't need it when i get to work. post-brexit,a retail sales, inflation figures, how the u.k. economy is faring. the pound is the worst performing amongst bg 10 currencies this year. hedge funds and speculators have made record bearish that's on sterling. i bring you exhibit a. line,s the data, the blue the cable rates, spot rates in

the white line. it is tracking lower and lower and lower. what is interesting is that , but hasefore brexit certainly accelerated during it. are we getting to stretched on sterling shorts? >> we are very stretched. we will have occasional bounces. we are short for a reason. part of the problem with sterling is that we are more than in 2008, 2010, when sterling deadfall a lot. every investore wants the same thing, yield, we have political uncertainty, economic slowdown, horrible balance of payments, and no yield. the only thing supporting sterling potentially on any given day is when everybody is short. there will be days when we

bounce, and sometimes it is .nough, but we will get lower we are not near the bottom yet. caroline: what about when you look at it versus the euro/ ? where you play it when you look at the eurozone? see potential for weakness. about that, but at the start of this year, you had huge negative sentiment goingthe euro, the euro sideways with policy, pushing on a rope, the balance of payments a strong as japan's, and strong as the uk's is weak. i think the sterling will fall again to the euro in the weeks ahead.

i'm not looking for to the exchange rate. let's bring japan and what is happening the u.k. together. then needs to push on fiscal front, needs to deal with infrastructure, needs to get productivity back into this story. we have interest rates down, but not negative in the u.k., the pound low, which japan would love, and we have a situation where it looks like mr. hammond when he delivers his budget actually will end up spending some money. you have what a lot of people would like it the moment, a fiscal push combined with the cheap currency combined with very low rates. >> the first one of those, yes, will i getr words genuine of fiscal expansion into economy? we are building an output cap

quickly in the u.k. economy that can be filled with cheap fiscal expansion. guy: you could build gatwick tomorrow? >> we could not decide to build gatwick. it takes is too long to do it in this country. out forntry is crying aggressive fiscal easing right now. they promised me they will do it? no. guy: let's say they do do it. >> then i will be in equal ts ande bearish of gil uncertain how much further sterling will fall. we have a big hole to fill in terms of balance of payments and the gross drag from the uncertainty around brexit, but thatinly the one thing would turn around is a successful pickup in the economy on the back of a big enough package.

more now, it is a dream than realistic prospects that we get anything on the order of magnitude that we need. guy: thank you for joining us. caroline: do stay with us. minutes away from the open. next, the potential corporate movers in today's trading. i housebuilder says it is too early to judge the impact of the brexit vote. this is bloomberg. ♪

guy: 7:54 a.m. in london. a lovely day, six minutes away from the markets open. offers,hill rejecting saying they undervalue the business. we have to see whether or not the 352 is something these guys are prepared to go on from and double down to. i suspect we have some ways to run on it. caroline: crawled up 1% on the open. a stock that could fall on the ftse is sage group. about 300 users could have been affected by a data breach. sage group is investigating the unauthorized access to customer information. it has to do with payroll services. this company could slump 5%. it wasm not sure whether

disseminated or it was access. , construction data out of the u.k. not great, and that is represented in the bovis numbers as well. the story remains positive long term, but the short term, quite a lot of ambiguity surrounding what is happening here. you can see that in the data survey surrounding the housing market. quick comment on this, is the construction data a useful indicator of where the economy goes next? the moment bad at that it does not tell us what is happening at the margins. is one of the fastest react to a sudden stop due to uncertainty. why would you plow ahead on long-term deals or start new ones until you have some sense of how this plays out?

don't think it tells you much right now because it is just going to be awful for a while. next,he market open is four minutes away. it looks like a mildly positive start. light blames across europe. ♪

guy: you are watching "on the move." i am guy johnson alongside caroline hyde. she is in germany. drift: japanyo mrs. growth estimates -- misses growth estimates. the pound failing ahead of a crucial week for u.k. data. what does the brexit economy really look like? .n increased takeover proposal will he --?

