>> asia-pacific markets are seeing extending the global markets. beats estimates and .aises forecasts president trump urges automakers to raise production in the u.s.. toyota says it will invest. >> this is the second hour of "daybreak asia." it is just after 8:00.

julie: is just after 7:00 in new york. it was an interesting day in the united states. with president trump being active. he is reversing moves by the obama administration, particularly on pipelines. and meeting with auto ceos. yvonne: it seems like what he has done in the last couple of days, put the green light on this rally. we have an interesting figure for japan trade with the export figure rising from 5%. let's see the reaction right now. reporter: the better than expected export number four downber not necessarily -- in the nikkei.

it looks like the rally in lifting -- looking fairly flat, even after this morning's data. we have the bok to speak later this morning. let's look at what is going on on the afx 200. miners up. like a all, looking mixed picture. 1.5%. up this could be in impetus for japan's exporters. minerswe have the aussie out with some numbers. sophie: a nice lift for mining stocks. the world'shts,

biggest miner here. this after it did announced better-than-expected numbers in the second quarter. giving the left to iron or prices. ore prices. rio tinto also up 2.3%. a $2.5 billion deal. and aluminum player, alumina, rising. aluminum rose to a 20 month high . a quick word on chipmakers. texas instruments saying the first quarter profit will likely top estimates. a word on toyota, up 2.5% after saying they will add 400 jobs and invest $600 million in the u.s..

hyundai motor, now down 0.7%. julie: in the auto industry, trump has offered a range of incentives. tell us more. interesting, evolving relationship. reporter: if you look at it through the course of the last year months, it was hammer, hammer on the part of mr. trump. now does like smiles and let's get together. positive meeting. there was civility happening. you can see mr. trump, shaking hands with ceos of various companies, from gm as board. he was talking about bringing manufacturing back to the u.s. theme, a recurring taking away regulations, the environment in particular. he thought environmental

regulations were out of control. he is also talking about reducing corporate taxes. we are going to make the process much more simple for auto companies and other people who want to do business in the u.s. you will find us to be from very in hospitable to extremely hospitable. reporter: off of that, we saw riseuto company stocks all because of the positivity coming out of mr. trump. we also got comments after the meeting. they ceo of fort having this to say. about workingted together on tax policies, regulation, trade, to create a renaissance in american manufacturing. reporting: not only that, mary barra gave her thoughts on the chat with mr. trump, saying it

is a huge opportunity to work with mr. trump. it is an interesting time to improve the environment, even though we know mr. trump once to pull back regulations on that richard talked about improving safety and improving job creation. new u.s. factories really are going to be hard to achieve. some analysts say that is the last thing the auto industry needs. hop into the bloomberg right now. if you going to julie's terminal, take a look at the reds and blues. the blues represent democrat white house history the red, republican once. the most recent is barack obama's. he had a 50% rise in auto payrolls. to another 15% rise, he would have to get up to 1.4 million. without be possible?

it could but we will have to see. yvonne: there is a lot of debate about how many jobs could be added. let's talk more about trump's day. he signed executive orders on pipeline projects, reversing more obama policy. reporter: we are talking about the dakota access headline and the keystone xl. those executive orders do not exactly give the green light to go ahead, but they do give the go-ahead to renegotiate those contracts to see if they can live again. we know mr. obama rejected the keystone pipeline a couple of years ago, in 2015. the dakota access pipeline was locked in september. let's also take a listen to what he wants to do with the keystone pipeline. president trump: we are going to

renegotiate some of the terms. if they would like, we will see if we can get that pipeline built. 28,000 jobs. reporter: possibly 28,000 jobs is what mr. trump expects. we saw trans canada as well as energy partners rise. they are also talking about pipes, made in america not just the construction of things but the pipes themselves. if they would be built in america. thank you so much. let's go to the first word news with rosalind chin. a little let's talk bit more about the auto industry with toyota reacting, saying it is investing 600 million dollars and creating 400 new jobs in indiana. the believe this will be high land, the number two seller in the u.s.. criticized theas

carmaker for planning a plant in mexico. the u.k. government has to rethink strategy for leaving the eu. prime minister teresa may argued she has the power to trigger brexit, but the court disagreed. the court also said scottish, welsh, and northern irish lawmakers do not need to be consulted. the u.s. has attached china on trade -- attacked china on trade. said the decision to support the entry into the wto has proved incorrect. gary: hence for the -- consumer protection

toncy wants manufacturers step up safety. they say will they conduct a review into battery technology, citing flawed industry standards. 1.9 million phones were recalled. they say they are continuing the investigation. global news, 24 hours a day, powered by more than 2600 journalists. i am rosalind chin. chor: looking ahead, inflation nation. the latest cpi data from sydney. yvonne: and where is the value in asia? this is bloomberg. ♪

this is "daybreak asia."

