♪ team trump pitches for the biggest tax cut in u.s. history. no mention of how exactly is going to be funded. >> that sparked caution the asia-pacific. a mixed day ahead as traders await policy decisions in japan and europe. >> twitter addressing it vague challenge, adding new monthly users. >> malcolm turnbull aims to tackle australia's power shortages, forcing export curbs on gas producers.

this is daybreak asia from bloomberg's u.s. and asia headquarters.rs. i am betty lou, i am in new york and it is after 7:00 p.m. yvonne: it is just after 7:00 a.m. here in hong kong, i am in unmanned. ,reliminary numbers coming in 2.7% growth in the first quarter. better than what economists were expecting, they were expecting 2.6%. quarter,an the fourth that 2.4%. lot of positive signals coming off the fourth quarter when it came to industrial production, investment, and consumer sentiment. they were quite strong. we watch the reaction out of seoul here in an hours time. this was up 0.9%. how things play out here. here are how things look in the asia-pacific. we did see this selling the last

part of the trading session on wall street, flat. 5896.wi holding on at a tough week for the currency. we have been holding at the three-month lows after inflation disappointed yesterday. 7478 in futures. ecb, theht before the yen was heading lower, 111.18. comfortable above that handle. caution into those decisions in terms of wall street. the news from washington came in and full course. tax reformeveal on a plan, markets shifting toward the ecb and boj.

betty: all of the above, that is exactly right. we certainly watched the tax reform but also earnings coming in and dominating the markets as well. su keenan will have more on the markets in a moment. the let's talk about the big audience questions about a trump tax proposal. ramy inocencio has more. it is about how you funded, right? has any is, no one answers. a lot of people are not happy what steve mnuchin has been saying in terms of trying to fund it with what he has been saying in terms of buyback and capital expenditures. let me get to the top and headlines. the corporate tax as this policy proposal suggests, would be taken down from 35% to 15%. we are also looking at a repatriate and tax, which is a tax holiday on trillions of

dollars. there is a territorial tax system, opposed to what the u.s. has now in terms of a worldwide tax system. under a territorial tax system, u.s. companies only pay taxes on the profits they earn in the u.s. it affects about 300 companies here. $2.6 trillion there. the biggest companies involved, gm, microsoft, apple, google. we do not know the percentage for the tax rate they will be applying. an official said it would be 10%. we're looking at potentially 260 billion dollars that could come back to the united states government. i want to talk about the border adjustment tax. it seems the trump white house is not in support of this. it goes against the gop house leadership, which does want

this. secretary of treasury mnuchin says it does not work in its current form but they will have discussions and consider later on. house speaker paul ryan says they do want it. it could raise $1 trillion over the next decade to help pay for tax cuts. of what this entire bill would be over the next decade. it would cost about $6.2 trillion to the american taxpayer. yvonne: it really could explode the debt issue. but there is no border adjustment tax on this blueprint. how is the white house going to pay for these tax cuts? ramy: that is the question everyone is asking. has said in terms of the affects of this proposal and plan, it would pay for itself. that is what he is saying here. a lot of economists are raising their eyebrows saying, really,

they will? tax cuts generally do not pay for themselves. it goes against an idea of dynamic scoring where people look at the long-term effects of what is happening in this plan. that is versus a static scoring where they look at just what is happening on the face of it. one other interesting thing, i want to hop into the bloomberg terminal. this potentially is another way to pay for this policy, this proposal. --ir appreciation repatriation of profits could go toward jobs. in terms of the blue line, that index and 500 buyback the other is the s&p 500 capital expenditure index. the money if repatriated will go back to stockholders and not capital investment, potentially going against what mr. mnuchin is saying. it is a wish list.

they will talk with the leadership in congress in order to see if they can come to some middle ground. yvonne: and more details hopefully to come. policy in the of u.s. saw markets assess all those measures. let's bring in su keenan with more. su: what we have got is a two-day rally. there are questions about the tax reform bill and protectionism. whether we will see more of that and it raises concerns. we look at the close, a bit of red. the big closers echo the earnings story. of the big copper companies saying there is a supply issue, that pushed the stock higher. twitter up a 2.5%, surging on the surprise announcement they have gained a lot of users, which is a big challenge area

for them. and united steel, a stunning decline. down by more than a quarter what is happening here is another steel company says it will be a tough outlook for a number of different reasons. these were the stocks in the spotlight post-trump election. let's go into the bloomberg and take a look at this. look at the asset boom, the shaded area in november to december after the election. in the six weeks of trump being elected, it reached fresh records. the u.s. dollar gained nearly 6%. the 10 year treasury yield jumped, rolling out to where we are now. of the three, the s&p 500 is the one spiking higher as we see it briefly hitting a new record intraday. they questions as we go from here. yvonne: and whether earnings can

propel that forward. up onyou for the wrap wall street. let's go to first word news with courtney collins. >> first up, u.s. national security leaders are emphasizing sanctions and the diplomacy to persuade north korea to drop its nuclear program while boosting military assets in the region. at the same time, north korea showed pictures of the kym johnson marking what he calls his country's largest ever fire drill. it coincided with south korean and u.s. forces. pyongyang says they are a prelude to invasion. president xi jinping has asked for better security, saying it is the foundation of a stable, healthy economy. he was speaking at a meeting also attended by the pboc governor. the president said authorities will conduct a comprehensive review of markets and finances. but reiterated china's risks are

controllable. chinese ride hailing app didi chuxing close to raising money in a deal that would make it the most valuable start up in the country. sources say it would lift its valuation to $60 billion, extending its reach by xiaomi. it will be the most valuable start up in the world after uber. new mining has reported third-quarter gold production of just under 600,000 ounces, down at 2.6% from the previous quarter. however, its cost per ounce measure was the lowest ever at $713. they are warning the base electricity cost will soared 90% in the 2018 financial year due to higher wholesale prices. 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. betty: following up on the output numbers from newcrest. more output numbers as well. from thetting word 1.285t producer at million tons. 17y revised their fiscal output mind. they had a mind that underwent a fire -- mine that underwent a fire. guidance, netok coal output. also seeing south african coal output at 30 million tons for fiscal year 2017. those are the two big output

numbers we're looking for. we will see how it trades and 45 minutes time. looking ahead, an in-depth look at president trump's tax plan. best selling author ed conrad and a hedge fund manager. decisions at wells fargo. this is bloomberg. ♪

