♪ >> u.s. stocks on the retreat with the dow at its lowest close in two months. oil slumping on the dollar, gaining strength. >> the latest survey continues to see growth although it is described as modest moderate at best. announcing ason review of the iran nuclear deal. delaysly delay is -- their ambitions. tighter controls on live streaming apps.

we have the world coverage on daybreak asia, live in beijing to look at why former high-ranking chinese currency regulators say china's economy faces significant risk. >> here in new york we break down the latest earnings. we will see why chinese regulators in san francisco are targeting apple's app store. this is daybreak asia live from bloomberg's asia and u.s. headquarters. i am betty liu in new york, it is just after 7:00 p.m. just after 7:00 a.m. in hong kong, i am yvonne man. a confusing session on wall street. to earnings, commodities, a tough day for traders in asia to find any direction. betty: you cannot blame them. you have stanley fischer and the fed is saying there is a right to be the about the u.s. economy and then someone like the big heavyweight, of black rock, saying we see something very wrong in the u.s. economy,

yields falling below 2% in the u.s. no wonder investors are so confused. yvonne: he was giving a 50-50 chance for yields to go lower. oil looks like the biggest drag that we saw overnight, that jump in gas inventories in the u.s. let's see how things are in asian pacific. new zealand on the inflation beat. of 1%.it up 1/2 now at a five-year high. stocks seeing a little pressure, down 1/10 of 1%. its month, g10n currencies selling off, the aussie. we continue to see resilience in the currency and not really tracking the fall and the industrial metals. legacy stocks heading lower according to futures, 1/5 of 1%. the dollar-yen coming down.

could be a better day for stocks. very marginal after the nikkei ends flat on the session. looks fixed and muted. mentioned, earnings of validation, more of a leg up in the markets. we are pretty early into the session. betty: we absolutely are. we will see by the end of the earnings seasons where we fair -- fare. along withged, plunging crude oil prices. we did and makes, but energy shares were in the red. >> is at the drop in stocks overshadowing moderate optimism given the comments from the fed

about an economy showing strength and growing suddenly that will be borne out in the next few days of trading? a mixed close with nasdaq coming back at the end. fox's 20th century parent, bill o'reilly, a key player departs under a cloud of controversy. -- the following the most falling the most. quarter trading really hit it out of the ballpark. let's get the market snapshot, the dollar strengthening and oil falling is the big story. if we go into the bloomberg, we see the oil story. crude and gas inventories diverging. of u.s. gas supplies

increased for the first time since february, while crude keeps rising. traders into a frenzy to reposition themselves in the oil trade. yvonne: we also have that trio of movers from qualcomm, it even a, and america west.' su: let's start with ebay, falling mostly on outlook. currentmmerce company's forecast could miss analyst estimates. ebay is still struggling with the turnaround. its e-commerce site expectations but failed to close the gap in e-commerce. that is moving the stock lower. the biggest2.5%, maker of chips in mobile phones

boosted by new markets such as automotive. a gained a percent to almost $6 billion in revenue. analysts are concerned that apple is withholding payments. there was a big lawsuit about that. american express also rising after hours. their first-quarter eps beat the global market campaign by the company, increasing their cars around the world. there is life after cost go. they parted ways with their largest cobranded partner yet still came in with a very strong result. with thatank you wrapup of earnings in the market. let's go to first word news with courtney collins. >> first up, secretary of state rex tillerson has announced a review of u.s. policy on iran, saying the 2016 deal delays their nuclear power ambitions. he says an unchecked iran can

travel the same path as north korea. he says the nuclear deal ignored iran's other threats, including hostility toward israel and support of hammas. trump administration has no intent to pass the buck to another administration on iran. iran's provocative actions threaten the u.s., the region, the world. >> the u.k. election campaign is underway after the house of commons voted overwhelmingly to support prime minister theresa may's call for a vote in june. 22-13 in favor, launching a campaign in which her conservatives have a lead in the polls. earnings fell from a six-month high in the news. it is seen as a one issue campaign, the u.k.'s departure from the european union. bankruptcy loan is not sufficient to support it

through the process. the companies are demanding better protection for their claims against the toshiba unit. westinghouse received $9 million from its parent at the beginning of the year but asked for extra indicating its finances may be running out. fox news host bill o'reilly leaving after a sexual harassment scandal that prompted advertisers to abandon his show. announced foxox and o'reilly have agreed he will not return. at least five women are reported to have been paid by fox or o'reilly himself to drop lawsuits or allegations that o'reilly abused them. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am courtney collins, this is bloomberg. number painting

an image of a brightening global economy, better to accommodate tightening. stanley fischer remains optimistic about falling unemployment and rising inflation in europe. china's economy is on more solid footing. let's bring in the fed reporter steve matthews. signal, an optimistic despite the market darling back expectations of future fed rates. you capture that exactly right. it was a very optimistic for trail of how things are going internationally. stan fischer pointed out the downside risk to growth was the lowest it had been in a few years. he said global expansion is more entrenched than it has been in a few years. he went around the itrld and said exit -- brex would cause volatility, but it did not happen. he said european unemployment

was lower and inflation moving toward targeting europe and that china was showing solid footing. , which in thisf week raised its global growth forecast for the first time since 2014. it is worth noting that stan fischer's views are not just speaking for himself. they are very influential to the fed and central bankers around the world. stan is well known as a former academic who taught a generation of central bankers, including a former fed chairman. he was for a while, the bank of israel's governor. his views are well followed around the world. betty: not just one person's view, but representative and influential.

reconcile stanley fischer's view with what we saw in the latest beige book survey. steve: the beige book was muted, not as optimistic. thehows a snapshot of where economy is over a six week per iod. fomc will be meeting, before that they surveyed businesses around the country and ask them what they see. they saw moderate to modest growth, depending what district you were looking at. and they found of the labor markets were stronger. notas a mixed report, particularly strong. but it was consistent with an overall expansion, consistent with the fed continuing to at least consider raising rates in june.