yvonne: a quick check of the latest headlines. chinese smartphones are routing rivals in india, challenging samsung. vo andand others -- vi others took four of the top five spots. samsung remains number one, but it's market share fell to 24%. chinese brands had a collective 46%. itse is expected to make case for starting phone production in india. is also seeking concessions to facilitate setting up production. apple said it was ready to start making phones in india. predatory pricing by --

is hurting the industry. the indian richest man launched free callsring in september. let's check back in on the markets. taking a cue from wall street. joining us now is the asia-pacific cio at deutsche. thanks for joining us. taking a look at this, we have seen funds coming back to asia despite the trump fears. china economy possibly bombing out. you think it is going to be sustained? we are talking about -- but

we did selloff quite badly after trump was elected. the fundamentals are interesting this year for asia. you've got to talk about the risk as well. you see president trump coming in with guns blazing, dropping the u.s. out of tpp which was no surprise. he is also talking about currency manipulation and border tax adjustments. you, americar first? what does it mean for the rest of the world? what it does. there are countries and sectors in asia, korea, taiwan. predictry difficult to and plan for. we have to be very flexible and make sure if we are in areas -- it is all seems like about dollar dynamics. one could move the dollar higher from here.

is it more about protectionism? >> it is probably more about the inflation trade. the dollar is being weaker, implying protectionism is going to be bad for growth. it real surprise is everyone in this street -- in the street is exacting a dollar that is stronger and it has been weaker. we expect that will reverse and we will get a stronger dollar. as the fiscal policies get put in. yvonne: i know you are bullish about japan. with the dollar-yen relationship, the exporters are going to be been eu fisheries -- be been yo beneficiaries. they have more net cash per se. compared to the u.s., we are seeing the dividend yield has

fallen below the s&p. where do you see value in japan in particular? bullishve been quite for a bottom of the japan. we see it as a market or you have had a return in equity changing. if you are focusing on companies they'ree changed, balanced sheets are better managed. they are producing better earnings. because it has been so macro driven, first because of the way the macro funds have played this and also because of the buying of the gpf which has been across board, the catalyst was trump coming in. which is going to weaken the yen. stock selection opportunities to be played. what if you are seeing this relationship with trump. -- balancesee this

this border tax adjustment? when it comes to cutting corporate taxes? there is a lot to decide on for these companies. >> they will find it is difficult to make a decision because they do not know the facts. do in thef us investment world, we don't know what is going to happen next month. you are having a lot of saying,kers in asia trump is unpredictable. it is difficult for them to react. central banks are worried about it. we have to be as investors. with it is to be flexible. we started last year very badly. was a huge buying opportunity. and then it sold off after trump and we still had a positive return. the same can be this year as well. hardermarket runs a bit over the next few weeks, they are already up 6% or 7%, you

have to be realistic. anchor: i have a chart, looking at the price to earnings ratio of emerging markets versus developed markets. take a look at the bloomberg here. we had seen a relatively overvaluation versus the average we have seen over the past five years. now, climbing back toward that average level. the bottom line is, do you think emerging markets are pricing in some of the risks you and yvonne have been talking about? >> heavily on that, no. the valuations for emerging markets are getting to an average level. we have to admit the return on equity's is much lower. in the past, looking at the pe

now, you have to accept we have less than have the return on equity. what is important is the earnings are coming through. there are areas where clearly the market is too optimistic. mexico, 28%. that is too unrealistic. we can still get 8-10%. the market is not factoring in political risk. it is very difficult for it to do so until it knows the details. it is probably underestimating some of the structural changes happening. the value is in asia. there are still good opportunities outside of asia. julie: within asia, particularly emerging markets, where are you looking? >> structure -- actually, on a structural basis. we think the capital account is

going to be tight. the economy has kind of reached the bottom. there is a boost to the property market. commodities are reasonable. premium of asia has come in a lot. domestic investors will put money back into chinese equities. that will be positive and we will get benefits. julie: if the dollar does begin strengthening again, what effect does that have on your china strategy? >> we are factoring in a b.ronger dollar, weaker rn that sort ofget revaluation hit. if we have an orderly

devaluation, we are expecting the rmb to be weaker. julie: thank you, we appreciate your time. alibaba at 7.5 billion dollars to its sales forecast. ♪