♪ betty: this is daybreak asia, i am betty lou in new york. yvonne: and i am yvonne man in hong kong. a big day for central banks. the boj and ecb releasing latest polity decisions. both are expected to stay the course today. investors are looking for any signals from mario draghi on which the ecb might taper stimulus.

with japanese inflation below says therget, kuroda boj will remain accommodative. joining us from taipei is mike schumacher, and i want to welcome kathleen hays, live outside the boj in tokyo ahead of that decision. mike, good to see you. let's talk about the boj click here. it will be about that forward guidance. politico said last week they thought the economy was stronger than expected from just a couple months ago. you see any itch from the boj to change their outlook? mike: not particularly. we think the boj is all in at this point and will keep stimulating, keep being accommodative. it has been working to a degree and i think the boj would like to see it work better. bottom line, no big changed policy from the boj today. yvonne: it was all about

inflation, as kuroda mentioned. we have a chart for our viewers. we have seen, when it comes to the yen, it went up after the french elections. geopolitical risk has abated, as well. about $50.back as a make it easier now for the boj to get to that 2% inflation target? we still see it as a slow grind higher to inflation. inflation expectations are also heading lower. mike: i think it is easier for the boj and ecb, maybe more directly for the ecb. people were very concerned about the french election. i have heard it from investor after investor over the last few months. after the first round people are breathing easier. up in the final is coming 10 days, give or take. central banks have to be marked confident thinking about policy than they were a week ago. they need to lower their

inflation forecast? mike: maybe not dramatically. changing it all the time or every other meeting is not productive. we do not see a big shift in the inflation forecast at this point. betty: i want to bring up another chart. don't know if you can see it, but you can imagine what it looks like. it shows how much the boj is off the inflation target. know, way below, as you their 2% inflation target. as these yields continue, it seems that they continue to fall. where do you expect capital to go? are we going to see more capital outflows from japan? it is a terrific question. i spent the last few days in tokyo. i was asking client after client the same question. the sense i got, we will see

outflows, but not quite yet. when you think about the various destinations for that capital, the u.s. has been challenging for them. a lot of investors would like to see better fiscal policy from the u.s. maybe they have a bit of that now that the tax plan has been announced. we will see if congress follows through. i did not get the sense investors were excited about u.s. funds. if you think about traditional places where japanese investors will deploy overseas, french government bonds, super popular for years. japan has been a net seller for the balance of 2017. to that shift, i think it will, but not yet. it is tough to put a firm timeline on it. is it a may event, a june event? i suspect it happens at the end of the quarter. hard to say if it is this day or this week. but i think people wanted to put money outside japan but were a little nervous still. betty: what about the federal

reserve? there was last year not quite as extreme, i disconnect between what the federal reserve is signaling on interest rates. based on rate hikes, maybe four. does that mean in the context of central banks, where they are heading and bond investors? mike: there is certainly a big gap. you think about the fed relative to the ecb and boj or bank of england. the fed seems to be going its own way. there's been a big difference between the fed's signal to the market and the actual rates for number of years. it is like the market is saying we get it, but we do not quite believe you. it is interesting if you look at the way the fed behaved in march, historically, the fed abouttalk up the market one month before an interest rate hike. in march it did not do that. it waited two weeks before the

event and boosted up of ability. if you think about your bloomberg screen, type in wirp. you saw take up after a nine-day span. market has not given the fed enough credit and at wells fargo we have the fed going twice more this year. we are more aggressive in the market on that one. betty: i want to get back to the capital and where it might go. i know we are not seeing it yet in terms of outflows. i am not talking about just moving into treasuries. might some of the highest interest rate companies any capital like us trillion benefit from the continued stimulative stance from the boj? mike: i think they could, that is a good point. there in mind, if you focus on the government bond market it is fairly small and largely held by

overseas investors. on the margin it can help a country like australia. the question is, how big could the flow be? the same argument you can make for canada, relatively small market compared to germany, italy, the u.s.. but still big enough to be interesting. the trade-off for investors in japan is not, do we do u.s. are go home? it is, do we go to market where historically we had better liquidity, or take less liquidity and higher yield? that trade-off is a developing concern for clients in tokyo and elsewhere. we had a guest on in the last day or so on bloomberg television, the head of a global bond fund. he said the u.s. treasury market is an accident waiting to happen. he said it is on thin ice and it will break through. do you agree, number one?