if you look at the hard data, we will have a slowdown in the first quarter, may be less than 1% growth according to the atlanta fed's tracker. this was suggesting things are more optimistic than that. yvonne: we will have to talk about that hard data versus soft data. thank you, for that focus on the u.s. economy. and we will discuss concerns that higher positive numbers are not translating into consumption and investment. betty: the outlook for the u.s. property market. our chinese investors bullish on housing and the u.s.? this is bloomberg. ♪

♪ this is "daybreak asia," i am yvonne man in hong kong. betty: i am betty liu in new york. to blaming bad weather

for missed forecast. it left shipments flat at 77 million tons in the market -- in the months of march. iron ore slumped into a bear market. below $65 a ton, the lowest in six months. yvonne: the chinese conglomerate said it ended talks of a stake in an australian mine. they sold their 50% stake in the super hit. another company owns the other half. they are no longer pursuing the project. world'swho runs the biggest money manager warned of a rising threat to the u.s. economy and the market, he points to growing uncertainty over the trump administration's

ability to pass reforms quickly. he says earnings will remain strong. >> there are warning signs here that are getting darker because we have seen pullback. you see that in car sales. we are starting to see a slowdown in mergers and acquisitions. people are taking a pause. valuations are high, that is slowing down mergers and acquisitions. so you have all those issues. yvonne: to talk about those issues, a senior economist at wells fargo securities. it is great to have you. let's look at the chart to talk about what larry fink was saying. there is a disconnect between data versus what the fed is saying. why do you think that is?

are there are lingering warning signs or was the first order just a one-off? >> i think the first quarter is a one off. it recovered from the global recession. of the seven quarters of being a very, very weak. i think the beige book, what it says, the economy is working on all cylinders. economylem is, the wants to be six cylinders but it is working at four cylinders. i do not think this information will change the federal reserve's view about the past four interest rates. yvonne: we see some doubts in the markets with a sense of the futures. let's bring up the chart. the market scaling back expectations on future fed rate hikes.

you can see with the red line, one more hike is possibly what we could get, more than a 40% chance of that. the purple line, anything more than that goes down to 25%. yieldsioned the 10 year touching down. where do you see them basing out and what we need to see to call it bottom for you? eugenio: we are expecting the next couple of quarters to be relatively strong compared to the first quarter. reaffirmation that the increase we saw in business and consumer confidence after the elections translate into more consumer spending and more business spending. i think the markets got out ahead of time when they saw may said theing,

economy would grow at a fast pace. now what is happening, they realize that things will not be so easy for this administration to put forward the reforms and policies they wanted to pass. betty: i am so glad you mentioned about spending. i want to pull up a chart you may be familiar with. it shows the difference between the board, the consumer confidence numbers, and what we are actually seeing with personal spending. it is such a sharp divergence between the two. i cannot make any sense of this, maybe you can help out on this? remember the first quarter was very, very weak in terms of a warm winter. in march on the east coast,

winter weather. that broughtctors down personal consumption expenditures. betty: but only by so much, right? i could see that being a factor but it is just such a sharp, sharp trend. i imagine that is something larry fink is looking at with his more dire forecast. you may have heard him say how morees yields going up -- than a 50% chance the yield will go down more than 2%. is that in your forecast? eugenio: that is not in our forecast. , andve seen yields go down the fed moving more than once more in the year. but the rest of the indicators of the economy are still looking relatively tight. book, look at the beige

the 12 regional banks say the economy is growing. all of them say the labor market is tightening. many say that wages are starting to move up. the federal reserve is looking at these very closely. to lookthey still have ifthis coming quarter to see economy growth resumes at a faster pace. go,ne: before we let you what is your forecast for the u.s. 10 year yield? will we had a lower below 2% before bouncing back up? eugenio: no, that is not our forecast. we still have relatively high yields. know from my memory right now, probably in the two-part -- 2.5% for the 10 year treasury.

i can get back to you on that. 2%.o not have a yield below that will say the economy is not growing in the federal reserve might have to look again at these interest rate issues. '-- issues. yvonne: thank you for joining us live from charlotte. facing scrutiny, why china is pushing apple to strengthen its review of live streaming apps. this is bloomberg. ♪

♪ "daybreak asia," i am yvonne man in hong kong. betty: i am betty liu in new york. morese regulators putting pressure on apple, stringent reviews of live streaming application sold through the app

store. they see significant loopholes by local operators. our bloomberg tech reporter has more on this. how big of a hit is this to apple? >> it is not a massive hit apple at this stage. we will see if it starts to creep up. what they are asking is that the app review, whenever they come up with a new app they submitted to apple, apple reviews it to see if there are bugs. is not entirely clear, but the implication is that they are asking apple to ensure these me chinese regulations, which require live streaming apps to record the user's mobile phone location and those kind of things. yvonne: we have been talking about apple putting a lot of pressure on its suppliers as well. i think we have lost alex there,

we will try to get back to him later on in the program. stay with us here. let's bring up what we will be talking about -- or go to break. plenty more to come. this is bloomberg. ♪

betty: a quick check of business headlines, jpmorgan planning to more than triple the size of its new york technology hub. they need -- they need more space for coders and engineers. they need an extra 300,000 square feet at manhattan west. the budget is close to $10 billion. yvonne: the worlds biggest money manager posted amounts of that beat expectations. more than what analysts had expected. $64.5mpany had a record billion. blackrock's profit was boosted by a tax benefit. a former high-ranking currency

-- chinese currency regulator, we will hear from him in a moment to read -- moment. this is bloomberg. this is bloomberg. ♪ did you know slow internet can actually hold your business back? say goodbye to slow downloads, slow backups, slow everything. comcast business offers blazing fast and reliable internet that's over 6 times faster than slow internet from the phone company. say hello to internet speeds up to 250 mbps. and add phone and tv for only $34.90 more a month. call today. comcast business. built for business.

