setor: a renewed caps off wall street down for a third day. gold weakening as traders assess the fed more hawkish tone. anchor: mark carney holds rates. 5-3 on theirit decision. betty: the bank of japan, and eventual end to bond buying. what is that going to happen? anchor: the pressure is building on anbang insurance.

it local banks ordered to cut business ties. we are live in shanghai -- are live in shanghai. we will be live in tokyo later for the details of major job cuts at japan's largest bank. betty: president trump at it again on his twitter. the details of his latest twitter tirade, coming up. this is daybreak asia, coming to you from bloomberg's u.s. and asian headquarters. i am betty liu in new york, where it is just after 7:00 p.m.. anchor: it is just after 7:00 a.m. in hong kong. i am shery ahn. we are so used to seeing this dovish tilt and it comes to central banks, and now, they seem to be going the other way. shery: now, we have the boe revealing that they almost hiked rates. the big question, will the boj also turn hawkish? betty: you get the feeling that come 2018 and beyond, the question is not one to be how low is monetary policy going to go, but really, when are the

others going to get in line with the fed? shery: yeah, that is a big question, and something that investors will be thinking about today as markets start trading. we have new zealand that has already got going. it is gaining ground for a fourth consecutive session. we are seeing it up .1%. the kiwi dollar is unchanged, but after falling yesterday by the most in more than one month, which was a very different story from what happened to the aussie, that got a pop the cause of really surprising to the upside jobs data. the asx 200 was a bad session. we are seeing futures pointing upwards. at japanese yen right now is 110.85. we do of course have the boj decision today through the nikkei has been losing ground -- today.ision the nikkei has been losing ground. the boj could be be calibrated in their medication to it

knowledge exiting stimulus. that hit the bond markets. whenll see what happens the boj does come out today and the trading continues in japan. that is an early look on what we can expect in the region, but the big news in wall street has been the tech selloff just continuing. betty: it did indeed. it did cause the u.s. stocks to fall for the fourth ti in five days. those benchmarks creeping back from the record levels. su keenan has more with the tech selloff today. su: the slide continues, although what we are seeing is stocks off their lows by the end of the session. look at the red on the screen. it is almost unchanged. it does not give us an idea that it is a heavy selloff, but it has been persistent. let us go into the big movers. this is a big grocery chain. there is a price were going on

with its major competitors and a lot of its rivals. jabil circuits reversing. was caught in the downdraft of the regular session. clearly havingn a down day, a lot to do with commodity action as well. let us go to the bloomberg. g #btv 99. we are not bad to the 90's. the s&p trailing one-year returns. we are seeing the blue is the return line for the s&p, and you are seeing that it really had tought come anywhere close what we had back in the early 2009 spike. we are still seeing, even though we have momentum in the market, nowhere near what we saw a couple years back.

shery: we had a set of numbers from the economic side of things. they did look a little bit more upbeat, didn't they? consistent drop in the jobless rate. we are seeing a persistent drop. video anding to the talk about the trends going on right now. it is the persistent aspect of the drop that a lot of the us isgists tell significant. let us was to one of them right now. francis donald had this to say about the latest. >> whenever i care about most is that import price year-over-year, because it factors directly into the federal reserve's inflation model. this is how we see the impact of oil and the u.s. dollar filter through to the economy. we have seen only six consecutive months. out ins like they peaked february, so this is a disinflationary force and a data point that does not get a lot of

attention. certainlywer jobless does underscore the efficacy of the updated expectations which called for a lower unemployment in the next few years, lower than previous foreseen. it is one of the most encouraging aspects of the economic cycle. it occurs at a moderate pace of gdp growth and persistently tame inflation to it all of this combining to be a positive picture that was overlooked by concern about tech selloff and other rumblings in the market. anchor: thank you so much for that. we have breaking lines on the bloomberg right now. php saying can mackenzie will -- ken mckenzie will become a chairman. favorite overwhelming in this decision. he was expected to be nominated as the new chair.

we have local reports out of australia. he is a young relative outsider here in bhp, but we are hearing now that this decision has been announced. can mackenzie to become the next chairman of bhp. we will have more detailed as we get them to the now, first word news with courtney collins. courtney: first up, the pressure is building on anbang insurance with local banks being told to cut ties. the chairman is already in detention and authorities are now said to have ordered lenders to suspend some business dealings spirit we are told at least six large banks have stopped selling anbang policies in their branches. their business model sees 90% of its products offered through banks. takataing airbag maker may file for bankruptcy within days. it could seek protection in japan first with its u.s. subsidiary filing for chapter 11

afterwards. takata's potentially lethal products are linked to 17 deaths worldwide. the liabilities exceed $90 billion and it is in the process of replacing 100 million airbags around the world. holdings in u.s. treasuries rose for a third straight month in april. it reached the highest in six stabilizes.e yuan the ownership of bonds, notes, and bills, rose to just over $1 trillion. by contrast, the largest non-us that, japan,us reduced its total down $12.4 billion from one month earlier. a split has emerged at the bank of england with almost half the policy committee dissenting at his latest meeting. the monetary policy committee two will the rate

at a quarter of 1%. they are facing an uncertain time. real earnings are falling. consumer spending is weakening. there is a fallout from last week's election. >> there is already great speculation about the exact timing of the first rate hike, and this decision is becoming more balanced. thanuld happen sooner financial markets currently expect. >> global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. betty: let us continue our conversations on monetary policy. it has been all week long that we have been focused on this and on the bank of japan, with their decision due later today, i wanted to bring in talk o takatoshi ito. to speak withon

on the boj today. thank you so much for joining us today. i want to talk about the fed and the ripples it made in the market. janet yellen and company throwing down the gauntlet and saying inflation or no inflation, we are going ahead and unwindingtes our balance sheet. what did you think of that? guest: i think the confident inflation rate will start going up again, and they are judging it from the real side that - the economy is reasonably strong. reducingrised they are the balance sheet, but it seems good. betty: they did seem to take it in stride. you understand the way central bankers think. why did they come out so assertive on that? professor ito: i think they are

confident. they had to show the way that they are going from here and there is uncertainty on the showical side, so they are the strong stance to give anchor -- betty: clarity with political uncertainty. talking about political uncertainty, how will that potential showdown in congress around the federal budget later in the year impact monetary policy> ? professor ito: the standard textbook was say that when the is going to stimulate the economy around it, fall it should contract the policyalance,

mix becomes neutral. if you think that fiscal will be a more stimulative month ahead, you want to be cautious on the central bank side. betty: that is definitely not something the boe has to worry about. i mean, this time around, they did not mention at all the shock election that we saw in britain, but that is something that is going to affect their economic outlook. how is that going to play into monetary policy at the boe? professor ito: i think they are worried about the uncertainty in the softer business conditions, and they want to be a little bit closer at this moment, but the split decision -- it is very much talents to on both sides of the spectrum. betty: just back onto the u.s. only time will