and number two, if we see a big sellout and jump in yields in the u.s., will that make governor kuroda's yield curve control tool more difficult to use? mike: i think if the yields in the u.s. surged, investor after investor would be thrilled. many say if it gets back up to three, i would love to buy some bonds. posture think about the of life insurers, pension funds, even banks, they could use higher yields. tough for me to see yields reckoning above that number. from heavene manna for a lot of clients. there was an anchoring effect, but tough to get past that for a lot of us. yvonne: mike, great to have you there. i also want to thank kathleen hays live from tokyo. samsung shares march to record ahead of final first quarter results. a look at what to expect stop

this is bloomberg. ♪

yvonne: breaking news, more earnings out of south korea. the south korean internet portal first quarter results were overall a miss. first order operating profit at 290.8 billion won. well below are just around the lower range of what analysts were expecting. 205.5 billion won. in line with estimates. analysts were a little cautious leading into the first quarter, given the fact they put a high comparison based from a year ago. to add sales out of south korea, number one, internet growth could arise less than 20%. that is what the analyst

estimates were according to them. we will continue to hear how this fares when they start treating later on. another stock to watch in south korea, the final raining of samsung's first quarter results, this hour.r -- due someone to check the numbers for us. >> we want to see if the number still stands, it could change. but we are looking for the net income numbers and the divisional breakdown. , was for net income to 6.7 in at $6 billion, about trillion won.6.77 44.4 billiont

dollars. samsung has a very strong lead-in chip sales. that would be a big factor in the results. there has also been rising demand for led screens. apple put in an order for screens to go into one of the models of their new iphone 8 that will come out later this year. the may not be reflected in current quarter's results. it has been marching ever higher, up 65% in the last year or so. more than 18% year to date. the ongoing questioning of jay y. lee in relation to the political scandal in south korea and the core issues it had with phone, which had to be pulled from the market. yvonne: thank you, we will wait

for those numbers any minute now. president trump toss tax plan is a pr stunt that does not add up. what the new york times best selling ♪

yvonne: got to bring out the amber alert, 7:30 thursday on this hong kong rainy morning. betty: had to break out the umbrellas here in new york. seven: 30 p.m. wednesday evening in new york where markets closed a little more gloomy there. closingsee the s&p down. yvonne: you are watching daybreak asia. now to first word news with courtney collins. >> first up, south korea's economic growth accelerated in the first quarter. as a recovery index ports supported investment.

gdp 9/10 of 1%. and 2.7% from year earlier. consumption growth remains a subdued. the economy showing positive signs less than two weeks before the presidential election. the white house has made its opening bid for what officials called the biggest tax cut in u.s. history. the list of goals include slashing the corporate tax rate to 50% and cutting the top personal rate to 35%. there is a one-time levy on approximately $2.6 trillion of parkedt u.s. companies a overseas. however, no mention of how the plan would be paid for. goldman sachs sees a downside risk for oil prices up three to five dollars a barrel. head of commodity research told bloomberg a continuation of the restrictions should see a 65 --g range for wti of

$65. >> the probability is high, you could create a significant selloff. you point out the technicals are week. it is wearing thin. if they are trying to gauge the market, there is a higher probability of that happened. tocredit suisse bowing investor pressure. agreeing to boost capital. they will raise $4 billion from the share sale, ending weeks of speculation by dropping swiss universal bank. they also posted profits, beating estimates of about $340 million. >> under normal circumstances [indiscernible] it was always possible. restructuring we

would need to refuel in 2017. have $900 million in restructuring costs to go through. >> 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. breaking news, samsung has released a final first quarter results. looks like this was a pretty sizable. rosalind: it looks like a miss. now profits that 7.49 trillion won. 6 trillionss at 50. won. it looks like a miss on all three counts, all those areas. a breakdown for the first quarter display profits that 1.3

trillion. at 2.2 trillion won. we will get a lot more details as we go along. samsung has been facing headwinds. the currency has not been helping at all. here we will soon be able to find out exactly what areas and what is driving some of these lower sales, for example. the fact it did not have a flagship phone on sale in the first quarter may have been a factor. although samsung does it so many , many types of other devices. betty: indeed, we're certainly watching the performance of that s8 phone in the performance of the stock when it opened in an hour. we are counting down to the major market open, as well as in south korea.

adam haigh joining us. aside from watching. -- the reaction, what will be the main theme today? samsung with the performance of the kospi, which is getting close to 1%, the all-time high. elsewhere it is a day of central banks. go in through to the ecb later on thursday and banking in sweden, as well. the tone there is around how monetary policy is developing. as we move closer to exit strategies in europe, we got through the first hurdle with the french election coming up, the key decision on may 8. that will be in focus their. have thethe day we governor speaking. the rba meets tuesday next week.

numbers were just shy of expectations yesterday. we will get his tone on where inflation sets and how it pertains to policy later this year. elsewhere it is a mixed picture for equities. remaining up slightly. we should have a mixed open when markets open here in japan, first and 20 minutes. we are watching chinese markets, they have been through a lot of turmoil recently. we are planning to watch out for that in the mainland. bloomberg reporters have been examining the performance of emerging-market assets, many of which have done quite well this year. become a haven for global risk now? adam: sounds a bit strange when you say it that way, em -- vm

becoming a haven. we think of it as a risky asset class. is been on the run since beginning of 2016. if we bring up the start of valuations, it is one of the key things in a say are's .2. they say after the run valuations are stretched. we can see valuations are still very much cheaper relative to their 10 year average. about 10 percentage points below where they are trading from a valuations standpoint over the past 10 years. that argument does not hold. even if you miss some of this rally, there are good returns to be had over the next full years in the same asset class. it lends itself to the idea that allocators are emerging market stocks. yvonne: thank you.