7:30 a.m. in hong kong. minutes away from asia's first major open. betty: it looks wet out there in hong kong. it is 7:30 p.m. here in new york. touch ofouching a gloomy. the dow down over 100 points on oil prices. i am betty liu here in new york. yvonne: i am yvonne man in hong kong, this is bloomberg markets asia. >> the fed it says the u.s. economy continues growing at a modest a moderate pace in recent weeks.

although consumer spending was mixed, the beige book says household purchases outside of automobile purchases are softer. not a rapid pickup that would reflect a surge in confidence among consumers and businesses. opec says producers are closer to ending the global oil glut and the cartel next month will decide whether to extend currency in june. opec and its allies were committed to reducing inventory to boost prices. he also said the current restrictions were working and would prove effective. crude fell sharply although west texas is recovering. >> the numbers are looking much more robust. that gradually, it is moving up for clients.

[indiscernible] vice president mike pence told business leaders in tokyo the u.s. is grateful for japan's investment in the jobs it has created. seeksd washington stronger and more balanced trade ties with japan and would combine diplomacy to build pressure on north korea. he reiterated that the u.s. supports japan militarily, including islands disputed with china. australian energy producers have assured malcolm turnbull bacon provide sufficient gas to avoid blackouts in the eastern states. meeting aboutnd the expected shortfall. there is a new framework for delivery and exports. global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i am courtney collins, this is bloomberg. yvonne: thank you.

we are counting down to major market opened in the asian pacific. let's bring in adam haigh, joining us live from sydney. where is the currency heading next, are we do for a bounce -- bounce?a about 8/10 of 1%, so still centring above that 75 u.s. mark. there is a relationship between re price, we have seen a huge plunge, 30% so far this year. the aussie has been relatively resilient in that context. makes the job difficult because they have been wanting the currency to come up a bit and they have been saying that

for some time. traders are starting to price in the chance of a cut later on this year. that growing to about one in five, a september time. when we started this year, the chance of a cut was very low. in terms of where the aussie moves in next, it is a tough call. we interviewed matthew peter, he chief economist at qic, thinks that when the fed has to move rates up further, that yield and premium differential between u.s. and australian rates may give opportunities for the australian dollar to go up a little bit. is a significant change in the iron ore price, it might not change. betty: in china, warning signs

of flashing in the chinese stock market. what are those warning signs? adam: he is focusing in on margin debt. barkindo has been fairly pressey nt with his called on boom and bust in the asian market. he has moved on margin debt and shown how much of a barometer this is of market moves. his worry is that regulators are tightening scrutiny slightly more on lending for stock investments. if this continues, we could see more of a fall in the shanghai composite. it is down a bit this week already, four days of declines.

sincest we have seen december. butees further declines, there is another side of the trade. investors,ger-term we spoke to a long-term china bowl who thinks there are buying opportunities on these debt -- dips. thank you so much for watching what is going on in the chinese markets. the chinese economy faces significant risk despite stronger-than-expected gdp. we saw that friday, that is according to a former regulator. he was speaking exclusively to bloomberg's chinese correspondent. he is also calling for faster reform of china's currency. >> that is right.

in the context, he was a regulator for 22 years. he is a leading member of this think take in beijing along with pboc. of decisionsce around china's economy and the currency. but he was saying to us is of the capital account is been opened up more quickly than reforms have happened regarding the yuan. he says both need to happen at the same time. it is like wheels on a car, if one moves faster than the other, the vehicle falls over. he says what needs to happen with the yuan, there should be more trade on shore. it has largely been done by banks. they should allow appropriate amounts of speculation. q1also asked him about the gdp number at the start of the

year for the chinese economy. he was quite sanguine about that. let's hear what he has to say. >> in the first quarter there was market confidence, which supports the liquidity of the exchange rate. solid, the markets on the economy in china in the short-term. expect thets investment economy will slow down again in the second or third quarter. i do not think those comments on the market were optimistic for the force -- for the first quarter data. tom: what is key for china in 2017, going forward? i think the key should be

financial risk. there is the property market double and central banking at default, something like that. they are very cautious about the prospects for the economy, and especially the financial system. tom: are you less concerned in terms of the impacts of the likely said it hikes? the mainstream view, the normalization of monetary policy in the u.s., will bring a new challenge to the market. government will develop closely the moment taken by the fed.

that would be the response from the market. tom: what do you make a president trump trying to talk down the value of the u.s. dollar? trump gives some incentive for a strong dollar. a strong dollar may be conflicted with the package of trump's administration. that is why trump wants to talk down the dollar. it could be effective at an initial stage. long-term, needs concrete action to strengthen the dollar. betty: we will have more from that exclusive interview in the next hour. and we will bring in an analyst to discuss their outlook for the yuan and how realistic it is to

lift controls on the currency. we are staying on china, but china's influence on the u.s. housing market. -- we will look at the implications next. this is bloomberg. ♪

♪ asia,: this is "daybreak i am yvonne man in hong kong. betty: i am betty liu in new york. in march, 14% of u.s. home purchases from foreigners were from china, a little over $27 billion. berkshire hathaway real estate brokerage once part of it. they agreed to advertise american homes on china's leading website for foreign property. joining us now is a partner at pboc.

and here is the senior vice president of international sales at berkshire hathaway. first off, why did you decide to make this partnership with this company? >> we believe they are a great opportunity for our brand to promote properties for sale in the u.s. and make them high net worth and ultrahigh net worth chinese consumers to have access to. betty: have you done something like this before? are there competitors you have looked at? how did you come to this conclusion? >> they are the leader. betty: like a portal. realtor.com or trulia in the u.s. we have other suppliers and syndicators, but they are our

top choice. betty: does this make sense? >> chinese investors are not looking at just incomes, they're looking at homes for a couple reasons. some of them look at the homes because there interested in having their kids go to school in the u.s. and some just look investment.ong-term they are attracted to the asset class. it is not always liquid. are the chinese buyers coming here because they want price appreciation are just a place where they can put some money? heree chinese have come for a couple fundamental reasons. the first one is, the u.s. is a safe place, a solid investment. children going to school here, every college population have a -- college town has a population of high net worth individuals

