♪ betty: asia-pacific shares expected to rise after walls great -- after wall street added to the all-time highs. the dollar fell. snapchat's parent a big loser. low user numbers. bettbetty: toyota may be under pressure after seeing the first back to back profit decline since 1994. the problem they say is their size and history. ceone: our clay's

apologizes after unmasking a whistleblower. this is "daybreak asia," from bloomberg's u.s. and asia headquarters. i am betty liu in hong kong, it is just after 7:00 p.m. yvonne: it is just after 7:00 a.m., i am yvonne man. we were expecting to edge lower than the 3.7% we saw in march. it kicked higher by three basis points. it has been the emotion and heart of what led to these protests. we have the breakdown when it comes to youth unemployment, which did reach a record in february, more than 12%. betty: that is such an important point. it seems that at least except for these numbers, south korea was enjoying good employment numbers. but youth unemployment is so

important. part of the reason why, there is discontent among the populace. wage growth is not moving in south korea, that is a big task for the new president. yvonne: he did mention his first focus will be on jobs. he wants to create 800,000 in the public sector. then, we will see how korea trades in an hours time. let's see how the rest of asia is performing. we did get central-bank atormation, anz unchanged 1.75%. the kiwi tumbling the most antenna months. the governor budging in his policy outlook. he says inflation will slow in the later half of the year. australia, good news for energy players. above $47 wti overnight. .735ussie seeing pressure,

4. we are seeing modest gains so far. , we are likely to pass the 20,000 level at the open. that would be a seven-month high for the index. a big mess on softbank earnings. toyota was weak on guidance. when it comes to the yen, we're above 114. the philippines, most people will be watching them boe this thursday. was oil and it earnings. we shrugged off the bombshell we got 24 hours ago today about james comey. betty: it is too early to tell whether the news on comey is going to affect legislative action in washington. that is what investors are watching. will we get tax reform done? his health care reform going to

be finished? that will affect markets. the facts we do not know yet, investors focus on earnings and economic numbers. let's bring up the boards. the markets did continue to tread higher. the s&p closing up at all time high, up 1/10 of 1%. the dow fell 32 points. is a barometer on investor sentiment. the nasdaq continuing to charge higher, up 1/10 of 1%. let's get the first word news with courtney collins. hasclays's ceo apologized to shareholders for trying to unmask a whistleblower. he made andon agm, mistake with getting personally involved in a compliance issue. he added it was not just to fire staley over the issue.

robust protection for those who speak up. >> whistleblower roles are incredibly important for maintaining and regulating control of banks. it is very important that people feel comfortable to contact the bank or the regulators for full protection to talk about conduct issues at barclays. we are doing everything they can. we have a robust whistleblowing program. democratic senator elizabeth war and remains keen to breakup of the megabanks. she has pushed the issue with the trump administration. said glass-steagall would make the system safer and protect consumers from risky bets on wall street.

president trump has expressed an interest in some version of that law. >> this is one of that law -- those laws that would allow simpler regulations overall. if the banks were only doing banking, banking regulators would see that. if investment companies are let's evaluatet, them separately. >> the u.s. court has been told staff telephone calls in 2013. three former bond traders are on trial in connecticut, charged with misrepresenting the prices of securities to clients and training junior staff to do the same. managers saida traders were explicitly informed not to lie. 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. ♪

-- this is bloomberg. inty: disappointing earnings snapchat user numbers. first-quarter revenue of $150 million. they added fewer new users than expected because of growing competition from facebook. sarah frier has been tracking this from san francisco. we knew that snape would face intense competition from facebook. why were they not more prepared here? >> this is a company that came out with immense exuberance from wall street about having potentially what could be the next facebook. people put their faith in that as the platform that could grow pretty rapidly. because of the popularity we have seen with it among young people. this earnings report shows the road is hard. revenue growth estimates -- they missed revenue growth, as well. this is a company that has the

opportunity to prove itself. they are just leaving people with a lot of questions. yvonne: the big question is, what will be the long-term strategy now for snap? this was a show me story, right? they have to deliver growth to justify valuation. go ahead. executives'ss the first opportunity to give a public explanation of what was going on with the company. roadshow before the ipo happened behind closed doors. here we hear about strategy for the first time. it is a great opportunity for them to give guidance about havee quarters or clear up future quarters will look better than this one. snap said they had no intention of doing financial guidance. he laughed when asked if he would give insight into the

product roadmap. they are famous for not giving any clarity. there a notoriously secret company. if you came to the call looking for answers, you would not get many. but he did see -- seemed confidence. confident. can -- to see if they they fell more than 25%. they got close to the $17 share price. gains.ased of their what will they be able to do? constant to show product innovation. toes,ebook is on their they have to go out there and continue to innovate. that is the only thing that will build up confidence in their future. sarah frier, thank you so

much. snap continues to fall. their payders, packages are falling as well. let's bring up this chart to show you what the stock price plunge is doing to their net worth for evan spiegel and is cofounder. on the right-hand side you see that downward slope. $2.4 billionbined loss. they each lost $1 billion today. i would like to have $1 billion to lose, to be honest. [laughter] yvonne: i think they had about $4 billion before. betty: exactly, it is a nice problem to have. how much u.s. executives are paid, as well. tech ceos making the list of the most well-paid ceos. we will talk about the story later in the hour. yvonne: we are talking about uptbank revisiting a tie

between sprint and t-mobile. how xi jinping plans to reshape the world. this is bloomberg. ♪

yvonne: this is daybreak asia, i am yvonne man in hong kong. betty: i am betty liu in new york. they are keen to restart merger talks between sprint and t-mobile. investors are more confident this time a deal may come around under president trump's administration on -- and their stance on looser regulations. ramy inocencio has details. he will not give up. ramy: no, he is not giving up. they want to also give their own sprint corporation a good run for his own money, to try to at&t, which are

the u.s. wireless leaders here. take a listen. i am open to everything at t-mobile, concerning we can expect to see the benefits of synergy faster than our counterparts might. t-mobile is, in the orthodox manner, the first priority. i am sincere about starting negotiations. ramy: he said the first option here is a merger with t-mobile. but he also adds, if there are other opportunities for industry cooperation, anytime he can give sprint a better leg up. let's take a look for how sprint and t-mobile performed. partpop during the earlier of today when news first hit. you can see the pop just at the start of today in the middle of your screen. but it dropped and is down by 1/4 of 1%.