down?- will he double guy: let's see where the markets are going to go. 10 seconds away from the market open, hold up by 0.2%. the market is a little softer into the close friday. let's see how the market makers shake out this morning. the footsie is just opening a little bit firmer this morning. .e are barely budging i suspect you will see a lot of movement today. the paris market is opening as well and as you can see it is a little bit firmer as well. let's find out what is happening , the details if you will, elliott goc and. -- elliott go. imacis is a picture on the

function on your bloomberg. it is not a huge amount of movement. this is the picture on the u.k. government bond's tenure. -- ten-year. it is a big week for the u.k. economy. we have inflation data due out tomorrow. all of these numbers are coming post voting to leave the union. happening to the u.k. borrowing costs. we are slightly higher with a tiny bit of money coming out. it is pretty flat overall. in terms of specific stocks we have some interesting companies

to talk about. we have one of the u.k.'s biggest housing revenue. the company saying that while it is too early to judge the impact of the eu referendum, the underlying fundamentals for u.k. housing remain positive. i suppose that you could say you would expect them to say that. william hill has rejected an improved offer. pence per share. william hill saying they still continue to significantly undervalue the company and sees no merit in engaging with bidders. that was a headline saying sage is investigating unauthorized access to customer info. guy: i think people are quite surprised to see william hill

softening up a little bit. let's talk to the interesting stories. a great little chart. is -- let me fix that for you. this is live television. that's what we are looking for. what this is showing you is the 200-day moving average. the 50 has really struggled with that moving average and tends to have bounced off. you can see we have come close to bouncing off. it does not bode well in terms of where european stocks go from here. what will it take to get european stocks doing what u.s. stocks are doing at the moment. positiveuld take a starting point from that, the

top of your chart going back to april 2015 first simple foreign-exchange. that is when the euro-dollar was at its lows. if we were testing that average at the time when the euro-dollar is in mid range, it is lows. if the euro-dollar were to drift -- idown to 110 or 108 would take a huge positive looking at the european equity market today from the fact that it is trying to break higher on this better global mood. despite the fact that the currencies at the higher end of where it has been recently. if the ecb sounded sufficiently dovish, if the european data trouble along quietly, european investors will want to get some better returns than they will get once they have mind

everything out of peripheral spanish and italian government debt. we may well see european equities go high. >> if he sounds relatively dovish, are you expecting any more moves in terms of monetary policy or are you going to see the boe go next like many economists are currently calling? >> mario draghi if you talked about willingness to do more he is always near the top of the list. he will continue to see what he can do and he will face more and more pressure next year if the inflation rate moves up at all on any kind of base effect if oil prices stay or they are. he wants to do what he can do now and he does want to do everything he can. his fundamental problem is that european politicians are hamstrung by the rules around fiscal policy and the one place

i am optimistic we will get easier fiscal policy is the eurozone. he will do what he can that i'm not sure there is much left in his locker. >> in terms of what happens with the bank of england. once again we are still overbought when we are looking at u.k. stocks, the ftse 100 above 70 once again with technical indicators saying it is time to sell the ftse 100 resolutely up 0.1% this morning. will we see it remain low? will we see that november rate cut again? if you look at the market it seems to only be factoring about a 28% chance of a rate cut in november. economists seem to be more bullish. >> was a massive defense of "ther monetary policy in sunday times" this week about why they need to do it and why

sacrificing savers to get easier money and protect jobs is a good thing. you do get the sense that the npc is willing to do everything they can but you you a very clear sense that they would much rather not cut rates into negative territory and would much prefer to find other alternative ways of boosting lending, buying more assets that they could go in and buy construction debt or long-term infrastructure bonds, a variety of measures that could be trumped up to find ways of monetary policy helping at this point in time. i'm not sure there is that much more they can do. i do think it's that which is going to drive sterling any lower or do much for the economy. what drives sterling is the unmitigated weakness of the economic data. >> up next, treasury's fall

behind company debt. we will break down the movers in the bond market less a rally in emerging stocks, emerging markets extend a one-year high. still to come, we are going to talk about japan. all the to tokyo with details. this is bloomberg.

caroline: 10 minutes into trading day, the dax currently up just 0.1%. france and italy could be slightly less volume. vw outperforming. the stoxx 600 tracking lower. we have some key stocks. >> the me get bloomberg in the right place. let's take a look at where we stand. that stock down by 4.32%. interesting to see exactly what's happening as well. the way is also softer. -- tennis also with decent numbers and the bank of ireland

is the only bank i can see in the entire list which is surprising. let's catch up with what is happening around the world. grownan's economy has less than forecast. it has risen by an annualized 2%. spendingas business contracted for the second straight quarter and a struggled with the resurgent yen. the u.k.'s exit from the european union could be delayed until 2019 according to the sunday times which said new departments may not be ready to start negotiations as early as predicted. also reported that the brexit and international trade ministries are still recruiting staff making it unlikely that they will employ article 50 until late next year. london properties are taking longer to sell this month