supporting the kids in school. it is not just college. kids are coming for middle school and high school. boarding schools and on to college and graduate school. it is not just that they are buying a house for a short period of time, it is an eight to 10 year period. yvonne: what can we get out of this partnership? we see capital control taking hold, and the domestic property sector regaining some speed now. the problems come other restrictions on currency moving out of china is obviously a concern to every real estate person in the united states. but we are focused on helping those chinese people who are who, as a result of the ed5 program, getting here

business and jobs and enable them to become investors in real estate, along with other opportunities in the u.s. >> when you look at the country, there are places in the market chinese investors are more interested in. is it coastal or middle america? >> great question. we are seeing a lot of different trends. initially it was all west coast. francisco, los angeles. we just looked at these statistics recently, florida has become one of the most important places where the chinese investors and homebuyers are looking. very significant movement in that direction, as

well as arizona. betty: everyone wants sunny weather. it is better than a beijing winter. i'm curious about this partnership with juwai. give me some numbers if you can, how much will it affect the business? what kind of projections do you expect out of this partnership, and how much are they a part of your base in the first place, the chinese buyers? >> it is important to recognize and keep this in perspective. foreigners buying in the united states represent 4% of the buying population. 96% of home buyers in the united states are americans. china just moved to the first position, surpassing canada for the first time. we believe that the opportunity for chinese to invest in the u.s. will continue to grow, hence our decision to partner

with juwai and promote the properties within the berkshire hathaway home services on that website. we think it will be a great asortunity for the consumer, well as for the american home seller, to have that exposure. talking about the overall housing industry in the u.s. right now, what is your gauge on that? the first quarter is showing weakness, we talked about hard and soft data. housing shares fell in the month of march, volatile set of data. is the industry still strong in terms of the outlook? >> the outlook is still strong. interest rates are still extremely attractive, record lows across the country. there is nothing that would suggest there is any change coming. employment is high, consumer

confidence is high. >> one of the things that is a challenge is a supply. there is less than four months supply of existing homes on the market. you cannot buy a home that is not on the market. i am sure we -- you would love to have all the listings, but you cannot buy a home that is not on the market. we are in a critical homebuying season in the u.s. and it is a challenge. one thing can to being to that greatly is baby boomers and empty-nesters are not putting their homes on the market because they cannot buy or afford a replacement home because of the supply and demand balance. prices of really risen. betty: i want to show a chart that illustrates demand by another measure, which is mortgage rates and applications. it is a simple correlation, inverse, when mortgage rates rise, interest-rates fall.

it seems the fed is on track for another rate rise. the fed is on track for a rate rise. what is interesting, the rates are continuing to fall in the bond market. that is still helping applications rise. i wonder if that is going to turn, do you see that in the coming quarters? >> fed rate increases have had minimal effect on mortgage rates. mortgage rates are still extremely attractive. betty: why is that? >> it has a lot to do with other factors. there is demand for mortgages. since the credit scores are still relatively high to the financial crisis days, bond buyers of mortgage-backed securities want to take the risk of pumping money in the system and it is keeping spreads tight.

it will be interesting if we see two or three quarter point increases and we get mortgage prices north of 5%. we still have not added supply to the market, meaning prices of homes are still going up. tip the scales from an affordability perspective and freezeout droves of buyers who literally cannot afford to step in. >> the demand is high, the supply is low. some reports are suggesting it is a 90 day supply. be, i wasd very well awake in college for economics, i remember supply and demand. prices will just go up. when buyers bid up above asking price, sometimes even though they are applying for a mortgage they cannot get it, because some will not fund the purchase price above asking price because the

appraisal is not there yet. betty: which makes sense. >> there is still strict underwriting criteria. betty: before we go, we have to ask you a buffett question. is it good to have the buffett name attached to berkshire hathaway for chinese buyers? they love him. >> they do, they love warren buffett. having his name attached to our brand and what we do is one of the best assets we have. it is extremely appealing not only in china, but around the world. betty: can't hurt, right? >> brand matters. betty: thank you so much. senior vice president from berkshire hathaway home services. we have much more ahead on daybreak asia. you can get a roundup of our stories to get your day going in

today's edition of daybreak. bloomberg subscribers go to your terminal. it is also available on the terminal. you can customize settings only get the news on the industries and assets you care about, including real estate. this is bloomberg. ♪

betty: this is daybreak asia. yvonne: i want to recap those trade monitors -- trade numbers coming in. that was expected, given some of the seasonal distortion we saw during the lunar new year holiday. the pickup for the month of february so no surprises there, but the most upbeat and is the figure up 12%. that is close to double what economists were surveying, around 6.2%.

imports also up 15.8%, quite aside will be. that's continuing the momentum we saw in february. this underlying trend is quite solid at the moment. this should royal relations between the u.s. and japan. let's get to sophie, who has the rest on these numbers in the market. behie: there was a side will when it came to the margin japan. we are also taking a close look , likeanese carmakers here hyundai, toyota, and nissan want to boost their presence in the chinese market. and plenty of resources are reporting quarterly reduction -- production figures today pigot -- today. and along with asian energy shares, oil anticipated ua on

stocks in the region today, even though we are looking at a slightly higher open in japan. -- we willt will the be watching when trading gets underw

♪ yvonne: japan is trading up. exports and imports smashed expectations last month and ended the quarter on a strong note. after and a mixed start oil dragging down wall street. the lowest close with the dow in two months. growth ind continued the u.s., although modest to moderate at best. and apple under pressure again in china over live

streaming apps. ofs is the second hour daybreak asia coming to you from our headquarters in hong kong. it on, as you mentioned there was a mixed open in the asian markets. that was dragged down by the fall in crude oil prices. thise: we have seen retreat in asian stocks as well. what we were indicating here. we got really close to the blue line. we are 2% away from it right now. with we had away from that, the momentum could continued to turn bearish, but we see this monstrous beat when it came to japan exports. a lot of the shares in the market are due to the share of the yen, so this export data could be the big catalyst here for the market open here and

