♪ bloomberg'se from asian headquarters. ime yvonne man. republicans finally passed the tax cuts, the most extensive rewrite in three decades. not a single democrat supported the bill. a collectiveed shrug and pulled little change. yields run to a nine-month high. . >> i'm betty liu. it is just past 6:00 p.m. on wednesday. putting financial risks, poverty and pollution at the top of the list in 2018.

and amazon tops $1000. stocks up 50% and on course for a $1 trillion sale tag. -- $1 trillion in sales. yvonne: a trillion dollar company, yvonne. speaking of trillions, we saw on interesting reaction in the bond markets. again, another day where yields the house and senate finally passed a tax reform package. theaps all of this by on rumor in salem the news is affecting not only equities, but also the bond markets as well. yvonne: yes. callsall of the extreme

for yield curves to flatten, it seems like we are pushing back on that now. we are seeing a steepening here as we close 2017, betty. reaction in the equity markets. kind of a collective shrug. s&p trading flat, and closing unchanged. same with the nasdaq. the dow down about 30 points. not setting up for a really recession. of course we are waiting for the boj. yvonne: we saw a bit of a rally that petered out on wall street. here is how we are. so on to new asia, zealand. a gross load in the third but a healthier picture than what economists were seeing. kiwi slightly off the highs it .

australia trading just getting underway. nowhere, buting there was the story in the bond market with treasury yields overnight rising to a nine-month high. a pretty dramatic selloff in europe as well. 266 for the aussie 10 year yield. windingral bank up. we are seeing futures pointing to a lower opening here today in tokyo for the nikkei 225. betty. betty: all right, yvonne. on to the news with courtney colman. courtney. courtney: a leading chinese think tank says the economy will flow next year. of social sciences forecast gdp at 6.7% in 2018, down from 6.8% this year.

as seniortion comes leaders announced a three-year drive against what they call radical battles. financial risks, collusion, and poverty as well. prime minister theresa may back at the increasingly topline from brussels said, saying the eu. the eu negotiator has said that the city should not expect a special deal under brexit. may told lawmakers she expects to find out about the trade deal before march of 2019. garnier said the transition. would allow the u.k. to understand the challenges ahead. it will enable the administration of britain, the public administration, to for the kindslves of challenges they will have to face.

courtney: rates unchanged and the bank of thailand, but real growth forecasts show the one bond repo rate staying at 1.5%. the latest r.b.i. minutes show more hawkish tone on inflation. this reinforces expectations that the cycle might end. raten is to make a decision later. courts,t with the top as judges ruled that should be regulated as a taxi company rather than a tech service. the european court of justice's is the first definitive finding that the company must be regulated by transport authorities. a challengeeen as to other gig economy companies, such as airbnb. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 counties. this is bloomberg.

courtney, thank you. republicans have passed the biggest overhaul of the u.s.. tax code since reagan was in the white house. gop celebrated the bill with the speech at the white house. trump: we are going to bring at least $4 trillion back into this country. money that was frozen all over the world, and some of them do not even like us. they will have the money long. all that is left now is the president's signature. joining us is laura davidson. she's joining us from d.c.. laura, what are we expecting to be signed by the president? laura: the president says he wants it signed, but they are working out something. lawmakers are concerned about whether or not needs to be pushed into 2018. they are dealing with technical budget issues. there could be a bit of a delay, but it would not delay the bill

or anything. involved finalf issue resolution. it will certainly happen in the next couple of weeks. yvonne: in light of that celebration of the white lawn, most republicans standing behind the president as he made that celebratory speech. her pelicans that this legislation would increase job opportunities and lead to higher wages. democrats are saying it will leave it to lose in the midterms. was correct? laura: we'll see. from was some good news comcast today saying they will use their savings in light of the tax cuts to pay each of their workers a $1000 bonus. that is certainly good news if you are republican, the bill is theoretically doing what you wanted to do. but look at the numbers out of polling. it is very unpopular. people think it will not benefit them. they will start seeing changes starting inchecks

february. that is when the irs will update how much money will be withheld and tax rates. we will see how people react then. yvonne: so far, you mentioned the reaction today with at&t dipping $1000 to their employees. comcast just an hour ago said the same thing. to seese are we likely come out from corporate american reaction? on the international side, people are talking about bringing back all of the cash they had stored overseas. trump said it would be about $4 trillion. it will not be quite that much, but there will be trillions of dollars. fore was not an advantage companies to bring it that, but with the discounted tax rate, they will. the hope for republicans is that it will be used to build new plants, higher workers, pay existing workers more. democrats say that is not likely to happen.

willhat balances out depend on the popularity of the bill. it suddenly there is a hike in jobs, it could get more popular. >> thank you so much laura davidson. busy reporting on all this. joining us now to talk more about taxes is and connor. ed connard. ed, good to see you. was it all worth it? was it really worth it? think the tax cuts are essential. they make us more competitive internationally. they will stimulate domestic investment. we had an antiquated tax system at 35% marginal rates. the rest of the world had moved ,o 20% in territorial taxation or they were fruitlessly trying to collect. we never collected them.

it does not work. i think it was long overdue. we paid a high price to get them with probably a $1 trillion when it. we had someone on earlier in the last hour from aei who was all for what is been happening with this bill, but still admits that this will only add, maybe 2/10 of 1% in additional net growth to the economy. most americans do not like this tax bill. so, was it all worth the cost? ed: i think it's worth the cost. over 10 years is pretty significant on $20 trillion. even in the most conservative about $1, you borrow trillion to get to trillion dollars of accumulated gdp. i think because the -- >> not of their voted out of office.

ed: i think they are going to be voted out anyway. it is difficult for a sitting president to hold on to the house in the midterms. i think the democrats did a very good job of selling against this bill, which i think on the other side ironically means that the republicans had to give more money away to the middle class in order to make it more popular in the long run, to try and bolster themselves politically because of this. think even president obama recognized that we needed adjustments to our corporate tax-cut. you probablyhat, could've sold corporate tax cuts more effectively than republicans can. and, we probably would not have given as much a way to the middle class to try and sell this to make it work. the public things if you lower the corporate tax rate, investors will put that money in their pockets. they do not see the competition that forces lower prices, and those lower prices get passed on to customers. ultimately, it affects wages.

