betty: asian stocks poised to extend the global rally. investors look ahead to the fed speakers and u.s. data. yvonne: 100% united, donald trump and shinzo abe pledged to reinforce their alliance. head ofhe south korean samsung is going to be questioned again. yvonne: china's central bank cooks up i'll bet suit of monetary policy stirring up

volatility in the market. betty: this is "daybreak asia." it is just after 6:00 p.m. yvonne: it is just after 7:00 in hong kong. sounds like a case of the mondays today. we are starting things on a positive note after the record session we saw on wall street. hour, japan gdp front and center. betty: japan gdp coming out for the fourth quarter. we'll see if the economy slowed or if they pick up was evident. as you mentioned, we are watching janet yellen's testimony, earnings, and economic data. who knows where the market will go this week. yvonne: let's see how things are shaping up in the asia-pacific. things are been quite bullish here since friday. after we heard from president trump and how we could be

hearing about a tax plan in the next couple of weeks. the kiwi dollars that 71.96. got a jump in we iron ore. economists do not think it will rally forever, but it will not fall off a cliff either. japan is focused on the 18 second handshake and bromance between shinzo abe and donald trump over the weekend, but we are seeing a little weakness in the currency. it looks like it will be a good day for stocks in tokyo as well. what is in store on wall street? that was the handshake seen around the world, right russian mark -- right? yvonne: it was a little too long. betty: janet yellen speaks this

week. the prey of earnings continues on wall street. is here with a look ahead of what to expect. boostedd janet yellen to look -- dollar rally? it does set up for a strong technical open on monday. we were strong a cost of board. -- across the board. if we go into the bloomberg, we see a correlation of records. we are seeing the dow, s&p, and the nasdaq. there you are. the correlation as we go to higher ground. that is adding strength to the records we are seeing. the story of the bloomberg on the dollar. we did see it gain momentum because of trump's strong remarks about a phenomenal tax plan. more importantly, he said the details are coming into-three weeks. that sent the dollar higher.

it broke the losing streak we had seen. what are investors hoping to hear from janet yellen and from earnings themselves? are looking for clues on the pace of the rate hikes. get yellen will be giving her semiannual monetary speech. for those who are following the dollars rally, which he says about whether we may or may not have a live rate -- large rate hike will be very significant. it could raise the probability to 50%. black rock has said they believe a rate hike is possible in march. meanwhile, donald trump will continue to dominate headlines with the bromance with shinzo they to a meeting with israel's prime minister benjamin netanyahu. that will be interesting.

we will see cisco systems, pepsico and other companies. betty: what about the economic reports? su: consumer price index, are we seeing inflation? how some -- household income is being squeezed. at home will be looking construction and industrial production. both are expected to see little change. yvonne: thank you. let's get the first word news. treasury undersecretary for international affairs. guiderst job will be to currency policy. he would bring extensive government experience to a team that has little background in public service. he previously served as deputy

assistant secretary in the treasury and state departments. ceo says the balance sheet is in great shape. rio tinto announced a bigger than expected dividend. announced a 500 million share buyback. the ceo does not see a dramatic reversal in iron ore prices. momentink the key at the is that consensus prices are below the spot price. that is obvious an unusual. say thisot necessarily fallen off a cliff or anything like that. be --: the uae is up upbeat. has hit 90% of compliance, the best rate in history. they want to see the cuts continue in the coming months,

especially from non-opec members. they want to see oil inventories decreased and further price rises. they have rejected a plan for cutting corporate taxation. opponents argued it would strain the public purse and increase the strain on tax payers. they are under international treatment to end pressure. global news. 24 hours a day. powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. yvonne: thank you. the defective head of samsung could face arrest when he is summoned for questioning by south korean prosecutors once again. just about 2.5 hours away from seeing jay y. lee summoned by the investigators.

why is he being questioned again? be an hour andto a half, 9:30 a.m. korean time is when he is expected to show up at the prosecutor's office. they say they have new evidence that they need to question him on. this is the second time they have three summons him -- re-summoned him to question him on allegations. dealing with foundations run by close friends of the president in exchange for favorable government treatment, including a major deal between two samsung affiliates that helped out his control of the samsung pinch bomber -- conglomerate. betty: what do you read into the government's case here against him. setback when huge

the court judge said they did not have enough evidence to arrest him. since that time, about three weeks ago, they say they have uncovered new evidence to suggest that he may have been directly involved in these allegations. -- aresult, they are's signaling they want to re-issue an arrest warrant to take him into custody. betty: could this affect or continue to affect is standing within samsung? inputs -- it puts his control at an uncertain level. the company continues to run smoothly. it has reported significant earnings increases. it is doing well in the stock market. running despite all of the scandal and turmoil

that is surrounding him. the question is, if he is vacuumd, how long this will last? that's the question the market is asking. back here in the u.s., president donald trump and japanese prime minister shinzo abe are wrapping up their weekend summit in washington. shinzo abe heads back to japan now. byre talks were overshadowed north korea which launched a ballistic missile on sunday. shinzo donald trump and they were showing signs of voluntary. they are pushing back for regional security. some good words for shinzo abe with mr. trump saying one line in a very short press conference. wantdent trump: i

everybody to understand and fully know that the united eights of america stands behind japan, it's great ally, 100%. thank you. >> i'm seeing reports that the agency says they did successfully fire that missile. and that the leader of north korea expressed great satisfaction. we saw the turn when it comes to china and the one china policy just a couple days ago. it was intended to focus on the economy and the trade ties between the u.s. and japan. they talked about that on friday as well is saturday. they also went golfing. it was interesting to see them talking about that. it were trying to get some personal time together in order to break the ice. this does follow mr. trump's

attacks on japan about currency devaluation. we also have a tweak from mr. tweet.-- we --'s -- he is basically saying how much of a great time he had hosting shinzo abe. yvonne: lots of handshakes and lots of high fives this weekend. we are not expecting a whole lot of market moves after this weekend trip. what about the deputy prime minister of japan? >> you have to look at it in one of two ways. the two heads of state do not want to get their hands dirty in the details of this. delegating it to