tell. we have to look at more data. do you think that inflation is about to really ramp up in the u.s.? the you see the whites of the -- do you see the whites of the eyes of inflation? professor ito: it depends on many factors. i think the fed must have the real side will translate into the consumers and that spending more than .nvestment should go up on the exchange rate side, the dollar has stabilized from getting stronger and stronger, the imports will be neutral, so i think they have the normal forecasts. betty: stay with us for more. we will turn our attention to the bank of japan meeting a

little bit later today, this decision later today and looking further ahead, some big interviews on bloomberg television. the surveillance team will be joined by the finance minister of portugal at 4:20 this afternoon. 20 past six in sydney. shery: it has been one year since disney opened its shanghai theme park a bob iger will be along to -- a part. bob iger will be along to discuss that. ♪

betty: and we are counting down to asia's first major market open, and of course, the japanese market is going to dominate here in the asian trade. this is daybreak asia. i am betty liu in new york. shery: i am shery ahn in hong kong. breaking news out of japan. tokyo exchange saying they are going to suspend takata shares.

we have heard news takata plans to file for bankruptcy as soon as next week, and that will pave the way for a sale of this company. of course, they have been struggling with their airbags he calls, and now, takata is expected to seek protection in japan and their u.s. subsidiary will be filing for chapter 11 bankruptcy shortly after. we are hearing from the tokyo stock exchange that they will suspend takata shares after the bankruptcy report. we will get you more details on that later in the program, but let us continue our discussion ito and kathleen hays. she joins this conversation as well. professor, thank you so much for sticking around. let us talk about with the boj is expected to do. the consensus is that they will at some point in time get rid of

, theond buying program target of ¥80 trillion. governor kuroda already talked about tapering that to ¥60 trillion. they have already dropped the purchases to when will they get rid of the target altogether? professor ito: i think it was clear when they+++ control that the amounts they

are going to purchase our endorsements, which means the market determines the price. it is not surprising that it is dropping from ¥80 trillion to zero. it is not targeted. it is up to the market how it will reduce to zero. shery: it is as -- betty: it is as though the bank of japan will buy as many or few jgb's as it used to to keep the yield at zero. professor ito: around zero. >> how would you play to the market that this is not tapering? many people are calling this a tapering compared to when the fed was tapering its quantitative easing, its bond purchases. professor ito: the important thing they decided is the yield curve, so the overnight and 10 year yields. notmuch you have to buy is important. >> could we take a look at a chart? i want to talk to you about inflation. we all want to talk to you about inflation because it is a big challenge for the boj. 7542.umber chart, #btv the yellow one is the national inflation rate. the important one is the white line, the cpi excluding fresh food. if you go down and see the takeoutine, that is

food, takeout energy. green is 2%. on that chart, it is a long way between any of those lines and green line. too early for far them to think about exiting or tapering the purchases at a time when there is no way the boj cancer to back off? professor ito: governor kuroda has repeatedly said it is too early to talk about exit, but this tapering is not an exit. it is a slowing down the extra so youe of the bonds, are either at zero net purchase, and it is going to be a flat balance sheet -- which is what the federal reserve is now. you know, the process now is not exit. it is a slowing down of the extra budget. betty: because they want to keep their target of the ¥80 trillion? professor ito: no, they already

changed the target to the interest rates, not quantity. important thing is to keep the overnight and 10 year bond rates. of any next move tightening is the change of interest rates. not attention to those quantities. betty: professor, there has been a -- shery: professor, there has been a lot of talk about the losses the boj picks up for when they carry out this exit strategy. is that the rate debate -- the right debate? professor ito: yes. there are two parts to it. one, yes, there will be losses , both balance sheet and cash flows. the bonds with a low coupon rate, prices will become lower,

so there is an unrealized loss. this is not something you have to worry about because the boj will not -- they can keep it until maturity. that is not a real concern. the concern is the cash flow, which, when they start raising pay toes, the rates you extra reserves -- which becomes ofher than average yields what you have on the asset side, that is a cash flow of losses. anchor: big picture i want to make sure we get to which is where the boj is in this process, whether the policy is succeeding. there are many critics of boj policy withi japan, outside of japan. ninflation, far from target.

kathleen: on the other hand, i can show you another target which shows gdp growing five quarters in a row. is the boj succeeding? or are there is critics who say it is not working, they can never exit because they can never hit the inflation target, are they correct? professor ito: they are obviously succeeding. the real site is getting stronger and stronger. if you look at the unemployment rate, it is dropping, has dropped, and is still dropping. it is below 3%, and it is around at the same level as the bubble years, the happiest years of japanese economy. [laughter] professor ito: and the job opening to applicant ratio is higher than bubble years, so obviously, the labor market is the real siteso is strong and the nominal side is weak. this is the puzzle. there are several explanations.

>> it is a problem we are facing here in the u.s., right? how do you think we both got here. [laughter] professor ito: one explanation is that the consumers lost confidence because of the crisis. and the u.s. global financial crisis -- japan is all the way back to 1997 with a banking crisis and we had to have 15 years of the deflation, so it is stuck in the mind of the consumers. they cannot get out of this deflationary mind. professor ito: if you were to look out -- >> if you were to look out, at what point do you think that, you know, japan will be able to hit its inflation target? when you think this is actually going to happen? professor ito: my hypothesis is the the inflation rate -- unemployment rate is so low that at some point, that should ignite --

betty: how low? when you say so low, we're pretty low here. [laughter] professor ito: i know. if you look at the phillips curve in japan, it is like l-shaped. 2.5,es down to, let's say, and then it starts going up. right >>. -- >> right. professor ito: i think the boj is looking to see that. >> should governor kuroda be more open with central-bank medications? professor ito: -- central-bank communications. professor ito: people are demanding the process of the exit. i guess the critics are demanding something like statements from janet yellen yesterday that how the balance , but iill be taken down think, as we discussed, it is so far away from 2%, it is too early to talk about exactly how they are going to manage and we

can do some simulations and people are doing some thosetions about how processes will affect the losses. it will depend on several key assumptions. >> can i ask you another big picture question? the inflation target as far away, so the exit is far away, so the boj keeps buying bonds. one of the criticisms or maybe critiques, i should say, of boj policy is that it is monetizing the debt. kathleen: it is part of the government's overall plan to try to lift japan out of its trap, bring the debt to gdp ratio down. is there a strong link between monetary policy and fiscal policy that is essential now to japan's future? professor ito: i do not share that view. the view that quantitative

