♪ >> steady as she goes, stronger exports boost in japan's account surplus. defiant and defend, donald trump attacking the media in his first press conference as president-elect. the samsung heir summoned by prosecutors. transpacific tensions, donald trump spake for secretary of state says china must be warned off disputed islands.

this is the second hour of "daybreak: asia." just after 8:00 in hong kong. >> just after 7:00 here in new york. we just got the numbers out of japan. we are also waiting for the samsung vice-chairman to come to the prosecutor's office for questioning. this has been a developing story in south korea engulfing the country and all of asia. as you can see, life pictures of waiting for him to arrive to the prosecutor's office for questioning. not a suspect yet, but coming in for questioning. it was surprising that people were expecting him to be called in for questioning, but now he's being summoned as a suspect, leaving questions about his succession plans.

if he is prosecuted, what is going to happen with him? there have been years of planning to get to that spot. we will see how things go there. that hearing is underway this hour. we will get you updates later on. gettingt to the markets the japan and account balance. is settinghow asia up for the day after donald trump's remarks overnight. did not give much of a spur for the dollar. asian stocks heading for another day of gains. the dollar continuing its decline. .rude just above $52 per barrel looking at the japanese and korean markets coming online, we are seeing gains for the second

day. the nikkei 225 opening lower, reversing what we saw yesterday in terms of closing. the asx 200, up one quarter of a percent. wellington snapping a three-day advance, down one third of a percent there. >> donald trump's remarks have not been a boon for the dollar strength? >> dollar strength is starting to show signs of exhaustion. the market not getting what it wanted when it comes to details about future plans. the dollar weakening the most against the japanese yen. the australian and new zealand dollars are also stronger against the u.s. dollar. the yen the strongest since

the dollar.gainst they turned bearish earlier this week. scotia bank says this could push the parent over -- push the pair lower. let's continue with this. , davidurplus numbers ingles is looking into these numbers. just to comment on what sophie mentioned, that is going to become a problem for the japanese economy. if these numbers behind the continue to stay in the red and the yen continues to strengthen -- we have seen a clear correlation between where they

yen weakens and how much these numbers improve. let's have a look. a little bit lower than expectations. 1.4 trillion was the monthly surplus. if you look at the adjusted figure, it moves to 1.8. you look at the trade surplus, a little bit higher than expectations. more importantly, it is further evidence that the trend is improving. we always see a drop towards the year end. in the same way that whenever we see march, you see a spike. you look at this back to 2014, it has been on the way up. it has not shown a deficit here since may 2014. if you do get above ¥3 trillion and we stay above that, that is going to create unwanted

pressure on the japanese currency. let's see how this plays out. long story short, it is a solid set of numbers, supporting this improving trade picture out of the japanese economy. >> you mentioned the pressure on the currency. how is it a factor in the outlook? when thelly speaking, currency weakens, trade improves. in the greater scheme of things, the trade surplus in japan -- this is 1/10 the size of this number. dollar\yen goes up -- where it was before this set of numbers, which was november, which was -- then the election happened.

we maintain -- if we stay at those levels, expect exports to increase in japan. from may of last year until november, there is still falling year after year. if they yen weakens, the hope is that is going to lift exports. you do not want to lift this number too much because then the boj might have to come in. you.ank now we look at first world news. >> secretary of state nominee rex tillerson has faced wide-ranging questions in his confirmation hearing including russian hacking, asian tensions, and the need for u.s. leadership . he says moscow was a danger to america to refuse to call vladimir putin a war criminal.

he says that beijing can i use disputed islands in the south china sea. the stability that is foundational to peace and security in the 21st century american leadership must not only be renewed, it must be asserted. we have many advantages on which to build. our alliances are durable and our allies are looking for our return to leadership. >> volkswagen has taken a step to resolving emissions scandals, pleading guilty today and facing a fine. prosecutors announced charges against five executives in germany. they admitted to using false statements and obstructing inquiries when authorities were suspicious of emissions levels. reluctant consumers have pulled down earnings at two of japan's top retailers.

stagnant wages have prompted many people to reign in spending good we will have more later when others report after the close. korea's national pension service has been drawn into the undue influence scandal. it is the third-largest in the world and the tremendous facing arrest, suspected of having put npssure on the fund and the owns 9% of samsung. day innews 24 hours a more than 120 countries, this is bloomberg. >> korea's undue influence scandal is our top story today. heir will be

prosecuted in the next few minutes. it is the latest in this is scandal that has artie brought down the president. you mentioned how it is surprising that he is being summoned as a suspect. does this mean they are no longer continuing with a blind eye? >>. .n a broader term, yes i think the public sentiment, the people who protested on the streets for the impeachment of park were also callg for -- they feel like they have continued to have too much influence. yesterday's comments by the unusualor, which were