their deputies. when it comes to the not and bolts of it, they will be looking at the coordination of fiscal as well as monetary policy. what they deem as cooperative projects including infrastructure spending, energy andects, cybersecurity, most importantly, bilateral trade. from both sides of the pacific. there is the automotive sector that donald trump campaigned on wanting to restarting. there is also the agricultural factor which lends a lot of support to prime minister shinzo abe. it is expected to be a start of foray past thew transpacific partnership. yvonne: still ahead, we will find out whether the efforts to boost japan's economy are paying off. they were loose growth data --

release growth data in less than an hour. this is bloomberg. ♪

betty: this is "daybreak asia." yvonne: a quick check of the latest business flash headlines. a hong kong telecom company is set to raise one billion u.s. dollars by selling its trust share units. this is a discount of over 8%. a statement to the hong kong w said they plan to invest in core businesses. betty: the governor who spearheaded regulation after the financial crisis will give

president trump more authority over the central bank. he will resign in march. donald trump will have to fill three of the boards several position. will gohas said he regardless of the november election outcomes. biggestit will make its log. takata expected a short fall after announcing a potential criminal investigation. they admitted to hiding risks in its airbags. betty: what about here in the u.s.? stocks hitting a record again on friday. -- bring inve in speed.

>> the honeymoon reign over is a catchy phrase. we hope the marriage with the country continues to do quite well. the euphoria out there is overdone right now. valuation on stocks are not cheap. betty: they are not overvalued either. >> on gap earnings it is 23. the market is up a lot. the economy is ok. autos are starting to roll over. the plan that trump is doing, on immigration in regulation. the health care plan will not happen overnight. it will take some time. betty: none of it is going to happen overnight. the market is anticipating that it is great euphoria right now. the tax plan -- betty: which he called phenomenal. >> he will announce it in three

weeks and on the surface it will probably be pretty good. companies have stopped doing anything until they get the definitive answers to be taxing. you may have a quarter or two where the economy is not doing as well as most people think. they valuations we have right now, it is not priced in. i've done this for 46 years. it can happen. betty: so a regular correction. let me show you this chart. you mentioned you think opec members are going to cheat. however, in the first month, this chart shows you that basically almost all of the opec members have agreed to their

production cuts. saudi arabia agreed to a over 100%. they exceeded their production cuts. so in the first month, they all said -- they are all doing what they said they were going to do. >> you are right. but things have changed. the u.s. is in the drivers she seat.eek -- system and an energy are producing a lot of oil. fracking is coming back and has exploded in the last couple of months. also on the chart we are leaving out libya, nigeria, iraq, and iran. all those countries that you mentioned have budget problems. betty: so, for good faith they are doing it for the first month. >> every country needs the money.

at the u.s. starts to produce more, they will get matt. plus, it we do the border tax, it raises their oil 20% to come into the united states. that will make them very upset because the you u.s. -- the u.s. will produce it with a 20% discount. or 45.l come down to 47 that is what is going to happen. yvonne: it sounds like you are skeptical as to what the fed is going to do this year. they are saying three rate hikes this year. janet yellen will testify this week. it is a chance for her to manage expectations. do you think a march rate hike will happen? >> i think there will be two rate increases, i doubt it will come in march. china's currency is under pressure right now. a border tax is a huge thing.

20% cannot be done overnight. you have to face it in over years. she will take that into account. probably two increases this year. most importantly, our tenure is higher than all the other free countries by a substantial margin. if she raises it too much, or dollar will continue to go through the roof and it will cause problems for the in ministration. most of the cabinet members are superb. we are seeing how the marriage goes now, but the honeymoon is over. yvonne: how high can the yields rally? or 4% like some of the bond king have mentioned? >> the 10 year will probably stay the same. i think the 10 year will stay where it is right now. the differential between the other countries is too much.

germany's differential is 1.8% from ours. spain and italy have a lower tenure rate than we have, -- 10 year rate and we have, which is mind boggling. yvonne: thank you. up next, we take a look at the toolbox. how can you manage market volatility? this is bloomberg. ♪

betty: this is "daybreak asia." yvonne: china's central bank is resorting to an increasingly elaborate array of tools to guide monetary policy. that is creating market volatility. let's get more on this. here?ina getting creative >> they have a veritable alphabet soup of facilities.

they have many acronyms they have conjured up. they have raised rates on three facilities. they have created a whole new one. they have asked banks to come back on lending. the pboc has seven different facilities. that does not include the traditional ones like the .enchmark rate and the rrr they do have a toolkit, but when they use them, it creates market volatility. bonds arechinese getting up to a 1.5 year high. because of this uncertainty in the money markets, when all of these different acronyms are used by the pboc, this is financial innovation, but he can make it more difficult for investors. we have heard from tokyo mitsubishi and less saying that

the pboc is juggling too many balls with all of these. betty: what does this mean for investors? >> it is hard for them to get a read on what the pboc is doing. overall, the analysts say they want corporate yields -- corporate rates to remain relatively stable while targeting other rates. it creates a patchwork of facilities with intervention. one minute they are draining funds, the other minute they are putting funds back in. that makes it a difficult picture for analysts and investors to navigate. this week is an example. billionll be $151 coming to the end of their expiration. have of these acronyms fixed numbers.

it is a difficult job for investors to have to read the dealings. yvonne: thank you. much more ahead on "daybreak asia."

yvonne: 7:30 a.m. monday morning in hong kong. we are kicking off the trading week. we are 30 minutes away from asia's first major market open. betty: looks gorgeous there. down .01%. investors are waiting japan's fourth quarter gdp numbers. i'm betty liu in new york. yvonne: i'm yvonne man in hong kong. you are watching "daybreak asia." sophie: the white house says president trump and prime minister shinzo on they have

displayed solidarity over north korea's ballistic missile launch. they lost a medium-range missile on sunday. it traveled 500 kilometers before splashing down in the sea of japan. it is been widely condemned. shinzo abe called it intolerable. >> president trump assured me that the united states will always stand with japan 100%. the president and i completely share the view that we are going to promote further cooperation two nations to further reinforce our alliance. facto headsung's de is being summoned again to be questioned. last month the court rejected a request for an arrest warrant. prosecutors will seek another

arrest warrant. arer samsung executives expected to face questioning. the imf chief as she sees the economy picking up in 2017. she said oil prices were unlikely to return to pre-2014 levels. she urged oil exporters to diverse and five their resources. means thatncertainty nations need to build their infrastructures. he in new south wales. a cold change has arrived for monday. high temperatures are expected to return midweek. one town near the queens land border reached 48 degrees celsius. global news. 24 hours a day. powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. yvonne: thank you.