despite a summer price cut according to the property website they are staying on the market five days longer than in may them at the month before they voted to leave the eu. will speaking to the director at 9:30 a.m. u.k. time. >> the leader of leslie -- lebanon's has been a group decided donald trump. it is the latest american adversary to praise the republican nominee. his remarks claimed that trump initially -- dayal news 24 hours a powered by 2600 journalists and analysts in more than 120 countries. >> you're talking about the united states there. we the great chart of the hour. nejra cehic is talking u.s. treasuries. >> we've heard the likes of bill

gross it janus capital say government debt is looking too risky for the return now. significant opportunity and corporate debt. what this chart shows is the corporate bond spread over treasuries is at the smallest in a year. investors willing to accept this money as 216 basis points at the edge of the chart. spread and more than a year we are seeing a real reversal here because last year they climbed about 1% while corporate fell about 1%. this year the u.s. treasury bond index has risen 5.4% versus 9.2% for the bloomberg u.s. corporate bond index of investment-grade debt and within that corporate bond index your sink metals, mining and energy companies being the best performers where is financial and technology bonds have been the worst. overall it is this spread i'm

focusing on in the chart. yield. the hunt for this action all over the place everywhere. that spread is very big relative to the outright yield on treasury. 1.5 is more interesting than 2% over 5.5. also -- there problem was in the high-yield bond market. if rates are low enough for long enough if you are not worried about how much rates will go up in most countries company struggle to default at zero rate, to some degree. big companies trundle along. they say i default when interest rates hurt me not when there are small parts of -- this is not a great outcome for the world. the boj owns a significant portion of the equity markets he have not got big events going

source it up we need better corporate structure when it's in government in here. at the same time you have the treasurer able to borrow at zero so there is no push from the fixed income side of the story either. this isn't coming full circle back to the productivity story. termss not great news in of the restructuring and getting productivity out and getting ifple to invest in kids -- you're getting management to do that right thing at this point. >> what investors wanted from the equity market, give me more m&a, not give me long-term projects that boost productivity. we have had how many debt finance share buybacks in the last tax years that have money back to people. >> at they don't know what to do with. >> we get corporate issuing debt in europe. they have an ability to take it vantage of the corporate

bond-buying program. they issued debt in europe so they can take advantage of a rule change by the european central bank while sitting on huge cash pile strengthen minimize the tax structures globally. all of this just troubles us along in this world where we are swimming around in lots of excess cash without any of it feeding through into economic growth and every buddy turning red steering it central-bank saying what you make the cost of money cheaper so we can boost demand. we'veis tricky because been at this particular spot for a while now and we are not moving very much. caroline: are we not moving in terms of u.s. change in monetary policy, the world probability rate for looking at work function on bloomberg we saw the

retail sales coming out on the united states friday knocking any sort of anticipation of a rate hike as soon as december. just 42%e it is now for december. anytime this year? >> i don't think so. the data could get strong enough to change that. my sense of the fomc and monetary policy, they are a bit like me and diets. if you can put it off until tomorrow you will. it really does not take much to persuade them to wait a little bit. the payroll numbers were strong. the u.s. economy is generating 1.7% employment growth on an annual basis in an economy where they are growing at 1% barely. we are going to go and use up spare labor but at the same time, year-over-year

productivity is -0.4%, last quarter. to type going to need monetary policy at some point but they will always have a belief that it is better to be too late than too early and there is nothing screaming at them in the moment that says anything different. expect they will sound like someone who says they should get on with it in a hurry. indeed.: very much up next a rally emerges. stocks in emerging markets extend a one-year high as oil stages a comeback.

caroline: a beautiful berlin sun is shining and the dax is up 0.2%. we have hit a level we have not seen this year. it's the first time that the dax index has turned positive for 2016. we're above water when it comes to 2016 games on the dax. marketthat rally in a from these previous lows and now we once again start to trade above where we started this year. it took a while. >> it did. the americans are really not invested. if that turns run we get through

the october referendum and maybe go on from there. let's talk about what things are happening with the emerging-market currencies. this is the rand. have not annotated or done anything clever with it. and massive selloff. fire.r words it is on >> it is. >> we had a very interesting anc story coming out of the local elections. the municipal vote went against them and you are wondering whether we are moving into a more developed sense of government in south africa but the risks surrounding that are enormous. turkey, russia -- the russian ruble -- the russian ruble is doing well but i'm not sure that has to do with russia. >> the first piece about them is the search for yield is huge. the ruble got pretty cheap. the rand got really cheap and the brazilian real got really