throughout the session in asia today. let's look the latest today with sophie. sophie: the monsters beat when it comes to march export figures for japan. in two the fastest pace years. the nikkei 225 is opening igher as the yen higher averagea grade we have quantities to look to when it comes to the move with the likes of australia as a oil is holding at losses from the new york session. that is expected to drag on. and even though solid earnings from morgan stanley appeared, it cannot upset the commodity offset -- it cannot offset the commodity dropped. we are also seeing some impact in japan as well. take a look at other movers. we have a mexican peso seeing its worst drop in three months, 1.4% against the dollar and the

greenback grows against commodity currency. this could be evidence of a correction. i want to look at what else is going on when it comes to oil, because that is a clear focus today. we have on the overnight pledge, still continuing to 50. that drop was triggered by the rise in u.s. gasoline stockpiles. that is coming along with continued increase in crude output. theave this hovering around hundred state moving average. i want to check in on some here. resource stocks several companies reporting quarterly reduction numbers. far, seeinganged so output and sales fall in the first quarter. evolution down 1.5%. that is on track to comfortably meet its target goal. also populat -- also rio

unchanged for now. cover output falling in the first order as well as iron shipments coming in flat. copper output guidance is being issued now, but it estimates that production will return to normal by july. betty? betty: sophie, thank you so much. sophie kamaruddin with reaction there and what is happening right now area progression in the asian markets. let's get you the first word news with paul allen. obama put a man resident -- the man does president obama put in charge said that dodd frank and other regulations have not damaged financial markets, banking, and growth. also told fed chair the government to be discretionary. >> i do not think you can

impress at all the role. to adjustve rules your judgment against, but i do not think we are going to make our policies better by this. goal: secretary of state rex tillerson has announced a review of u.s. policy on a run, saying delays iran's ambitions. he said that unchecked iran has trajectory as north korea. >> the trump administration has no intention of passing the baton to a future administration on iran. evidence is clear that iran's provocative actions threaten the united states, the region, and the world. paul: the u.k. election campaign is underway after the house of commons voted overwhelmingly to support prime minister theresa

may's decision for a snap election in june. favor,rs voted 522-13 in launching a campaign where conservatives have a 21 point lead in the polls. it is seen as a one issue campaign -- the uk's archer from the eu -- departure from the you eu -- from the eu. and this bankruptcy loan is not sufficient to support it through a process. the companies are demanding better protection for their claims against the toshiba unit with accounts received $900 million apparent at the start of the year. appealing for extra cash at the start of the year, sign that might be running out. i'm paul allen. this is bloomberg. yvonne: japan ending the first quarter on a strong note.

we saw but the exports and in reaching record numbers. inty: we wanted to bring ryan fowler. first, was it expected that these numbers would come in quite strong? think without the numbers will look pretty good, but not quite this good. shipmentssported by of steel, auto parts, and one of the big numbers is the 16% growth in exports to china, japan's against trading partner. it comes the day after the imf upgraded it for cross -- its forecast for japanese gdp growth this year. it is all a bullish picture, and there are questions on whether or not it will be sustainable going into the second half of the year. the china numbers were probably distorted by chinese lunar new year, but a bullish set of data that will support the stock market this morning, i'm sure. betty: is fascinating, because

without this would be the month where he thought everything unwind given the seasonal distortion in february. but this is all due to uncertainty between trade relations between japan and the u.s. as well. they are focusing on a bilateral dialogue and there is some uncertainty about that. are three points of uncertainty. first, the currency. the and started to strengthen in yen started tohe strengthen and that month and it has been writing since then. second would be china. it is still growing at a fast there is some expectation that growth will decelerate later this year. as he said, the third one is relations with the u.s.. we had vice president pence here yesterday talking about the need for fair trade. i think it was interesting that the trump administration tweeted some very significant facts that are part of japan's agenda, which are that japanese

companies have created more than 800,000 jobs in the u.s. and have invested a lot of money in the u.s., and i kind of wondered to set was their attempt expectations, modulate expectations among americans, the rhetoric may be softened from here. it's hard to tell. but it looked like a pretty diplomatic way to end that trip by pence. betty: they also said there was discussion on a win-win outlook in japan. we'll see without looks like it a bit. ryan fowler, we will talk you later on on the japan data. but now, unexpected of from marilyn's joins us to discuss how private demand is edging out main sectors of growth. this is bloomberg.

betty: this is daybreak asia,

i'm betty liu in new york. yvonne: i'm yvonne man. stronget more on those japan trade numbers. this was the fourth consecutive month of expansion. i will show you exactly what we are talking about in the bloomberg. 12% there. we were expecting not this sizable of a beat, we are up about 6.2% higher than expected. from a merrillw lynch executive from tokyo. this tsunami triggered the deficit, but we continue to see 2015,the early end of that trend continuing care of export growth. where are you seeing things right now when it comes to this? is this underlying export the

turn of the moment quite solid? >> we think exports are helped by a variety of factors. first there is stabilization in china and other emerging-market economies, and then you have ase help from the tax cycle well. we think export growth will be fairly solid for another six or so, but we are a little bit cautious on the outlook for the summer, given that we expect a slowdown in china reflecting some monetary tightening going on over there right now. -- cyn yvonne: it is interesting because we were talking about or the gdp 10 year yield have gone, that they hit 0% for the first time since november. this chart here shows the ,lattening of the yield curve which is really showing how this is not in the control of the boj anymore as the treasury is moving a leg lower as well. how worrying is this to you?