"daybreak asia." alibaba has added $7.5 billion to its market value. reporterng in our tech who has details on this. we're specifically is the growth coming from? reporter: it is mostly coming from emerging businesses like

cloud computing. those parts of the business showed triple digit growth. the core business of alibaba did not grow as quickly. most of the growth is coming from outside businesses. something i have been curious about with alibaba, one of the aspirations is to grow outside of china. have we gotten updates on that? best majority of sales are coming from within china. said he wanted half of the revenue from outside the country. e-commercequire an country in south east asia. that has boosted some of their overseas revenue. they also have overseas express. they have not put a ton of is atment -- but this long-term ambition for jack ma, not in the next two or three years but within the next 10. yvonne: it seems like the big

question is, can they continue to build on this momentum? what is the risk factor for alibaba moving forward? reporter: they were just too good to be true, how long can this be sustained? one thing hanging over them is the sec probe. that is still ongoing. they are looking into the accounting practices. lots of skepticism. there is the fact they were recently put back onto the list of notorious markets. it is seen as a haven for knockoff goods. for alibaba to execute on their international goals, get 50% of revenue from outside, they have to gain the respect and get the global recognition they need to bring international retailers on to their platform. getting off of that list will be a big deal for them. yvonne: absolutely. a big bet they made when it came

was brick and mortar stores. reporter: we didn't get too many more details. they reiterated their goal of re-creating their shopping experience. this is similar to amazon. they have opened brick and mortar stores and physical bookstores. jack ma's vision is how do we go back to brick and mortar business again and make them more innovative with our capabilities? we will get more updates on how that integration is going. yvonne: thank you for that wrapup of alibaba earnings. let's look at how markets are trending. a great day for japan. 1.7%. weaker yen dynamic. updid see the export figure,

5%. we saw a swelling of the trade balance for that month. we are seeing positivity all around after wall street saw close to records for the dow. more to come here. ♪

you are watching "daybreak asia." let's ring you breaking news out of australia, which has just released its newest inflation data. let's go to paul allen with the details. paul: it is a bit of a letdown. quarterly cpr coming in at 0.5%. an annualized figure of 1.5%. it is the trimmed mean the bank of australia looks at.

that is at least in line, take a look at the aussie dollar. nt is falling steeply i wake of these numbers. the bank of australia will hold its first meeting of 2017 in just over two weeks. consumer price index is critical to what the r.b.i. does. inflation well below the 2-3% target, although it has indicated it is willing to wear a little flexibility on that front. to recap, consumer prices in australia weaker than expected, 0.5% for the quarter. yvonne: more breaking news out of taiwan. risingtalking about gdp, from the previous quarter. 2.58% on year. it was quite a miss from what economists were expecting. they were expecting 2.85%.

in the year, we are coming at growth for taiwan at 1.4%. arise from the prior year, but also a mess. 2.58% number, -- a good track record for 2017. the government taking some aggressive measures. there is a lot of headwinds when it comes to global trade barriers with the trump administration. the u.s. economy on solid footing, that could be a big factor for the boost at least for 2016. you can help think apple for that as well with some of the suppliers in taiwan. we are seeing a rise in gdp, but still a miss for the fourth quarter, julie. let's see how things trade.

iwan close to so not much reaction from them. sophie: we are checking in on taiwanese markets when they open later, but first, let's pull of the line chart of how to cut a is doing. shares surging. they do not anticipate restructuring through a court led bankruptcy. takata undergoing the biggest recall in history. let's take a look at elsewhere in the region. japanese shares. the nikkei two to five of 1.5%. drop.a a 14 monthhaking off slump, which could be a boon for 'sr mr prime minister abe,

efforts. we are watching what is going on tohsiba,shiva, -- down. the board is meeting to approve the sale of its chip is this. toshiba says they will disclose the amount for -- on february 14, along with earnings. seeing korean we stocks react? right now, it looks like not much change. sophie: of about 0.2%. let's take a look at some of the movers. this happening, despite korea's economy growing at the slowest pace in over a year. the slower pace largely anticipated. here is a look and what is going on. sex 200 --ng a a

let's get the first word news with rosalind chin. rosalind: president trump has laid out incentives for carmakers. ceo, trump said he would reduce taxes and regulations. the companies have not built factories in the u.s. since 2006. trump also moved to resume construction of the keystone and dakota access pipelines. president trump could have replaced him come but that could have been controversial as the bureau has been investigating ties between the president and russia.