are shaping up on this monday morning. david ingles joins us today. reflationike the trade is ready much intact. david: that is the argument to be made when you look at across the currency markets. we may have overshot the reach racing of that reflation trade. at thelooking at the yen top end of the 2-3 week trading range. we are looking at a one-month low at 1.0621. in seven days you had the deadline again. there are certain differences that the imf has with greece. wantsf once greece -- greece two-putting certain

regulations. the 20th is the deadline for the new agreement. look at the markets. very impressive first full month of compliance. you know what they say, the first cut is always the deepest. have a look at australia. have a look at new zealand. the story we are watching their is a rally across the commodities space. asx is 2% now on that materials index. .05% for five straight days. is near 7200. a lot to consider today. lots of data coming through. a solid start to the trading week. betty: what about japan and south korea and things we should be walking -- watching for, including takata. david: there is that stock.

i'm looking at the bids at the moment. we could be looking at roughly where we close on friday. gdp is in focus. , we you look at the markets are looking at gains on the nikkei. maybe 19,500. somewhere around there. flip the boards. betty mentioned the kind. you also have one of the oil producers in japan lifting his price and -- its products. , because wecbc could get new loans, credit data on money supply out of china as early as today. betty: thank you. david ingles there with a look at the markets as we kick off the week. the fed is back in focus this week. janet yellen is preparing to testify before congress. boj waits to see if

the japanese economy slowed at years end and whether consumption increase. let's start in the u.s. >> on saturday speaking in england, he did speak about fiscal uncertainty. it is hard for the fed to set its compass when all these steps need to be taken on taxing and spending. he said that fed is almost there on jobs. let's look at the bloomberg chart and see if he is right. unemployment,e is it is down to 4.8%. that is close to that most optimistic forecast from the fed on this year for the unemployment rate. pce is getting a little bit closer. when it comes to dodd-frank, he said he hopes it will not be

repealed. he wants to get rid of a lot of it. he thinks it is too restrictive on banks. reducing capital requirements reduce the safety of the taking system. if you are a central banker, you are convinced. dan tarullo has been the point man at the fed. he is leaving five years early. donald trump is set to roll back dodd-frank. there is a direct challenge to tarullo. that means donald trump will be able to appoint three new governors to the fed board of governors. betty: we know that janet yellen will talk about the economy and interest rates. will she talk about dodd-frank and regulation? >> she is been asked about it before and she has defended dodd-frank. you need the capital requirements to keep being safe.

endorse three rate hikes. let's go to another chart. you can see the line just in from the left-hand side. the cluster in that diamond are the officials at the meeting in december when they gave their forecast. it is barely consensus. but the consensus is three. will janet yellen endorse that in any way, shape, or form? they have a different view. hikes only in june and december. yvonne: governor kuroda has been upbeat at the prospects of growth as well as inflation. he upgraded is forecast earlier this month. could he be disappointed? >> maybe a little. it is in the market now that the numbers will slow a little bit.

on fourthaying 1% quarter gdp, that would be down from 1.3%. , youis what is going on have exports growing, more capital spending, housing is doing well. the minuses are public investment, private inventories consumerrowing, spending is sluggish. what we are seeing is interesting. there bloomberg team is reporting that the industry of finance has indicated that at the weekend meeting, prime minister of a and best shinzo abe and president trump confirmed japan's policy. that means that donald trump even if itt the boj keeps the yen weaker. leaked a subtlety being by the ministry of finance. yvonne: interesting.

thank you. has had to reverse on its forecast of profitability for this fiscal year. it is now expecting a third annual loss. let's get to a bloomberg editor live in tokyo for more. what does this mean for takata? takata is in talks with several potential buyers. there are antitrust concerns. this report points to the uncertainties. there are many of them. this was the second shoe dropping. they reported a few days before that that they had a $1 billion settlement. that was interpreted as good news because at least there was a price put on it. this also gives a clear picture of what the company's losses are going to be like.

it puts an endpoint to them. the negotiations are still very tough. as i mentioned, there are antitrust concerns that have to do with potential buyers. there is also the idea that we still do not have an absolutely crystal there picture of where all the losses might be. the company also mentioned that they still have some non-core assets that they might sell. they're still going to be some trading in this name. betty: is there growing concern about the solvency of tech, -- takata? >> there are. the company said material uncertainty is a growing concern. that should not shock anyone. there is a lot of uncertainty built into this company because of the nature of the recall that they had with the air bags. there are still liabilities that are still outstanding. yvonne: thank you.

we will be watching the open for that trade and stock. much more ahead. and asia's economy is breathing a sigh of relief after donald trump said he will honor the one china policy. is it a diplomatic win for beijing? this is bloomberg. ♪

yvonne: this is "daybreak asia." betty: a quick check of the headlines at this hour. to cut morering than $1 billion in annual operating costs by eliminating businesses.sing they will release annual results next week. senior executives believe rbs has more staff than it requires.