-- the fact that they said "suspect" says that the possibility of them seeking arrest -- >> does this have any impact on succession plans at samsung? >> if he is arrested, definitely . the question will be, who will run samsung in the meanwhile as to who will run the company? has been groomed to run samsung for years. who would be up next? >> thank you so much. we will be watching for these developments. still ahead, a trade spat between the u.s. and china over agricultural products could cost american producers $2 billion. >> donald trump sets a belligerent tone as his news

conference dominated by russian hacking claims. this is bloomberg. ♪

♪ >> this is "daybreak: asia." top story today, donald trump confronting two of his biggest political challenges over one week before he becomes president. he says he will not divest from this company's that out plans to avoid business complex. he also rejected unsubstantiated claims that moscow has damaging information about him. been haduld never had and should never have been released. released and i think it is a disgrace. i think it is an absolute disgrace. i think it was russia but i think we also get hacked by other countries and other people.

i could actually run my business and government at the same time. i don't like the way it looks but i would be able to do that if i wanted to. i would be the only one. as a president, i could run the trump organization -- great, great company. i could run the company -- country. >> we have more on the story. let's start with donald trump and russia. in theheard it soundbite, he conceded for the first time that russia was behind the hacks the democratic national party and their attempt to hurt hillary clinton in the white house race, but aside from that, he pushed back against everybody else related to reports of that dossier.

you are seeing one tweet right now about russia, saying he has nothing to do with russia -- all in caps as he is want to do. he also pushed back against journalists, the newsmakers, saying that he won the election easily, calling his opponents crooked. he says fake news is a star a state but we also saw some flareup when he was doing his first press conference when he actually attacked one reporter over at cnn. take a listen. >> your organization is terrible . the organization is terrible. -- i am notm not going to give you a question. you are fake news. [speaking simultaneously] >> some stark contrast between donald trump and barack obama.

there is one more thing that donald trump also pushed back ,gainst, the intel agencies saying that the agencies should not have allowed this fake news to leak into the public, saying, are we living in nazi germany? >> if you wanted policy, he would have been disappointed. what about his conflict of interest on the business side? >> he came up with a plan that some who are critical of. let's walk through the points. the first, he was going to step down from all positions at the trump organization. one interesting point of contention -- he will not divest

ownership in the company. it has been said that his plan "meaningless" -- also, he will not be informed of any new trump organization deals. definitely, the criticism is going to continue. >> thanks. from a stocks fell after that news conference but wider indexes swung into games. as well as theks dollar fall during the press conference but we ended the day with a mild dance. -- mild advance. >> we did see a relatively mild day. take a look at the close. green across the board. the last 18 sessions have come within 1% of 20,000. ,f you look at the big movers

walmart, arcadia pharmaceuticals -- that was in the bullseye of donald trump's remarks. we will get to that in a minute. johnson & johnson down in the regular session, but getting a reaching hours after an agreement. tactical signals have been telling us that it could be bearish for the nasdaq. the biotech industry makes up a large portion of the nasdaq and if you layer on the fundamentals now, donald trump's remarks, analysts are saying that biotech could be volatile. mergers and acquisitions could not be easy as a result. deeper into biotech. >> he is talking about making competitive bids for these

companies. he slammed them saying drugmakers are getting away with murder by charging high prices. impact, mylan the pharmaceuticals. their second day really shows the difference, down 4%. a big drop. biogen, big drop. aroundpening right midday when those remarks occurred. >> thank you so much. ahead.re politics is the key risk on the horizon, and the opportunities that may be created from that from the chaos. this is bloomberg. ♪

♪

>> let's take a look at how trading is going in asia. good to see you. ,et's talk about your forecast 2.75%. you are sandwiched between this debate. what does it mean? is that going to be the end of the bull run for the bull market? >> the rate is going higher because as -- because of growth. trump may add stimulus to the economy. .e could see the rate go higher at the same time, the dollar index will rise because of the divergence between the united states and the rest of the world. you will see that index continue

to trade higher and higher. it will be self-limiting, how much it could go higher. the higher rate is itself inflationary to the u.s. we would see inflation. >> a higher dollar for 2017. what would that mean for asian currencies? you can tell that almost all of the asian currencies are undervalued against the dollar right now. what do you think is the most undervalued at the moment in the region? >> undervalued? fundamentally -- asian currency is a reasonable value given donald trump's policy and the divergence, we will see most asian currencies