>> and come up tough of a cell is it for the republican party to sell this to the american people? we talked about how popular this is. some polls suggest that americans think their taxes will go higher next year. do not think republicans did a good job of selling it. again, they think all we have to do is wait for a substantial increase in after-tax income because you're not paying nearly as much tax next year as you in that will make you satisfied and happy. i think they think by the end of voters willaxpayer see a significant increase in their after-tax income and reduction in taxes and that will sell the bill. i do not think voters are very deficits,he particularly the long-term effect. we are on our way to a hundred 50% of gdp, so a trillion dollars is actually smaller in

the large scheme of things. i'm not in support of increasing the deficit, but i do not think it will have a big effect politically. >> we heard comments from gary cohn, who seem to focus on carried interest in quiet state on the hill. and discussedress his attempts to repeal carried interests. how does it make it? ed: i'm a big beneficiary of carried interest, to be clear. , but easy to talk about extremely difficult to do anything about it. you are just reassigning capital gains from one investor to another. if you do that with a call option, that reassigned capital gains could be taxed at capital gains rates. similarly, it is capital gains, it is reassigned from investors to the general partners that may end up getting caps at capital

gains rates. the reason they don't get them is because corporations are double taxed. when they take the deduction as ordinary income, the government says we are going to charge you ordinary to make up for the fact that the corporation did not pay those taxes. and so, there is that case of options or in private equity. one last question, because cohen did mention an increase of wages. will it? ed: not as much as proponents are trying to make it out to be. they are obviously trying to push the extreme as far as credibility. they'll take them. yes, it will increase them, but it will be hard to see. if you get a lower tax rate, your profits go up. its first competition and investment, and a lot of that gets passed on through lower

prices. we are likely to see less inflation, lower prices, but not pretax wages go up. their hourly wages will go up. they will see after-tax wages go up, because the tax bill will be significantly less under this bill. >> good to see you ed conard. author of several new york times bestsellers. looking ahead, china signaling a three-year critical campaign on battles. the latest with bob for master and about a half hours time. up next, a look at the bank of japan's final meeting of the year. this is bloomberg. ♪

>> we are counting down to asia's first major market opening this morning.

japanese futures look slightly lower here. this is "daybreak asia." when the bank of japan wraps up its final meeting, we expect the new change in policy and perhaps a change in the forecast for 10 year bond yields. institute economist and former boj assistant governor joins us from tokyo this morning. thank you so much for joining us. of course, the focus is going to be more on the press conference and the signaling from the governor today. what do you expect he can say, and what should he be saying? >> good morning. the economy continues to grow at some pace.

it is all because of the high energy prices. if you exclude energy price from gpi, it is only up a little bit. that isn't indication of pressure on the economy. so i think there is another story about the boj continuing exceptionally well. so do not think that is the case. i do not think the boj will change course anytime soon. saying it is too soon to even communicate and exit strategy. but why do we hear the desert zirp speech a talk of reversal rate? was talked itself

about by some united states professor. is quiteboj has said the same as what they been saying for many months. it is been too low. it could be damaging to the economy. it has already begun the data has artie been done by a comprehensive assessment. i think the boj with this kind of communication line continues. impacts onining finance mediation. we are trying to strike a good balance between that. >> we had a prominent japanese economist on in just the past hour was arguing the other

direction. he is saying that the boj should in fact at more stimulus, particularly ahead of the down tech hike that will take place in 2019. he says that we have not been allowed to see the inflationary effects of stimulus. that we need to add more to counter the effects of the sales tax hike. ma: actually, the economy is in quite good shape right up. earnings are high. the market conditions continue to go high. i think the economy in japan through 2018 and 2019 is .robably brilliant enough same time, if inflatoion has to be assue, it matter of patience and

reinvigorating the economy. this could be a long-time projectm. the question is whether or not boj has an option to better invigorate inflationary pressure for the economy. is it an imperative to strengthen policy? the maximum will continue. that whatthink happened a few years ago is not going to happen this time around? that we will not see japan plunge into a recession from such a tax hike? you not worried about that? momma: actually, what happened was gross consumption.

there were 2015, other factors. china, for example, and rate hikes in the united states. china still continues to grow. look at the u.s., and the fact that they are supporting the economy. looks positive, >> especially when you look at the internal dynamics of the economy. >> is the 0% on the 10 year jgb at what point do we need to see a magic inflation number before fine tuning in the yield control target takes place? actually, this is a very

difficult question. when a central bond reaches 1%, it will probably be necessary for any central bank to participate. most people are aware that they would move near the reduction. of course, what the boj is going anything,d be, if taking into account mediation. rates hasin interest to be recognized by the market. i think some kind of convincing inflation timeline would cause the boj to decide on the issue. drivingis going to be the 10 year yield?

fed?it be the boj or the momma: what the boj is doing is separating external forces on interest rates from internal processes. convincing with confidence that they will be able to keep interest rates at 0%. this, in spite of what happens in the united states, japan, or elsewhere. i think we would do that. there is a lot of talk about your successor. unfinishedill him to seek aore all cap second turn? will he?

momma: the prime minister of the government will decide who will be the next governor of the boj. minister.e the prime so i think it is reasonable to that. but at the same time, i think the continuity of boj policy would be the thing we expect. this anyway. >> all right. i appreciate your insight. research institute economist and former boj executive director. for breaking news reports wherever you are, we have launched tick-tock by bloomberg. it offers live video coverage and hourly top of the news reports verified by bloomberg. get onto social media and follow tictoc by bloomberg. betty. apps: apple has combined

to offer a single approach that works across all devices. sources say software developers will be able to design a single app that works equally well with touchscreen or mouse or trackback. currently, they have to come up with two separate apps, one for ios and one for mac. users have long complained that mac apps get short shrift. blackberry sort of the most in two years after reporting revenue, saying that sales will be at the top of the forecast. 11%.ces rose more than orders thanks to new from the justice department, nato, the dutch government and deutsche bank. and chasing chinese tourists in evaluating the long-term potential of the company's -- of the country's $45 billion digital payments market.

alipay grew about eight times in september, and now has 38,000 vendors using it across the country. stay with us. as is bloomberg. ♪

♪ a.m. in hong kong. a sunny morning at victoria harbor. several minutes from the first asian market opening. p.m. here in new york. as you can see, markets closing to the downside. this following record after record of highs. i am betty lou in new york. and i and yvonne man. republicans finally passed a tax bill, sending legislation to president trump to be signed into law.