they did not reveal the number of jobs to be cut. yvonne: a 20% in profit as it gets set to boost its staff pay. coal india's profit dropped and this estimates by 6%. 10% was set aside to cover potential salary increases for employees. increasedt disney has theme park tickets by 4.9%. costar entry will now $110. the rise in admission charges is less than last year's. $124eak holiday price of is remaining the same. glad that i went years ago. i'm way past dixieland -- disneyland. turnaround onp's the one china policy is offered

relief to asian economies. relief?big >> i have read a lot since been thursday call. winners all across the board. onna got the upper hand donald trump. china would not want this kind of backdrop of negativity with the united states. is a beneficiary of this as well. abe were shinzo getting chummy in washington, d.c. you can see a softening of trump's asia stance. welcome thethey

phone call on friday. even taiwan is not the loser on this one. taiwan welcome the call saying that it is beneficial to taiwan. community also welcoming that phone call. said it is in no one's u.s. andrts to see china conflict. this was one issue that was difficult for china. andas been put to one side now they can negotiate in a much more levelheaded way. surpriselike that zero approach. china was a frequent target of trump on the campaign trail. are there other areas where he can potentially hit them again? >> you know with donald trump things could change when he takes to twitter. they have not invoke the issues

of currency manipulator and mortar attacks tariffs. north korea is wanting china to play a bigger role they are especially after the long range missile test that was reported over the weekend. keep in mind, you have countries like india, malaysia, and vietnam who also have trade surpluses with the u.s.. yvonne: thank you. we know the japanese relationship got more solid. the latest indication of how japan's economy is faring. we will get the gdp numbers lie. this is bloomberg. ♪

betty: let's bring you some of that breaking news. japan's fourth quarter gdp. those numbers are now out. a slowdown from the prior quarter. down to 1%.

1% --ists had estimated a 1.1% growth. i also want to point out private consumption. it is very key in japan. no change here as expected. slowdownesenting a from the prior quarter. despite those stronger than expected numbers that we got last week, this looks in line with the continued view that it is hard to get the economy in japan growing. yvonne: absolutely. not a whole lot of reaction in dollar-yen. let's get the media analysis now. great to see you. we are seeing a bit of a slowdown. we are still talking about a fourth straight month of expansion. does the longest since 2013 for growth in japan. a slowdown, not robust. how are you gauging this right

now? >> it shows the pattern of growth seems to be the same as over the last couple of quarters. this is an export driven recovery. private consumption has been pretty weak still. unless we can get private consumption fired up, it is hard to see growth improving strongly. we are seeing a nice of cycle, but it is dependent on exports right now. yvonne: we did hear from the boj was month that the upgrade based on the yen's depreciation. a lot of it is beyond the boj's control. we have seen them continue to conduct emergency fix rate operations to try to anchor the 0%. we are still hovering around 0.08 right now. can they continue to stay on this cruise control? >> i think so.

if you have a global backup in yields, that puts more pressure on the boj to contain the 10 year yield around its target. they are still capable of doing it from a technical perspective. overve come in stronger the past week or so with more frequent operation. i think it is possible. the bigger headache for the boj is what happened -- happens if the yield starts falling again. it is harder to defend the floor than the ceiling. yvonne: wrapping up the weekend with the meeting with the prime minister as well. should the prime minister be spending money to bring jobs to america when we consider -- continue to see things muddling off in the domestic economy? >> i think there's a need to onest domestically and focus

economic policies, and also held a stronger bridge to the united states. on the prime minister's part, it was part of an indication to the u.s. that japan does contribute to the u.s. economy. he is trying to offer a win win situation for the united states. he's trying to take some attention off of the bilateral trade deficit. it is a smart move on the part of the prime minister. betty: you said the single biggest rescue japan's outlook might be donald trump and the u.s. do you think that this weekend that was mitigated? >> i think it is too early to say for sure. and currencyes issues did not come up in the summit. that is not a surprise given has trump's economic team not been confirmed and assembled yet. we will have to wait and see. for now, it does reduce concerns among market participants, especially on shore, that we are

going to get some commentary around dollar-yen in japan's monetary policy. betty: describe a scenario when we would see the yen drink then again. going to seewe are a lot of economic data this week. we are going to hear from janet yellen and whether she concurs with her other colleagues about a march rate hike. perhaps on acceleration in rate hikes. where do you see the scenario of the yen strengthening? >> fundamentally, we do think the direction of the dollar is one of strengthening. what donald trump says, is side pointhe fiscal to a stronger u.s. dollar. some of the other events around the world might cause some issues. the visibility around china's growth is not very clear. we are on the card for that. betty: what about fourth-quarter

numbers? what do they tell you about how the first quarter might shape up for japan? whichhink the exports drove the growth in the fourth quarter will remain strong. japan can sustain this sort of 1% annualized growth for the next couple of quarters. i think there is question on the upside as to what will happen to private consumption? we have seen consumer confidence pick up gradually. i think private consumption will be better in the first quarter. without private consumption picking up, it is hard to see growth accelerating above 1.5 cent numbers. -- 1.5% numbers. yvonne: do you think the projection from japan was too bullish? actually that is precisely

why they kept their inflation numbers largely on change when the last provided their forecast. the upgrade at the growth was a reflection of the better revised gdp numbers when they switch to a new national account standard. they are still conscious of growth. you can see that in the outlook report. betty: thank you so much. she is head of japan economic that merrill lynch japan securities. she is reacting to the japanese fourth-quarter numbers. a slowdown, down to 1%. the economists are pretty spot on with these numbers. in terms of how the futures have traded, we have moved a bit higher here. 25. at nikkei to is up now 2.5%. the yen here, the dollar strengthening and is now at

113.96 against the yen. perhaps there is no downside surprise here. we will be back.