should we be worrying about a flattening yield curve? >> this is not a great position for the bank to be an. not think they are worried about these levels it levels at all. they're working for the shopping for u.s. yields to back up more and strengthening of the yen to but this is a very procyclical policy. it works well when the yen is weakening and the rest of the world is relating and yields are going up, but a bit more difficult to contend with when you have a risk off situation and the yen strengthening. we have always said it is more difficult for the bank of japan to maintain the floor on their 10 year yield target rather than maintaining the ceiling. they're going to take a wait-and-see approach but might need to cut back on bond purchases to make sure the yield curve does not flatten excessively. backe: i wanted to bring brian fowler, who was talking

about these numbers earlier. about thetions negative rates in japan. betty: how difficult is that going to be for the boj? we desert as he me say it is going to be more difficult to find that bottom therefore that bottom there for rates. how did the boj take control of that you'll curve -- yield curve? aan: it is definitely difficult -- brian: it is ask.nitely a difficult t i think that boj has the situation under control. but we have these mixed sets of dynamics from gdp growth seemingly upgraded, accelerating, imf raising its forecast yesterday for japan's gdp growth. and we're hearing from economist that many are scaling back their expectations for when the boj might start to taper. i think most of them won't does

think it will not happen during mr. kuroda's tenure, but we also are in from that hearing from people who are in a position know that the boj is planning on lowering its inflation target -- week.ast from next inflation is perhaps cooling a bit and the boj will have to find a way to modulate that. manageto find how to that issue. i wanted to bring up a chart, ofch i think brings in a bit what is going on here in the u.s.. we have been talking a bit during this program about auto sales, and that being a soft .pot here in the u.s. economy you can see that clearly from the lines on this chart about how much auto sales seemed to have slowed down so far this year.

affects obviously the japanese card companies exporting here to the u.s., but japan itself given the soft this -- softness indicated here in u.s. consumers? izumi: it is a bit of a source for concern. rapid are not looking for deterioration in auto sales in the united states. we think it to go sideways from here, so on the whole we are still not there yet. the thing about japanese exports parts to the u.s.. mostly exported is finished cars. severe as a as massive slowdown of sales in china. we are not too concerned about this issue yet, but it is something that needs to be monitored, given that auto exports to the u.s. constitute

about 6% of japan's overall exports. >> and we mentioned rick -- the imf raising gdp expections for japan. you expect that expect -- excess growth could be waiting on the second half. thatcould be driving izumi:? we are looking at strong first-quarter growth. it is important to remember that that sets a very high base for the rest of the year. in fact, our view is that growth will be very strong in the first half of 2017. then we are looking at a bit of a sequential slowdown because of this moderation in exports that we are expecting. also, public investment is going toprovide a bit of a boost

japan's gdp numbers over the next few quarters, but unless puts together another big stimulus package, it is unlikely that the momentum will continue. we are very constructive on the japanese economy, and have to remember that the headline number is being flattened a bit by the sequential dynamics. izumi, thank you so much. ourn fowler as well, reporter there in tokyo. and westinghouse, reports that -- this loandollar for toshiba is not going to be enough. this is bloomberg.

daybreak asia, yvonne man in hong kong. betty: and i'm betty liu in new york.

this means closer ties between the two biggest holders of the nation's debt. japan's host bank says it has been working to diversify is asset management since becoming a private company. the 10 year yield dropped for the first time on wednesday in five months. and bad weather is being blamed for shipments of iron that missed forecast. sitting below the median estimate of $78 million. they are lumped into a bear market this month. this week, it fell below $65 a ton. it lowest in six. and opec says they are looking at ending the global oil glut. it is said that opec and its allies were committed to reducing inventories to produce

the price -- boost prices. they also said that current restrictions are working and have been effective. >> the numbers are being much more robust. thisre showing gradually higher level of compliance and conformity. and these countries are overcoming the key challenges they might have faced in the past few months. betty: and the u.s. based utility is working that westinghouse is 800 $50 million loan does it had a $50 million loan is not enough to support operations. steve, what are utility saying exactly? are saying that westinghouse will not be able to pay their bills. lastnghouse went bankrupt month at the end of the month,

and there have been many claims ,- westinghouse is a big complicated nuclear reactor maker. in a partnerships and deals with an utilities. a group of utilities in the northeast have said that the money westinghouse has received in their bankruptcy protection filing is not enough to cover all of their bills. he after member that westinghouse burned through 900 million dollars -- you after member that westinghouse burned in january0 million and february. the utilities are saying look, the first two months of the year, they burn through a sickly all the money. what will stop them from burning through that now? we need some protection. to makefolks to help us sure they can pay back those bills. that is what is happening here. this is the first one to happen. it is sort of a wait and see situation. others may come forward as well. yvonne: how to they miscalculate

this? how did westinghouse get into this messed? -- this messianic oh steve -- mess> ? steve: this goes back a couple of years. because the nuclear industry in the u.s. took a three decade hiatus, along with tighter more complicated, new technology, this has caused westinghouse to effectively create large overruns in the projects that they are building in the united states for reactors to be exact. so because of that and the convocations surrounding building these reactors, there have been enormous write-downs and been making their cash flow nonexistent. money,e using a lot of much more than they expected. that is causing the problem at the moment. still dealinge

with this kind of large hole. it is interesting because what happens for westinghouse here on forward? they need to restructure, but do they need to find a buyer or someone to step in? steve: that is just it. those question will be answered that those questions -- those questions will be answered at the end of the month next week. they filed for bankruptcy protection. they look to this and decided what they have to do to restructure. we talked to, what we liquidate who do weo on -- talked to, what do we liquidate, and so on. this he will will take less of a role in what they do with westinghouse. there are many different avenues they could sell all or

everything to potentially a in korea or china, very avid nuclear builders, or they keep doing what they do and they restructure. we are going to have to watch what happens next week, when they go forward with plans they resent -- present to the courts. let's do a quick market check here. i want to see how markets are trading here in the region. the nikkei 225 of .25% of that beat that we saw. exports the highest we have seen since january 2015. we saw a jump in export -- imports as well. wesee a bump your as continue to watch where oil goes from here. we saw the u.s. asked inventories advance for the month of march. betty? betty: that's right. and a minute, we will get a rare and excuses that exclusive interview with a high-ranking former chinese currency

regulator. that is next.