it is the tax code in more than three decades. it is the president's first major legislative victory. it provides a permanent tax cut. not a single democrat in either chamber voted for the measure. is said to have arrested more people and frozen more bank accounts and its continuing crackdown on corruption. bloomberg is told that new suspects are being detained, and banks have been told to freeze accounts of people who are not under arrest. the kingdom is hoping to recover as much as $100 billion from settlement deals made with those in detention. catalonia votes later on thursday in an election ordered the spanish government seized and sacked local leaders. several ousted lawmakers are in jail, and the president is himself a deposed exile in brussels.

mariano rajoy has been paying for the status quo by boasting of his crackdown on separatists. is suspected of initiating to attacks on the crypto currency exchange you bit. say the exchange was targeted by hackers back in april, when it was operating under different name. youbit says 20% of its assets were stolen. it went into bankruptcy after announcing the attack. powered by more than 2700 journalists and analysts in more than 120 countries. i'm courtney collins, and this is bloomberg. >> coming down to the market opening in tokyo and seoul. at how bond traders have lost their holiday spirit. >> that could be the case of the grinch among us as we look at gains from the u.s. petering out

later in the session. put it on the board, you can see the mood is looking low. we may see gyrations for japanese markets with the yen back above 113 and korean investors having a sense of what is going to happen. of course yvonne, we are keeping our focus on the bond markets given the retreat on treasuries. bbg3653, where yields have reached a curve steepening. so this is extending the global bond selloff sparked by concerns, and hawkish central bank talk. quiet trading come a but it could reach a december hide this pickup in yields. on the 113 yield market right now. betty. we saw today in the

treasury markets of bullish mood. what are you seeing? so let us take a look at the japanese session. a $141 eye on million occupation. subaru investigates claims of fake mileage data. also, tourist arrivals in japan rose. in sydney, we are seeing a drag come through from the ruling states in kelco as sectors. set to snap a three day rise, so a'sk out the map for the next 200. resources are gaining ground in sydney right now. have rent back above 64.

but take a look at what is helping lead the 200 higher, we have food. thank you so much, sophie. now, a closer look at the u.s. market. for the s&p end of the day, almost where we began. a lot of fluctuation in between. reaction to the tax reform bill was somewhat tepid. you have consumer real estate and shares dragging on the s&p. that created some fluctuations, but as we go to the close, not much changes you mentioned. you do see a slight gain on the russell 2000. also with the members most likely to benefit from tax reform, although the general agreement has been priced in. let us go to market snapshot. what you see again, a little pressure on the dollar. bonds crumbling. oil above $58.

gold edging a bit higher, although we see fluctuations in extended trading. in.o the bloomberg thisve been better in month of december. however, there is a view that a lot of the drama and anticipation has passed. we are looking at end of the year repositioning. a lot of these stocks will selloff after the bill has passed. to see theait beginning of the year before and more significant selloff. thank you, su. tobacco in real estate were a big drag. what stood out for you? su: behind the benchmark that did not move much, chipotle was under enormous pressure as there of possible new illness

outbreak in los angeles. fedex really doing well. analysts pointing out that it is robust. it's prospects in europe have .iven it an edge investors like that. and red hat the software company under pressure with negative results in terms of earnings. the chipotle chart, because his is been closely watched. it looks like the company was launching a comeback after some serious have crises or concerns -- some serious health crises or concerns. quickly to fedex again, or i should say at&t, the carrier lost the battle with the government over the time warner acquisition. here it is celebrating the tax-cut bonus. -- some the motive baby say the motive may be to butter up the trump administration. >> amazon stands out with

several milestones met and passed. they include shares topping $1000, with stock up over 50% this year. it is on track to becoming the first u.s. retailer to hit $1 trillion worth of sales. joining us now, jitendra waral. what a year for amazon. how did it reach that mark? alibaba provides gb number, amazon does not. what we did was, we looked at impact from segments of the gdp within the retail cloud services and advertising that they can target, and how these markets are growing. what we find out is, about 16% of global gdp excluding china can be addressed by amazon. the direct market of e-commerce

clout that they are going after is growing double digits for the year. so by 2025, even if they marginally beat the growth, they will have a trillion dollars in gross sales. revenue should triple over the. . period. sales, thisross includes grocery. but what about amazon prime? what potential does it have globally? how may people do not shop on amazon? jitendra: great question. next year, we estimate prime membership will cross 100 million. when you look at and global sample size of digital buyers, it is 1.1 billion by 2025. it will cross 1.5 billion by 2025, rather. look at penetration. 800 million people globally are not shopping on amazon. so they are using video and alexa to attract people to the in hopes of expanding

avenues for advertising dollars later on. it is growing and growing. they're heading in one direction. what is the biggest risk for amazon? regulation. we talk about antitrust issues. their attacks applications for the third-party seller business become the vigor and bigger. in fact, more than half of gross sales are coming from third-party sellers. it will make up a bigger portion. the recommendation is that the top for competition. walmart is stepping up again and groceries. that could delay. local competition in southeast asia from alibaba. but look at how amazon wins, and they are in the budget. they spent the most amount of r&d dollars at any public company in the world, at $20 billion. that creates a moat around the.

em. they are already 6 to 7 years ahead. i think regulation and competition will be the biggest risk. >> jitendra waral, thank you very much. now, let's switch over to china. a leading chinese think tank says the economy will slow down slightly next year. the chinese academy of social sciences forecasts gdp at 6.7% in 2018, that is down from 6.8% this year. they announced a three-year drive against what they call critical battles around financial risk, pollution and poverty. enda curran joining us from hong kong. the main message was about controlling financial risk, so tell us exactly what they were referring to when they talk about risk. >> good morning.

the focus is on keying up the banking sector. with targeting, who knows? perhaps, it is an acknowledgment that the economy and handle deleveraging of the financial change, chinaader does want to keep a grip on its own situation. they want to keep a grip on the base of credit growth in the economy. in the near term, the focus is banking andhe financials sector. it remember, at the same time they are trying to curb pollution. they have a lot of objectives, and ultimately do not want to take anything on that hurts growth. >> you cannot do everything it wants. but when it came to monetary policy, they are stressing this prudent and neutral policy stance for 2018. it is not like we will see benchmark rates go up anytime soon. endra: you are exactly right. the fed is tightening. we see tightening in europe.