more breaking lines from samsung, they are really tripping through right now. there is going to be a dividend of 7000 won a share. it is the first time samsung has posted this quarterly dividend. that is big news. samsung saying 2017 overall earnings will grow, year on year. capex expected to increase significantly. we are seeing green shoots come out of samsung in the first quarter. betty: shareholder friendly on that announcement. bank of japan making its way to a policy decision later this morning. all that one of 39 economists we surveyed expect no change to policy. investors will be looking for guidance on the economy, inflation, bond purchases, strategy. lower its inflation

forecast for the fiscal year, they are just so far off from their target of 2%. is a scholar from the american enterprise institute. also, author of the new york times best-selling book, the upside of inequality, how good intentions undermine the middle class. ed, good to see you again. i know you were in japan last month. >> i was. betty: you're gone from finance to being an economist. when you look at what happened in japan, how difficult -- what a difficult time they have had to stimulate the economy. they are so far off from hitting their inflation target. what lessons do you draw here? ed: they will have a hard time stimulating their economy because they do not believe financial policy makes a big difference to the economy. you need organic growth. they are in a manufacturing business, not where you want financial bets. you look at google and facebook business, tesla

relative to ford and gm, the future is not in manufacturing. they do not have growth in their population. there is not a lot they can do with fiscal monetary policies to stimulate their economy. the evidence has proven over the last couple years that the stimulative effect is not very strong. betty: i am thinking about money such and seeing yields at low levels moving to ohio -- higher-yielding markets will benefit us. there is a surplus of savings, we do not want that. but there is eager to bring them here. we expected that outflows to stop in japan as people retired. but surprisingly, they have ran trade deficits and continue to flood our markets with risk averse savings we have little use for.

the money sits unused at near zero interest rates. businesses today, google, facebook, microsoft, they can scale to economy-wide success. their cash flow positive as soon as they become successful very quickly, and can scale very large. betty: there is a lot of capital out there, a lot being wait to put to work. stay with us, we will talk specifically about president trump's tax proposal that was unveiled today. a big, bold proposal, but short on details. this is bloomberg. ♪

♪ is daybreak asia, i am yvonne man in hong kong. betty: i am betty liu here in new york.

the trump administration made its opening bid for what they call the biggest tax cut in u.s. history. it calls for cutting corporate tax rates to 15% to make u.s. businesses more competitive. we have a hedge fund manager. also hear from us -- with us is edward conard, former partner at bane capital. seems to be the one line i keep hearing, big and bold tax plan, but what are the details? ed: all good, no bad. we would like to see tremendous tax cuts, but you have to offset them with tax cuts or revenues in other areas that are more efficient than the revenues you are already raising, like a value added tax instead of a corporate tax. there is none of the bad, none of the difficult stuff to go along. stake inting a ska -- the ground.

even the past this with sunset clauses, when you lower corporate taxes, the money that is overseas comes back to the u.s. and they cannot pay taxes in the future. that increases the deficit out a decade. when they scored, if you do not get the tax neutrality you have no way to get it. a corporate tax cut of this magnitude, if you only put the sunset in for a couple years, you get no effect on the economy because it was going to expire three years, why would i change anything? a lot of work to go. betty: it certainly is, just hearing from ed sounds a lot of details. the devil is in the details. james, give me your take on this. james: i love christmas to come early, tax cuts, 15% for the corporate, is absolutely fabulous.

you make america competitive globally, off shoring businesses no longer need to be done if you , that tax15% tax cut rate they instituted. no need to offshore all of those trillions of dollars of corporate profits in the future if we can actually institute of 15% tax rate. i love christmas coming early. friends, family, would all be beneficiaries. and so would you guys, if you pay taxes in the united states. ; if i: contrasting views was a ceo, what would be the biggest take away from this tax reform plan? when you look at corporate tax plans in singapore or ireland, does this trump proposal released but the u.s. in a more competitive landscape against these countries?

james: i think this makes america the most competitive, larger economy in the world. u.s. seen the benefits in hong kong and singapore, as you mentioned. if america could compete with those tax regimes, this would be spectacular. i am all in favor and help congress sees it as an opportunity to make america great again. ed, we mention this is only the beginning and we have to see if it will pass congress. ed, we mention this is only thewe have to see the detaw it will be paid for. aside from that, hearing someone like james who says christmas comes early, it sounds great, even just putting the stake in the ground, is it enough to stoke of the animal spirit? is it enough sentiment-wise to improve the current situation? woni think when republicans

the house and senate they had the animal spirits. we see it in the marketplace. it is a baby step in the right direction, shows trump is on board. running it through congress is what would really affect animal spirit, showing you could get it through. that means having a plan you can pass of reconciliation. betty: what would that be? ed: you have to find offsets to these tax reductions. going back to obamacare, which i believe they will go back to and negotiate and settle on the courthouse steps. that would get them about $1.3 trillion in offset. you think that will pass congress? ed: it could potentially pass congress the reconciliation. it was in the ryan plan as well. and this territorial tax where you stop trying to tax companies that are going overseas and simply tax people selling things in the u.s. of theles and googles

world are paying 15% tax in ireland in singapore, as opposed to taking -- paying it in the u.s. is paying itoing to us. they just put their intellectual property overseas, they do not put many people there. all the thinking and innovation is created here. you have been encouraged where you are, the tax reforms happening in japan in particular with new rules that allow companies to spin up their businesses, tax-free. houck -- how effective can these be? japan is a country that likes tradition and values corporate relationships differently. james: they do, indeed. is now inster abe

japan the largest and most effective activist investor we have ever seen. his leadership has led the corporate governance reforms, including the tax changes you mentioned. specifically the ability to spin off owned subsidiaries tax-free. they have seen conglomerates at chock-full of value but not reflected in share prices. the ability to spin off these divisions of enormous corporations could unlock value like we have not seen in japan since the great bubble period of the 1980's. i am jazzed about it, excited, cannot wait to see mitsubishi, panasonic, or another enormous conglomerate begin the process. much.: thank you so

ed conard continues to stay with us in the next round. plenty more to come. this is bloomberg. ♪

♪ betty: this is daybreak asia, i am a little in new york. yvonne: i am yvonne man in hong kong. twitter and of the day 8% higher after encouraging first quarter headlines. we have been following it. what drove it higher? >> better than 12%. almost 7.5%own with gains. the story is, they boosted their subscriber growth -- user growth, much more than analysts expected. it was an area of struggle for the company. so that gives optimism to investors. however, there are concerns in that it was their first quarterly decline in sales since their 2013 ipo.