battl -- microsoft's battle may be heading to the supreme court. this after a lower court refused to consider a decision. prosecutors say they are considering an appeal because the ruling would create legal loopholes to be exploited by hackers. beenhe maker -- has snapped up by a chinese maker. they plan to pay at least $1 billion for the mobile company. exploring aid to be sale with goldman sachs. global news, 24 hours a day, powered by more than 2600 journalists. i am rosalind chin. get more detail on

the south korean gdp figures. the economy is it ending at the slowest pace in more than a year. at the slowest pace in more than a year. let's go to david ingles for more analysis. david: let's have a look at the top numbers. we did see a slowdown in the fourth quarter. beating estimates, but i guess it depends what you want to look at. estimates, longer-term trends. let's look at it through the prism of what the target was. the target of the bok was 2.7%. it basically came in line for the full year. quarter, slightly above estimates but we did see a slowdown from the previous quarter. private consumption, barely changed. this came at the same time as in political scandal started

south korea. i don't want to draw a direct line between the president's thelems and the decision, spending decision of regular south koreans. here is one thing. we are getting lines out of the bok. what they are saying, you look at what the biggest rat was to growth, it was this drop in construction investment. 1.7%. now they are saying right is a lot of that comes down to the basic fact. it is unlikely we will see the bok says, a rapid slowdown in construction investment. dragg ahead as far as that is concerned, and the drag we saw in the fourth quarter, don't worry about it. if the numbers don't really come in, there is always the base effect to blame. you got the political

risk, still uncertainty. is the bok going to have to step in? david: the key rate is 1.25%. let me shift this and have a look. can we get into my bloomberg? you have the key rate, 1.25 percent. even though people can say, they can lower it. look at where inflation is. i am not an economist. areooks like real rates negative. that is something to consider. you also have the high household debt levels. youou lower it further, exacerbate the problem. let me and on something positive. have a look at a key driver of south korean growth. is gdp growth.

the other line you see is the change in exports. the did you see, the middle of your screen, that was during the global prices. the right side, we have seen a pickup in exports. i believe half of output comes from net exports. something to watch very closely, good and bad. we have more breaking news. we are talking about sysco. they are going to buy another company for $3.7 billion. this deal is going to be made in cash and assumed equity. the company is going to be led closing at about the third quarter or so. we will get more details about

appdynamics. we are going to watch that. so fascinating, this is supposed to be the first tech ipo of the year but it looks like that is not happening with the cicso acquisition. it was going to be a big test of investor appetite. cicso's it is a test of appetite can it will be interesting to see if there's any cisco reaction. yvonne: in the meantime, bhp an 18on is that -- at month high. reporterover to our

joining us live from sydney. what has driven bhp's performance? it has been another strong quarter. iron ore is their biggest money spinner. they beat expectations, 16 million tons for the quarter. petroleum off a little bit. petroleum and iron ore have been doing the business. shares are responding accordingly. yvonne: it was no surprise, given the rise we have seen. the company is also looking to boost its petroleum investment. yeah, they describe this as sort of a little bit countercyclical. have recovered since last

year, but still a way off the highs from a few years ago. they are pumping a lot more money into exploration. they won a big mexico will auction. they are looking to put money into that. another and tobago area. onshore as well. doubling the amount of money they spent the last quarter in terms of onshore shale. that idea we have been hearing that shale is sort of back and in for a booming year. julie: one thing that is not back is coal. does it look like investors are going to be pleased with this transaction? look, a pretty good price.

just shy of two point $5 billion. analysts have been saying this 10-20% somewhere between premium on what they thought the assets would fetch. shareholders are a pretty happy bunch. already the attention has turned to what rio is going to do with its money from its asset sales. got the money they are looking to deploy for capital management. all eyes are turning to their full year results in a couple weeks time. they have toaying, use the money to trend that. others saying, there could potentially be a special dividend for shareholders. it will be interesting times. we should know more at the february results. julie: thank you very much.