there's already an indication that china is heading in that direction. most economists do not expect an increase in the benchmark rate. at least, not one that really impact the economy throughout the first part of 2018. there was no indication of a near-term shift. there were some omissions when it came to corporate deleveraging. we've seen the some language before. does this mean that corporate deleveraging takes a backseat in 2018? endra: ultimately, china does not want to promote the culture of zombie companies relying on debt to stay alive. promote consumption and services. they do not want to have an old sector economy that relies totally on debt. the message for their near-term focus is financials for sure. that does not necessarily mean a

green light for the zombie companies to continue operating as they are. >> and a, thank you. chief economics correspondent in hong kong and her . the campaign against those critical battles mentioned. we will break it down with bob hormats. stay tuned, this is bloomberg. ♪

♪ this is "daybreak asia." as we just mentioned a few moments ago, chinese leaders wrapped up their annual behind closed doors were conference. they are reviewing the economy in 2017 and looking to the challenge is to come in 2018. let us discuss all of this with kissinger associates by's chair

bob hormats. here is kathleen hays. bob, you have been reviewing some of what came out of this. what is your reaction? laying this out is one thing, but executing and is a whole different story. is meant to give a general idea of the direction in which they are going, although the meetings themselves tend to be more detailed with instruction to various ministries and localities, provinces for instance. the key elements are one to achieve quality growth. not so much rapid growth, but all over growth. that means moving from heavy dominance on, say, investment and capital expenditures, and

more in terms of services or technology or developing brands. the second is alleviating or reducing poverty, not just in the cities but the agricultural parts of china. third, the environment. it is politically important, because a lot of parts of china are subject to a lot of toxic fumes and badwater. yvonne: right. know thathinese also the politics of china demand that people live better quality lives, and they do not want their children subjected to that. let's just take the environment for instance. getting rid of the smog in the fast-growing cities. an economic and social situation, but it is also political. so let's take that one example. how can chinese officials make a difference there in 2018? what do they need to do? bob: will they need to invest.

one of the major points in the short summary we have gotten from this conference, one of them was to focus both public and private investment on improving the environment or avoiding environmental degradation. so they clearly want to inject a lot of capital into the green economy. they made the point, resident xi jinping himself made the point during the conference, the areas that are not green cannot prosper. which is very interesting thing. you would not heard that being said by a lot of politicians here, but they said that. the chinese burn a lot of coal, but they are the leading force in the world in solar technology. not so much windmills, but solar. they do want to do it for economic and political reasons. the things that comes out of this, moving from

made in china to created in also relying on innovation. they goingn is, are to modernize state enterprises? are they going to rely on foreign companies to come in? btv659, how employment has come down over the years. everywhere around the world. what is happening there? almost certainly come a xi jinping once to have state enterprises play a greater role in the economy, but not the same role as it has been playing in the past. you want to be more efficient. he wants to produce with less borrowing. he wants them to improve their supply chains. he wants them to be more environmentally friendly. party tothe communist play a leading role in the planning of the strategy for state enterprises, so they will

continue to play a greater role. many of the best companies in the private sector companies that are integrated -- innovative are starving for capital. if you want them to play a new role, you have to enable them to get more access to the capital markets. foreign markets is an interesting thing. mentioned two or three times in the short summary that we had in chinese of the conference itself. what happenson is, if you have a foreign company that has the same kind of technology that the chinese wanted to develop alongside their own companies? did encourage partnerships? they talk about production of intellectual property, trade secrets, and so they need to be more stable in the way they conduct creating rules. you have been going to

china for years. you watch the list for. is there a dynamic tension between wanting innovation, wanting to open up, and xi jinping making it clear that he is in charge and this is a socialist communist country? is there uniquely chinese way to balance us? bob: they call it socialism with chinese characteristics. but they socialism, also have -- and they talk about it in the summary -- a greater role or the market. the party to want have control over the direction of the economy, and to a large degree, over allocation of resources. whether or not they can roll all of these things together is a huge question. they want to do a lot of things, but they want the party and state enterprise to play roles. they want innovation and new ideas. to a degree, they want foreign technology to come in, at least for a moment to help and do this. whether or not foreigners will , the chinese will have

to work to given that level of confidence. aey got it today, but to lesser degree than they had 10 years ago and they're worried about it becoming a problem in the future. there was no mention of president trump's national security speech in this statement coming out from the conference. but we heard the rhetoric before of president trump saying that china is no longer a u.s. rival. beijing responded that you should never be in an "i win, you lose" mentality. does this have to be a zero-sum game? a point.chinese make but under what terms or conditions do they were together? they are still things worried about, companies that are worried about intellectual property. others are not so worried, and they believe that they need the china market to grow.

it is been a big market for high tech companies. so there is a possibility of working this out. but, to do that there has to be some agreement on the protection of intellectual property and trade secrets, and that needs to be -- and is being -- discussed. they need to move in that direction. it will help china to grow. it will help companies to feel more comfortable. hugeecond area is the amount of infrastructure along the silk road. is very costly. some american companies have great capabilities in the infrastructure area. do they want to play a role in this process? does the chinese government want them to play a role? working that out is an area where you may also get developments on both sides. third is the overall global economic and financial system. china has mentioned in this communique stability.

there is very active relationship between china and the u.s. treasury and the pboc and the fed. so there is an area where they need to work together to ensure that the system is stable, and that the system does not lead to unpredictable movements which would be harmful to chinese trade or american trade. there are areas where there can be leeway. they will not come by these solutions by the u.s. banging or battering china. , it is a slow process and sometimes, having negotiators makes it frustrating. unless these two countries can get together on trade secret protection and improving the global trading order or maintaining stability and dealing with environmental issues, it is hard to make real progress. >> bob we are going to leave it there. i also want to thank kathleen hays.

more ahead on "daybreak asia." this is bloomberg. ♪

♪ yvonne: coming up in the next hour of "daybreak asia," we are awaiting the final boj decision for the end of the year. what we expect.