cheap. and investors looking for yield were drawn to them. once we were passed that january meltdown in china the commodity story became left out. since then it has been a massive one direction tied for them overall, some are more or less sensitive. russia has political stability -- stability. i thought that was a big deal at the beginning of the year, turkey has some political stability, not always comfortable. you are already seeing the first push back in brazil on friday against currency strength from the acting president. of them all, the south african land is the cheapest if you are in different to the political situation and looking for a cheap place. south africa is very cheap and it has more political

uncertainty potential instability than any of the others. if you're a dreamer and a believer the fact that you have had local elections that look like a shift away from race-based party politics toward a future of coalition politics and progress, then you are piling in with enthusiasm, you are very excited about the future and if you are an old cynic you are saying we think this is ok now because it's coming against this general mood. and the rest of us are looking at it thinking this is probably got further to go on the back of this global tied but it am not going to put all my chips on south africa yet. >> we would be remiss to ignore what's happening in china today we are seeing in terms of the bremen be a weakening of 0.2%. where we have seen the weakening story go for you on we are getting numbers coming up showing that credit is not rising at any sort of pace than we rigorously saw.

what do you look at when you're seeing chinese data? >> we look at total debt growth in china in terms of how much debt growth it takes to get each unit of gdp. the story is that the debt has been growing too fast overall for the growth rate. the economy is slowing. even with retail sales and capital spending we're on the slowing path. the big long-term uncertainty are one of them is the amount of debt overhang that has been fueling this slightly disappointing growth story. the one source of encouragement is that the policy of weakening the currency which am sure is going to continue is happening more commonly now. they found themselves a formula for steady depreciation for the currency does not result in massive volatility and financial markets.

>> you can carry on the conversation if you want to. kit will be joining the bloomberg's radio team at 9:45. ♪ [ clock ticking ]

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♪ endless hours of the best tvs ♪ ♪ brand new apps, shows to go, ♪ ♪ awesome internet that's super whoa... ♪ ♪ everything is awesome xfinity. the future of awesome. caroline: 30 minutes into your trading day. a gorgeous morning here in berlin. the dax for the first time this year is an positive territory we're above where we started the year on the 10,732 where you trade up 0.2%. on crude oil. $45 on wti. breaking above the $45 mark. by oil and gasr stocks but by autos in particular.

thoseget into some of stock stories, let's get to elliott gotkine. >> quite a few movers this morning. one of the biggest decliners in the stoxx 600 this morning, this is the software to be with shares down 3.4%. this is because of a nasty report talking about a data breach thing it may have compromised the data cancer salary related to the information of 300 users. it says it was an internal login. so potentially it could've been an inside job which is created questions about the people they are hiring but at the same time it's rish -- reassuring people we are all a bit speculative until we get further information but sage is one of the biggest decliners so far today. .hares are up 2.7% one of the biggest gainers in

july sales, analysts have been expecting 8%. this is an interesting one, william hill, shares down half a percent after it rejected an improved bid from rank group and aaa holdings. very often we get these kind of bids for a company and they say that this undervalues us the market expects it to come back and the shares go higher. that's a happening here suggesting that the market doesn't think that 888 will come back for another go to buy william hill. those are the main movers we are watching this morning. >> disappointing growth figures out of japan, gdp extended by an annualized 0.2%. that was less than the 0.7% increase that we have done in a survey. business spending also decline for the second straight quarter. let's get some context around

all of this. my guess is the chief economist at japan's macro advisors. thank you for being with us. ava nymex is fail -- of a number -- abenomicsnymex is failing. >> it's been more than three years in the japanese government has tried to the maximum point of expanding it. they've also been spending a lot of physical costs to stimulate the transition from public demand to private demand is not happening. >> why would a company want to invest in capex at a time when demand is so low? how do we fix that? >> that is a good question. the idea was that for the yen to depreciate and japanese exporters to make enough profit to that they start to see that

it makes sense to invest in japan. the company has become very profitable but in terms of long-term expectations i would say it must remain pessimistic so they are deciding not to invest in japan despite the week yen. >> give us a sense of the one thing they can potentially feel secure in his at they have a buyer of their stock. we are seeing things bought up by the bank of japan. you have been critical about this. they could become the number one holder in some 50 companies trading on the nikkei 225. going to still see money poured into the stock market in particular? >> i don't think so but i think that bank of japan is taking an enormous risk in front thing to buy per year.