♪ >> japan is still struggling to revive its economy, fourth-quarter gdp numbers below as to men's. >> north korea called its foristic missile test success as president trump and shinzo of a reinforcing their alliance. facing allegations on bribery. >> australia's biggest gold mine are reaping rewards on higher prices and volumes. >> this is the second hour of "daybreak: asia" live from

bloomberg's u.s. and asian headquarters. is just after 7:00 p.m. in new york. i am betty liu. we just had japan fourth-quarter gdp numbers, a slowdown as expected for the fourth quarter, but in line with what economists had estimated. we will have a bunch of economic numbers in the u.s., at sales, inflation, the fed speaking, so the direction of the markets could move any which way at this point. from janettimony yellen will be crucial to see if she's trying to manage rate expectations on a march rate hike. be asay that march could live meeting already, so some bullishness on that front. let's get more on the markets in asia. the reflation trade in tact after that gdp data from japan,

and now the latest from david in glass. right, the government releasing its statement on this gdp report. highs, 1n, session 13.96 is the next resistance level. things, moves and financial markets, nothing has changed as far the gradual recovery is concerned and speaks to the fact you had the miss, it when you look at the gdp, did not fall that much, which speaks to this reflation trade. are we seeing more inflation? much, the't fall silver lining there. , what they want to refer to as a virtuous economic cycle.

all right, let's flip the boards and look at the open. japan had one of its most -- stellarson friday days on friday, so we are adding to those gains .6%. , southlook at the topix korean earnings coming through. reaction across our earnings on friday. group ofboards, one stocks we are watching and south korea are defense related stocks. typically you get a bounce when you have a ratcheting up of activity from the north, and we are talking about this missile launch. south korea saying they will monitor after the firing of that ballistic missile.

all right, last but not least, action in at the sydney, mining stocks in focus, dollar stronger, so more pressure on prices. when you look at net call -- nickel, 4%, old story, but still a move up in new goal prices. -- in nickel prices. there we go, 2.5%. or leading gains post earnings in sydney, so all things equal, a solid start to this trading week. yvonne: we will come back to you later. david engel less live from singapore. samsung,e head of shares falling 1.3% right now. facehairman could

questioning by south korean prosecutors, j widely expected to speak to prosecutors less than a month after a court decided there was not enough evidence to detain them. let's get the latest from our seoul, korea bureau chief. why was he summoned back? the special prosecutor announced they will re-summon this morning, in about 30 minutes, they gathered new evidence to suggest that jay involved inave been a bribery scheme involving the president as well as the president's longtime friend. comes after a toth ago, the request arrested jay y. lee was denied by a court judge, who said there was not enough evidence. prosecutors think

they have enough. they may seek his re-arrest. >> how surprising is this summons again? actually, it is not quite surprising, because the special prosecutor when they have the setback a month ago indicated they will continue to investigate and they were gathering more evidence, so they have suggested that they will either re-seek his arrest or perhaps indict him without arrest, so it is not that surprising. >> thank you. on the latestre with samsung some breaking news out of toshiba, they are announcing or expecting at least that the nine-month earnings will come out as a net loss, due loss withstantial that goodwill write-down. they say they are still

calculating earnings for the third quarter after they responded to this nikkei report on earning sunday, when they expect a net loss to be large on that right down, so we are not getting the phone number or figures when it comes to this net loss, but certainly some upside for stocks, the toshiba stock, up 1.8%. betty: some local report saying as loss could be as much ¥400 as ¥400 billion, all related to their nuclear business, a write-down of their nuclear unit. this is just a continued fallout from that. some clarity, as you point out, but not the exact clarity that investors desire, so we will see how much more detail we get throughout the session. in the meantime, first word news with sophie kamaruddin. bill uae is upbeat on the progress to curb the global

glut by reducing output. the iaea said they implemented 90% of cuts, the best compliance rate in history. the energy minister said he would like to see the cuts continue, especially from non-opec members. more time is needed to see oil inventories decreased and further price rises. rio tinto cfo says the balance sheet is in great shape after an emergence from an industrywide downturn. rio announced a bigger than expected dividend and a $500 million buyback. lynch says he does not see a dramatic reversal in iron ore prices. at the moment key you can see the consensus prices are below the spot price. so i would not, necessarily it will fall off a cliff or anything like that. takata walking back on

its forecast for profitability this fiscal year, saying it will probably make its biggest loss. is expecting a shortfall of $562 million after agreeing to settle a u.s. criminal investigation. ae company said it would book combined $946 million in charges after it admitted to hiding risks in its airbags. anald trump plans to nominate former bear stearns economist as treasury undersecretary for international affairs. if confirmed by the senate, his be to guidell currency policy. he has previously served as deputy assistant secretary in the treasury and state department. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. betty: thank you so much,

sophie. president trump and shinzo abe wrapping up their weekend summit in washington. talked to trade ties, but were overshadowed by north korea's missile launch. remy and a sincere has the latest on the meeting. ramy: first off, new reaction out of north korea, talking how the korean central news agency as saying the launch is a and the korean leader has been "greatly satisfied" at this launch. reaction from president trump and shinzo abe, showing solidarity. shinzo abe saying the missile test are "absolutely intolerable" at this hastily convened press conference. want everybody to

understand and fully know that the united states of america stands behind japan, it's great ally, 100%. thank you. one interesting note, richard haass, president of the council on foreign relations said north korea is likely able u.s. with theew u.s ballistic missile during president trump's tenure. prior to that, they were talking about trade times and golfing, other,to warm up to each especially after some negative comments on the campaign trail. they have been talking about how to do business better, bilateral ties in terms of currency manipulation. esther trump had said japan had been devaluing the yen, and also japan has the second biggest in terms of current accounts after china. >> not to make light of this,

but just reading a headline, kim ing un makes a cameo buddy movie. don't forget them is what the signal was. saying i amng un here, don't forget. north korea often does this, saying, we are not here and not going away. >> in between the golf, they were pushing controversial issues. he did talk about this new economic dialogue could what does this entail? ramy: it is a three-pronged approach. the first involves trade, the second involves fiscal, monetary policy, and the third is cooperative projects.

that includes infrastructure as well as energy as well as cybersecurity there. oft is the policy side things, but it very well could be a replacement for the tpp. after mr. trump did pull out of that 12-country packed, he said he wanted to do bilateral deals with those member countries, and this could be the first foray into laying the groundwork for that. on the policy side, mr. abe wants to keep his hands free from the details, the dirty work, and pushing the finance minister to do that kind of work so he can work on the friendlier side of things moving ahead. >> i just want to come in with more news. , south korea,ils japan, and the u.s. are requesting a un security council to the in reaction ballistic missile that was launched by north korea, so the three are requesting a un

security council meeting. still ahead, find out why some potential trading hotspots in asia are escaping president trump's glare right now. details later in the program. >> it is about dollar risk. what should investors do amid this political uncertainty. this is bloomberg. ♪