-- capital outflow will continue into the united states. in general, asian currencies will continue to be valuable. the most undervalued? many.ot see most of them are reasonably priced. we see more room for the korean yuan to be valued more. >> you mentioned that political investorskey risk for and have you changed your mind a little bit at all seeing not only the donald trump conference but also rex tillerson and his senate hearing where he seemed

to be diverging from donald trump on key issues between the u.s. and asia, particularly on trade? >> i think the risk is political, not economic. the rest of the world, still slow growth, but we do not see a lot of imbances, other than china. the market volatility this year is that china and u.s. trade policy, increasing tensions between china and the u.s., and increasingly-populist governments in europe. most countries are increasing in populist. anti-immigration, anti-globalization, anti-e.u. year of great opportunity, good for traders.

you can invest to capture the opportunity. >> within this volatility, certainly traders love that volatility. note, we had a guest who says that given the volatility and uncertainty, we are not going to see global growth beyond 3%. eu agree? -- do you agree? >> yes. pushew u.s. president may a little bit, but the rest -- china is going to slow down. i do not know whether they can maintain 6.5%. outflow andapital tensions with the united states.

japan is not going that were a lot. we are stuck. it is not going to push -- >> thank you so much. we will have much more, straight ahead on "daybreak: asia. ♪

♪ >> you are looking at live pictures from korea where the samsung heir has just arrived for questioning as a suspect in bribery investigations. investigators are looking at whether samsung made payments to a confident -- confidant of president park yuan hey. .- president park geun-hye the fact that he has been named a suspect was a surprise. apologizing to the citizens of korea.

, thisng to watch live scandal has artie seen the president into each -- this scandal has already seen the president impeached. >> tensions high ere, as you mentioned, with that crowd. let's get the first world news. courtney? >> thank you. india's central bank has refused to offer details of the ban on high denomination rupee bills as questions are asked about who took the controversial decision. the move was approved three hours before it was announced on november 8 but the bank declined to offer any more information. they cited national security reasons. bolin's biggest competitor airbus has stretched its commitment to the united states market one week before donald trump takes office. the president-elect has adopted

a protectionist approach in the run-up to inauguration. airbus has a factory in alabama employing more than 1000 people. >> we have decided four years ago to invest in america not only because it is a big market but this is the biggest place to be regarding aerospace. we create jobs. we arenot know that probably procuring more u.s. equipments then our competitor, boeing. >> aviation marking the end of an era with the iconic jumbo jet preparing to make its last flight. will use its final 747 later are this year, retiring the plane one year ahead of schedule. many carriers have relied on it since his debut in 1970 but demand for different air club -- aircrafts has slumped.

global news 24 hours a day powered by more than 2600 journalists in more than 120 countries. this is bloomberg. let's see how asian markets are shaping up this morning. it is a mixed bag in asia this morning with japanese shares leading. down over 6%. cutstocks rating has been after they posted weaker than expected third-quarter sales. another warning side for japan's struggling retailers. this is setting the tone for retailing -- other retailers are due to announce results later this afternoon. n shipping upnji

almost as much as 26%, gaining the this year, making it best performer in asia. shipping company is being dismantled as they sell assets and shut businesses in the wake of creditors ending financial support. >> it is looking like the dollar strength is getting exhausted here. what about the currencies in asia? >> we are seeing the dollar strength supporting asian currenci. the dollar falling as much as 1.1% against the chinese yuan. the dollar softer against the yen as well, dropping to a session low. the yen stronger for the fourth day. dollar,ralian and kiwi australia -- the kiwi hanging onto gains. slipping, theling

worst-performing g 10 currency overnight. >> thank you. decision -- ethanol byproduct could cut $2 billion in annual sales from the american agricultural sector. tom mackenzie has been following this for us. what is going on here? prelude tobit of a what could happen if we enter this talked about potential u.s.-china trade war when donald trump takes over. what we are talking about our tariffs of 53.7% on something called dried distiller grain, a product that comes in the production of ethanol in the united states, shipped to china. the market is worth about 2