--ing is encouraging fiscal to be irresponsible. i think it is a very important part of the quantitative easing is to help the economy to getting stronger and touch revenues to go up, and -- tax revenues to go up. that is happening in japan and helping to make the fiscal more consolidated. document thathe doj and government signed has two parts to it. one, the boj will have 2% inflation target and the government will be responsible for the fiscal, so the document is presenting that. g joe, thank you for joining us, and of course to bloomberg thank you forto, joining us, and of course

bloomberg's kathleen hays. go to tliv . the blogs will start at 10:30 hong kong time. this is bloomberg. ♪ so new touch screens... and biometrics. in 574 branches. all done by... yesterday. ♪ ♪ banks aren't just undergoing a face lift. they're undergoing a transformation. a data fueled, security driven shift in applications and customer experience. which is why comcast business delivers consistent network performance and speed across all your locations. hello, mr. deets. every branch running like headquarters. that's how you outmaneuver. tthat's why at comcast,t to be connected 24/7. we're always working to make our services more reliable. with technology that can update itself. and advanced fiber network infrastructure. new, more reliable equipment for your home. and a new culture built around customer service.

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>> it is 7:30 a.m. here in hong kong. we might be getting a sunny weekend after all. it is not minutes away from the first major market open. >> it is that markets closed here in new york a little softer led by the age of your tech shares. pretty nice evening. watching daybreak asia. let's get the first word news with courtney collins. hisresident putin used annual colin tv show to poke fun at washington over a legend idling in the presidential election.

he said james comey's leaking of discussions with president trump preparedge but he was to offer the former fbi director the same asylum deal he gave edward snowden. there was nothing surprising. now we know that in the senate of united states, law has been proposed for the strengthening of these sanctions. frankly speaking, why? nothing extraordinary is happening. those new sanctions sent russian stocks to the lowest. they were at a record on optimism. a bipartisan deal expanded to penalties imposed on moscow in 2014. it had minimum impact on the ruble and currency bonds. u.s. jury has charged --

a former trader has been acquitted well a third was cleared on eight counts with the jury deadlocked on the ninth. the mixed verdict high -- highlights the difficulties. there will be a retrial on the unresolved charges. the u.s. justice department wants to acquire more than half a billion assets were misappropriated from malaysia. that brings the total sought by the doj to $1.5 billion. more than $4.5 billion was diverted by 1mdb. global news 24 hours a day powered by more than 2700 analysts and journalists in more than 120 countries.

this is bloomberg. >> thank you. let's get a check of what to expect as the markets open in asia. resumed decline as traders digested the more hawkish tone struck by the fed. how are we expecting asian markets to react? will we get that bearish sentiment as well? asian markets are actually rather bullish. we are looking at a happy friday in the asia-pacific region. that is especially the case in japan. it is a real relief for japanese stock traders. the end had been strengthening. that since japanese debt further and further.

with the u.s. shares coming off a high, that must have been a concern. the boj meets today. don't expect them to do anything to change policy rates. there will be some focus on what kuroda might say. bond purchasesow otherwise they run out of bonds to buy. there is not a lot of expectation that could do anything major to upset the apple cart. australian and also chinese shares of futures have been gaining overnight. looking like a nice end to what had been something of a difficult week. australia's daughter, -- dollar climbing the most among major currencies. what has been fueling those gains? >> the aussie dollars gain has been somewhat surprising.

so is the economic data in australia. if we look at the bloomberg, we have a chart ready showing how australia's doll term -- dollar has been climbing and has beaten expectations by the most in about one year. at the same time, the u.s. been meeting has economic data by the most in a year. the backdrop to that is australian expectation has been pretty low. , we cane growth inflation. all the same, it has been beating expectations. if those surprise index is turnaround, the australian dollar could turn around two. right now it is sitting pretty. >> it is indeed. thank you so much. garfield reynolds on the asian market.

the pressure has been really building on china's en banc insurance. authorities have said to order banks to stop doing business after its chairman was detained. the story spiraling bigger and occur. tom mackenzie joining us now from shanghai. more twists and turns in this ongoing saga, particularly with the chairman. that's right. the news is tightening not just on the chairman. the banks are told to stop dealing with anbang. six large banks have stopped selling their policies in their network of branches in china. this follows the detention of the chairman on june the ninth. we do know the disciplinary and expansion committee are

investigating a wide-ranging probe into its operations. not just domestically but overseas as well, particularly when it comes to overseas acquisitions. went on acompany that buying spree from europe, asia, the u.s., famously buying the wall golf astoria -- the waldorf-astoria. it also flirted with the idea of investing in trump's son-in-law's business, kushner companies, one of their businesses in manhattan. the authorities have been stepping up their campaigns to rein in financial risk. habit of using insurance policies and leveraging those for assets overseas, often illiquid assets. things seem to be wrapping up for anbang.

it will have widespread presences that consequences because they have a widespread web of connections not only in china but abroad as well. >> one analyst have called this move by authorities breaking the legs of en banc -- anbang. how will they hit the bottom line? >> that is a pretty brutal description. possibly fairly apt. in 2016, they raised about $17 billion from its life insurance premium policy. that was double what it raised in 2015. look at april this year and those revenues they'll about 88%. look at its health insurance unit as well. revenues from their insurance rhenium and policies in the health insurance part of the business sell about 95% in april. the company says it is selling more of its policies online via mobile app.

they had aaid meeting on wednesday with senior executives to try to take up the morale at the company. it seems that willie difficult. they claim to have assets under management of about 290 billion dollars. they have investment in real estate, insurance. it has investments in bank like china's merchants bank. of course it has assets overseas. it is going to have widespread reverberation, this investigation. as one expert told us, this is also a change in terms of the crackdown on corruption here. it is not just focused on billionaires who made their money by working their way up. they are going after someone married into chinese political royalty. that could have political as

well as economic implications. >> thank you so much for that. a different mackenzie, ken mckenzie has been named as the chairman. in september.ver let's get over to paul allen in sydney. what do we know that ken mckenzie? >> can mac comes from packaging backgrounds. he was with the amp or packaging ground for about 23 years. that supplies packaging to companies worldwide. he was the managing director and ceo. he is 53 years old and he has this job over the other two candidates. one has been on the board for six years, and malcolm broome head was eight mining sector veteran who has been on the board since 2010. mackenzie is relatively young and doesn't have a wider

experience. could say the same about the outgoing chairman who came from a background with the ford motor company. can mackenzie is an excellent choice for the board and i wish him all the best. forhey have been calling big changes at bhp for some time. how is it going? >> of those three candidates, perhaps mackenzie is going to be the most palatable for elliott management. of whathas accused bhp it calls value destruction, particularly its misadventures when it comes to u.s. shale. mckenzie may not have the resources in the industry, but he does come untainted by all of those decisions that elliott management is talking about. he has only been on the bhp board since september last year. the last we heard from elliott was on wednesday.