buy would involve capital expenditure. they do own 80% of sprint. but sprint has been known to be mired in debt. i also want to look at the net income for sprint, at least over the past few years. this is the sprint fa function, the financial analysis function. you can see their income has been negative for the past three years. 2015, more than $1.5 billion in the hole. just edging up. i will click this other button, this is adjusted revenue. look a much money they are actually making. but they are still losing in terms of income here. $35 billion they are pulling in, a lot of capital expenditure they have been doing. but it has not gotten them

anywhere in the positive. let's also take a look at what t-mobile is doing for our investors. they are up as much as 3.3% during the day. they did fall by a little there. still up by 2% or so. it is the fastest-growing wireless carrier here in the united states. they only have about 14% or 15% market share. they are the ideal candidate for sprint to get a leg up. yvonne: you have to look at the timing of things. why now? masayoshi son has a pretty good relationship with the president? ramy: i will not comment on that, i am not sure about that. but it has to do with the banks and the change of administration this year. masayoshi son saying in the obama-era administration there were more regulations. but with trump and the idea of looser regulations -- and the idea, we do not see the reality yet -- it could be a benefit for

the merger. take a listen. to the previous u.s. administration, i think the current one is more open to new businesses and industry consolidation. i used to find it difficult to do business in the u.s., but now we are finding more opportunities. i am willing to take more steps now that regulations are easing. ramy: there is timing. a gag order was lifted from april 2007 that barred merger talks in the wireless industry to talk amongst themselves. that was lifted a few weeks ago. that is some timing there. willeal involving t-mobile have to go not just through the u.s., but germany. 55% of thelekom owns company there. they say it is the crowning jewel in their own company because it is the main driver. let's take a look at the market share for all the u.s.

companies. i want to show you where t-mobile and sprint will be, if there is indeed a merger. verizon, 31.3%. that is the number one telecom carrier in the country. 25% is at&t. mr.buy sprint, owned by son. that could push them to number two. japan, toyota out of profits will fall for the second time. the first back-to-back decline since 1994 for the carmaker. to $40fit shrinking 20% billion in the year through march, prompting promises from the automaker to take a closer look at investment. the president says part of the

problem is the company's size and history. >> we have established, tough financial foundations, and we're able -- willing to make smart investments when the time is right. we are willing to improve our competitiveness, step-by-step. we will make better and smarter cars in the future. joined by are bloomberg intelligence auto analyst onset. it is one wall of worry, but you have the stronger yen. car sales in the u.s. are also slowing. of the bumps in the road are in the u.s. they sell most cars in the u.s., other than japan. there are a few things happening. interest rates could be a risk. weyou look at the forecast, think there are downside risks because of the interest rate rise. what is not talked about, there

are off lease papers coming. leases areast -- coming due. it affects the new car market. betty: what about deteriorating relations between japanese -- between japan -- between china and korea, and how that might affect japanese carmakers over the fed anti-boosting the system? a few days ago before president moon came into the office of south korea, we were expecting the japanese, potentially european americans, to take market share is in the south korean automaker like hyundai and kia. moon comingsident into office, the rhetoric is about better relations with china.

that benefit may go away for toyota. it will have a negative impact. betty: steve, thank you so much. we will be watching toyota and their results. a quick check of latest business flash headlines at this hour. staying in the transport sector, takata facing an it is a talent as they have a record loss. a net shortfall of almost $700 million through march. the third straight annual deficit. takata had forecast a profit of $80 million. more staff are leaving the normal. moste: volkswagen's two senior figures under investigation for alleged market manipulation. they faced questions about whether they delayed informing

porsche shareholders about the vw cheating emissions tests. it has already cost the company $25 billion. betty: boeing's new jets after was discovered days before deliveries were to begin. there was a quality concern over low pressure turbine disks. this seen as they easily -- fixable issue. i do not know if i want to be on those first planes. it recovered somewhat by the close. backlash, the white house taking plenty of political heat for firing fbi director james comey. this is bloomberg. ♪

betty: this is daybreak asia, i embed a little in new york. yvonne: i am yvonne man in hong kong. the trump administration has begun the search for a new fbi director. there are questions about the president's abrupt decision to fire director james comey. we have more from washington. rbnz president donald trump fighting back against criticism. his spokesperson telling reporters at a briefing it is form of hypocrisy for eight democrats to be outraged when they called for his ousting during the presidential campaign. however, he is facing criticism not just from democrats, but members of his own party. members of the senate intelligence committee have invited director comey to testify privately next week in the senate. elsewhere, mixed reaction on capitol hill. >> absolutely laughable. it fails to pass any smell test.

>> both parties at different times have asked for the dismissal of mr. comey. it is not watergate. >> nobody has been happy with his performance. the clinton investigation was much politicized. it is time to take a new direction at the fbi. i think the president made a wise decision. reporter: he is said to be considering several employees already at the fbi. kevin cirilli, bloomberg news. betty: other headlines we are tracking outside of comey. but involved in this, the health care reform. statesill be leaving the with obamacare, the latest health insurer to pullout. they flagged losses of more than $200 million. they are still selling the affordable care act plan. obamacare's markets are increasingly vulnerable as major

health insurers quit setting financial losses. havee: shareholders approved the buyout of general motors european. a deal was announced in march. to have more them losses in the coming year. they have not had a full year of profit since 1999. pxty: reports from japan's a toshiba'sl face investigation. it is a problem with of the nuclear unit. doubt.l remains in just ahead, barclays chairman says they would not have been