bhpguest, outline the rio tinto news. there will be a delay in the brexit. ♪

julie: this is "daybreak asia." yvonne: the u.k. government will have to rethink its brexit strategy. hays bring in kathleen with the ramifications. how big of a setback is this for theresa may? they will see if they can make it by the end of march. there is opposition to the hard brexit, but the court left no u.k. in a 8-3 decision the

government has to have parliament vote on this. theresa may did win on one brexit issue, and that is the fact that scotland and northern ireland will not be up to vote on article 50. now the bill has to go through five stages in both chambers of parliament. that is going to take a while. this need to get parliamentary approval may slow down her deadline. made it very clear, there is no going back. they are moving back as quickly as they can. quest this government is determined to deliver on the decision taken by the people of the united kingdom to leave the european union and we will move swiftly to do just that. julie: you heard what david davis had to say.

tradersit seems like are on the side of theresa may, the pound went back up. kathleen: it sure did. it got hit when the news came out but then bounced right act of. you can look at the today chart. you can see how volatile it has been. no surprise there. everybody is watching brexit including traders. made it clear,o there is not going to be a second recommend of -- referendum on brexit. they are going to move quickly to introduce the legislation to go to article 50 as quickly as they can. keeping the end of march timetable will give businesses more certainty and that is important for the u.k. economy. this going to be good news or bad news for the u.k. economy overall?

kathleen: bloomberg intelligence reports the u.k. economy has held up really well overall, even in terms of uncertainty. i have a terrific chart for you. it shows the u.k. index, a measure of inflation, labor market indicators, and the uncertainty gauge. thehows how u.k. l -- index has gone down as the pound has declined. there is a lot of uncertainty and that is a big deal. how quickly theresa may can move. thank you so much. final quarter earnings delivered winners and losers. let's bring in su keenan. we got a couple of big reports after the close. u: most companies have beat

profit. was interesting. they came in with higher than expected sales. prices are up 13% over the last year. i should note the missed on the eps. they beat on revenue. what is interesting is shares 63%.p rise.tock has had quite a texas instruments, a different story. the biggest semi conductor maker. beating the street. sales rose on stronger demand from the auto industry. 78 centsprofit will be --

compared to $.80 a share. you saw a selloff. in the regular sessions, we saw verizon and johnson and johnson. they may have disappointed investors with her story. as 5%.izon down as much they added fewer new cell phone or tablet customers. also, when you see a slowdown in the core business, it puts more pressure on the company. let's get to johnson and johnson. big medical devices maker. a week forecast. -- weak forecast. the ceo talked about his call with president trump. he said his takeaway was there

was likely to be tax reform. very important to johnson & johnson as they are trying to put together a deal. yvonne: adding to the negative sentiment on health care ever since donald trump mentioning how these drugmakers are getting away with murder. up next, plans for a six star trump hotel in bali. ♪

asia."this is "daybreak yvonne: present trump -- president trump's plan for a ory hotel on bali could run into obstacles. it is interesting they measure building height by coconut trees. reporter: you have got to love how they do it. coconut trees as a form of measurement. anything towering over the major hindu temples is a big no-no. when trump and his indonesian partner decided to expand a hotel they bought two years ago golf course, the locals are saying, do not do it. the sacredverlooks

and famous temple.. it is also a unesco listed heritage site. when completed, the trump hotel would be the largest resort in bali. no trump'll trump -- has said he will distance himself from the business and projects, he will still be at the center of the anger for the balinese people. something to note in indonesia and bali. people don't really speak up. but these things are very sensitive and have the potential to blow up. the trump international hotel is off to a rocky start. julie: this hotel could require the purchase of farmland nearby which could also be tricky. haslinda: you are right. we here to make the hotel bigger, they will have to buy

nearby farmland. we are told there is a standing indonesiantrump's partner. no details on how much extra land it needs to buy to meet the target. pretty tricky in bali. haslinda amin in singapore. we are counting down to several more market opens in asia. more coming up with rish next. this is bloomberg. ♪

>> this is bloomberg markets asia. ♪ >> president trump urges autoakers to boost production. ore jumping.iron