.> this is "daybreak: asia" >> a quick check of the business flash headlines. toshiba expects a large net loss when it reports earnings ending in december. it is still calculating the figures ahead of tomorrow's release. the large loss will be due to calls a goodwill and

permit on one of its westinghouse units. the company will spin off its ship unit and put its swissie unit under sail to cover losses. >> calls a goodwill and nissan has stopped predicting when it will reach its target. the company would reach 100,000 annual sales and 5% market share within two years. short,ssan has fallen selling 22,000 units last year, less than 2% of the market. as for the company's overall business, cautiously optimistic. >> hong kong telecoms company said to raise just over $1 billion by selling a stake in two entities. the price represents a discount of 8% of the units last close. lee's second cell and less than a week. in a statement, pcc w said it went invest in media, debt repayment, and corporate purchases. nearerging stocks trading

their highest levels and more than 18 months as investors bet on faster global growth and a pickup in earnings. our next guest says the appeal of bric could be making a comeback. good to see you. i have to wonder about what happened over the weekend with president xiween jinping and donald, going to honor the one china policy. does this reduce risk in the markets? >> it should potentially it we will see in terms of trade agreements, how it will play out, and for now, it should provide summer's fight to the market, at least in that sense. the big risk to markets remains the u.s. dollar trend. there are a lot of elements which seemed to push the u.s. dollar higher, the fed rate hike , the border tax, measures of

boosting the economy. the major risk to over all, and asia in particular, but we know if it gets too strong, that will affect the momentum out of the u.s., so janet yellen and mr. trump are probably keeping a close look at whether the u.s. dollar is going, and if it were to accelerate, maybe they would be trying to temper it and limit thatmpact, so right now, risk is there. it has been identified and the markets are cautious and looking at it carefully. in the meantime, there is a lot going on. mentionedoncept you is interesting. them one by take one, they have strong arguments to be investable right now. >> let's talk about the asian side of bric right now.

this inverse relationship we do see when it comes to asia ex-japan. every time it rises, the valuations come down, so what does that tell you? this is mostly priced in now? tremendouslye up across asia, and still a worry, and it has not come down as much as people would like to, but that debt is reflected in the relative valuation of asia, which means investors are fully acknowledging the risks. andnew measures by the pboc other central banks across asia, that debt level to gdp was to stabilize because the gdp is rising, while the debt is starting to be under control, then you could have a reverse in terms of discount valuation of

asia, and unc asia start to outperform the u.s. markets. on aboutntioned early how the u.s. dollar, the strength of the u.s. dollar is this big risk for emerging markets. we were speaking with the philippine central bank deputy governor, and he is facing that pressure. you saw the pace of the stabilize because of rate hikes and the stronger dollar, so what can emerging-market central banks, what leverage do they have if they do see the dollar continued to strengthen? >> we started to see already the central banks taking into context, the central bank of india did not raise rates. we have the same move out of thailand. if we talk about mexico, last week, they raise rates by 50 basis points. cross the emerging-market world are taking into account that new trend and

will try to protect the that trend, and most of them have the means to do so, and so even if -- that would mean the growth momentum will slow down out of asia, and most economies can see a stabilization in financing costs, and sewed janet yellenld m decide to raise, the dollar would go up and asian central banks will be taken into default. from a currency point of view, we need stability, so not to worry about that trend in the near term. chartant to pull up a that does support the trend that you set at the outset, emerging markets are very attractive in your view right now, and particular the brics. this shows a change in earnings

forecast between emerging msci world the index, the companies on that world index, which is the blue line, and that cap is widening and supportive of your view. i wonder why the money is not flowing into emerging markets when you see a chart like that. >> we had that kind of expectation for many years, and every january, february, the markets announcing they will see strong growth this year and then it does not materialize. what is interesting with that wert is that potentially have seen nothing into that acceleration. why? historically, we will either go higher and see further acceleration, or we are wrong again and it will come down again and we will end up with 2% to 5%. this time around, it is not just a new economy providing growth, but across the board for the

first time in years. you see traditional sectors, cyclicals, heavy equipment, industrial materials come in they will generate year on year r some impressive numbers, so the combination will create that momentum you are seeing on that chart, so this is extremely supportive to asia and the gem world. people have been buying those markets for that reason, it is materializing right now. >> thank you so much. still ahead, australia's biggest gold producer is saying first-half earnings jumped more than fourfold. we will be live in sydney with details. this is bloomberg. ♪

has announcedning

better-than-expected first-half profit on the back of stronger gold prices. we are joined by paul allen in sydney. tell us how the number stacked up. paul: really good. newcrest mining underlying profit for the half of four 273 million dollars, revenue up 22%, stronger gold price, copper prices hosting, volumes also up, so a good all around story from newcrest see thatnd you can reflected in the share price, currently up 1.5%. horizon, the rail operator performing stronger, one of the best performers on the asx, up 5%. profit $54 million, reverses a loss. an interim dividend of 13.6 cents. >> thank you so much. some breaking news, samsung jay y. lee has been summoned to

speak to investigators in seoul, korea, and has arrived at the special prosecutor's office for the second time on bribery allegations. we will keep tabs on his arrival. ♪

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♪ betty: 8:30 in a gloomy singapore. i half in hour away of trading. i'm in new york. you are watching "daybreak: asia." first word news. >> santos air has arrived at a special prosecutor's office to be question over allegations of bribery and embezzlement. a lack of evidence was cited. prosecutors may still seek another arrest warrant. two other samsung executives are expected to face questioning.