♪ in hong8:00 a.m. here kong. we are live from bloomberg's asian headquarters. i am yvonne man, welcome to "daybreak asia." republicans finally pass their tax cuts. the most extensive rewrite in three decades. not a single democrat supported the bill. markets shrugged at the news. wall street closed slightly down. the tone is set to spread in asia, as well. betty: from bloomberg's mobile headquarters, i am betty liu in new york. fore combines apps touchscreens, systems that can work across all of their

devices. get smart, singapore and braces tech for their aging population. ♪ yvonne: now that we have tax reform out of the way for now, until we see the signature from president trump on the tax overhaul, a lot of focus this morning will be on the bank of japan. not just on the signaling from it comes towhen yield curve control and the etf purchases. i have a chart that highlights this, g #btv 8826. we have seen the boj recently toned down there etf -- their etf purchases. they don't have to because we and nikkei 225 holding on to the 20 year highs. at what point will this look

frosty for the markets and boj to start thinking about downsizing or discontinuing altogether their etf purchases? we are hearing from analysts this market is reflective of corporate earnings. it will be a big judgment call for 2018 from the boj. bety: kuroda's remarked will parsed and watched closely. may even be splitting hairs with his words. slowing down purchases not the same as stopping or even pulling back. boj will be the big event. here in the u.s. we do not see that much reaction to this historic event, this big legislative victory on tax reform. very quickly, pulling up the boards in u.s. markets. we closed lower to unchanged in the markets.

in the meantime, let's get to first word news with courtney collins. >> first up, a leading chinese think tank says the economy will slow slightly next year. alongside a decline in investment growth. the chinese academy of social at sixs forecasted gdp point 7%, down from 6.8% this year. announce aers three-year drive against critical battles -- financial risk, pollution and poverty. prime minister theresa may hit back at the increasingly tough line from brussels, saying that hate -- the e.u. will meet what is best for britain. barnier said the brexit transition period would allow the uk's understand the

challenges ahead. isthe transition period useful and will enable the administration of britain to get prepared, prepare themselves, for the kind of challenges they will have to face at their borders, which are also our borders. >> saudi arabia said to have arrested more people and frozen more bank accounts in its continuing crackdown on the latest corruption. bloomberg told new suspects are detained and banks have been told to freeze the accounts of people not under arrest. the kingdom hoping to recover as much as $100 billion, from those in detention. koreas from seoul, north expected to have initiated the attack on youbit. they say the same exchange was targeted by north korean hackers in april, when it was operating

under a different name. youbit says the attackers escaped with almost 20% of its attackers. they went into bankruptcy after disclosing the attack. the judgee top court, ruling it should be regulated as a taxi company and not a tech service. the european court of justice withoutviews a drivers licenses -- the first definitive being -- finding they must regulated by transport authorities. it is a challenge to other gig economy companies, such as airbnb. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am courtney collins. this is bloomberg. ♪ yvonne: courtney, thank you. let's look at the market open in tokyo and seoul. things in the red as we count down to the christmas holiday. red, nomoore in the

green insight, asian equities under pressure. asx 200 halting a three-day rise. the kospi lower for a fourth straight session. exports to look out for come the numbers coming out this morning. days.in the first 20 we do have the nikkei losing 0.2%. it is still set for a weekly rise of over 1%, its first weekly advance in three weeks. bond bulls beware. given that retreat we saw in treasuries overnight. we do have a 10 year yield sticking around at 2.5%. there could be downside pressure for jgb. that may limit the downside. we are waiting on the boj policy decision. the dollar-yen sticking above 113, while volatility for the pair nudges higher. high,olding, 26 month

after firm resistance after 134.50. pressuret the topix, coming through with materials and real estate sectors, dragging the most on the index. when we take a look at equity movers, let's pull up the board to check stocks. asahi selling its stake in ofna, tsingtao, for millions dollars. murata on the radar, and subaru, after investigations of fake mileage data. nissan declaring leadership changes. rising for the first time in two weeks, after its earnings updates. a look at sydni under pressure. rising afterrces

they agreed to their $430 million takeover. movers, as of the you mentioned. thank you, sophie kamaruddin. the votes are in. congressional republicans having passed the biggest overall in u.s. tax code since reagan was in the white house. president trump and the gop celebrating with the speech. pres. trump: we will bring at least $4 trillion back into this country, money that was frozen overseas and in parts of the world, and some of them don't even like us, and they had the money. they will not have the money long. betty: all that is left is the signature. joining us, our capitol hill reporter, laura davidson. is the president going to put the pen to paper? laura: that will not happen until january 3, 2018. the reason is, every step of

this bill is a technical issue to deal with. if he were to sign the bill today or tomorrow, he would trigger automatic spending cuts to medicare and medicaid. he needs the senate and house to get a waiver, the pay-as-you-go rule. this bill as to the deficit, would trigger deficit cuts. he needs to get that out of the way, which could happen as soon as friday. there is a government spending bill coming up. betty: republicans say this legislation will increase job and grow wages, the elusive wage growth -- is it? laura: this is the theory of trickle-down economics -- if you give more money to the corporations at the top, will they expand businesses, pay their people more money? there were a couple examples today, at&t and comcast both giving their workers $1000 bonuses.

that is one example, a one-time hit, versus agreeing to hire more people for perpetuity or higher wages. obviously we mentioned how no democrats were supporting this bill. given how divided it has been over tax reform, and how quickly republicans were able to sign this, or get it ready for president trump possibly to sign in january 3 of next year, will there be unintended consequences and changes we need to look out for? laura: that is very likely, just with this be this went through. as recently as yesterday evening, democrats pointing out mistakes, things that did not comply with senate rules in the bill. as we go on, you can expect there will be perhaps the whole second bill to correct this first bill. republicans are planning on a technical corrections bill. how widespread these changes are

remains to be seen. particularly if in a year or two they have more democrats in the house or senate, you could see them rollback or change significantly, because democrats are not happy, no democrat supported the bill. they would like to see a lot of this undone in the coming years. yvonne: laura davidson, bloomberg capitol hill reporter, from d.c. the tax bill has been passed and gone to the white house for the president's signature. let's see what it could do for corporate america. ramy inocencio has the charts you need to know. ramy: it is interesting to see in my first chart, g #btv 7169, the enthusiasm. the investor enthusiasm over the past few days in terms of the most taxed companies in the u.s. this is a ratio of the most taxed companies compared to a basket versus the s&p 500. if it is up, the most taxed

companies are doing better than s&p. if it is lower, it is not doing as well. ever since through march, april, may, it has been over performing -- the most taxed companies, that is. but as we have been hurtling toward the certainty of passage, we see this push-up. it is the highest since march or so. possibly could get higher, looking ahead, as all these stipulations get solidified the as donald trump goes to sign a january 3. g #btv 3316, this is more of a condensed timeframe. that was the past year or so, this is the past month. up between the highest taxed companies in the goldman sachs basket, the white line going up higher. and the low tax bracket, which as you see has remained flat. interesting to know, a couple milestones. the highest taxed companies take

one leg up and another. november 28 the budget committee in the senate passed the version of the tax reform plan. december 2, the senate passed a version. december 15, a couple gop holdouts said they would vote for the bill -- mainly susan collins of maine and marco rubio of florida. a great look at the evolution of corporate tax rates and personal tax rates over the past 40 years. the blue line is the affective corporate tax rate. in 1967 it was around 40%. halved.w have -- you can see the personal income tax rate has held at 15% over that entire time across the blue and red, respectively democrat and republican administrations.