they were calling for a strong experienced and visionary chairman of the hp, saying such an appointment would be a good step. tenured directors having approved disastrous acquisitions. mackenzie might be agreeable to them area the of people on the board -- >> thank you so much paul allen. up next, trump's latest twitter tirade. the president labeling the russia investigation a witchhunt. this is bloomberg. ♪

counting down to asia's first major market open this morning. things are looking good after the japanese yen weakened the most in all most five months in the last session.

this is daybreak asia. a quick check of the latest business flash headlines at this hour. nike cutting 2% of its global workforce with competition from adidas and under armour stiffening. they suggest the cuts could affect about 1400 workers. the shakeup did impress investors who sent the shares downward. nike's biggest intraday decline in almost one month. >> japan's biggest bank is facing the most dramatic reduction in headcount since it was formed after a banking crisis shook the industry 20 years ago. they may limit 810,000 staff or at some -- they may eliminate 10,000 staff. that is a must three times the number of the bank said they were aiming to cut last year. >> a new robot is being sent to

study the damage of the fukushima meltdown. the radiation means humans cannot enter the reactors. even an earlier robot had been unable to cope with it. toshiba has developed a new thece that will enter number three reactor. it is about the size of a loaf of red and will study the extent of the meltdown. >> sources are telling us alibaba co-founder jack ma may -- be part of a singapore-based biggest reported $1.5 billion fundraising, which gives it the fire party to challenge uber in southeast asia. they may also participate in the round. and president trump has been firing off on twitter as usual. -- at this after serious

reports that the russia investigation is now targeting him. >> he was up earlier this morning. majoras the first of four ones. he definitely was not happy here. coming off of these leaks of obstruction of justice coming out on his 71st birthday. not happy about that i am sure. let's go to the streets. the first one, he is talking about phony collusion with the russian story, saying they down zero proved so now they're going on obstruction of justice. that just a few minutes later saying it is the single greatest witchhunt in american political history led by some very ad and conflicted people. later on he shot off to more treats and brought in the clintons. he brought in hillary clinton the democrats, saying why aren't

their dealings big looked at in terms of russia? he also says crooked hillary destroyed phones, deleted emails and talked about bill clinton's dealings with then attorney general loretta lynch before the election there. all this stuff swirling around in the twitter sphere. it does have to go back to robert mueller. former fbi director in charge of the special counsel, planning to interview to top intelligence officials. one would be dan coats, the other mike rogers, who is the director of the national security agency. at the heart of the question here is whether trump asked of them to stop or in pdf be a probe into then national security adviser michael flynn. last week at the senate intelligence committee hearing they both said they were not directed to, but interestingly

they were asked if they themselves were asked. it looks like they are going to get to the bottom of this going ahead. it puts the president into an uncomfortable position. not surprisingly, there is concern the president might fire robert mueller. he has the legal authority to do it? no,hat is a flat out especially after the testimony from rod rosenstein whose book to -- who spoke to congressman on capitol hill earlier. that is what he said and he does have the backing of other republicans. notably they are moderate republicans. two in particular came out today saying that for one, it would be a catastrophic mistake. that is what republican senator suzanne collins of maine said. donald trump does not have the authority to fire mr. mueller. as for republican richard burr who is the chair of the senate intelligence committee, he said

that i have a lot of confidence in mueller. that is the republican side of things. earlier today on daybreak america, we also had the former senior adviser to barack obama, valerie jarrett on air. let's take a listen. >> i say what we should all do is take a step back and let bob mueller do his job. greatk he is a man of integrity and character and is extraordinarily competent. i know it is a feeding frenzy, but part of the way our democracy works well is when you have independent branches fulfilling their responsibilities and we should let them do that. >> there you have it from both republicans as well as democrats. you can imagine the optics of that if donald trump decided to let mr. mueller go. this would be the second time in his administration having to do this and that would call into further question any possible collusion that might be

happening or might have happened between russia as well as attacks on the campaign of 2016. >> the scandal would snowball. ramy inocencio in new york. brexit moving, hong kong-based financial is looking to buy a bank in europe to diversify away from its london trading center. the ceo told bloomberg that pulling out of the eu would hurt the city. >> it is going to affect our business. we are looking at opportunities for acquisitions on the continental as we speak to establish a platform on the continent are self. it may well be that five years from now with more people somewhere in the continent, but it is yet to be seen. at persons ining the financial industries in and

in what form it will be. it could be a bank. that is something we are very carefully looking at at the moment. >> france, luxembourg permanent -- luxembourg, germany? we don't need to put a flag in any specific place. it is more about finding the right institution that is the right fit with the right regulatory environment that allows you to expand into investment banking. >> you think london could lose its competitive advantage? >> absolutely. london is to start with a very expensive place. start to open the door and people are starting to leave the place, it is going to lose.

the play's works, people speak english and everybody is there. change, that starts to it is gone. >> that was the interview with michael lowy. you can get that story and many more you need to get your day going in this days iteration of daybreak. it is also available on mobile in the bloomberg anywhere app. you only get the news on the industries and assets that you care about. this is bloomberg. ♪

>> this is daybreak asia. i am betty lou in new york. >> and i am shery ahn in hong kong. bp and reliant are to invest up to six alien dollars to restart gas in indian oil and reserves after a hiatus of eight

years. the two companies are reviving their partnership. they have been encouraged by government reforms. the reserves are situated in deep water off india's east coast. >> a quarry said to be offloading its stake in the biggest utility in washington state. the lenders infrastructure arm is selling its interests that could be worth $2 billion. holdings other investors have no plans to sell -- sell theirrian stakes. executives failed to apologize for what her lawyers called outrages conduct. , and a thirdlanick form executive questioned the woman's claims, then made up a story about rival accounts being

-- over says it is truly sorry she had to we live her ordeal. we have the major markets just about to open. certainly all the focus will be on the bank of japan. >> we are seeing the japanese yen holding steady. all of the focus will be on what happens with the communication that is released. let's take a look at what markets are doing. that is gaining ground for a fourth consecutive session. we are continuing to fall a 10th of 1%. that is right. over in australia, you can see sydney futures pretty much unchanged right now. about 1.2ines down

percent. of course, the aussie has been strengthening. ,nd in japan, nikkei futures expect from much unch

♪ >> asia-pacific markets set to the yen's steepest slide since january likely to spur gains in tokyo. it'sspended after a report ready to claim chapter 11 bankruptcy protection. >> japan las vegas bank is facing the biggest staffing shakeup in its history, 10,000 jobs are to go. >> the complete package, former amcor boss is now going to succeed jack master at dhp.