billion dollars according to estimates from 2015. these tariffs essentially close the u.s. exports out of the largest markets. these tariffs were announced yesterday and it comes amid a painful time for the producers in the united states. theave a chart that shows price dropping around 30% since june 2016 good another blow to the distillers and producers of these materials. these are generally used for livestock, cows. this is where they come into play. this obviously comes at a time of tension between china and the united states. what are the wider implications for america's agricultural sector if the situation deteriorates? >> i will just give you a breakdown of how important china

is now for america's agricultural sector. according to the usda, imports to china from the u.s. have in the last 200% decade. by the end to 2015, the exports billionth over 20.2 dollars. likeng the list on things soybeans, course break -- course greens, cotton. it is increasingly important. there are also potentially further tariffs to come on ethanol products from the united states. the chinese are looking at increasing tariffs to 13%. it is probably no surprise that the biofuel industry in the united states has told us that they will be lobbying donald because theyrvene have increasingly positioned their businesses to what the

chinese market but it is a complicated issue given his and weon trade and china know that often these cases end up being tit-for-tat. last year, china extended tariffs on u.s. chicken imports, retaliation every measure after the u.s. extended tariffs on chinese truck tires. it could end up being tit-for-tat, both sides ending up the loser. for the moment, the u.s. agricultural sector very much an area that could feel the pain if these relationships continue to deteriorate. >> thank you. how the president-elect shapes relationships with china has been a question ahead of his inauguration. we spoke to the peterson institute president at imposing this is a trade war would do damage to the united states. >> if you are dealing with somebody who isn't going

anywhere, and china isn't going anywhere, you cannot bully them and try to foster and say i am going to make this threat. we actually modeled what a trade war with china would look like and it would put people at a walmart, theegas, production in ge, the automobile industry. the fact that you can do more harm to china than the united states doesn't mean it would not harm the united dates. for the last 40 years, american administrations have try to convince china to behave and usually that has worked not perfectly. the other thing is we going into football playoff season. donald loves football. the point of football is you do not whine about the referee, tom brady being pulled out, you go out and you win so it is not up

to the referee. what donald trump is doing is taking america out of competition, wanting to the referee did all that means is you are going to forfeit the game. >> a football metaphor, you are killing my brain. on the flipside, rex tillerson said in regards to china, the economic well-being of our nation's are intertwined. that is different than the tweets we hear from donald trump. what is going to be the reality? >> rex tillerson's remarks are perfectly reasonable. .e gain from their benefits frankly, it is good for the rest of the world that china has one billion people -- >> what does that relationship look like? >> you reach out to the people in the chinese government who recognize this problem. sin --e up with their you come up with an exchange

where everybody starts taking some steel capacity off-line and you come up with the world in which you say, we know there is overcapacity good so, we try to make it so that nobody gets more than an unfair share. imposing speaking to us earlier. as we have been talking about, donald tru's pick for secretary of state had pointed words for china in his senate confirmation hearing. stephen engle's continues this conversation. he wants a stronger u.s. presence in asia? >> i'm going to pick up on the comments that rex tillerson had to make a that china in the senate foreign relations hearings on capitol hill. he said the two countries are intertwined and he called china a valuable ally in certain areas, like in the battle against islamic extremism.

he also had their he pointed words on other areas, including intellectual property rights, human rights, and south china sea, which he says, china's moves there are extremely worrisome. he said that the weaponization of those islands, if china is doing that -- those in the illegal actions again to russia taking crimea. soundbite.ery short this is what he had to say when asked if the u.s. should take a more aggressive approach to china in the south china sea. >> we are going to have to send a clear signal that the island building stops and your access to those islands is not going to be allowed. >> i will run through some of the other points. theddition to what most of senate committee hearings were

about russia and the battle against islamic history is in. chinana and asia, he said has serious human rights olations. he criticized china for stealing intellectual property. he is not opposed to the tpp, which has been a hallmark of obama's ticket to asia but he -- obama's pivot to asia. he said the u.s. should review some of the climate change accords. that was another hallmark of the obama administration's success in reaching a consensus with china on climate change. >> let's move to north korea, though. >> that issue, yes. .hat is another one, of course he would like to see china take a larger role in renting in north korea's nuclear ambitions. the south korean defense ministry had a paper saying

pyongyang may considerable on nuclear capabilities and rex tillerson said the united states could no longer accept china's into promises. there he interesting times, indeed. they are going to have a lot on their plate. >> indeed, a lot to talk about. thank you so much, stephen engle's. newsping that breaking moments ago, there he is, lee jae-yong has just arrived to be questioned by prosecutors in seoul. this is known ago, getting mobbed by reporters. the undue part of influence scandal that has brought on the president of south korea. he was widely expected to be summoned but his identification as a suspect did come as a surprise or prosecutors want to know whether samsung and other

companies made payments to a confidant of park geun-hye in exchange for political favors. there he is speaking to reporters. he apologized to the citizens of south korea. >> quite short in his comments walking into the courthouse. up next, why mark carney says that you may have more to lose from a hard brexit. this is bloomberg. ♪