staley for a jeff whistleblower. this is bloomberg. ♪

yvonne: hot and humid this morning. it is 7:30 p.m. thursday in hong kong. we have a live look out of victoria harbor. we are awaiting asia's first major market open. betty: it is 7:30 a.m. here in new york. it looks like the bull run is still in tact -- intact. i am betty liu in new york. yvonne: i am yvonne man in hong kong. you are watching daybreak asia. >> first up, the trump administration may struggle to find a replacement for fbi director james comey, one who is

acceptable to both congress and the bureau staff. several fbi agents have replaced their photos on facebook with comey's, saying they are outraged by his sacking. they spent most of wednesday interviewing candidates to hold the job on an interim basis. onc rosengren called colleagues to make three more hikes this year and start shrieking the balance sheet after the next raise to avoid overheating the economy. he expects above average growth in the next 12 months, which will continue to bring unemployment down. that would represent an unsustainable overshooting pace. china's foreign acquisition frenzy is ending as dramatically as it began. billion from $246 a takeover in 2016. they are facing tighter capital controls and increasingly wary

counterparties. year,ses plunged 67% this the biggest drop for a comparable period since the financial crisis. three chinese hackers best all from new york law firms have been fined almost $9 million. the government said they broke into the email accounts of firms lawyers whose two were hired to advise on mergers and acquisitions. they made money on the information and were ordered to pay a fine and interests. india's gold imports have more than quadrupled since april, given by the anticipation of a recovery in demand during the traditional wedding season. rose above 98ents tons last month from just 22 tons a year earlier. imports were dragged down by a strike of jewelers who were protesting and next size tax on jewelry made and sold locally.

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: we're counting down to major markets open in the asia-pacific. let's get more and what we should be watching with adam haigh. we continue to see the declines in the kiwi this morning on the back of that decision. we were hoping to hear more from graham buehler, but he did not budge. languageeed, keeping stunning in terms of the comments. they called the stance aggressively neutral. no change to policy now through the rest of this year. it will be as early as the first quarter of next or before we see any change in stance from the

rbnz. the kiwi kicking down a fair bit this morning. it is holding down reasonably well as trading continues this morning. in may have further to go. the equityand markets, not expecting a big move in 20 minutes or so when the aussie market opens with a japan and korea. we might see a little follow-through from the s&p 500. maybe an uptick there. moves expected. it is still a big move for banks. we have deadly speaking in india late this afternoon. traders are watching for the boe and their comments later when london arrives later in the day. very much a central bank day. betty: china markets look like they were stabilizing yesterday and then they took another dip. should we be concerned, should investors be concerned?

or is it just a blip? adam: if we dive into the bloomberg and bring up this the performance of the stock market and bond market in china this year, a gives you context as to how severe these moves have been. we have stabilized over the past couple days. we saw an uptick at the open yesterday. the selloff continued in china. not a huge selloff, but another 9/10 of 1% decline on the shanghai composite. we spoke to macro advisers. that sumsa key point up how investors are looking at the situation. ultimately, people should not be too worried. it is under control. what regulators are doing is a different scenario to what we saw in 2015. in the crash we saw stock market, there are only three things they are looking at.

the measures we see from the regulators, beijing is pretty comfortable with that. top officials in the government tighteningy orderly of this credit binge we have seen in china over the last few years. key later on in the year, fiscal policy takes the upper hand to support any weakness we might see in growth. continued fiscal spending should help the economy sale through this. -- sail through this. they are not panicking. they seem happy to do that. thank you, adam haigh in sydney. barclays ceo says he never involved inbecome

attempting to identify a whistleblower involved with one of his top investment anchors. staley says he is not a vindictive person. he says banks need to protect employees a speak up about misconduct. respect the regulatory construct in the united kingdom. the bank of england, the fca, executives should be held accountable. it is asenior managers, very important piece of regulation in the united kingdom. have got here, one of my goals was to be very transparent with regulators. in many ways, we are partners in trying to avoid the next financial crisis. it is a very constructive dialogue between barclays and the bank of england and the fca. it is very important to us. i appreciate the framework here. we will see how this plays out. if the unthinkable happens,

and you are deemed unfit to run barclays, does the bank have a succession plan? >> i have the full support of the board and the shareholder vote today. let's let the investigation run its course and see what happens. >> what i still cannot understand, and a speak for others as well, what would motivate you to exercise bad judgment? there are so many things going on with an executive officer of a bank, the complexity at barclays. there are decisions every day. i thought i was trying to protect a colleague who was vulnerable, from a malicious attack. but it should not have gotten involved as i did. that was a mistake. >> your friends, your colleagues

, passionate and even-tempered. as a person who prides himself on a high ethical standard and a high standard of conduct. tael --staleyjes s perhaps vindictive, vengeful, emotional? >> i am not vindictive, no. that yourworry actions put the chill on the very people you need to come forward? one way of phrasing it, why would anybody pick up the phone and call the whistleblower line if it was not a guarantee of anonymity? >> whistleblower rules are incredibly important for maintaining and regulating control of banks.

it is very important that people feel comfortable to contact the bank or the regulators for full protection to talk about conduct issues. -- issues that barclays. we will do everything we can do have a robust whistleblowing program. towill do everything we can maintain the scale and depth of that program. all signs are, there has been no change. >> people are using it? >> absolutely. in placeput safeguards to make sure people are comfortable using it? >> i do not want to go into the details. whistleblowing is very important to this bank, and we respected. yvonne: that was barclays ceo jes staley. its one spending big on belt, one road program.

instituteterson thinks it is leaving developing economies in the dust. this is bloomberg. ♪

yvonne: this is daybreak asia, i am yvonne man in hong kong. betty: i am betty liu here in new york. it is the world's second-largest economy, china. they want to increase their lotuence more, flashing a of dough, a lot of money on this one belt, one road money -- policy. they want to connect asia, europe, and the middle east and africa to bolster trade and development. spendingnfrastructure is leaving others for dead. joined now from beijing. thank you so much for joining us. leadersaying china is a

when it comes to getting infrastructure right? i would not say this initiative is leaving developing country's in the dust or western countries drive. the basic idea is sound. there is a massive need for infrastructure investment in asia. it is particularly true for the poorer countries in central asia. trade is very important. strengthening the european and chinese trade link is important. when it comes to implementation, things are usually more complicated. chineseso the case that leadership still needs to tell us details about what exactly they have in mind. that hopefully will become clearer in the next few days. betty: absolutely. particularly with this conference over the weekend, the international forum were 70 countries will be participating. i want to bring up this map for the viewers.