this is the second hour of "daybreak asia." i'm shery ahn in hong kong. is just after 8:00 p.m. in new york. i'm betty liu. here on theof news corporate front or the macro front. the macro side of thing has ,ushed the markets around including central bank decisions. we have surprise here by the doe and how hawkish it seems they really are. and the fed and the aggressiveness they came out with on the unwinding the balance sheet, all of that meaning watch closely these yields, including what happens after the boj decision. shery: yes. that is something key we need to watch out for us markets start trading. as thereally interesting fed decision came out, it seemed that the u.s. did not really have so much time to digest it,

and an overnight, they digested the hawkish tone, and then markets just fell. but already in asia, that had been taken in. yesterday markets falling the most since march. so, the regional benchmark took a downturn. let's see how they open today. it seems that today things are looking more positive. we are seeing markets now at the open rising. >> japan is rising. we just have three markets open up at the moment and to your point earlier, when you have a lot of dollars, but especially during the london, new york time, it plays out across a major space leading to a lot of weakness in the japanese currency. there we go. 1%.re down about 1/5 of that is really looking at the nikkei 225. continued -- the continued

downturn in tech stocks, what i'm watching in asia is we do get some sort of automatic selling, if you will, just to reflect these outflows of a lot of tech tracking etf's in the asian space. 1%du, alibaba, tripled over to give you a leading indication of how it will be viewing these chinese tech names. the other big story, thinks big surprise, hawkish in the boe. there we go. massive move up, especially the short end of the curve. when you look at sterling, pretty much back to levels at this time yesterday. boj is supposed to be talking about it. two things here. do we get a further upgrade in the economic assessment? we first time in nine years, have that word expansion in their. the second one, will they even mention thinking about and said or do they just rush it off? at the moment, 111 here.

they do spend a lot of time talking about the exit. this is going to drop as quickly as is getting back to 1115 are concerned. the other thing i'm watching, this takes you all the way back 12 months. we are near the session low for the year of may. surging inockpiles the u.s. we are close to our session low. a three-day look at where we are, at the moment. give me one sec. and, there we go. session low, as we get started this friday in the asia-pacific. betty: a lot of factors here in the markets. let's get to the first word news, paul allen in sydney. has named former amcor chief executive ken mckenzie's chairman. the takeover on september 1 having joined the board last year, as nonexecutive director.

he is a former ford ceo. he has been bhp chairman since 2010 and said last year he would not seek reelection. is facing challenges from activist investors and slowing growth that top customer, china. local banks being told to cut ties. the chairman is already in detention and authorities now seem to have ordered lenders to suspend some business dealings. we are the least six large banks have stopped selling policies in their branches. is 90% of itsicy products offered through the banks. china's holdings of u.s. treasuries rose, reaching the highest in six months as the yuan stabilizes. beijing's ownership of government bonds, notes, and bills rose by $4.6 billion to just over one trillion him up, japan the largest non-us holder of government debt reduce the total to $1.1 trillion down from

-- down $12.4 billion from the month earlier. the splits has emerged for the bank of england with almost half the policy commitment dissenting at its latest meeting. the monetary policy committee voted 5-3 to hold the key rates at a record low 1/4 of 1%. the u.k. is facing uncertain times great earnings are falling, consumer spending is weakening, and there is the fallout from last week's election. >> this already great speculation about the exact timing of the first rate hike. in this decision is becoming more balanced. it could happen sooner than financial markets currently e xpect. greece's creditors have agreed on potential measures to burden, country'd ebs debt and could help athens return to international capital markets.

as pensioners protested against austerity measures, euro area finance ministers and the imf agreed to extend average maturities on great loans by as much as 15 years. global news 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. 120 countries. i'm paul allen. this is bloomberg. shery: thank you. a troubled airbag maker has been suspended in tokyo amid claims it may file for bankruptcy as early as next week. bloomberg japan auto's reporter is following this. them to fileing first with danger pen and then in the u.s., how does it play out? >> japan has always been the focal point of the takata crisis , whether to file for bankruptcy in japan, this has been the question. the funding family -- founding family which owns more than 50% hares have been

against filing for bankruptcy in japan, mainly from the symbolic reason. they only compromise until recently. it took very long for all the parties involved to reach this point because there are 15, 16 carmakers involved. we are talking about 100 million airbags, ¥1 trillion in total recall costs. the ultimate goal may be the same for all the parties involved. the interest for each carmaker may be different. takata's leader and the steering committee have to reach a deal with each carmaker, in terms of the legal ramifications and the continuity of future business. there are said millions of cars that still need to be recalled. what happens to them?

>> the cars are not completely recalled by now. the recall rate in different countries are different. it is only less than half the cars on the road, with takata airbags being recalled. they will have to process-wise, takata will have to ensure there is a bidder who buys business to this companynue process. what will happen next is takata will have a shareholders meeting to formally recommend key safety systems as a buyer. approve by a sport that plan put together by kss as well as external steering committee. betty: what will that mean, that kss-takata merger?

what will that mean for the auto industry? >> the merger between kss and takata will immediately create a second biggest airbag maker in the world. it will elevate key safety systems. in markets like china and japan, there are synergies. the two can work together because key safety is owned by china's safe and electronics and has a very big presence in china. there are synergies going forward. betty: thank you so much. [inaudible] go ahead. >> i was saying but for one key customer is honda, which is biggesty takata's

customer. whether honda will continue to do business with takata will have a big part to play in their future business. betty: good to keep that in mind. thanks you -- thank you so much. central drama starting with the federal reserve's decision to raise rates in spite of weaker inflation, the bank of england's biggest split vote in 6 years. critics,eets with saying it is time to be more transparent with monetary policy. kathleen hays is here. what do we do about inflation, right? is interesting, isn't it. you can think back to the early 1980's, people were so concerned about inflation going off the charts. most central banks in the world are worried about not. the big exception is the bank of england, and that's why we have some central-bank soap opera going on here. melodrama, because the bank of england policy rates steady,

0.25%, but it occurred in a 5-3 vote, so there was a big split. yields up, prices down. and of course, the economy is a conundrum because inflation is searching because brexit cause the pound to tumble. -- caused the pound to tumble. u.k. very dependent on imported food. inflation is rising, and today as the bank of england met, retail sales tumbled. they are now falling year-over-year. i want to now call up a chart for you. it is #gb tv 6094. what you are seeing is this surge in inflation, that is the white line. it's up nearly 3%, the target for the boe is 2%. what is that turquoise on it? wages. they are starting to come down.

at the same time inflation is rising. a double whammy. their paychecks are buying less because of inflation. an issue.rtainly meanwhile, brexit talk start on monday, june 19. brexit strategy chief and leader of that has been leading brexit talks. meanwhile, we hear about theresa may's political woes. the former member of the monetary policy committee, the bank of england on "daybreak sayingith us earlier this means there is no credible government in place and this is something else swirling around the bank of england right now. worry for the markets is that basically the u.k. doesn't have a credible government right now, doesn't have a credible fiscal policy. how could they actually pass anything in the parliament? the responsibility rests on the central bank to try and calm nerves, raising rates would actually be a bit mistake.