japan, and the u.s. have requested a un security council meeting over north korea's ballistic missile launch. the north has the confirmed -- the north korea said they did launch a missile in the ceiling of japan. sea of japan. the premised to of japan called it "intolerable." >> president trump assured me that the united states will always stand with japan 100%. the president and i completely share the view that we are going to promote their -- we are going to promote further cooperation between our two nations and enforce our alliances. the house of commons under growing pressure to quit after disclosing that he voted last year for the u.k. to remain in the e.u. he willtion means

remain impartial. one conservative lawmaker submitted a motion of no-confidence confidence to the speaker could lastly, he said he would veto any plans for president trump to speak in parliament when he visits the u.k. this year. around 80 bushfires are burning across south wales after record heat. doesn't the properties have been destroyed. change has arrived, but high temperatures are expected to return next week. several towns posted record highs with one near the border reaching 48 degrees celsius. --bal news 24 hours gay global news 24 hours a day. this is bloomberg. go to david for next date. david: everything but korea are on the way up when you look at the equity markets. at the risk look

appetizers we are getting because the dollar is continue to strengthen. back above 114. that move came within the last 30 minutes or so. pushing towards 106 here. greece is past its deadline. the hope is that they are able to iron out the differences with the imf when it comes to if they need legislation or further budget cuts? at the moment, when you look at the news and greece and in europe, it seems there is a white graph between -- there is a fairly wide gap. yields are back up on the u.s. 10 year. pulling back ever so slightly. as i mentioned, have a look at equity markets. japan getting a lift from the weaker japanese yen. half of 1% on the nikkei.

i am being generous there. five days of gains. the south korean market a little bit under pressure. they will be watching market most following the missile launch. day, youat space on a are seeing dividend stocks on their way up. guys? betty: what about chinese markets? they are opening in an hour. what is going on you go -- what is going on? david: when you look at the index of groups of chinese companies listed in hong kong -- let's get into my bloomberg because we had been talking about this rally, being pushed up above 1000. the reason i bring that up is when you look at the 14 day rsi, there is a little too much momentum.

quickly thek at how stocks have been bid up, just about every single stock in this index is now above its 50 day moving average. to some, it might be a bullish call. the amount of time we got from zero is astonishing as well. some people may look at this and too-- it may have gotten ahead of itself. there are changes within the composition of the hsi. postal savings from china are getting added to the a shares. guys? >> all right, david, thank you so much. as he mentioned, the economic week kicking off just as we saw with japan reporting a fourth-quarter gdp. markets are waiting to hear what

janet yellen have to say to congress this weekend. also about rolling back dodd-frank. we heard from stanley fischer over the weekend. we have an update on stronger growth. what do these gdp numbers tell you? >> if i am the governor, i can still say that confidence moved forward -- see that confidence has moved forward. into the bloomberg chart. gdp.n look at japan what we had here was peace in exports, capital spending, expansion -- that turquoise line is japan's gdp. it is not growing as fast. our tracker suggests that we could see more deceleration. let's look at what happened in the fourth quarter. consumer spending unchanged.

i think the governor would like to see people pick up their spending, but there is still a little more uncertainty about the future. business spending up a full percent. these are quarter on quarter numbers, not yearly. exports were- net up 2.2%. is the japanese economy has grown four quarters in a row. a weak ego -- and then there is a weak yen. with this much growth, no chance of easing. at these weekend talks, shinzo abe and donald trump are knowledge aimed that japan is going to maintain its monetary policy easing commitment. no pushing back at this point currency manipulating talk from donald trump, or at least that is what is being reported. betty: interesting, kathleen.

we are looking ahead to yellen's testimony on capitol hill. we know that she will talk about the economy and interest rates, but will she talk about overhauling dodd-frank? she will he asked many questions -- he will be asked many questions. >> a lot of republicans and those committees. she will defend it again. want to hearnkers about what she hears about the economy and interest rates. will she endorse the consensus for three interest rate hikes this year? triangle,k at that that middle line, those of the one saying three rate hikes. that is not a huge consensus. some say they're only be two rate hikes in june and december.

stan fischer said he hopes donald trump will repeal all of dodd-frank. it has helped create financial stability, so we will see. that was a curtain raiser or whatever down -- for whatever janet yellen has to say. takata is currently up from 11% in tokyo this morning. it let's go to our bloomberg editor david combs. there has been a surge in the stock, but what does this mean when it comes to takata pasta -- takata's process for looking for a buyer? david: this is a company that has a product that is still in very high demand. they have automakers, their clients, and they are filling orders and doing better than expected. they did recent operating forecast for the year. they moved it up to 40 billion

from 45. that is a small measure from optimism -- for optimism. even when the news is not good, the markets seems to be judging it as a diminishment of uncertainty. at least the picture is clear as we move forward in the prospects for a buyer to take over. the numbers are rising. dave, what about the concerns of its status, it solvency? for those rising? one of the things the company did say in its earnings reports that there was material uncertainty about growing concerns. that was not a shock. anybody can look at their performance and see that they are in troubled waters. there is no question about that. but going ahead, investors are confident that there will be a buyer coming in. when you look at the product they do supply, they are essential products that carmakers need.

that is the bottom line and why -- are seeing people should and what you're seeing people buying the shares today. betty: takata's shares are up by 11%. up next, the mobile gaming industry becoming much more competitive as nintendo is joining an already crowded market. this is bloomberg. ♪

♪ this is daybreak asia. sayshief christine lagarde she see the global economy picking up in 2017 and 2018. speaking in dubai, lagarde said oil prices were unlikely to return to the pre-2014 levels and she urged oil exporters to

diversify their revenue sources. she also said gop uncertainty nations need to build with robust finances. cuti. is prepared to operating costs by eliminating jobs and closing branches. the lender said it will share new plans to meet profit targets when it releases its results next week. sources have said that rbs has more step and it requires, but did not reveal the number of jobs to become. of thethe departure federal reserve governor who spearheaded regulation after the 2008 and after crisis will be president trump greater scope to stamp his authority on the central bank. he will resign april 5. his departure means president trump will have to fill three of the board's seven positions. he decided to go last year regardless of the outcome of the election. >> and online gaming company next on shares soaring in tokyo

after profits beat estimates in the company announcing a 10 billion again share buyback. shares of 6%. shares up 13% so far. the company famous for titles ,ike dungeons and spider popular with gamers in south korea and china. let's take you to tokyo to speak with its chief executive. the to have you on the program. online gaming,n are you aiming and looking for your super marielle? --super mario? what is the plan this year? massiveink we have franchises that keep getting stronger every year. dungeon and fighter, which is our biggest franchise, had a terrific you for appears to be having a terrific you one. people are exciting -- people are excited. dungeon fighters is now 10 years old and it appears to be getting