it is a beautiful map that shows thisust how big a scale project really is. we mentioned all the different countries and regions it is going to touch. the chances of pulling this off successfully are what? there are a couple issues. one issue, the ambition of this project is not just to get stuff built, but also to get things built and used efficiently. more generally, to help the development of these countries. here it is more complicated. very often, lack of infrastructure has less to do with money and more to do with the projects, particularly when it is private money that is supposed to be spent. very often, infrastructure is not the main development constraint in these countries.

if you look at responses of small and medium businesses in the region, infrastructure is not among the three constraints mentioned. with publicto do institutions, corruption, public services, competition. when it comes to infrastructure, it isusinesses complain, electricity access. not so much transport. they need to get those constraints right. the other issue is, how much infrastructure will help you depends a lot on the quality of how it is spent. here, we will be facing the same constraints that lead to low quality infrastructure in the first place. the whole point is whether this new initiative can help navigate those constraints. that is not just about the money. it is about the know-how, embedding it in a development strategy. of the development banks and know something about this will be very important.

that is partly why the chinese leadership pushed to the creation of it. you have worked with the german government and done extensive research at the imf when it comes to duration of growth. i am curious to get your take on enhancing connectivity in a project like this, such as one belt, one road. can they achieve sustainable growth? what has been achieved economically out of this in the last three years? the main fact is, what constrains growth in many of the countries that are part of one belt, one road, is low quality of governments and public institutions. that is the main constraint. the question is, how do you get

around that? connectivity, enhancing trade, international integration, and foreign know how, getting chinese know how in how to get these projects done can be important. but it is not the silver bullet, per se. you have to worry how it will interact with problems locally. the main worry is that if you flood the country with infrastructure money in a short time, you could see counterproductive effects. whenever you flood a country with money it lowers accountability, there is a potential for corruption and boom bust cycles, macroeconomic overheating. it will have to be a long-term initiative, well-planned, coordinated with a development strategy of that country. and it will have to worry about a 10 of unintended consequences. , just havingm

infrastructure spending on a much larger scale than before will solve the problem, that is probably misplaced. do not saying they understand these problems. i am saying we have to wait and see and be careful. that is a very chinese approach to problems, i think. yvonne: that is very much the china way. china forge ahead and continue on with these really expensive overseas it domestically, their growth is slowing and they have capital controls? a generally, there is complementary aspect to infrastructure investment they have done domestically, and what they want to do abroad. in one sense, they are trying to export some of those skills. it will help. what i like about this, it is a long-term approach.

it is about building more connectivity issues. when theyl help china take the foot off the gas. it is a good idea. i'm not saying it is a bad idea. but it is easy to get it wrong. how do you compare infrastructure spending between how the u.s. does it, because we are talking so much about infrastructure spending here, versus countries like china? what is the biggest difference you see? jeromin: the single biggest difference is scale. i am not sure what the numbers are by comparison, i would guess it is about 10 times as high as the share of gdp in china. it is just a guess. it is orders of magnitude higher.

partly it is a reflection of the chinese system. it is a reflection of using enterprises as instruments. there are problems with that in china. with are also problems that in the u.s. that go the opposite way. namely, there are not enough of it. the trump administration has announced initiatives. thate are not sure how will pan out or if it will add much in the u.s.. that remains to be seen. betty: thank you so much, senior fellow at the peterson and the two for international economics. i want to bring up, headlines now, economic numbers on the current accounts. a surplus here in japan. 2.9 trillion is the surplus. at that is well above -- this is for the month of march, by the way. it is well above economists had

estimated at 2.5 9 trillion for japan. imagine much has to do with the exports we saw in the first quarter. but also, that surge in imports, as well. that has also hit japan. we did see at -- robust export growth in the first quarter. it is also higher than the 2.8 in the prioraw month. let's check in japanese futures as we head to the open of trade in tokyo. let's bring that up. unchanged for the nikkei. the nikkei 225 above 3/10 of 1%. the dollar-yen trading slightly higher. you could call that flat right now. we see quite a bit of movement in the dollar. you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak, including reaction to these numbers. onscribers go to dayb

your terminals. also available on mobile. to can customize settings get news on assets and industries you care about. this is bloomberg. ♪

yvonne: this is daybreak asia, i am yvonne man in hong kong. betty:yvonne: i am betty liu inw york. tech leaders seizing the tops ought among u.s.'s highest-paid executives. we looked at the top 200 paid in u.s. companies. $237 millionlmart, in 2016. secondk of apple wasn't with a hundred $50 million. $124 million.erg,

we are joined now to break down these numbers. no surprise tech ceos made it to the list. weinberg, itree, is unusual to see anybody other than tech in the top compensated executives. big paydays for banks back in the day. it is not gone. is a big name come third-generation goldman sachs executives. deal when hea big is up there with these tech guys. surprises, ither is the first time we have a woman in the top 100.

and it is the first time we have a person topping the list who is not a ceo. yvonne: we have to compare it to the rest of the world now that we are here in asia. how did the asia ceos do? we do not see these nine figure salaries. you want to make a lot of money, the united states is your best that. it is not as good overseas as it is in the u.s. when we look at news reports out of hong kong, there are employees at certain companies that make in excess of $40 million. that is nowhere near the close to $240 million walmart is taking home. an executive at softbank, 70 more -- $74 million. ad he is not japanese, he is

foreigner. not asbig paydays are common as they are here in the u.s..