interesting to see. those are your three bloomberg terminal charts. betty, back to you. betty: thank you, ramy inocencio. we look at the future of health care with singapore's senior minister of health. talks about using technology and the challenges of an aging population. the final bank of japan policy decision of the year. boj director joins us to discuss what we can expect later this morning. this is bloomberg. ♪

yvonne: this is "daybreak asia," i am yvonne man in hong kong. betty: i am betty lou in new york. the bank of japan wraps up its final meeting of 2017, with no

change in policy expecting. focus turning to what lies ahead in 2018. kathleen hays with more on what to expect from the boj. reason forhere is no the boj to be changing policy right now. i think a lot of the focus is, we are wrapping up the year, what will happen in 2018 and what will come out of their minutes, the press conference with governor kuroda, that gives us so -- some sense of how things are shaping up. we know the economy has been growing for seven straight quarters, the best track record for gdp since the 1990's. governor victory for kuroda and prime minister abe. that 0.8.pi, is a year-and-a-half ago it was still negative. that is where you see a sense of victory.

change of policy, i do not think governor kuroda will signal change their -- there. to getor later they have a little off zero, that 10 year jgb. it may be exacerbated with the global bonds selloff. will the boj be able to make a shift like that? maybe that makes it less likely. governor kuroda's term will be up in a couple months. is he going to be reappointed by prime minister abe? tons of questions undoubtedly after the meeting. people getting some sense from him, is he interested? i do not think governor kuroda will give us any hints. said --y advisor to abe a bloomberg survey, he is far ahead. everyone thinks prime minister abe will ask him to stay on, and he will. yvonne: stay with us, as we bring in our next guest, shigeto nagai, head of japan economics.

also former director general for the boj. thank you so much for joining us. is 2018 going to be the new direction for the boj? kind of a new direction. but i really echo what kathleen said. there is no chance the boj will change, the current policy framework. and also the current target in the coming years. event ofhe probable downgrade to inflation projection. kathleen: let's take a look at what is driving inflation right now. inflationdp growth, has started to come up. governor kuroda has made optimistic comments about wages. maybe not as much for big corporations, but small and medium companies. 89, welook at g #btv 84

can see the average monthly earnings plateauing. you do see the key gauge of inflation starting to rise. which camp are you when? -- are you in? steady as they go, or they need to do more, as they did at the last meeting? shigeto nagai: i think the current pace of wage increase is ok for part-time workers. the wage increase is reflecting this tightness in the labor market. at the same time, the majority of the labor force, regular a's increase, i am not expecting much of an increase in the coming spring. down the pace of inflation in coming years. myself and others do

not see that. 2% inflation target in the short-term and medium-term. bojng said that, if the does more in terms of monetary policy, will it raise the inflation rate up to 2% -- i doubt it. i think the current framework and target is the ultimate monetary easing. there is no way to move beyond this point. betty: i want to ask you about what you expect to hear from kuroda. what will you be watching out for today? basically, he will see this better economic condition, in terms of growth

rate and gradually rising inflation rates. he will stress the economy and prize heading to the right direction. that is a way to justify the is optimal in, this conjecture. kathleen: should governor corroded the reappointed? is he the one for the job, or is it time to move on to someone else? if they want to start graduating policy, it may make it easier. shigeto nagai: i think for prime minister abe, governor corroded is the most safe choice. -- governor kuroda is the most safe choice. if he takes offer. but the person who follows the current strategy is the best choice. the strategy for the next candidate, he or she should be a

good communicator to the financial market. especially foreign-exchange markets. that is my opinion. yvonne: this is coming when the falling against president trump, for corporate tax cuts, but only for companies that will raise wages and capex. how inflationary is a 20% corporate tax rate? i think even if we have a better corporate profit, the key for this toanese economy is how transfer that increase in profits to household sectors, whichh higher wages, could provide positive feedback for the economy. realize the only way to

this 2% inflation target in the coming years. yvonne: we will leave it there, shigeto nagai, oxford economics, head of japan economics. and we want to thank kathleen hays. find in-depth analysis and the days big newsmakers on bloomberg radio. check in with "daybreak asia." you can also download the app or access the of bloombergradio.com. this is bloomberg. ♪

betty: a quick check of the latest business flash headlines. short seller carson block has a new target, focused on it chinese stock that went public in july. -- they saylete they make money from lending, but block says almost none of its business is real, and the

only person taking out loans is the chairman. the stock sank briefly but then recovered strongly. >> china internet nationwide financial services, just in the name, the only thing accurate about that is china. there is nothing internet about it, nothing nationwide. and from our vantage point, this thing is a complete fraud, a total zero. yvonne: blackberry sores of the most in almost two years after reporting record software revenue, and saying for your sales at the top of forecasts. they bailed on enterprise software and services, rose 11%, to $97 million in the three months through november. this is thanks to recent new orders from governments and banks. betty: alipay chasing taurus in japan. evaluating the long-term potential of the country's $45 billion digital payments market.

they say the amount of payments processed on alipay in japan grew eight time since september. they now have 38,000 vendors using alipay across the country. this is bloomberg. ♪

yvonne: 8:30 in singapore, near the open of trading. we are envious of the warmth in the lion city. i, in hong kong. betty: could it mean -- could not be more chilly. let's get the first word news. >> republicans finally passed to their tax bill, sending legislation to president trump to be signed into law. it is the most extensive change to the u.s. tax code in more than three decades, and hands the president his first legislative victory. it provides a permanent tax cut for corporations, and short-term

relief for individuals. us -- not a single democrat in either chamber voted for the measure. naturalamco looking for gas assets from russia to east africa, as it tries to meet growing demand. told bloomberg aramco has failed to find enough natural gas reserves. they are looking for ways to bridge the gap. >> saudi aramco may invest with russia. it is a clear possibility. not only a question on gas, but refining investments and markets that could take either or both, crude oil. >> the bank of thailand cap rates unchanged in the face of subdued inflation. the one-day bond repo rate stays at 1.5%, since 2015.