in two years time bank of japan will own more than 20 junior equity which divorced the bank of japan's capital. cycle, equitymy market losing one third of the value is not uncommon. when that happens, boj will lose its shirt. >> what should happen if you're worried about the exchange rate? they are running out of ammunition. >> i would say -- they are more sensible policies. they have measured growth without spending or fiscal cost which is deregulation the service sector the sector still remain very heavily regulated so if prime minister abe is willing to spend his political capital on the deregulation there is a

way but it seems he is not willing to spend his political capital on these economic reforms. >> can i ask you a little bit about what's happening with the yen. i was speaking with kit at socgen who says real money is flooding out of japan. it's going into the treasury market but money is leaving japan in terms of the flood date s flow in a at an aggressive rate and yet the market throughs to prop up speculative positions. when the market decides that is the longer the case how quickly does the yen come down? the yen is appreciating. what this means is japanese domestic money is starting to the cautious in its investment abroad. i do not necessarily agree that the money is fleeing japan.

the yen's appreciation that should mean somebody once again but having said that -- i do believe the global risk sentiment is still deteriorating. unlikelyned that it is that the fed will be able to raise rates in the next six months. there is room for the dollar to depreciate and yen to appreciate. >> how much could we see that exported? how much are exporters dictated by the yen or do they need to start selling different types of goods? are they lagging when it comes to the quality of what they are trying to sell? week yen definitely helps. japanese investigator -- investors are enjoying this profit but they do not think it

is sustainable which is why they are not investing in the japanese economy. what they need to do is rather than rely on depreciating yen they should tackle a more fundamental problem with japan such as a shrinking population and the declining workforce. issues -- the bank of japan buying equity or the bank of japan trying to weaken japanese yen. >> let's round this off. properly?it get used what impact would it have? >> the short answer is that it is unlikely to be deployed at all. it depends on what kind of scale

you are expecting to see. there are small-scale reforms iming out, don't see anything --'t think we will see any in the name of structural reform in japan. >> the chief of comest at japan, macro advisors great to have you on the show. next, the british homebuilder sees positive fundamentals and u.k. property despite the brexit vote. we will look at his earnings and optimistic forecast next. ♪

caroline: we remain high on the stoxx 600. but it up-to-date with julia has >> million hill rejected an increased offer from 888. about 352valued at pence per share. this proposal continues to substantially undervalued the business. first-half profit more than doubled as the high gold price boosted revenue and a weaker rand lowered costs. they reported adjusted headline earnings at $169 million to the

period. a 4 -- fullintained truck-year -- full-year forecast. shares in sharp continue to climb in tokyo after stocks on completed the purchase of the stake in the company. it was approved in april but delayed by antitrust proceedings. has wonionaire len approval from shareholders to buy out his party unit for 4.4 billion u.s. dollars. the approval clears the way for hong kong's biggest ever privatization deal and could be for property developers to mainland china where companies are fetching higher valuations and in hong kong. and kkr is said to be making a play -- the private equity firm is setting up until proposal to buy the company that

owns the preschool gushing character. entertainment one has already rejected an offer from itv. that is your bloomberg business flash. >> i do not love the character, but there are people i know who do. revenue thatorted is risen 18% on the first half of the year but that the underlying fundamentals are me positive. let's talk u.k. property now, our real estate reporter joins me on set. everybody's trying to figure out what the brexit effect is. london property started sliding before the brexit so how easy is it to understand what effect brexit is having and what can we learn from the likes of bovis? that everythe fact company is saying one thing, there are a few indicators giving a picture.

they followed barrett one of the big u.k. housebuilder saying they are slightly modifying their approach to land investors. they said they are increasing the required returns they want before making purchases. that is a good forward indicator of where they might see the market going. the other bit of data is the right move asking price data. clearly that is asking prices, not sold races. it is pretty negative, london particular, the asking price is argument there is an to be made that the negativity ways that down. guy: i drive out of london every day and i drive past an awful lot of property still going up. there is tons coming off the

market. >> the overall picture is that the u.k. still has house prices. in london within certain pockets of london you have very high volume and similar types of apartments being built. there is clearly going to be an impact on pricing when you deliver so much of the same kind of product. there is data from consultancy said the pipeline of luxury apartments in london would cover hyde park twice. that, together with the tax changes we have had over the last couple of years is really what is driving london prices down. >> as always, thank you very much indeed. caroline: we will move away from london property now and talk about corporate. an ongoing feud within a secretive family behind the discount supermarket chain.

it is thought to be because of a rather extravagant spending habit. you done some extensive reporting and to all of this, a fascinating feud that is building within a shop i'm coming to know far more intimately now. tell us more about the company and why it is in turmoil. that everybody in germany knows whether they love it or hate it, it's not exactly the world's nicest customer experience. it is a very secretive company owned by one of their wealthiest families. there is a bit of a family feud going on and this affects what northern company in germany. there is another half called aldi zut which is not affected but the family are very rich and very angry at each other.