♪ asia-pacific stocks expected to rise. the dollar fell on conflicting statements about rates. betty: the berkeley ceo apologizes for trying to unmask a whistleblower. toyota is under pressure after seeing a first back-to-back rocket decline since 1994. it says the problem is it's size and history. betty: takata feeling the heat with a record loss and its exodus of staff. yvonne: this is the second hour

of daybreak asia. it's just after 8:00 a.m. betty: i'm betty liu. over the last few hours and in this program are going to talk about one major project out of road,which is that putting a ton of money into this project. this chart was quite interesting. we talk so much about the capital controls and how it's affecting the renminbi and the bond markets in china. look at this, it's really affected dealmaking. we know that chinese companies have been so acquisitive, especially in 2016, it was a year when they went after many foreign target in the u.s. and europe. with these capital controls, it looks like it's working here. the money staying at home, not a lot of deals. the lowest levels you have seen

in years to. since 2015 have you seen merger activity this quiet in china. it's going to go slower here, so expect the deal size and flow will tap the brakes here for the rest of the year. china markets facing another down day. were still looking for signs of a rebound of some sort but it doesn't seem the case after late day selling yesterday. tokyo and sydney still open. markets,bout asian picking up on the resilience of the u.s. session. grexit is resilient, it seems like all the wrangling and saber rattling from north korea. just atve volatility low levels at the moment.

as one research note said, this is the world we are operating in. these are the early movers, atea opening to the upside the moment. the nikkei 225 showing a bit of positivity. that's when thousand level when it comes to the nikkei could be tested as early as today. were very much watching what's happening on the commodities front because that will be the theer when it comes to trading catalyst here in asia. we had oil rebounding on the back of the drop down in u.s. applies. the biggest declines this year in the fifth straight month, outweighing the concern that u.s. production is undermining the credibility of opec. goldman sachs expecting the u.s. stockpile draw to accelerate by july. those playersg after they had a good session in the u.s..

the other story is gold, putting and into the longest run of losses since november last year. these expectations, we heard the comments coming through from about whether we will get the number of rate hikes that we expect. but the big story in asia this morning, the kiwi dollar. kiwiiggest decline for the since the november u.s. elections, as it were. rates at record lows, 1.75%. it really does take a bit of pressure off because they had been afraid that any tightening bias we've seen would drive gains in the kiwi dollar.

that's where we've seen the biggest move and some pressure when it comes to the kiwi and aussie as well. betty: let's get to the first word news. >> first two barclays, and the ceo has apologized to shareholders for trying to unmask a whistleblower. he told the banks london agm he made a mistake becoming personally involved in the compliance. citing his inexperience as ceo. staley told bloomberg barclays has robust texan for those who speak up. >> whistleblower rules are incredibly important for maintaining and regulating control of banks. it's very important that people contacting thee bank or the regulators for full protection to talk about conduct issues at barclays.

we will do everything we can to make sure that we have a robust program. >> the u.s. court has been told nomura started recording telephone calls after a traitor was indicted for lying to customers. three former bond traders are charts withnecticut training junior staff to do the same. a former manager said traders were exclusively warned -- explicitly warned not to like. over to boeing, the company has halted all flights of its new 730 max after engine flaw was discovered just days before deliveries were to begin. there was a quality concern over low-pressure turbine disks which is seen as easily fixable issue. they expect to deliver the first planes later this month. shares fell on the news but

recovered somewhat by the close. volkswagen's most senior figures are said to be under investigation for alleged market manipulation. chairmand the ceo and and a former ceo face questions about whether they delayed therming shareholders about diesel emissions tests. it has cost the company almost $25 billion. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. you so much. softbank gaining at the tokyo open after they beat analyst estimates, despite the company struggles in the u.s.. with more is our asian tech reporter. tell us first what drove these results. fiscalas been a good year for softbank. they reported a record ¥1.4 trillion in net income for the

ending march 31. that is a one-off. the bank sold part of its holdings to alibaba. the company also reported more than ¥1 trillion in operating profit and the founder has pointed out there's only two other companies in japan they can break that threshold outside of the financial circle. those companies are toyota and the statement lovely -- state monopoly. investors can expect operating profit in excess of ¥1 trillion going forward. we spoke about the future of sprint and he showed little willingness to merge with rivals like t-mobile in the u.s.. is it really going to happen? theet's recall that for past two years, sprint has been a sore point in the portfolio,

losing subscribers as well as leading money. the reason it's happening is the original plan when softbank acquired sprint was to merge it with t-mobile. of course that deal has been shut down by the regulators, letting sprint get caught up in a price war with t-mobile as well as facing larger rivals like t-mobile and verizon. now you have a different chairman and there's been a market difference in the regulatory climate which suggests that there's more opportunities to merge with t-mobile. t-mobile is still at the top of the list but they are open to other options. raising $100 billion in technologies which raises questions of what it means for sprint in the united states. yvonne: we were just talking yesterday about how that are close to it, reaching 95 billion

right now. any clues on when it may close? sources have been saying next week for about two months at this point. but they did say they are very close and the details of pretty much been locked down. what we know is that they are on track to raise about $95 billion in the first round and investors include saudi arabia as well as .bu dhabi, apple and qualcomm the question is of course where will the money go? some of it had already been announced. really in the details where the money will fall going forward. thank you for joining us live from tokyo. exports will provide japan with another boost to growth. betty: i will be live at the world economic forum, later in the show, live from cambodia.

this is bloomberg. ♪

betty: this is daybreak asia. i'm betty liu in new york. yvonne: expanding to ¥2.9 trillion, wider than analysts had expected. they expected it to narrow. let's bring in a senior japan economist. marcel, let's start with you. , thew the account balance surplus widened but the trade balance did shrink considerably here. i want to ask you more about those figures. can exports still be the same engine of growth when you see china bmi slow and u.s. car sales?

we focus on the seasonally adjusted figures and they show quite a read of drop in the current account surplus. that was mostly due to a lower trade surplus. some of it is certainly due to the volatility around chinese new year but you are probably right that going into the second half of the year we will probably see some slowdown in exports volumes which is been very strong. we will probably get another , q1 gdp butet trade that will probably fade in the second half of the year. betty: how much is that going to hurt the economy? what is your forecast of it seems exports are going to become softer? >> i don't think it will make a major difference. we think the economy will grow quite strongly this year. our forecast is 1.5%. one reason we are relatively optimistic is consumer spending is ticking up.