analysts are saying there is some stability going forward. another big story we saw come after hours. the stock down as much as 4% in trading. it is that big cholesterol drug that is been leading sales, had a 15% decline and that is raising concern. we will see that play out in the thursday session. betty: thank you so much, su keenan with how the markets and earnings are propelling the markets. let's bring back ed conard with final thoughts on the markets. we are here, almost closing out the first 100 days. the white house take credit for a few things. i want to pull up a chart on how the economy has been doing. it is the economic surprise

index, which i think is interesting. it shows that for most of the numbers,he economic things like consumer confidence surveys, they have surprised to the upside considerably. that is represented by the orange line. when you look at hard data like industrial production, household spending data, retail sales, the surprises are not as astonishing. --t is telling people may be maybe the economy is not doing as well as the white house says it is. ed: the white house changes slowly, and other indicators can change quickly. they have not accomplished a lot yet because they have rolled back regulations. those are significant things the market would react to. in terms of demonstrating they can pass tax reform, could repeal and replace obamacare, those would have a big impact on the economy and ultimately, the

markets. they have not yet proven they know how to get it done and through congress. betty: how do you think trump has done? ed: i think he has done better than the liberals paint him to be. obviously we would hope for more. but getting gorsuch through the supreme court is a big accomplishment. he enforced the red line in syria, which restores some credibility for the united states and the world. all of his executive orders, even though they are not legislative accomplishments, still rollback regulations. a lot of regulations are behind the scenes in the executive branch, which republicans now control. that looks good. he passed the keystone pipeline, you can be plus or minus on that. $50 a barrel oil makes it improbable. he has at least held back illegal immigration by threatening it. you can be for or against it, but he has had little effect

there. betty: do not dodge this question, has he done better than what you thought he would do? ed: yes. [laughter] ed: i was concerned. but not a lot better than i expected. i thought he would stumble and try to feel his way around in the first 100 days, that progress would be slow. i was worried he might have a more liberal supreme court nominee than gorsuch, so i was relieved on that front. i think he has moved more cautiously and thoughtfully and built a much stronger team than all of the people who are concerned about him. have to give him credit for that. betty: ed, great to see you. new york times best-selling author. we have the major markets opening soon. samsung earnings, still getting news from the company. especially with this interim dividend accordingly of 7000 won per share.

they've been trying to increase tax returns with a series of buybacks. the dividends announcement could

yvonne: samsung has for its best year ever. profits held up in the first quarter. however, the company sees more competition ahead. betty: auction is the word today in the asia-pacific. policy day ahead as decisions are weighted -- expected in japan and elsewhere. this is the second hour

of daybreak asia coming to you live from bloomberg's new york an asian headquarters. i'm yvonne man in hong kong. betty: i'm betty liu. we are certainly watching the continued reaction from some of the policies put out by the white house. also, news out on samsung. certainly some shareholder friendly news. we will watch and see how the stock will trade. yvonne: shareholder from the, but they also have come back on some of the concerns that paul's finger had in terms of restructuring the company. he wanted to split into the holding company, have a u.s. company. they decided to not restructure after reviewing the issue in november. they said it will not be helpful for samsung in terms of competitiveness and they don't

think they will get a shareholder approval on that front. let's take a look at how the stocks trade. first, a market check with sophie kamaruddin. sophie: dancing in the dark when tax reform trump's announcements. some weakness coming through in the equity market. we do have aussie bonds tracking what we saw in the treasuries market. as it was put, fundamentals in asia might be more of a driving force today then macro things. chinese bank with reports. we have the profit putting traders on the cautious front when it comes to taiwan. south korea's gdp numbers

looking good. bi seeing some weakness coming through. we are unsure why. currency markets, take a look at how that is spreading out, we did have the dollar resting on some strength. we do have continued to rise, the kiwi flirting with the 70 mark yo here. aussie hovering over the overnight session low. euro yen containing to move higher here. betty: thank you so much. now let's get the first word news with ramy inocencio.

: locked in a fierce debate on how aggressively to move on reshaping nafta. that is happening on saturday. canadaasured talks with and mexico. meanwhile, u.s. national security leaders emphasizing sanctions and diplomacy to persuade north korea to drop its nuclear program of boosting military assets in the region. at the same time, north korea jong-unigns of kim marking what is called the largest ever live fire drill. pyongyang says they are a prelude to invasion. next-door, chinese president

speaking at a meeting. discussauthorities will a comprehensive review of financial markets and said that chinese risks are controllable. app didise ridesharing could become the largest startup in the world. it would make didi the most viable startup after uber. investors include softbank, silver lake. a manganese outlook beat estimates at 1.3 million tons. out.t silver and led says third quarter

gold production was just under 600 ounces. the cost per ounce measure, the lowest ever at $713. global news, 24 hours a day, powered by more than 2600 journalists in more than 120 countries. i am amy inocencio. this is bloomberg. as we have been talking, samsung first quarter results beat expectations. there are some clouds on the horizon, as we mentioned, particularly in the structure of the country. rosalind chin has the numbers. go through the headlines we have seen over the last half hour. atalind: we have net income about $6.7 billion against estimates of $6.6 billion. operating profit, more or less in line with what they had announced earlier in the month. $8.8 billion. billion.44.9

doing a little better there. down, wrapped up 6.3 trillion. yes, clouds on the horizon. the company saying they expect market competition in mobile to intensify in second quarter. second half, sorry. second quarter, they do see there and divisions but could be trouble for long-term divisions. they expect assets to increase significantly. that could be because generally chips are going well. just given what they have been through with the note seven debacle and the trial still undergoing now. a lot of questions about the restructuring process. we got some clarity today which