singapore, half an hour -- 8:30 in singapore. betty: i'm betty liu in new york. that gets in the first news of paul allen. paul? paul: welcome boost with japan exports and imports have both in march.pectations 12% from a year earlier, doubled expectations while imports surged almost 16%. the trade surface was $5.6

billion, in line with forecasts. the u.s. economy keeps growing from a moderate to modest rate over the past couple of weeks. it is maintaining its steady expansion without the rapid pickup that would reflect a search and confidence among consumers and businesses. vice president mike pence has told business leaders in tokyo that the united states is grateful for japan's investment in the jobs it has created. he also says washington seeks stronger and more balanced trade ties with japan, and will combine economic links with diplomacy to put pressure on north korea. hence reiterated that the united states supports japan's military. australia is tightening the rules on citizenship. prime minister malcolm turnbull made his second comments in two

days. the weakening job market is indicated by skilled worker visas. any workers would need to offer strong english language skills. cracks me need to ensure that our citizenship test -- >> we need to ensure that our allowsship test immigrants to engage with the australian community. permanent resident for four years, speaking wish, share our values, be integrated. those are critically important elements. i believe they will be empowering for applicants. paul: global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. i'm paul allen, this is bloomberg. betty: time to see how the asian markets are shaping up so far this morning. yvonne: sophie, we saw a mixed

session on wall street. sophie: i want to point out an unlikely winner for the second time. the central bank in new zealand might be playing at a james is "at last," because we are seeing inflation hit its target for the first time in five years, of a up about 2.2%. these are the strongest levels in the third quarter since back in 2011. remain.price pressures the forecast is expected to slow later in the year. the benchmark rate is likely to stay at 1.75%. in threeave a 1. chance when it comes to a rate hike this year. it but the kiwi's the data after

inflation data coming out. numbers are saying it is positive for the currency, and as we are seeing the economies in new zealand and australia continued to diverge, this will put pressure on the aussie kiwi to keep coming to a seven-week against the australian dollar. betty? betty: sophie, thank you. and old chinese financial the endr says that should be open up to offshore platforms. speaking out to tom mackenzie. and he is also causing for an appropriate amount of speculation on chinese currency. why? part of the reforms he says are needed for the yuan. a dual approach or synchronization, a lack of synchronization. they say the capital market have

been reformed quite quickly. that is his view. in terms of reforms of the currency, they have not kept pace. there is a lack of synchronization. part of the way to resolve that, according to him, is to allow one trading of the yuan shore. currently it is dominated by the bank. he wants to see more people be able to a trade the currency -- to trade the currency and an appropriate level of speculation. he says chinese investors can always push things to the extremes. so that is what is being factored in by policymakers here. he also said on capital control as well, he does not see those easing up. he does not think that should be the priority. he says that trading bands for the yuan could be loosened somewhat, and gave three scenarios for the currency for this year. have listen to what he has to say this exclusive conversation. the first scenario is that the market believes the

government has the ability to maintain the stability of this exchange rate. the second scenario is the economic recovery becomes more and more solid, and the dollar index is not so strong as the might hitected, it the exchange rate. the third is domestic economies are slowing down, for whatever reason. they would need to impose down word pressure on the exchange rate -- downward pressure on the exchange rate. tom: in terms of the moves guan see, nothinge to from the policymakers before the end of this year.

this man is a very respected individual. his experience -- he has 22 years as a currency regulator, so was a good chance to drill down and some of these issues and hear from him and what was quite frank conversation. and very honest on where his opinions go from here. tom orlikbring in now, joining us from beijing. -- we talkthe yen about the end, but i want to show you how range bound we are in it comes to the offshore and onshore yen right now. pretty stable offshore at 6.89%. that is where we have been for much of the year. so what will be behind the stability? is at the weaker dollar or is it time to see some reforms, as guan tao was saying? tom: i think we are somewhere in between the first and second scenarios that guan tao

identified, yvonne. we have a government convinced of the market, prepared to stand behind it by controlling capital closes more tightly and extending foreign exchange reserves. we have growth, which is looking more robust. exports are expanding again, --ucing the market here fear. and we have slightly diminished expectations of federal reserve rate increases, and slightly increased expectations of pboc moves to guide a market rates higher. all of those things together are providing forces to the yuan stability headed to the second quarter. betty: tom mackenzie, describe a little bit more about what guan tao was saying. he said china was moving on its reforms in three ways, or pulling three different lovers and at some point -- levers and

at some .1 will have to go? tom: there are a couple of aspects. first, he talks about this that tome trinity orlik was mentioning. could years ethics reserves are put in place capital control. he said we are doing a little bit of all three and adjusting them as conditions change. in terms of what he was saying about the openness or need to synchronize the reforms we have seen in the capital markets, he is saying that they have actually up the pace of reforms there, but what happened is that reforms of the yuan have not kept pace. like tworibed it wheels on a vehicle are not going the same speed, so it will topple over. he was talking about reforms and a potential reform package that he expects not just on the currency, but on the base talks with parties congress -- the

party congress. yvonne: and thinking about that impossible trinity and what it means for the chinese -- not as the government but the economy itself. what is the cost of opening this up? what is the cost of this reform? talk -- we call it be impossible trinity. what china is demonstrating is at least if you're a big economy with a lot of impact, it is a possible trinity. at the same time, there is a cost to china, as you suggest from these fairly to crony and moves to manage the exchange rate. back on theep reform agenda. you stop capital from moving freely across the border, you are opening yourself up to the risk of asset price bubbles in the domestic market, and taking a step back from the efficiency in capital and credit allocation , which is necessary for china's

economy to escape from its debt trap. --ty: tom, what it guan tao what did guan tao say about the timelines in turn of these when does hee: think these reforms will likely happen? to the growth in the data, -- we asked him about that and he was much more circumspect. he said look, let's be careful. most economists expect that the second, third quarter gdp numbers are likely to slow. saying the government will not be sitting back and relaxing on the back of this number. also saying that in terms of what we are seeing with reforms and reform agenda, we will not see much action until after the party congress. he does not expect -- he gave me

for growth timeline to the yuan, and he thinks there is no timeline. he thinks the government has not put a timeline and for that, but he expects to see some movement after this party congress this congress, the big political event the end of the year. so it is interesting to see that he is pushing for liberalization, but also emphasizing that the chinese government does not need element of stability. this is a focus always, but particularly this year with this political event coming up. and tell us the cost of not moving fast enough, or too slow for china. is there a big risk in that way? start at 2017he was for the chinese government to restore stability. they came into the year with sliding exchange rate, cap

saving capitalized lows. they had to stop that and they succeeded that. that is a short-term positive. looking forward, if china wants to escape the debt trap, if they want if financial system that allocates credit more efficiently, ultimately they do need to make considerable progress on you on liberalization and capital account opening. suggested, itm seems that will be a priority. but after the party congress, not before. i want to thank our to tom's here. toms here. next, obama's recovery exclusivehis interview. that is next on bloomberg.