>> he has been a critic for some time that the bank of england might be ready to hike rates despite inflation. not just one dissenter, suddenly three dissenters. we heard him saying earlier, paul allen giving us first word rate hikes may come sooner than people have thought. i want to say one thing about the fed, which meant more than 24 hours ago on wednesday, raising rates, even though inflation is weak. the opposite side from the bank of england, today a terrific story on bloomberg talking about strategists, looking at a possible policy error by the fed as we see inflation expectations falling and the yield curve flattening in the u.s.. a lot of this uncertainty at drama affecting investors. funny that you call this melodrama and central-bank straight it's been a different story for japan. it has been a newsfest.

we have seen the boj not changed, but consensus again for no change at all. we are having to focus on the details, like a bond buying program. >> with japan maybe it's more like theaters, very subtle, very slow, but powerful. there is a debate. this more and more calls for the bank of japan to detail, talk about its eventual exit strategy with the boj's balance sheet almost as big as the entire economy. i want to start with the jjb's. howd laying out so nicely even some expected things from the boj could come along and hit the market. policy, that's true. but now i want to call up another chart for us. it is #gb tv 742. because of they most obvious. look where inflation is.

if you look at the headline, that's the yellow line. everything is down, they are too far from target. we talked to potentially a contender to be the next head of the boj. also, a professor at columbia university. he said, look, the fact they have reduced the amount of bonds they are purchasing is not a taper, it's nowhere near exit, it's because the bond market is shifting and the boj has to shift purchases too. nevertheless, we will be looking for those nuances, shery, those small shifts that could signal progress towards potential bigger moves by the boj. shery: kathleen hays we will continue to watch that kabuki theater unfold. he will ask the former boj executive of the central bank will continue to struggle with low inflation, irrespective of how the economy evolved. betty: later the program will look at what airbnb is doing to

fight local rivals in china. this is bloomberg. ♪

betty: this is "daybreak asia." i'm betty liu in new york. shery: shery ahn in hong kong. the boj concludes its today meeting, and economists aren't expecting change in policy. economist, in an also a former boj executive director. kathleen hays in new york also joins the conversation. thank you for coming in and talking to us. the consensus, no change expected. what was interesting for me looking at the boj's actions over the past few months is that the amount of debt they buy in market operations to respond to week moves in bonds, last ago, yields surged and they didn't do anything. why the shift in stance? well, i don't think there's

any shifting in the policy at all because the economy is in favorable condition right now but despite all the good news about the economy kathleen , farined little bit ago away from 2% target. so i think the boj is very close to manage policy for the time being. betty: what about the increasing calls for even in the broadest, biggest picture way, for governor kuroda and the bank of hown to start talking about an exit from bond purchases, from yield curve controls is going to work? a terrific boj decision day guide from our colleague in quoting the president of japan's life insurance

association, saying it's time for this kind of open talk. is the pressure building? should they say more? kazuo: yes, there is pressure for the boj to say more about the possible scenario. people are debating about the financial losses the boj may incur. it is very likely that boj will have to take some losses because the interest rate on the boj is going up sharply, but the asset side over the boj balance sheet, long-term bond yield will stay low. there is a negative margin of interest for the boj, maybe in the coming years. that is debated by the boj. far, governor kuroda, some

other boj officials have been refraining from giving any any communication right now could be confusing, but i think there's mounting pressure from the markets to the boj to say something more about tangible scenario. betty: when the yield as it rises, if inflation pick up, the economy picks up and the boj buys fewer, that means yield is rising, prices are falling, so the boj will have to start selling at some point to reduce a balance sheet. the irony is the boj will do that because the economy is improving and inflation is rising. is this a cost worth paying, losing some money on the boj's holdings to be the benefit of a stronger economy, presumably maybe there's even more tax revenues and you help bring down that budget, debt to gdp ratio

that is so big in japan? kazuo: you have made a very good point. people are focused on the downside. you mentioned, the gdp is has been -- growing much faster. revenue would be rising. be against should the possible downside of the policy. boj should explain, especially to the markets, to convince the markets that the boj is doing the right thing. shery: last time at the previous meeting, the boj did update their economic outlook. we are now seeing better and firmer gdp data out of japan. does that mean they will eventually upgrade their outlook again, and once that happens, if

that is taken as asset purchases tapering, is a bond selloff inevitable here? kazuo: first of all, i think as far as the economy is concerned, we have good numbers coming in, although others indicate fairly favorable. the labor market very tight. 43 is high. market conditions very tight in the labor market. this is the situation. even withm for boj is those good news in the economy, it is low. i don't think boj is going to change policy, in terms of the accommodation. shery: that's exactly what i mean. and than expected in april,

that coming at a time when it is the start of the financial air can many companies -- how -- concerning is that? right there with the bonds available in the market, that is a judgment by the boj. and also, people are talking about the so-called tapering, -- still, i think the change, a difference between the current pace and by the boj clearly, the primary goal is the interest rates, 10 year bond yield.

if 10 year bond yield stays around 1%, that is ok. betty: it's interesting to say, boj policy not succeeding when it comes to boosting inflation, if your government -- governor kuroda you are saying not yet. on the other hand, saying well, it's not working well on the inflation cyber working on the gdp side. going to call up another chart. it is bloomberg g #btv -- would they raise their economic outlook? five quarters a positive gdp. gdp numbers are not big. the bars are not tall yet. but how significant is that, and how much stronger does gdp in japan have to get to put more of a boost under inflation? kazuo: i think that is the median, as far as gdp is concerned. i don't pay much attention to the quarterly gdp numbers. that, we have been

coming through 1% gdp for the past 4 years. we have a shrinking population. still, we have more than 1% gdp for the second period. this is very significant. even with that we did not have pressure. unique situation in japan because we had a long history of inflation so people are now convinced that any strong economy is translating to the high inflation. shery: i guess also you have to keep an eye on wage pressures. kazuo momma, thank you for joining us, also the former boj executive. thank you, kathleen hays, joining us from new york. you can also turn to your bloomberg for more on the boj decision coming up.