is not reflecting well against investors. : they said they will not restructure this holding company. what they had said at the time was essentially this system is in conglomerates not giving investors the best sense of their money. a lot of pressure there to restructure. it was presented as a way to improve shareholder value. now, something saying, no, not doing that. they did not seem so keen but did do so under pressure. basically, not going ahead with this. it will not be helpful with competitiveness. several problems including

seeking shareholder approval. the sharef keeping prices up, they have announced the second part of the share buyback. thees being brought back in second phase, more than 9 trillion bought back in january. that is the second part of that. the firstsaid quarterly dividend ever. off some of the lows, but hitting close to record highs. thank you. still ahead, china looks to take a unique dining experience global. we will hear from the ceo of the latert chain haidi lun on. betty: the latest doj policy

decisions. we take you live to tokyo on the decision. this is bloomberg. ♪

betty: this is daybreak asia. i betty liu in new york. yvonne: i'm yvonne man in hong kong. let's get a list -- a look at the latest busy flash headlines. three-wayies are in a alliance with renault. the tie up avoids duplication what keeping the integrity of each brand. the target is at least doubling the market share. we will have to take time to do it well. without any doubt, i see the potential for doubling the market presence in the southeast of asia. almost aitter jumping

percent after finally attracting new users. it has been fighting the perception that it is a dying platform. average monthly users rose 6% on the year. yvonne: line court says operating profits fell 20% in offering quarter income dropped through march as costs rose 22%. however, the most popular messaging app said it is on track for profit this quarter. we have some breaking news out of japan. the manufacturer of chips as well as integrated devices in

japan. take a look at the stock, falling they are 10%. this is in response to the report we saw yesterday with the consideringcompany a sale. enesas says they are not the issuer of this report. not in a position to comment on this story now. we did see shares fall as much as 10% after that report. easing off a little bit here. certainly watching that as well. the boj, watching the boj. no changes expected. investors around the world waiting to see what the next , when it could likely be. kathleen hays has more outside the boj in tokyo.

good morning to you, betty, and everyone else in your, good evening. no surprise, but this is of course an important meeting, where they issue a monetary policy report. the actual inflation rate is so far away, there's action no justification for the boj two make any policy change. let's jump into the bloomberg. it tells the story so clearly. what you can see are three lines. the top two lines are the inflation rate. , well overe numbers negative, where it was. it goes to show that the

prices caneek energy have. as i said the monetary policy report will include the forecast for gdp and inflation. point, people saying the change inght see is a the forecast. maybe a better view of why the boj remains optimistic on the economy. inflation gradually getting to where it has to go. the boj governor kuroda optimistic about where they're going. there's so -- they are so far off from the target. is it justified? he is the answer that thinks

he will roll the rubber tree plant. he thinks he will make more. here is why. labor markets are a lot tighter. now for, 1.4 positions every worker in the labor pool for japan. the trade surplus has improved. recently upgrading the growth for the economy. ,here is a fly in the ointment if you look inside the bloomberg again. the unemployment rate falling. not is the part that has caught up yet. consumer spending in the aggregate still flat. the jobs, so plentiful. a be they need to see more wage increases. later today we will be speaking an economist who thinks it

will be several years before the rate rises above 1%. he thinks we will see a cut in the forecast. that's right.ne: i'm taking a look at the 10 year bond deal. it hit 0% just days ago. now we are back at 0.1%. do think the boj is going to change?ome kind of >> it seems that is one of the things that people will wait to see. be talkingss we will to in this hour, another formal says you boj official have to target one or the other.

zero or the yield at you target the amount of bonds you will buy and let the yield fluctuate. you cannot do both. the bank of japan is benefiting .rom this unexpected rally it has it back down to around 2.3%. bloomberg did an interview last week, heard around the world it seems probably too early. markets want to know what is the planned, what is the of mitchell change going to be? many reporters thought the press

conference this afternoon, maybe they will be pressing the point and getting some guidance this afternoon. yvonne: kathleen hays, think is a much. coming up next, recovery and macau. it looks to expand in japan. we will discuss all the that with a veteran. this is bloomberg. ♪

yvonne: good morning. this is daybreak asia. i'm yvonne man in hong kong. , helpedarter sales grew by the rebound in macau. revenue wynn resorts increased to have a billion dollars. .ood news coming in from macau let's discuss that with a veteran of the business. great to have you here. talk a little about this.

in general.acau we talked about the rebound after a two-year slump. we have seen it straight -- eight straight months of improvement. is this the start of coming back chuckle -- coming back? >> thank you for having me. what you see in the first quarter is year-over-year growth. byt you see that being led is the actual market. yesterday we had wynn resorts primarily driven by the strength palaces business. you mentioned you were a little disappointed with the earnings over all. you'd used to work in macau. about this.ttle bit

with the recovery being led primarily by vip resorts, german , they are a vip focus operation. they are the reporter -- are those who would be most likely to capture those gains. then you had the parisian palace a year later. yvonne: they lost on that. >> certainly there is overall going potential and tremendous operations. if you take out the deluxe ,actor and look at operations it seems to be that existing operations were very flat.

certainly when the market grows quarter, thater will be probably disappointed. yvonne: china, the leader of the mass-market, how would they strategize? when you mentioned some of these rivals building resorts, will they be able to generate the same amount of traffic? >> historically, macau has had up and downs over the past five years or so. when you have these recoveries, you see the vip market lead the recovery. leaving customers generate more mobile, easier to get in and out, and the first people to come back. in this situation, i would not worry too much about this particular quarter. parisian is at the product. our view is that you will seek eventually coming back with the mass-market recovery.