we probably had the biggest gain in consumer spending with the sales tax hike and household incomes are rising strongly so that should import that that should support growth. someone did get him to concede that in fact the amount that the boj is buying to control has fallen to an annualized 60 trillion yen. the guidelines for 82 again. todayleague and singapore saying he gave an oscar worthy performance because he managed to talk about tapering and the markets barely noticed. realizing this is an

important thing we are talking about now. >> i haven't seen the latest figures yet which were released this morning but i think the big picture is that the bank of japan has been cutting its bond purchases steadily ever since the long-term yield curve control. you can't read too much into the arehly figures, there seasonal patterns that distort them and obviously we had a pretty big drop in u.s. government bond yields in april that allow the bank certainly to scale back its bond purchases. again, the bigger picture is that the bank is cutting the purchases and we think it has further to run. we think by the end of next year probably they will have it slow down to 70 trillion from the current 80 trillion, and they will probably also drop the wording from their statement. they still say they are buying

80 trillion, but we think they will eventually drop any explicit targets to make it easier for them to taper without disrupting the markets. yvonne: it's kind of hard to do both. that i the one remark thought was very revealing as well. he actually said the boj could face a 23 trillion yen loss on its bond holdings if interest rates rise by one percentage point. could this the of potential mess for the boj? how are they going to handle this in a more safe manner? i think there's a couple of factors when you look at the large potential losses. the bank of japan will probably hold those bonds to maturity. i don't think they will sell them or reduce the balance sheet by selling bonds. rise, it affects

the market price on those bonds japan isank of recording the bonds on its balance sheet at discounted fair value rather than at market prices. inn if there is a sharp jump interest rates and a sharp fall in bond prices, it won't the bank ofaffect japan's profits, and any loss in terms of if they did buy some bonds with negative interest rates on which they will take a little bit of a loss once a mature, but that will take place over a very long time, so the loss can be offset with other revenue and it won't make much of a difference to the bank of japan's overall financial situation. betty: just briefly, i want to bring up a chart here that shows for the average japanese, wages are still quite stagnant and inflation is well below the 2% theet when you judge it by

cpi and the average monthly cash earnings year on year, rather than moving in the right direction, it's moving in the wrong direction. without that it's hard to see wages go higher. so what does the boj do? what did the japanese do here? >> in terms of the consumer i think it's important to remember that employment is growing around 1% per year. by .5% onwages rising trend, the latest figure was probably a bit of an aberration. you still have household incomes growing by around 1.5% which is fairly decent. but the sluggishness of wages is certainly a big problem for the bank of japan in terms of reaching inflation targets. inflation is currently around zero and with wages not growing, it's unlikely

to pick up much. in effect we think inflation will be .5% both this year and next. the bank of japan will have to continue easing and they will start to tighten policy soon, which we think is wrong. >> the governors saying stimulus will continue. a lot of people are emphasizing, one who joined us last week pointed out that if you look at small and medium-size companies, there are many signs that those wages are starting to rise and the big corporation wages that are set more that seem to be held back more, do you see that, and do you see what the optimists are saying, that make you were looking at the wrong

target? four quarters of gdp growth in japan has not happen for a long time. corona saying we're on track to higher inflation. do you see merit in that more -- or are you in the camp that says is not working? enterprisesng small , we don't have very timely data on this, to be honest. but the data we have to show that they are rising faster than that the companies. if you look at the overall wage figures, it's clearly not enough. in terms of the output, you are right, the economy is on the longest growth front since 2005-2006. but that offers you a cautionary tale because you had a pretty long stretch of strong roles in that time but inflation did not

budge. it only budgeted 2008 just before the global recession and that did not last. japanutionary tale is will close the output gap but it won't make much of a difference. andy: thank you, marcel thanks to kathleen hays as well for joining us. you can get a roundup of the stories you need to know on japan to get your day going in today's edition of daybreak. on mobile on the bloomberg anywhere at. customize your setting so you only get the news on the industries in assets that you care about. this is bloomberg. ♪

yvonne: this is daybreak asia. betty: over the next few days we

will talk about china's economic plans to revive the old silk road to europe. companies and government officials from around the world will meet this weekend to discuss how to push the billion-dollar project ahead. stephen engle spoke exclusively with the world biggest cement maker which is betting big on the program's success. >> 312 big production lines in the region over the past 10 years, making up about 60% of the overseas market. there will be an enormous demand for cement for infrastructure construction. the number will be astronomical. the building material industry del start off with the

potro initiative. if you want to get rich, build a road first. in march 2015, you talked about foreign acquisition as it relates to one road one belt. what is planned, and where? m has grown large through mna. on our expansion overseas we would always put m&a in the first place. we would occur -- preferred that him in a approach prewitt we also would like to accelerate the pace with the investors as we have helped to build most of the cement factories in the region. we will speed up under the one belt one road initiative. we would not only think about our own interests but also those of our partners so that both

parties can make profits. that was the cnbm ceo speaking exclusively with our stephen engle. they're confident been at how it will open doors for them across the world. let's do a quick check of the latest headlines. toyota said profit will offer the second year in a row. the first back-to-back decline since 1994, seeing operating yeart shrinking 24% in the through march, prompting a pledge to take a closer look at investment. the ceo toyota said part of the problem is company size and history. toshiba on the rise today amid the much delayed earnings report. says they agreed on condition that further investigation is carried out into the problems of toshiba's