top live logs on the boj decision will start around 10:30 hong kong time. this is bloomberg. ♪

shery: i'm shery ahn in hong kong. betty: i'm betty liu in new york. you're watching "daybreak asia." we are getting those singapore numbers out on exports, nonoil , 8.1% for thets month of may. electronic imports, more than double the expectation of a 4.2% rise. looking at year on year, you can see it fell by 1.2%. a smaller fall than what

economists estimated at 5.6%. this was helped by electronic exports, rising 23.3%, a substantial gain from the prior month and also for exceeding the economists'expectations of an 11.9% rise. certainly good news for the city there on the export and trade front. let's get to first word news. paul? putin used his annual tv show to poke fun of washington over alleged meddling in the presidential election. he said james comey's leaking of discussions with president trump was strange, but he was prepared to offer the former fbi director the same as highland deal he gave whistleblower edward snowden. putin addressed the new sanctions approved by congress. >> there is nothing surprising. now we know that in the senate of the united states, law has been proposed for the

strengthening of the sanctions. frankly speaking, why? nothing extraordinary is happening. sent those new sanctions russian stocks to the lowest in a year, less than five months ago they were at a record on optimism president trump would try to improve bilateral ties straight however, the deal extended the penalties imposed on moscow in 2014 for its role in ukraine. the vote had minimal effect on the ruble and local currency bonds, little changed since the start of the week. struggling airbag maker takata may file for bankruptcy within days. sources tell us it could seek protection in japan first, with its u.s. subsidiary filing for chapter 11 afterwards. takata has potentially equal products are links to at least 17 deaths worldwide. the company plus liabilities exceed $9 billion. of company is in the process replacing 100 millionaire bags around the world. au.s. jury has convicted

trader. acquitted,der was while a third was acquitted on eight counts with a jury deadlocked on the ninth. the next arctic highlight the challenges up losing at policing fraud. prosecutors must now decide on a retrial on the unresolved charges. the u.s. justice department wants to recover more than 1/2 of $1 billion in assets they say were purchased from funds and misappropriated from malaysia's wealth fund. they include artworks, jewelry, and movie rights, and bring the $1.8 soft by the doj to billion. the firing of california claims more than $4.5 billion was diverted by one mdb officials between 2009 and 2015. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. allen.l this is bloomberg. thank you.

it's time to get a check of how markets are trading. it is still early in the asian session. david ingles is here with the latest. happy friday, daivd.. david: yes, happy friday, shery. we had been holding their. the improvement in the last 20 minutes or so has been australia. have a look at the forex space here, it's fairly mixed. of course, dollar-yen weaker ahead of the boj. two stocks i want to mention. softbank leading gains here. getting an upgrade from morningstar, upgrade to buy. the other stock i want to mention, fourth biggest mover of about 3%. the company that makes people prettier than they actually are. have a look at the cost index, or beginning that sort of followthrough in selling on the

tech space? no. samsung is up to you look at these chipmakers, for example -- up. to these chipmakers, for example. i'm going to wrap things up here with a look at oil prices, very close to the session low, which roughly 44, 22. let me put that into context, where we are at the moment and one-year chart takes you all the way back to november of last year. session lows back in may. on a closing basis, we are basically back to the levels of last november. betty: we're watching the deflationary aspects of oil prices. japan's biggest bank may be finding the most are manic job cuts in its history. sources say mitsubishi ufj planning to shrink its workforce by 10,000 over the next decade. garrett allen tracking this in tokyo. what is behind this? background it is the

squeeze on profitability that banks have been facing over the past couple of years, negative interest rates over the past year have really dramatically reduced the margins. the obvious answer to that is, it is cutting costs. they have come up with a strategy called, re-measuring strategy looking to improve efficiency. also looking to streamline -- they're going to try to digitize more areas of the branches and try to cut down the number of people that they have on the floor in branches. once they have eliminated those jobs and moved people into more -- and byacing roles controlling the intake of staff, they're looking to shrink the entire workforce by that 10,000. betty: i'm really surprised here

because japan has very strict labor laws, and they are going ahead with this debt reduction will be very big within japan. these banks must be really struggling. are making a profit at the moment. mitsubishi is the only of the three big thanks to be predicting their own rise in profit this year. -- thegest job cuts implement laws are strict trade you can't just go and fire people in japan. they take on employees, one of the year in april they bring in a bunch of new graduates and they train them up. by controlling the amount of intake they have, they can control the size of the workforce. that's a plan, to shrink it down, gain some efficiencies, cut some cost.

are re-mentioning strategies, looking to save about $120 billion over the next seven years. they are trying to make the cost cuts, take the hard decisions now over the next 10, 15 years so they can remain profitable. shery: gareth allen in tokyo, thank you so much. change occurring as other companies, ken mckenzie named as the next chairman of bhp. mckenzie replaces jack master and will take over from september 1. let's get over to our commodity support her in melbourne. -- commodities reporter in melbourne. who is this guy? can mckenzie is a 53-year-old canadian. he spent 10 years to 2015 as the one of ther limited,

world top packaging companies. it's kind of that track record with amcor that perhaps made him the most appealing candidate at the hp. the market value of m core actually more than 150% rose during ken mckenzie's tenure. he was appointed to bhp aboard last september. people told us in recent weeks that that relative lack of experience with the company may have counted against him and rose to become the next chairman. from heard in recent weeks bhp, talk about mistakes they made in acquisitions earlier this decade. mckenzie seen as free from those concerns, and of course, this is

all amid an activist push from people like elliott management core. they had been presenting proposals to bhp for changes since april. mckenzie taking that on head-on, he intends to get around, talk to shareholders over the next couple of weeks and understand the different perspective that investors have on the company at this point. betty: what about the push against bhp by activist investors? is this going to take the heat out of some of this? it is certainly true that he was the favorite candidate, .ertainly the favorite we still haven't heard any response as of yet from elliott. as i said, mckenzie himself said he will get out there, listen,

discuss some of the issues that have been raised. activists have been pressing for changes that go beyond the chairman position. they are asking for reviews of the petroleum business. they want a review of the top management team. several of them calling for quite widespread changes to the board. this may go some way to address their problems but there is still plenty in trade, still plenty of things that those activist investors are calling for. betty: david stringer, thank you for joining us on bhp. there's the more to come on "daybreak asia," a closer look at the energy market in the future. this is bloomberg. ♪

betty: this is "daybreak asia." i'm betty liu in new york. shery: i'm shery ahn in hong kong. fully -- solar power was once so

costly it only made sense in spaceships. erg new energy finance says it is now becoming so cheap it will start pushing: natural gas plants out of business by 2040. we are joined by the head of asian economics and policy. thank you so much for joining us. tell us a little bit about the key highlights of your findings. well, the report this year is really all about the march of clean energy. we forecast about $10 trillion of investment in new regeneration infrastructure, and nearly 3/4 of that will be spent on new levels and nearly 1/2 of that will be on wind and solar. very similar a story. about $5 trillion will need to be invested in china, india, southeast asia, australia, japan, korea. nearly 3/4 of that will be spent on renewables.