vips andaying on the as you mentioned, usually the ones who the the come back, i want to bring up this chart here. i don't know if you can see that there and hong kong. --looks that the vip revenue let's bring that up, that chart of. the revenue growth is coming up. while. take a it is coming back, but certain the going to take a while before it was years ago. what will help to drive that? >> that is a good question. there are a number of drivers coming into the market. a game changer, i think, would be the bridge from the hong kong

airport. certainly you will have the ability, at least infrastructures in place to increase transportations that could drive the mass-market help to support not only the new resorts open in the past six month, but also the resorts coming online next year. betty: really quickly, what out there in asia could rival macau right now? gaming.r view, you know gaming is a high demand product and is undersupplied. you look at the success of singapore. we look at gaming here in asia as a regional product. certainly there are the ability for customers to travel to different jurisdictions. generally speaking, you can look , and singapore, how

they have approached it. yvonne: thank you very much. we will have much more on daybreak asia including more on the right telling out -- ride hailing a sergei kislyak sergei kislya -- [ beep ]

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private wifi for your business. strong and secure. good for a door. and a network. comcast business. built for security. built for business. yvonne: cloudy is the theme here today. starting in singapore, have away from the opening. kind of reflecting what we are seeing in the markets, some cautiousness with trump's tax reform plan as well as the boj meetings. i'm yvonne man in hong kong. betty: i'm betty liu in new york. you are watching daybreak asia let's get the first word news now with maybe inocencio. : gdp expanded 9/10 of 1% od andhe previous peri 2.7% from one year earlier. construction expanded.

the economy showing positive signs less than two weeks before the country's present shall election. the white house made its opening bid for what officials call the biggest tax cut in u.s. history. the list of goals include to 15%. the taxes no mention of how the plants would be paid for. risk downchs sees of on oil. that is is the commodity curves not extended. could seeuation restrictions. he thinks it is likely to happen. given the inpatients in the market, the volatility is relatively high.

the technicals are week, market is wearing thin on patients. if they are trying to gauge the market, a higher probability of that happening. ramy: credit suisse has abandoned the sale of its biggest profit generator. it will erase about $4 billion from the shares cells, and did weeks of speculation. credit suisse also posted first-quarter profits beating estimates of about 340 billion. circumstances, it should be equal. said we would need a repeal in 2017, which we are now doing. we still have restructuring to go through.

ramy: global news, 24 hours a day, powered by more than 2600 journalists in more than 120 countries. i am amy inocencio. this is bloomberg. yvonne? yvonne: a look at how the asian markets are shaping up so far this morning. here is sophie kamaruddin. we have plenty of earnings today, samsung, key among them. coming off the 60 are high that we hit on wednesday. samsung part of how moves are shaping up. . a fifth day of gains. aroundthe share prices the news that they will not restructure, which is what markets were anticipating. when you take a look at the movers on the cosby, we do have samsung among the biggest drag of the news there.

tokyohave shares in dropping as much as 4.5% earlier. on to release full earnings may 15. yahoo japan dropping here. offering the profit outlook estimates and falling as much as 10%. first-quarter profit falling as much as 10% from a year earlier. sydney, 10 markets sinking. the company says they are looking to borrow aussie payment needs.t didi could be the second

most valuable start up. what are the details of this funding round right now? >> our sources are telling us that they are close to closing the deal. the main investors will be .oftbank, silver lake only uber second place globally. yvonne: what is the significant here? >> this is one of the largest didi.g rounds for if you look at its history, it has been fraught with crisis since day one. because of regulatory hurdles, and the requirement on the number of private car drivers and cars that run on the

streets, especially in beijing and shanghai, the company -- country faces significant setbacks. the funding coming in at this longer period gives them more time to explore technology and driverless technology and also global expansion. do withwhat will didi all of this money now? >> driverless technology is an area they are planning to expand. they are locking has with er on that-- with ub extent. they have expressed interest to expand in south america as well. yvonne: thank you so much. let's talk about samsung now,

maybe on track for the best year ever. they beat estimates by 10%. however, there are clouds on the horizon. bes about how they will not pursuing any restructuring plans. let's get the latest from peter ahlstrom. we are seeing the stock reversing losses now. seeing some solid gains. what do think investors are most focused on now? mixed signalsome coming out of earnings, as you mentioned. net income very strong. revenue, a little light. samsung has decided to not convert into a holding company which had been one of the points s.shed by activist samsung has a wide variety of

expenses, a lot of cross share holdings. so that there is more transparency of who owns what, samsung now say that they will not do that, partially because the business has been doing so well. trading atctronics an all-time high, at least as of yesterday. they decide, we don't have to move in that direction after all. yvonne: i guess they are feeling good about their business. saying a bold move here to an activist investor, we will not be doing this. how do you think paul finger will react to this? they have had scrapes over

certainly they will continue after this point. leet now you have jay y. going through a trial over allegations of bribery. at the heart of that is a merger with an companies that the prosecutors -- prosecutor was facilitated paying money to the present. samsung denies all of those charges. they of course make more than smartphones. they are best known for the phones but the chip business has been strong and the display business has been strong. they just came out with a new phone. the cells of the phone going very well after the fiasco of the note 7 last year.