>> it seems that one person rather likes splashing the cash while the rest of the company's management wealth founders are more discount friendly and austerity friendly. give us a sense of the peculiar structure behind all of this and why it remains important. >> that is absolutely right. what's going on is that the heirs to the fortune which is worth about $15 billion quinn to the billionaire index are at odds over their lifestyles. yum on one side, the widow of is wellheo's suns who behaved as you would expect, she likes to spend money she likes art, she likes cars where is on the other side you have the other heir who lives the ethos of austerity, penny pinching never showing any interest in

any kind of material luxuries at all. he's very upset with his brother's widow for what he sees as damage to the brand and this is playing up and the german courts where they are fighting over control of one of the three companyhat controls the and whoever controls the trust controls the brand. caroline: it really is like a soap opera. very secretive family suddenly spilling out into the press. who will win the fight? >> we do not know. this is currently before the german courts, both sides have had some wins and setbacks. it seems probable that they will have to come to some kind of compromise. i do not see how this could continue to play out in the tabloids in the rest in this ugly way for the years and years it would take to resolve a legal battle but both sides are very upset. we are told they are not even on speaking terms which is not a situation you want to be in with your siblings with whom you

control a massive retail empire. caroline: it's amazing when you just see them only recently started to take credit cards. it really does question how companywe see the reorienting and setting to speed itself up and perhaps move away from the austerity and has sufficiently matched until now. a fascinating story that seems like it will run on. our senior reporter matt campbell. up next, bets are off. william hill rejects an increase takeover offer. details next. ♪

guy: welcome back to your on the move. i'm showing you a shot of london and new york waking up. mid august, what is going on. a busy week in terms of what is happening stateside. we have a lot of fed speakers so there are plenty of things coming up in the week ahead. let's look at some of the highlights for you. tomorrow we get some of the first high data on the u.k.'s post brexit economy. on wednesday is the last fed rate setting meeting and on thursday the release the latest monetary policy decision. we have to dig in to some of these moves going on. >> bets are off. rejected an has

increase offer from -- jarvis joins us now with more on this story. why is the stock down if this is a raised offer. >> let's establish this first that it is a raised offer. the stock terms of the offer have been increased today. instead of getting 44% they will get 48%. the cash terms are unchanged. the problem today rises where william hill said that the offer is worth 352 pence per share. a week ago, william hill said that the original offer was -- 364 pence per share. there has been a reduction from where they were originally.

>> explain that to me. >> in short, they changed the methodology i which they calculate the value of the bid. from what i understand, they originally calculated based on the value put on offer by 888 for rank that would've proceeded their offer for william hill. said, we are going to take the value of all three before the takeover approach is made, and basin on that. the methodology -- and based it on that. the methodology has changed. caroline: the fact that the , is that mean0.9% they are not expecting a revised offer a suit? expecting revised offer anytime soon? >> i think -- william hill has made its case on valuation,

risk, and debt. whichever basis you take it by, if they are increasing one, the price to make up the gap, you are then going to put an increased emphasis on the other thing. if you don't you'll miss out on evaluation. the market is saying jeter way this goes it will be really difficult for -- whichever -- the market is saying, whichever way this goes, it will be really difficult. guy: it will be interesting to see what happens sunday. >> always great reporting on this stuff, paul jarvis up next. pulse.e: we have the francine lacqua will be talking this newsrices with director and you will be heading to the radio, guy. radio booth.to the

jon ferro will join me from new york and will carry on the conversation surrounding what is happening from tokyo and what this week will tell us about the story in london. the london market of 0.2%. this is bloomberg. ♪

oil which is about $45 a barrel, asia in positive territory. can the summer optimism hold? will japan's growth star t as it wrestles with slow business spending, piling pressure on the boj to act in september? properties in london are taking longer to sell, despite a summer price cut. we bring you an interview with the director. welcome to "the pulse," live from ldo