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yvonne: a call and 30 in singapore on this thursday morning. kind of a gloomy picture. i'm betty liu in new york. you're watching daybreak asia. let's get to the first word news now. >> first we look to washington administrationp may struggle to find a replacement for fbi director james comey who is acceptable to congress and bureau staff. several fbi staff have replaced 's.ir photos with comey attorney general jeff sessions and other spent wednesday

reviewing candidates for an interim basis. more and said reviving the depression area glass-steagall act separating rico -- retail investment banking would protect customers from risky bets on wall street. president trump has indicated an interest in at least some version of that law. >> this is one of those laws that would let you have separate regulations overall. if the banks are only doing banking, the banking regulators could say that and if investment companies are doing investment banking, the kind of risk taking , let's evaluate that separately. foreign acquisition frenzy is ending almost as dramatically as it began after record 200 orders $6 billion of outbound takeovers in 2016, chinese dealmakers are now facing tighter capital controls

and increasingly wary counterparties. the biggest drop for a comparable time since the financial crisis. three chinese hackers who traded on data they stole from new york law firms have been fined almost $9 million. the government says they broke into the email accounts of senior lawyers whose two firms had been hired to advise on mergers and acquisitions and they make money on the acquisition and were ordered to or for their profits and pay interest. global news, 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. see how the to asian markets are shaping up so far this morning. looks like inc.'s are all green when it comes to equities. key levels there, particularly with the nikkei. right, that 20,000

level for the nikkei and the topix trading at the highs we've seen since december 2015, just eking out these gains, the same thing we saw in the u.s. session overnight. to all theence geopolitical concerns and the situation in north korea. still getting some saber rattling over there and concerns that the political wrangling in washington around president trump's other policy issues. should we save fragility when it comes to the sentiment at the moment? .25%.kkei still up by i want to take a quick look at worst stillcause digesting some of the details when it comes to the federal budget, but take a look at this. we knew it would be a good day for energy big -- because we had that rebound in the oil price. expectations that the drawdown in u.s. inventories will take some of the pressure off when it comes to opec's efforts to address the global glut. and taken a look

at some of the other sectors like materials, we had a little bit of rebound in the iron ore price after a horrible few weeks. metals miner's doing quite well today. the other thing going on, futures of gold numbers has driven some of the australian gold miners high today. independence up by 2.7%. despite seeing a little bit of a relapse when it comes to losses in gold, were on track for a seventh day of declines. --st wants take you through i just want to take you through some of the movers. of .3%ocusing on toyota, at the moment despite the president saying the company needs a little bit of a reality check, take a closer look at their investment.

a 1.5 percent decline, so underperforming the broader market which trading post to highs at the moment. toyota forecasting what would be the first back-to-back profit decline for japan's biggest carmaker since 1994. so some tough decision-making when it comes to that company, and toyota saying part of the problem is the history and size and its ability to respond to changes in the industry. the other one were watching his softbank with a confounding set of numbers. the stock is trading up for yet another session, up 522%. ating he's open to looking restarting merger talks between sprint and t-mobile. took a pause because of the expectation that regulators in the u.s. would be against the

idea that maybe we will get a looser regulatory environment from donald trump. taking a look at the australian banks, what a difference a couple of days make. all on the back of the bank levy, a number of banks are trading a little bit up. this is what were looking at in terms of a one-year chart. some of the banks have had a very good run. so would a banking levy be much ado about nothing? we are waiting to see. betty: the bank ceo certainly fuming about it. bloombergey ceo told the city of london is innovative --ugh to navigate a path and navigate a path through brexit.

>> what i would say is the level of dialogue with the prime minister's office, with the chancellor, with the regulators, has been really quite something. a lot of listening on both sides. we are here to support the united kingdom. we are the largest underwriter of european sovereign debt, so france is very important to us, germany is very important to us. we have bankers and salespeople all across europe continuing to engage. just like having to set up holding companies in the united states and do investment banking in the u.s., the european union will require us to set of structures across europe that make it more robust and more within the fold of europe. >> does the hardness of brexit determine how great the impact is on a bank like barclays?

>> there could be decisions taken that might not be in the best interest of the free flow of capital, but i think one of the tenets of the g-20, if there were a couple of things that came out of the financial crisis as a positive, one is the coordination of the g-20. one thing the g-20 step two, as we reregulate the financial industry, let's not inhibit the free low of capital. as long as those barriers are not put up, there will be workarounds around brexit so london will remain a very important source of capital for continental europe. >> relative to some of your peers, on the subject, you are an optimist. what is the upside to being optimistic? what gives you that degree of confidence that they don't have? >> i'm just expressing what i think. i don't know if it's optimism or pessimism, but it is what i

think. we have a bank subsidiary in ireland that is part of the european union. we have 1200 employees today in continental europe from malan to paris to frankfurt to madrid. uncertainty, but having been in the financial industry as long as i have, it's amazing how creative the financial industry can be. now we just have to be sure we do it in a safe and down way. >> there's less than a month ago before the election. giving the alternative of uncertainty, would you say it's accurate to say that a decisive tories,for the presumably, would be good for the british economy, good for the pound, and by extension, good for barclays? >> i don't want to insert myself

as an american into written. craig fugate have certainty or you could have uncertainty. ,f it's a decisive victory there is uncertainty there. the government has given her body a pretty clear idea of the path it's planning to go down. economy isy a strong good for barclays. corporatenty helps investment which is the fuel for economic growth. we enjoy a very constructive dialogue with the british government. i said, i've been very encouraged by the openness and candor and exchange of ideas and information. but whoever is in the british government, it's important that barclays stand behind the u.k.. yvonne: that was the barclays ceo speaking to our colleague,

erik schatzker. talking about outrage among the big lenders over a new tax, that continues to build this morning. paul allen is joining us with the latest on this. just talking about how the stocks of all the lenders have rebounded. investors are shrugging it off at the ceos are not letting it go. >> this could be a buying opportunity. the banks provide pretty steady and regular and impressive dividends. they were already blindsided by the levy that was announced on tuesday. bankr executives from the will meet with treasury officials today. in terms of how the levy will be set up, it looks like it could end up being passed on to consumers. the national australian bank ceos saying the tax cannot be absorbed.

the former anz ceo mike smith said this is a measure you would see in somewhere like africa or south america. the government is really going after -- the banks have a public image problem, largely of their own making, with failure to pay off on insurance claims and another rather -- number of other scandals that have persisted over the years, combined with ongoing profit growth and apparent lack of contrition for it all. the government think it's onto a winner here with by imposing a levy and is probably right. what about the ratings agencies, how are they reacting to this? other measuress may restrict the passing on of this levy. they will watch this quite

closely. they're dealing with the need to carry extra capital. saying it will be negative but manageable. betty: much more to calm on this levy. paul allen there in sydney. up next, we are live for the world economic forum in cambodia. the lloyd's of london ceo joins us to discuss the risks facing the region. this is bloomberg. ♪

betty: this is daybreak asia. i'm betty liu in new york. yvonne: prominent business figures aren't phnom penh the world economic forum in cambodia. fromnda amin joins us there. give us an idea what the theme is this year.