they feel that if they could get that back on track, the business has been doing very well overall. betty: peter ahlstrom there in samsung.this news of you see the shares over 2%. australia's prime minister will announce curbs on gas prices later today. paul allen joining us now with safe to say hey did not get what he wanted. no, he didn't. now the prime minister to really see the issue head on. gas exporters buying gas on the market to meet export markets and pushing the price up as well. as you said, a couple of meetings, not getting the pledge that he wanted. enforced froms

july 1. is an attempt to repair the gas market. it has been said in the past that it is simply not acceptable that a story on the verge of becoming the greatest exporter. he will have a news conference in the next 30 minutes. we will hear more than. how severely will this impact gas exporters been? -- then? paul: it depends which exporters we are talking about. i would say for seven, for example, they mainly operate on the west coast. they are likely to be unaffected. is 18.5 billion dollars project. they said that almost two thirds of the gas are on the domestic

market. tradingas not started get. they just put out an announcement saying they are seeking clarification and will start supplying more to domestic markets than purchasers by the lng exports. thank you. coming up, a former boj policy board member says the timeline is unrealistic. this is bloomberg. ♪

yvonne: this is daybreak asia. betty: i'm yvonne man in hong kong. betty:betty: i'm betty liu in new york. a quick look at the business flash headlines. espn2 be cutting up to 100 jobs this week. the president made an

announcement but did not say who would be let go. the network has been hit by rising programming costs and a falling subscriber base. yvonne: line court's operating cost falling.ue $36ating income dropped to million through march. costs rose 32%. for profit this corridor without giving specifics. two companies in a three-way alliance with renau lt. the ceo says the tie up avoids confusion. nissan the mitsubishi currently have 7%-8% market chairs in the region. doublytarget is at least

the market share. obviously week are seeing time necessary to do it well. without any doubt, i see the potential for doubling the market presence. the bank of japan widely expected to keep the monetary program unchanged today. looking atill be clues on the policy. with a formerare boj policy board member. she thinks they have lost credibility is. >> she has many reasons how they could get the credibility back that they lost. she was a member of a policymaking board of the bank of japan until march of last year. fairy recently.

she has set at the table with governor kuroda and other members of the board and talked about policy. she knows what the debate has been like the last few days. great to talk to again. >> thank you. >> no inflation expected. running .2 rate year-over-year. let's dig a little deeper. what is the debate like now with in the bank of japan, right there behind us. how do they put the forecast together? >> nine members always have an independent position. usually they tend towards the media. with anis always optimistic position for many years. as of january, the projection for 2017 is 1.5. almost nobody believed that. boj helps to drive the projections downward.

we have to see if the boj will do that this time. time,ime, for the first the boj will include the forecast on 2019. what will happen on this day, boj will decide in there. the forecast is 2.1%. i would love to see what the boj says. obvious.ms so governor kuroda said he is sticking to the 2018 forecast. if the exchange rate is running against the boj and inflation takes longer to get there, why don't they just change it? why are they telling the market if they change it? >> i think the central banker should provide more in terms of projections.

there is a big gap between the forecast of projection and central-bank projection. i think they have to provide more projections. it takes minimal years to get to 2%. they had to say what they will do about the policy framework. >> they are afraid to do that because there nothing more they can do. they've got the key which is below zero. they are buying as many bonds -- they have already but bonds and still don't have it moving faster. are they afraid that would expose some kind of weakness of the boj or would open the door to more pressure on prime minister abi? afraidably they may be about the projection and markets reacting, what can you do more rather than less?

moreoj has to provide realistic projections. .t takes many years might be eventhey expectations over boj policy. >> many say the governor has been too optimistic. the longer-term view of inflation? what do you see for inflation? is this too optimistic for you or will take a longish -- longer time to get to 2%? >> now, if you get is because

wages are not going much. there is no support. they find it very difficult to raise. boj is counting on generating inflation. imported prices would be against expectations. that would lower the evaluation. the boj really has to count on inflation through wage growth and demand a growth. >> we have a lot more to talk to you about. we will talk -- continue to talk about this conversation and all of the dynamics surrounding the japanese economy and bank of japan. here in tokyo. i'm kathleen hays. ♪

>> welcome back. i'm cap think hayes -- kathleen hays live in tokyo outside the bank of japan as they wrap up their two day meeting. we're speaking to a professor of economics and member of the bank of japan policy japan until march of last year. i want to talk to you about the exchange rate on a couple of levels. one, governor kuroda has always

almostbout is this impossible to reach the 2% inflation target? how important is the exchange rate and how is the bank of japan doing it? was a main driver. i think yes, inflation is .mportant to generate i think it is the right way to look at it. not continuel forever. at some point it will stop. i think mr. kuroda and the boj have to think about how to have a convincing argument for the household and generate higher demand. maybe that come edition with the government in order to do a more structured reform and generate more growth.

>> is there any danger to the japanese economy from the fact that japan is still on the currency watchlist? we got that report just a couple weeks ago from the u.s. treasury department. they do not call japan equity when it later but they are among the six nations they are watching. yen's currenthe exchange rate is no longer over body. they look at historical data. yen-dollar rate is a bit undervalued. generate higher demand and >> expectations. yield curve control. i think a lot of traders and investors are asking questions about where this goes. ¥80 trillion is the target.

governor kuroda wants people to realize, we are not tightening policy. whatmuch of competition -- should the bank of japan do next their? -- there? maintain 83 orto sticking to the 10 year yield control, it is not very clear. it is not very clear to anybody. they are not strongly committed to user control. i think, as a policy maker, they it clear on this point. to me, it takes so many years to get to 2%. the amount should be reduced .rom 83 to around 60 trillion

>> a very simple equation to me. we will find out if the bank of japan is listing when we get the press conference this afternoon. thank you. very interesting. i will toss it back to you in new york. all right. kathleen hays, think is a much for that interview. certainly she will be quite busy today with that decision and statement coming out from the bank of japan and market reaction to it. also from the ecb, just a couple of hours later. we will have play more to come out of tokyo as well. this is bloomberg.

>> there were almost two incidents where you lost your life. hospital, out of the you show them you could do push-ups. you had never once had people working under you directly were killed in afternoon. -- action.