the latest r.b.i. minutes show a more hawkish tone on inflation, reinforcing expectations the easing cycle might be ending. in taiwan, they make a rate decision later thursday. mexico's new central bank governor maintaining a tight policy. uncertainty over trade relations with the u.s. make it impossible to change course now. whenon took over last week the board voted for a 0.25% increase. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i am courtney collins, this is bloomberg. yvonne: thank you, time to see how the asian markets are shaping up. you see the regional benchmark down about 0.1%.

the story has been in the bond markets. we are still trying to figure out what led to the jump in yields. sophie: the third day of yield curve steepening. this sticking around the 2.5% level. the pressure continuing for asian bonds. korean debt yields rising three basis points. korean bonds sliding along with the won. the kospi falling to an october low. this index snapping a three-day drop. let's take a look at what is happening in south korea, them kospi falling for a fourth consecutive session. the biggest laggards of falling almost 4% this morning, stocks like hyundai and lg electronics. amid the bleeding, a slight rebound when it comes to tories amend cosmetic stocks. pulling up the board to see you those -- to show you those movers. concerns over china banning tourists.

but they say they do not know about tourist suspensions to south korea. i want to highlight korean shipbuilders. they have lost over 40% in this december and remain under pressure. shipbuilding sinking to a fresh low. betty: sophie kamaruddin there on the markets. big headlines on uber. the european union delivering a blow, ruling goobers should be regulated as a transport company, not a digital tech service. former -- over has employee former orbitz as its chief officer. first up, what do we know about barney harford? we thought dara would not bring in a number two. when he took over in

september, they thought he would not bring in a number two coup. he did not promise that, but that is what we took away from it. in fact, he made a realization he needs someone else, next a pair of hands. has problems and challenges facing uber, little -- literally all around the world. the problems in the e.u., london, brazil, competition everywhere and across the u.s. he cannot be everywhere at once. he will be waving the flag of uber. he needs someone at home to be making sure things are running the way they are supposed to be running. mostof operations, big, valuable private company in the world. he needs a somebody to be running the ship while he is waving the flag. betty: he has to be the ambassador, dara has to be the

ambassador for the company. but it sounds like he did not do enough in the e.u. >> i do not think the best ambassador in the world could have resolved about one. the e.u. limiting uber. uber wants to present itself as a technology company, and at -- an app that connects passengers with drivers. has said, this lets unlicensed drivers pick up passengers in their cars, when most of us think of uber in the u.s., that is what we use most of the time. , basically saying this is not a tech company. likell be regulated just these drivers, just like these taxi companies. handseally ties uber's with regard to this product and sets a precedent. you wonder if you will see that take part in other -- take hold in other parts of the world. yvonne: that distinction is

quite important. a very costly distinction for uber. you mentioned the implications for uber and other parts of the market outside the e.u. it also has implications for the gig economy. the likes of airbnb, the as well. >> we are able to rent out parts of our homes, rooms in existing homes. -- they are not subject to the tame kind of the scrutiny, rules and regulations that companies, like hotels, like bed-and-breakfasts, are subjected to. we do not have to meet the same requirements. aredo wonder whether there going to be other countries in the world, whether parts of the e.u. will say individual home renters need to be subjected to the same rules and regulations as the marriott.

saying uberresting, is a taxi company, then airbnb is considered a hotel now. thank you, joining us from san francisco. apple said to have a plan to combine iphone, ipad and mac apps as early as next year. it will cut the workload of software developers. will they find a single application that works on all three devices? our technology reporter mark gurman broke the story. >> that makes so much sense -- why did they not do it earlier? >> it makes a lot of sense, part of the long-term initiative to make their ios devices more like max and vice -- and vice versa. why haven't they done it? there are a lot of resources involved in making the shift. explained, it is

the biggest thing to happen since it was converted to the iphone operating system a decade ago. joe: explain what that will mean for users. will the app -- look exactly the same on any platform? how will we notice this? mark: it means a lot for the end user and the developer and apple itself. now you will be able to run your iphone and ipad applications on your mac. there will be the mac interface versus the iphone interface. one type of app versus separate types of apps right now. whatever app you have you can run on any device you have in front of you. joe: could we get to the day and ipadses and max are on the same operating system? mark: i think it is the goal. that they want to merge ios. separatethey want two

devices. it is possible. another strong indicator that is what they are looking towards. they are looking to expand the ipad chip systems. they're coming out with the new ipaq pro this month. new ipad pro this month. interesting, i get the sense mac users have not been cater to for a while. does this suggest apple will be focusing more on the mac and making sure software and technology, innovation and resources will go toward the mac, rather than taking it for granted? mark: that is exactly right. apple has neglected the mac in recent years. we had a great story a year ago talking about that. apple has restricted its priorities to build more professional macs. some loveving the mac

again, with an iphone bend. not giving a lot of attention to pro-mac apps. but just sending them to the mac, which makes the ecosystem on the mac stronger for customers. something customers asked for? mark: for years, you can look on wishlist. the apple developer community give a list of 10 to 20 things they hope apple will announce that year. this has been on many wishlist for many years for multiple developers. it is a long time coming for some of apple's most loyal app developers. betty: that was mark gurman on apple. let's pivot and talk about commodities. struggling noble group says it waiver an extension on a for a credit until it matures. this gives commodity traders breathing room, as it tries to

reorganize more than $3 billion in debt. david young has the story for us in kuala lumpur. how significant is this? david: noble has implicated they want an agreement for traders before christmas or end of year. that is not going to happen now. the extension gives the company breathing room to negotiate. and to avoid debt default. at the same time, it also suggests creditors are basically holding their ground and trying to extract as much concession as possible from the company. much time has how noble bought with this waiver? how critical is it in terms of noble's survival? absolutely.

i think noble has been in a crisis the past three years. they have been selling assets. some of them are their most prized possession in -- possessions in north america. they have $400 million of bonds coming due in march. another $9.1 billion in revolving credit facilities. the next six months will be absolutely critical for them. yvonne: david, thank you, david yong, our credit reporter joining us from kl. meeting the challenges of an aging population. singapore's strategy in the future of health care. this is bloomberg. ♪

betty: this is "daybreak asia."