yvonne: this is daybreak asia, i'm yvonne man in hong kong. chair paulran volcker has defended dodd-frank and regulations, saying there is no evidence that they have hindered financial markets, banking, or growth. speaking exclusively to kathleen hays at the community meeting in washington. he also called for a more unified approach to financial regulation. paul: i would be happy to tell that this alliance has a soul report on this particular subject. ways, butd be other it was to get the supervisory authority to renew the agency, get all the supervisory in ansibilities and put it new agency. relate that to the federal reserve, because the vice

chairman of the federal reserve can be the chairman of that war on it, anyway. the other agencies might be represented on it, but you could have a unified supervisory approach. that supervisory will supervise the banks and supervise goldman sachs. so that is what we have had. clarify, the other loose point historically and even now, who is responsible for oversight? equipped toly suggest it is certainly not the secretary of the treasury, and he is not wanting to be. the federal reserve -- i have the feeling that the federal reserve is, but if you ask them they will say no, there is nothing about it. i think, in fact, the instinct that it should be the federal reserve is correct. better pay bank

attention to the institutional structure and the stability. that is an inherent part of their responsibility in my view. some countries do not agree with that, but that has always been my view. it is not an uncommon view. but that is the way i would -- get an independent supervisory agency, get it all together, make sure the federal reserve knows that it is exercising be overall surveillance, and they would retain regulatory power when they thought it was necessary given the overall structure. talked about also resisting idiosyncratic domestic approaches to domestic -- to federal regulation. -- rank regulation -- bank regulation. are you concerned about what is coming out of washington right now? that that is being ignored?

poll: is a strong reason i wrote the speech. talk about international things, but the international point is yes, do not forget that in this area and other areas, nothing can work well in today's interconnected world without some basic degree of consistency between the other big markets and ourselves. that was true -- that is true now, it is true in some --ivative stuff, it is true it is all steps in the right direction. it is a quick conclusion to this. halfling: one more question. i wanted to know in the so question of what is going on in washington, the structure of the federal reserve. how it operates. is there anything you would change, and in particular this notion that the federer he -- federal reserve needs to have a monetary policy rule. paul: this is an entirely different subject.

i do not think you can compress it all in a rule. rules if you want to trust your judgment against her rule, but i do not think we will run monetary policy by making this kind of rule. that was our exclusive interview with veteran executive chair paul bulger -- paul volker . you can find all our conversations from today through and also become part of the conversation by sending us instant messages during our shows. i'm sure betty and i would encourage that. bloomberg, check it out at tv . ♪

betty: this is daybreak asia, i'm betty liu in new york. yvonne: and i'm upon men in hong in hong konge men -- yvonne man in hong kong. that has a serious injury when he inflate a ruptured and a third crash in march -- las vegas.

this airbag came from a batch that honda says has a 50% chance of exploding in an accident betty:. -- accident. betty: asante has joined forces with general motors and volkswagen, and is importing locally made buicks since blaster. it plans to send its own cars to the u.s., but says it will now focus on china and europe yvonne:. yvonne:-- europe. china is cracking down on apple's live streaming apps. apple was forced to shut her itunes movies and ibooks last year, and has wanted to them series of trademark disputes with local rivals. betty: and another set of u.s. earnings after the bell.

let's recap what we saw after the bell. higher, one lower. we have a mix set of earning -- mixed set of earnings. ebay's forecast may miss analyst estimates, and that is what is weighing into the markets going into the open on thursday. analyst say even a is still struggling with the turnaround. numbers show they are struggling to show consistent results as amazon is the main competition. they failed to narrow the gap in its e-commerce, even though they were able to show the site gained 2 million active buyers in the first quarter. they could have a strong opening thursday. makers ofhe biggest chips and mobile phones. they just did a percent almost

$6 billion in revenue. here is the concern. analyst say that there is concern that apple is withholding royalty payments or forcing contractors to do the same. that in could impact -- that could impact guidance and revenue. and american express is another winner. analyst saying this came in with strong results. the stock was up in the first and cosco parted ways with their strongest or biggest co-brand partner -- and they hearted ways with their strongest or biggest cobranded partner, costco. in focus fort is the thursday session? >> we have a trio of companies reporting before the opening bell. visa will be up and analysts expect them to come in with another strong report. there are up 15% year to date. almost 50%. they are doing well. this could take them higher. titans from conservative analyst

say -- guidance from conservative analysts say it is expected to be -- and you layer the year to date. blackstone also reporting before the opening bell, stock up 11% year to date. they have done well. yvonne: we will look at how those performed tomorrow. but sega look at what is coming up on bloomberg markets. rish, i know you have the number with the japan trade, but this is one thing to watch out for as well. rishaad: this has been reflected in the hm market, the hong kong enterprise and a -- index. 8.5%. there's a reason, someone argue. yvonne: and the southbound flows

coming over here. shot: the nevada japan as well : the number atd a japan as well shows that domestic economies are picking up a bit of team at the end of the day. yvonne: maybe. we have some guest coming up to talk about this. talking towill be the head of emerging markets at rothschild asset management. looking at this latest slump in chinese share. -- shares. and theresa may and the french elections are this weekend. we will be around in an hour to discuss that.

♪ david: what was it like when you came here? did people make crocodile dundee jokes? james: people would say to me is it true that all australians wrestle crocodiles. david: people throw things at the walls, scream and yell. james: i think if you are the seventh of 12 children, you don't want to be the thrower. david: are you in favor of repealing dodd-frank? james: what will replace it? the world doesn't want the large banks to be unregulated. david: you have been a ceo for seven years. that is pretty long. james: what are you telling me? [laughter] >> would you fix your tie, please? david: well, people wouldn't recognize me if my tieas