♪ >> this is "daybreak: asia." >> a quick check on the latest business headlines. the biggest count retailer among its customers after agreeing to a deal with walmart. the conde suffer provider said it was seeing delays, leading to concerns over brexit and elections in the u.s. and europe.

which is competing with oracle saw shares jump head >> the owner of the casino is launching a bond sale to fund construction of a larger resort. imperial specific -- imperial pacific -- attention from the united states. in tableed far more revenue than casinos in macau. prince fans are closer to hearing his songs on spotify and apple after his estate signed a deal on royalties. the agreement allows gmr to collect radio royalties and make deals with online music services . he removed his work from most streaming services because he was not happy with the level of compensation he was receiving. politics overshadows economics

with donald trump's failure to detail -- that decline we saw in the u.s. dollar. hays is here with more on this. investors are now purchasing bonds. what a change. washat is all you could do sell bonds after donald trump won the white house. year yield traded above 2.5%. it is now back down to 2.3%. i want to talk to you about the auction. year note auction, $20 billion worth, the best demand since june. that is that line we are showing you. .hey came in at 2.58% 70% of that was in direct bidding, foreign banks showing interest as well.

what traders are saying is, show me the proof. how can i hold onto these treasuries if you are not going to tell us what you are going to do to cut taxes, boost spending? i want to show you another charge. of blue line is the measure liquidity in the bond market really interesting one, that simple white line because you can see how yields rose, rose, rose. we are referencing -- the double if thating, again, yield goes above 3%, he says it is the end of the bull market. now, it has turned around. this could be the beginning of the end. , wealking about brexit heard from mark carney defending his strategy on brexit.

industrial production rose. what happened? >> people are worried about a hard brexit. it is really hitting the pound no matter what mark carney says s. pre-brexit and post-brexit strategy -- the economy has held up but he says over risk analysis was correct. we had all of the things to keep the economy going. >> a number of major institutions would have been caught on the wrong side with -- and the reason they weren't -- this is important. the reason they were not is because the bank correctly risk that is a risk

to the financial sector. it helped take that risk off the table. >> the pound fell even though industrial output improved in november. this is a really cool chart. warning signs. hsbc predicts that the pound could slide -- that is the dotted turquoise line. if we get into that hard brexit situation, they say this a be the worst level since 1985. they say the pound is becoming a ex-ometer." >> next, singapore jails a bigger. we will -- jails a banker. this is bloomberg. ♪

♪ >> time for a look at what is coming up here on bloomberg television. what are you watching today? trump's news conference, his first press conference since july. he talked about russia, china, and what he is doing in terms of his business. will get different takes.

-- investment in china. you get one asset bubble. of course, which one is going to be the biggest one this year? what about the commodity super cycle, as it were? ?re we out of the woods yet we will have a look at all of that. [inaudible] >> thank you. singapore has jailed a foreigner lin dunn charges -- linked on charges. the swiss national is the first to be convicted of involvement.

the clampdown continues? >> this was national is a former branch manager of falcon private bank which has now been shut down. .is name is jens sturzenegger he was charged with 16 counts, including failure to comply with anti-money-laundering rules. he pleaded guilty to six and for that he was sentenced to seven $89,000. jail, find the court says he engaged in deceitful conduct and lying to authorities. this is singapore's biggest money laundering probe. has taken action falling -- following breaches when they were discovered. >> the man at the center of the investigation is this malaysian

financier. what is the latest on him? charged with been any offense is. he described his role with 1bd as informal, consulting -- with 1mbd as informal, consulting. he allegedly acquired assets from the bank last month. ,- was found from intervening to confiscate everything from a the barney a jet with 45 minute -- bombardier jet. >> thank you so much. bloomberg markets is straight ahead. ♪

rishaad: 9:00 a.m. in singapore. on a wednesday evening in new york, from bloomberg's asia headquarters in hong kong, this is "bloomberg markets: asia." ♪ -- aad: a men's and power payments and power. the samsung heir apologizes to prosecutors as he is mocks as a proper suspect. donald trump attacke