>> asean's future is the main focus. when you talk about the future of southeast asia, it's about millennial's, it's about technology. account for will more than 50% of the total population here and it comes at a time of disruption. were talking about the fourth revolution. the question is how the region will position itself to capitalize on all the opportunities and talking about capitalizing on opportunities, one company that wants to do that is lloyd's of london. good to have you with us. there's a great insurance gap in this part of the world. give us a sense of how bad it is and where it is worse. it's probably have what it is in the western world. less than 3% across the board.

at the same time, this is the region that bears half of the and weconomic cost measure that to be about $53 billion u.s. a year. thatmeans the losses happen here, there's a huge gap between the coverage provided by insurance and the uninsured losses. >> you try to make it as affordable as possible. what is lloyd's doing and what are your conversations with like to governments to make them understand the importance? >> lloyd's is still relatively new to asia. in london in the 16th century. in the last 20 years, we brought our underwriting expertise to asia. was not the there know-how. being here being close to the government and communities, we

can now start to create a narrative and raise awareness of the demand. >> where is the biggest potential? >> across the board, if you look at countries such as thailand, the philippines, and china, the insurance penetration rate is less than 1% of gdp. there's no real exceptions. if you look at countries further south such as new zealand, they insurancehigh penetration rates and that's because the government has created a scheme to mandate the purchase of property insurance in the event of a major catastrophe. >> you tend to link insurance and gdp growth. you see the most growth in the likes of india, china, philippines, indonesia. where are we, and what kind of growth can we anticipate? >> we are excited by the growth of gdp in this part of the world.

asian gdp is outperforming the west, also in indonesia and the philippines. i don't need to tell you about the economic growth in those countries. we are very well positioned. last year we opened our first ever reinsurance branch in india to support that market. we've opened in china in 2007 and we've seen phenomenal growth the last few years in china. growth triple in the last seven years. risks to that growth. if you take a look at china, capital control is one of them. are you seeing any impact on china's capital control? >> we are very much a reinsurer at present. that means we complement the domestic markets in china and elsewhere and fill the gap.

we provide coverage is they would not have the capacity to provide. we are secondary to a lot of those issues. >> what is your expansion plan in this part of the world? gdp.re looking to track >> what is that translate to in terms of -- are you opening more offices? >> if you look at singapore, for example, we have nearly 400 people on the ground in singapore and most of those our local players. , that'syears ago today a sort of growth were expecting across the region. >> what can you do to mitigate the risks?

>> we've talked about the natural catastrophe risk, which i still think is the largest risk in asia. one index tracks the economic output at risk from a range of man-made and natural disasters. , the region is very prone to natural catastrophes. some of the biggest risk are -- such as cyber, penn dead -- pandemics and stock market crashes, for example. the whole risk landscape is changing. is not just traditional natural catastrophe risk but emerging risks. these are less tangible, so they are much harder to ensure. >> we will have to leave it there. it's going to be a very busy morning with lots of interview

still to come. betty: we look forward to that. haslinda amin at the world economic forum in cambodia. a chinese company looking to dominate the world of television. meets a chairman, that is next. this is bloomberg. ♪

betty: china host the one road one belt summit and they are

discussing plans to boost global trade. chinese manufacturers are confident the move will open doors for them. >> looking ahead, i remain confident in china's economic prospects. we've seen a clear trend -- trend of upgrading china's export structure. not only traditional electronic products being shipped overseas markets, but also high end products like high-speed trains and telecommunications equipment. even for the traditional export items, the profit margin has been growing continuously. it is very healthy for china's economy. initiativee road will create a lot of big opportunities for china's export oriented manufacturing business. >> are you aiming for the number one tv spot? toof course our goal is become the number one television maker in the world, but realistically, it's not easy to achieve, and i think it will

take us at least another five years or even longer to make it happen. we will advance production lines for lcd panels and we are investing heavily in research and development of display technologies. semiconductor panels have become the biggest operation in the whole system by investment. based on these premises, i believe we deftly stand a very decent chance to overtake the two leading south korean companies to become the top player in the industry. aside much have you set in terms of investment to grow the semiconductor side of the business, and what is your ultimate plan when it comes to semiconductors and panels? l has invested to build and putting used three semiconductor panel factories. a combined total of 150 billion yuan has been in place to purdue -- boost the production of semiconductor panels.

that in the noticed past few years, a huge amount of capital has been flowing into the two sections of semiconductor panels and semiconductor chips in china. given the current technology level, i reckon it's more likely for china's semiconductor panel industry to achieve a leading role are extremely competitive where isin the world china's semiconductor chip industry will face a long and tough way ahead. there are many perceived risk investing in semiconductor chip businesses. that is set for us here on daybreak asia. another slump in bonds in the china market. thinking that the leveraging campaign has a long way to go. >> we had a bit of a reprieve day before yesterday. you can see bond prices falling and equities falling.

how far do they go down? .e will talk to several guests no such thing as a free lunch, perhaps. betty: a massive undertaking. we will also hear from marriott after its strong growth were cast. >> they were unbelievably bullish. the chief operating officer at that world economic forum on asean. ♪

♪ do you get tired of people asking you what it feels like to be a woman ceo? mary: it is a question that gets asked more than it should. me last mother's day your most important job is mom. david: did the government get its money back from general motors. mary: general motors will be forever grateful. david: do your board of directors let you go in a driverless car? mary: if it is from general motors, yeah. >> would you fix your tie, please?