i am betty liu in new york. yvonne: i am yvonne man in hong kong. singapore aims to leverage its smart city strategy into health, as it expects its population of elderly citizens to triple by 2030. the senior minister chee hong tat says the government remains upbeat. >> aging by itself is a good thing. longevity, to give people a good life, they age well. this is a positive trend. in singapore, we see the lifespan, the healthy lifespan of our population, increasing over the years. this is something which we embrace. the key is, how do we help people to age healthy and well? >> singapore is moving toward a smart city. where does this intersect with health care in the future? chee hong tat: the use of technology is something which

the health care sector has had for many years. up with big data, it opens big possibilities. one thing we could do now that telould not do before is erehab. they need not come back for rehab services, but perform a rehab exercises under the guidance of a therapist from home, using a device and broadband. this opens up new possibilities for us to improve productivity. within hospitals, too. nurses known -- no longer need to take blood pressure and monitor vital signs of the patients. they just need to monitor it through sensors. all the data we collect on the computer so one nurse can effectively monitor the whole ward. we have other ways to introduce automation.

to pack our prescription drugs, medications, manually at a pharmacy. now with the automated system, it will pack bottles. this is innovation from our health care system, across different health care institutions. >> you have to talk about startups, singapore is encouraging a startup culture in the country. how are you tapping the private sector to get there? chee hong tat: i was mentioning partnerships. all the good ideas we want to be able to embrace will come from the public health care system or even the health care system. we need to look at how other sectors can help us, whether it is engineering, design, media, there are many other sectors that have good ideas that we can borrow, adapt and apply to the health care sector.

>> you talked about accessing the data. how was that translating to assets to come up with an electronic health care record? it looks like you have been looking at it for a couple years now. chee hong tat: we had the system in place, but it has so far been voluntary. the reason we want to make it mandatory is for the benefit of patients. from a patient's point of view, they will not only visit the public health care institution, they will also be visiting doctors in the private sector. when the patient most from one doctor, one institution to another, you want to make sure the data can flow. one positive design feature has to be respect for patient privacy. we will allow patients to have the option to opt out, if they do not want the data to be shared. but we do think it is important for the data to be captured so

that if one day they wanted to be shared, they have the option to do so. captioning -- capturing the data is important, but so is patient privacy. haslinda: it is all coming at a cost. health care spending expected to rise more than $1 billion by 2020. what impact will it have on taxes? how will expenses be covered? chee hong tat: to cope with it the aging population we have to be prepared. start planning now, do not wait until it comes, when we do not have time to make important steps to prepare. first, what i described transforming our health care system, prevention, going upstream, helping people to lead healthier, more active lives. haslinda: does this lead eventually to higher taxes? chee hong tat: we can't avoid health care costs going up. aging means you have higher demand for health care systems

and home care. all this needs to be funded. in a system where you want to ensure health care costs remain you have to put in place government subsidies. haslinda: when it comes to challenges for the future and health care, what is the biggest challenge? chee hong tat: it remains, how do we provide appropriate, quality care for patients? and how do we help people focus on leading healthy lives? the focus is not just on health care but health. we do that andif are able to help people stay healthy, that is the best way to help them have a good life, have good health, and eventually for the country as a whole, have a healthier, happier population. setty: that was it singapore' senior minister of health, chee hong tat, speaking with our

haslinda amin on the future of health care. find out more on our website, head to bloomberg.com\fu tureofhealthcare. this is bloomberg. ♪

♪ ."onne: this is "daybreak asia betty: now, to an exclusive interview with bank of america

ceo. he talks about tax reform, the state of the u.s. economy and prospects for europe. he looks at china and saying simply creating enough jobs for people is hard work. ourhey are working on it, research team, one of the best in the business, has been growing between 6% and 6.5%. it is that fundamental organization, industrialization, pulling people into the economy, they have to create a lot of jobs and that creates a lot of work. the shadow banking, all the things we see with policy changes, it is not news to them they have to figure this out. they are working on it, trying to engineer that change without slowing it down too far. that is the tension that goes on. so far, there have been times they thought they could do it. it is the second largest economy in the world. 6% is not a bad income --

outcome. >> a big central market for bank of america. in the past you had some interest to their. now china is saying we want to liberalize and welcome in u.s. banks, owned more than 50% of some of the equities. how big a priority is that for bank of america? outside the u.s., we do investing and we have that in china today. we have been moving along to do a couple other things, to allow us to do more with capital markets inside the country. on the equities side, we do not have any plans. we do a lot of hong kong. it is not clear how much is there for us today. but because it is growing and big, it it will have a lot more activity. more activity for global companies to help them go in. it is a good market for us.

we have 700 people that work inside their -- there. there will always be an institutional situation. we will be careful about making the steps, steps to equities, there has not been a lot of chance to make a lot of money. betty: -- yvonne: you can catch the full interview later on bloomberg daybreak: americas at 8:00 p.m. hong kong, 7:00 new york time. that is it for "daybreak asia." a quick look at what is coming up on a bloomberg markets. >> we're looking at tax reforms, how they play out. does it make any difference at the end of the day? will it really translate to workers getting more wages? we have seen at&t make that announcement, other companies making similar noises. yvonne: or could they buyback dividends? rishaad: and who does that help?

we will look at that with our guest in about 15 minutes. also, having a look at what we can expect from the bank of japan, looking to the last meeting of the year. yvonne: it has been pretty quiet, all of 2017. rishaad: they have not done much to change things. they had that stock buying program. and a bank institute dean joining us here in hong kong, looking at financials with david marshall. there we have it. betty: that is it from "daybreak asia." market coverage continues. this is bloomberg. ♪

cannot live without it. so if you can't live without it... why aren't you using this guy? it makes your wifi awesomely fast. no... still nope. now we're talking! it gets you wifi here, here, and here. it even lets you take a time out. no! no! yes! yes, indeed. amazing speed, coverage and control. all with an xfi gateway. find your awesome, and change the way you wifi.

♪ >> the republicans finally passing tax cuts. it is the first capital victory for president trump. china's leaders targeting the includingattles financial risk, poverty, and pollution. apple combines apps for touchscreens and trackpads. >> also coming up, and a target in china. company is a complete fraud. this