stronger and stronger every year so we think we got that, plus many others in the works. betty: why is that? , we think what makes that sun so special is -- we think that we know what makes games last every year. the number one question we got during that ipo from the investors and analysts looking at us was when does dungeon fighter go away? they asked that question because most people think the games industry is hits industry and cannot make a franchise last. dungeon and fighter today is twice as big as it was during the ipl five years ago. it is really incredible. -- on a a revenue revenue basis, it is achieved a $.4 billion. star wars, which was my favorite

franchise coming it like a box office is $7.6 billion u.s., and it is a 40 year franchise. dungeon fighter is only 10 years old. betty: ok. you are speaking about franchises and i mentioned pokemon go and we had this big revival in the same thing with super mario. what did you learn seeing that phenomenon last year, what did you learn from that? >> well, to make a long story short, quality counts and differentiation counts. marios in our business or five nintendos in our business, we would have a much healthier industry. we are focused on taking the cash flows that come from our business from these great franchises like dungeon and fighter and maplestory and putting that into development of new games that are differentiated and really fun. if we do that well with those experiments, hits come out of

that. it is not like when i was growing up, the tv industry in the 1970's and 1980's, which dates me a little bit, there buddy shows and they were trying to engineer these hits, but tb has had a renaissance in the last five years from companies like netflix and amazon who are making wonderful franchises like westworld and the sopranos and these wonderful franchises that are very strong. more people are coming into tv. we like to see more companies in our industry making great games. betty: ellen, talking about just the outlook for certain markets, it seems like you are doing well in korea and china. japan think declining a bit. talk about china. that is a bit focus on why your first-quarter guidance has surged from eightfold it comes to the profit growth. can you sustain this type of growth and you're talking about

30% to 40% growth in china right now? owen: we don't put out yearly outlook, but what we are seeing in china is general strength in our major franchises. active- our monthly users account is up. we are seeing strength indicators in the business. china is a wonderful market. you know, japan has been up quarter over quarter, in southeast asia is up. we see a lot of opportunity cross our major markets. >> ellen, there has been a lot of talk with some of the business models of some of these apps. talking about free to play in this gotcha style. the you think this could actually be more of a lucrative approach for many of these companies now? owen: in general, there are two ways to approach any business model. there is an approach called the more cynical approach, which is

where you are trying to monetize as quickly as possible. been there is a long game -- and then there is the long game which is when you keep people up -- when you keep people around for a long time. when you play to keeping people in your service, you can to have a very long lifetime. that is what we think we do better than anyone else. we do that by working hard to build a community that engages people for very long periods of time. if you do that, you will have a very healthy business. about expanding in the u.s. -- i think you acquired a company called big huge games in maryland. are you looking at expanding more over here? owen: absolutely. we think there is a great opportunity in the north american market. there is a lot of great developers. -- and we havee -- i know a lot of game developers.

we want to find people who have the same approach of building a franchise over a long period of time. sadly, that is unusual. a lot of companies are focused on short-term monetization. we want to build committees over a long. oh of time -- we want to build communities over a long period of time. your eyes on the western market, what are you looking for when it comes to potential partners? owen: we are looking for companies and teams who are willing to push the creative envelope to try to do something different than what is out in the market. we're trying to look for people with a similar occasion that we do and building a committee over a long. of time. we think that is the most powerful thing in the video games business and the one that is least understood and one we think we are best at. >> all right, owen mahoney,

thank you, president of nexon. coming up, president donald trump has attacked the trade policies of japan, china, and karina -- and the korea, but we have not heard much of his stance on southeast asia. we will discuss that next. this is bloomberg. ♪

♪ >> this is "daybreak: asia." betty: time for a quick look

that is coming up. what you have for us? >> yet the chief executive of horizon -- verizon. he runs railroad set to commodities and gets an exported here. good numbers coming through. is this the start of a new mining boom in australia. do they go from boom to bust? andrew harding will be joining us. after that, we are looking at defined gdp. we have a man who is very bullish on it. but izzy bullish because he -- but is he bullish because they are coming out with something that he has not been seen. that is coming up. betty: talk to you seem. -- talk to you soon.

u.s. run trade deficit with many of its partners in the region. let's get to our southeast asia correspondent. -- other concerns growing? >> all of the above. already attacked the likes of japan, china, south korea. beware the rest of asia. we are talking about the likes of india, indonesia, malaysia, vietnam -- they all have trade deficits with the u.s. they may be singled out by an angry donald trump anytime now. i want to pull out this chart that shows the trade balance of asian countries with the u.s. the year is 2015. that is the latest data we have. almost every country in asia exports between the u.s..

trade deficits are definitely a problem with trump pushing for tax reforms, it seems all the more likely he will impose a higher levy on u.s. imports from all of these countries any moment now. protectionist policies propagated by trump is bad news for asia as a whole. it is bad news for growth. keep your eyes on trump's tweet. the best way to follow his next move. they: who was next on attack list, you think? >> you know, betty, probably vietnam. it the novice probably next. , itou take a look represents 15% of the economy driven pretty much by exports from furniture, bedding, knitwear. vietnam's exports to the u.s. has doubled 202010. -- doubled since 2010.

vietnam has really been counting cement its trade ties. betty: thank you so much. on the tension between the asian nations and trump. we may have given trump the idea for his next tweet here. [laughter] i hope not. >> after that call from shinzo a softening show from donald trump when it comes to foreign policy, especially in this part of the world? possibly. we are seeing a whole lot of green in the markets. this is bloomberg. ♪\

♪ rishaad: it is 9:00 a.m. in in sydney, anday 8:00 p.m. in the evening in new york city. i am rishaad salamat. this is "bloomberg markets: asia." ♪ growth remains subdued, gdp expanding, but shy of estimates. error apparent jay y. lee faces prosecutors again for further questionings on bribery allegations. aurizon