shery: a lot has been made recently about the comeback of coal. when can we expect that market to peak? >> in asia for the very first time, we are actually forecasting peak coa. -- coal. in the late 2020's we see coal capacity start to peak and coal generation reaches peak. the sort of fall of coal is in sight. renewables, wind and solar, will begin to outcompete new coal in the late 2020's. it's generation will decline from then on into the 2040's. however, peak coal doesn't actually mean total demise of coal. in 2040 we will still be consuming about as much coal as we do today. net-net, market will be flat but the peak is coming. betty: there will still be large consumers of coal, and of course

i'm thinking about china. china will remain a large consumer of coal but india will sideline coal in favor of solar. >> that's right. india has always been seen as the next big market, the big growth market for coal. what we find actually is that solar has become so cheap and will continue to get so cheap, he will decline by another 66% and costs by 2040. it's the cheapest thing to build in india. in the next couple of years, it becomes cheaper than building a coal-fired power station. india's development is skewing towards renewables. that will mean coal grows by 80%, despite power demind nearly quadrupling. talk to us about japan and south korea that are so dependent on imports, imports of oil, of gas.

. we've seen that with japan and their consumption of liquefied natural gas from qatar. where do imports go for both of those countries, but particularly in japan? >> yeah, so another interesting story. japan really isn't breaking its dependence on imports over the next 25 years. that's what we project. its mix is shifting. we forecast japan will start to use less and less gas, and instead substitute that with coal. what's happening is japan post-fukushima is reorienting its power mix towards coal and longfrom nuclear in the term. japan is locking in a dependence on coal and a high emissions pathway for the next 24 years and beyond because they are building coal-fired power stations. south korea is in a similar situation. they are a bit of an anomaly in

asia, and also, a bit of an anomaly -- they are 2 of 3 countries to build new coal- powered stations. --ty: shery:shery: it surprising because the south korean president made clean energy a key focus of his campaign paid let's talk about the historic relationship between economic growth and co2 emissions. how does clean energy cling to this relationship? so, this is one of the all-important relationships when it comes to looking at climate negotiations. , andhole climate process having the world or community or someone tillie country, we need you to cap your carbon emissions, has historically meant that that means you have to cap your growth. gdp growth and carbon emissions have grown in lockstep. clean energy is breaking that relationship and is allowing in a much lessow

emissions intensive way. to achieve growth without a huge growth in emissions. we see that break in our relationship happening very starkly in china and india. and that's going to change the dynamics in global climate negotiation. shery: he will change the dynamic of how you look at economic growth. -- it change the dynamics of how you look at economic growth. a roundup of the stories you need to know to get your day going in today's edition of "daybreak," bloomberg subscribers go to daybgo. in the bloomberg anywhere app, you can customize your settings so you only get news on the industries and assets that you care about. this is bloomberg. ♪

shery: this is "daybreak asia." i'm shery ahn in hong kong. betty: i betty liu in new york. to $6 billionup to restart work in the india going -- oil and gas reserves after a hiatus of eight years. the two companies are providing their partnership after coming together in 2011. they have been encouraged by government reforms including the freedom to price and market gas. the reserves are situated in

deep water of india pass coast. cory said to be ready to offload its stake in puget energy, the biggest facility in washington state. the lenders infrastructure sending the sale of its 42% puget's current come in a deal that could be worth $2 billion. puget's holdings to other investors may exercise their right, first refusal to buy employee holdings. betty: a woman raped in 2014 by a new delhi over driver is suing executives for feeling to apologize for what her lawyers call outrageous conduct. she alleges that the third former executive questioned the women's claims and they made up a story about a rival being involved in your account. in a statement uber says it is truly sorry she has had to relive her ordeal. uber, is looking to the

which is to win over china. the room sharing company planning to double its investment on the mainland as it looks to fight off local rivals. bloomberg west david remley joining us from jakarta on this story. does airbnb have any chance of succeeding in china? it's hard to say at this stage. they are facing a huge amount of challenges that got local rivals that have five times more listings in china, and cities that airbnb never even dreamed of reaching out to. so it really will depend on how ourting local at c customers, local listings, and courting the government to convince the government not to kick them out. betty: who are these local rivals? >> there are 2 primary local rivals. a very similar model to airbnb's in china.

a are backed by the likes of morningstar --morningside. on the other side, you have a company that is huge, it has 700,000 listings. they are backed by china's agency andine travel the world's second-biggest online travel agency. shery: what is airbnb doing in china? how much are the investments? where are they investing? they are saying they are going to double if not triple the amount they just over the next few years. it's the only country outside of the u.s. where they have software engineers currently stationed. basically if you email anyone in china or airbnb, they have a totally different email account and that's because they put their servers and the countries to comply with local rules and regulations. they are wrapping up their marketings, their lobbying, and

the arrow being controversial local laws to cozy up to the government. those are the main things they are doing at the moment. shery: when it comes to china, the regulations are a key problem. so what are they worried about? >> well, at the moment just like shared housing isn't quite legal or illegal in china. so they've got to work out ways to make it a more legal industry, and also work out ways to work with the various different provincial governments down to the municipal governments who have some say in whether or not the houses can be used as quite as i hotels. --quite as i hotels. -- quasi-hotels. david, thank you so much. andcan follow that story the new look of bloomberg businessweek magazine and online, also this week our cover

story with tim cook says america is more important than politics. shery? shery: right. that's almost it from us on "daybreak asia." time for a quick look at what's coming up on the next few hours -- in the next few hours. we are seeing the boj, expecting that policy decision. >> thought that would be the case. the bank of england did surprise everybody. three people willing to raise rates. we have a couple of guests coming on. just looking at the statement as well and what the bank of japan has to say about the economy looking ahead as well. fromout 12, 13 minutes now. he's at bank of america merrill

lynch. she's going to be talking about this bank of japan lack of movement, as it were. the aaib meeting, right? kicking off their annual meeting. that will be an interesting one. >> our guest joining us to have a look at all of that. there we go. that is all to come in and is couple of hours. betty? betty: that is it from "daybreak asia." our market coverage with richard haidi, that is next. this is bloomberg. ♪

♪ it is 9:00 a.m. in hong kong. i'm haidi lun. rishaad: i am rishaad salamat coming to from bloomberg's asia headquarters in hong kong. this is "bloomberg markets: asia." ♪ haidi: japan leads markets higher, the deepest light for the yen since january. -- slide for the yen since january. rishaad: