>> we are live from bloomberg asian headquarters. welcome to daybreak asia. the top stories this tuesday -- asia stocks building on wall street records. japan returns for the holidays with the nikkei shooting for 24,000. we are live at the korean border ahead of -- hi stay stocks between the north and south. the first in two years. global bloomberg's headquarters in new york, it is 6 p.m. on monday. bitcoin slapping on monday, worries about demand and regulation dragging down smaller rivals as well. president trump is said to become close to deciding on the

fed vice chair. richard clarida is out of the running. ♪ betty: we are watching for the fed news. we continue to watch the gains in the equity markets. i want to pull up a chart that basically everyone can go home, right? what i mean by that is that already with the record rise we have seen in the s&p, a lot of these year-end targets are already being blown out of hsbc, morgan stanley, bank of america. already being reached. everyone can go home, they have made their money, right? [laughter] yvonne: i guess so. it was interesting in that it has been four days but

it really feels like 40 days in how much we have gained in the last couple of days in 2018. big question is will we see a revision higher from analyst or are things good as it is or are there for the risks ahead? betty: that might have been what hung over the markets today. let's pull of the boards on where we end up for u.s. trades. a mixed trade. the markets trying to eek out. the s&p by 2/10 of 1%. the dow essentially falling flat. the nasdaq riding the tech betty:stocks, continuing to addt momentum. how much longer can they hold? that is a very big question for investors. yvonne: yeah, still seeing a positive outlook for asia for the tuesday morning. let's see how things are looking in new zealand. up 1/5 of 1%. we saw some big moves in the dollar overnight, gains the most

in three weeks. with the exception of the kiwi. trading getting underway right now. we are expected to get those building approvals numbers in the next hour. stocks up about 10 points. 78.44, the aussie. this month-long rally taking a bit of a pause as the speculative investors pull up the biggest short position in the currency in nearly two years. treasury gained. the curb slightly steeper. the aussie 10 year yield holding at 2.65. also coming back from holiday is japan. there could be a big catch up rally that is in store. we are eyeing the 24,000 level for the nikkei 225. n, the weakness of the yen will be helping. 113.14 against the dollar this morning. let's get you caught up with the first word news.

jessica summers has that from new york. jessica: an iranian petrol tanker it on fire could explode and create an environmental disaster. media says the body of one sailor has been found but 31 others remain missing. the tanker collided on saturday. china, south korea and the u.s. have sent vessels and planes to help with the search. toxic smoke is hindering the efforts. atlanta fed president has added his comments with officials concerned by low inflation and the risk of an inverted yield curve. says the two to three rate rises this year in less inflation picks up. the white house says it is very close to announcing a pick for fed vice chair after stanley fischer's departure. a slump in bitcoin has dragged down smaller rivals as concerns grow as regulators will tighten their grip on the market.

authorities in china and south korea areauthorities in china ah korea are increasing oversight and cryptocurrency trading and mining. the sec started cracking down on some digital sales known as ico's. bitcoin slumped as much asbitco, the most in more than two weeks. china's in her region has admitted inflating key economic data. it is a latest blow to the campaign to improve the quality of statistics. the region revised down the industrial outlook by 40% to $45 billion, while fiscal revenue was 26% lower than first reported. last year, it had faked data for three years from 2011. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. let's take a closer look

at the fifth straight record rise for the s&p. corporate earnings are the big focus, as well as a fresh round of economic numbers. let'snow a little bit of compln in terms of the direction of the u.s. dollar. su keenan has more with a mixed close today. weak. started out fairly it looked like we were barely moving in the s&p 500 and we got a record gain. also, seeing some dollar strength which we will get to. nasdaq higher at the end. gold -- oil, close to $62 a barrel which is a very bullish theme. let's go to 4792. as you can see, we have seen hedge funds take a sort of very bearish position on the dollar going into the new year. you can see this little bit of green. flirtingyou saw them back bullish and now they are bearish again. renewedbecause there is

renewed -- recording these three to four week losses. renewed -- recording these three to four week losses. let's show today's rare move. higher for the dollar and that su: gopro, huge example. this is the maker of the camera that has been favored by sports enthusiasts. the stock was down more than 30% early in the session as the company came out and said their holiday sales were especially week. competition is a big factor. the losses reduced by the close. , you go into bloomberg will see that the stock is down from 75% since its ipo. you go back a couple of years and this was a rockstar stock. it was not only looked at as a camera company but a whole media company because people would post the videos online. nick woodman, one of the highest-paid ceos has now announced he will only take one

dollar in compensation as a result of these current issues they are facing. let's take a look at dave and busters which is a retail and restaurant chain. taking another big hit on the day as they guide lower for profit and that it has to do with the change in restaurant chains. this is a big chain that appeals to family and younger people. video games are part of the repertoire but it has taken a hit. yvonne: thank you for that wrap up on what we saw overnight. north and south korea will kick off high-level talks in a few hours. the first in more than two years. the meeting is being seen as an opportunity to ease tensions after a tumultuous year in which kim jong-un's regime increased its nuclear program and president trump threatened to fury.ack with fire and

stephen engle joins us from the reunification bridge of a south korean side of the dmz. fury. tell us the feeling on the ground. looking pretty busy and lively where you are. can these talks go just beyond the winter olympics? stephen: that is what we are all expecting or anticipating. where the scopes of the top will alks will go. other issues could be discussed, such that of course is the nuclear eyes asian of the korean -- nuclear hiization of the alks will go. korean peninsula. also, the restarting of the industrial complex across the border. ventureecedented joint between the two countries that was shut down in retaliation for the north nuclear and missile program. let me set the scene. we are at the entrance to the

reunification bridge which leads into the joint security area of the dmz, where the talks at 10:00 local time, to hours from now, will take place. face-to-face between north and south korea. this is the bridge that leads in here. momentarily, we are expecting the south korean delegation to arrive. we have seen a couple of cars come through. l aboutd leave seou two hours ago and they should be arriving pretty soon to begin the preparations for the anticipated talks. not necessarily peace talks but direct face-to-face talks since december 2015. there is a lot on the line. we're anticipating a big delegation coming through. betty: we talked with a guest earlier, gordon chan, a longtime observer of north korean

relations. he said we have been at this rodeo before. if north korea does not get what it wants, we will see some kind of retaliation or tantrum. is that likely to happen if for some reason these talks don't make any progress? stephen: there is so much at stake for both sides and the fact that they are talking, if the north koreans have excepted the overture from the south from these talks is a good sign. do they go beyond the inclusion of the north korean athletes onto the south korean olympic team for the olympics which begin a month from today? if these talks can go beyond that, that would signal a victory for the south koreans and also the united states as well. because the ultimate goal for the united states and south korea and japan and others at stake is the denuclearization of the korean peninsula. that is very unlikely to happen

but result of these stocks, the fact they are talking is a good thing. there is wariness. shinzo abe has said talks for the sake of talks are meaningless. but the fact they are talking is a good thing. there is wariness. mattis hassecretary james said north korea cannot mattis s said north korea cannot drive a wedge into u.s.-south korean alliance. that is the key. how can south korea engage with korea, have that much-needed dialogue without korea, have that much-needed dialogue without allowing kim jong-un to drive a wrench into that rocksolid south korean and u.s. alliance? also, south koreans must uphold the red line on sanctions from the un security council. we have been talking about how president we have beeg about how president trump has been saying how these talks are positive. they are obviously looking at this from the sideline, china as well. they have been relatively quiet

on what they are expecting out of these talks. --phen: china is expecting clearly come the fact that the talks are happening following the new year's transmission from kim jong-un that china is perhaps wielding its influence from behind the scenes. trump administrations efforts to get china to play a stronger role -- whether it is truom's rhetoric on twitter has helped, we don't know. china is having somewhat of an impact to get the north to come to the table later this morning. keep in mind, it is the debt of winter right now. it is freezing cold. these sanctions are likely biting hard and fast across the border to the north. whether it is the oil embargo, the partial oil embargo. also come of the ban on exports on a lot of north korea's key exports like coal. these are really having a financial impact on the north. that could have been a

significant impetus for the north to say it is ok, now is the time to talk. betty: it does look freezing. thank you so much, stephen engle , in south korea who is monitoring these talks for us today. much more ahead on daybreak asia. we will discuss the future of health care with a top executive. hear what david redfern has the cigarette president trump's impact on the industry later this hour. yvonne: just ahead, we are joined by the chief equity judge from blackrock. she shares her market views for 2018. this is bloomberg. ♪

yvonne: japanese stocks are coming back online. open and open, close, now open again.

nikkei futures are higher by 4/10 of 1%. gainsks like these record we have seen in u.s. stocks, even if it was a mixed session today filter through for optimism in asia. futures showing a higher open. futures showing a higher open. i'm betty liu in new york. thank you for joining us. just to set the scene in what we have seen in january for 2018 -- we really see what looks to be a thest 2017 making way for january we have seen so far in terms of annual returns. we have not seen these kinds of returns in january for some time now.

does this set the stage on how the rest of the year will look? kate: it may for how the next few months will be. i think we all focus on the calendar year and obsessed with restarting. i think we continue with a very strong growth trajectory in terms of the global economy and global earnings into the start of the year. i'm not surprised we had a strong start in january. yvonne: betty was talking about how these analysts price targets for the s&p, we have reached them in just four days of 2018 which has been quite remarkable. do you think these targets are right where they are? kate: i think analysts have been really cautious about factoring in tax reform and changes in the tax bill to company earnings because many companies are trying to figure out how to interpret the tax bill for their significant -- specific situation.

which of their assets will be as cash overseas versus reinvested assets. what they will do to take advantage of new locals -- looph oles. we are still trying to get the work done. with a holiday and people taking time off, getting greater clarity on the tax bill, there is not an estimate quite yet. betty: i'm curious -- i want to bring up this chart to illustrate the point that yvonne just made, which does show you how this melt up in the s&p has started to steamroll these hsbc,ts forecasts at morgan stanley and others. you mentioned that the targets are not pricing in certain factors, maybe it is tax reform and its impact, big d you see this as maybe a contrarian sign that the market might be a little bit inflated here? that we are already hitting these targets? it does feel like markets

have moved ahead of the analyst earnings estimates and that was the point i was trying to make which analysts have not really price than the changes to the tax story yet in their earnings estimate. it is fair to say that the markets are trying to price some of the good news in. strongalso having a very global backdrop and we are having data come out from different regions at the same time. company guidance has been quite solid. some of the sectors that have 2017beaten down in much of produced pretty solid activity in the fourth quarter. as we go into earnings season and companies tell us how they expect to do over the next four quarters, we will get more accurate pricing in the market. yvonne: what do you think will be the biggest headwind for the market? you mentioned more clarity on taxes but is it going to be the

dollar if we see a melt up in the dollar or is it interest rates? more hikes than expected. what is going to be the biggest headwind? kate: forecasting the dollar has been very difficult as we have known for a long time now. outink many people started 2017 really optimistic about dollar strength and found themselves a little confused and perhaps disappointed with the positioning as the dollar weakened through most of last year. it feels like because of policy differential and strong growth in the u.s., there should be a little bit of dollar strength but we find it very difficult to forecast and we expect a small orforecast and we expect a small or modest appreciation but nothing that is super meaningful. i am also not that worried about that policy. i think it has been well telegraphed and the companies are well-positioned to take on modestly higher rates after locking in low rates.

what i am more interested in watching is what happens on the trade and geopolitics side. that is the number one threat in 2018 which is a significant deterioration in relationship u.s. and its nafta trading partners or the u.s. and china and that will cause a moment for companies and investors. yvonne: exporters should be a key risk to that. we are also seeing this buildup whichlts up on currencies has been pretty good overall but with the some extremes south koreans talking about intervention right now. how much are you watching that side of things? kate: we are absolutely watching that it is not exporters we are concerned about all the companies that have a significant part of their supply chain outside the u.s.. whether or not that causes u.s. companies to rethink how the company is structured. it is true appreciation was very

welcome for em equity investors. what i would say is a lot of this is coming on the back of good growth. unless we expect a significant deterioration with the growth trajectory, it is hard for us to make a call for it to really weekend. we will watch the policymakers and the signals they give.your point on korea is well taken but we are not expecting a significant reversal from where we have been in the last 18 months. yvonne: only so much the central banks can do. thank you, kate moore from blackrock. we have more coming up on daybreak asia. stay with us. this is bloomberg. ♪

♪ betty: a quick check of the latest business flash headlines. airbus is offering china rural for the first time as it faces a

program extending order for its double-decker double-decker je. it is granting finishing interiors work to china if it commits to a significant new order for the model. further discussions are respected during the visit by the french president. stopping fundraising through asset backed securities after selling billions of dollars of such debt last year. the company has not sold any abs since early december and a broad ship after issuing $37 billion worth in 2017. authorities announced on december 1 they were requiring selling into the acid sheets. gopro has hired jpmorgan to advise on a potential sale. become a revealed plans to cut more than 20% of its global workforce and exit the drone business. s pared losses after declining more than 33%. ceo nick woodman said gopro

would consider partnering with a larger organization to help scale up. coming up, another official looks at siding with and the latest from the fed. this is bloomberg. ♪

tuesday in0 a.m. hong kong. looking pretty dreary. it is called. that's it is cold -- it is called. betty: 6:30 p.m. monday in new york, where markets closed mixed, pretty much it we did see the s&p hitting yet another record. beautiful new york city skyline despite the freezing temperatures. i am betty liu in new york. yvonne: i am yvonne man in hong kong. you are watching daybreak asia. first word news with jessica summers. >> north korean and south korean officials are due to open a

high-level meeting, the first in two years. they will focus on the north's participation at the winter olympics in south korea. tois seen as the best chance revive negotiations on the north's nuclear program. of saudi arabia's biggest dairy company are said to be among a group of 11 princes detained last week. they were arrested for what a story said was an unlawful protest over the government's decision to stop paying the utility bills. a voice recording challenge d the official account of the arrest. saudi aramco is said to appoint banks including goldman sachs and citigroup to manage the ipo. morgan stanley is expected to be named as a global coordinator. some of the banks are tentatively valuing the company and 1.5$1 trillion

trillion dollars. mandates could be finalized this week. oprah winfrey says she has no plans to run for u.s. president after a rousing speech at the golden globes fueled rumors about her interest in the nation's high office. after i accepting the lifetime achievement award, she said she did not plan to run. speculation helped drive up shares in weight watchers, in which winfrey has a 10% stake. thailand's prime minister has avoided media questioning. that if theyorters had any questions on politics or conflict, they should ask "this guy." he powered a military coup and has previously threatened to execute journalists who criticized his government. global news, 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. i'm jessica summers. this is bloomberg. yvonne: we are just breaking

some lines here. samsung electronics for quarter profit coming through. it was amiss when it came to the top and bottom line. let's go through the operating profit first. 15.1 trillion won. this big surge in the won could ease into the bottom line quite a bit, which would link to this slight miss on the earnings coming through. sales coming at 66,000,000,000,001 -- 66 trillion won. record.uld set another we are not going to break down here until the later part of this month, but there is a lot of questions here on whether the weak spot is hitting the top now. it looks like we are reaching a peak. growemory segment may not as much this year as it did in

2017. betty: i think there were a lot running onions from these numbers. analysts saying 2018 is not going to look like 2017. this market might be topping out. part of the reason we saw samsung pacer generously to its shareholders with the doubling of the dividends in the fourth quarter. let's head over to sophie kamaruddin, who has got some reaction perhaps at a preview as well to the korean market. sophie: let's get a preview of that. we did see shares close lower on monday, falling over 1% at one point. bear in mind, up 2%. yvonne pointed out there is going to be a lot of focus on the semiconductor unit. we have seen that industry maintain its robustness throughout the course of the year. the mess on the bottom, top line, going to be in focus at the open. taking a look at samsung shares. we might see reaction to the

news lines coming out of the consumer electronics show in las vegas as well as gopro exiting. memory cards in use for this drones. keeping an eye on the korean won , which did take a hit on monday following the government bringing the currency lower. when it comes to the set up for the kospi checking in on futures, you may see some caution in korea's equity session. tech shares may be a bright spot. betty: we will be watching samsung and the korean markets. japan coming back online again after a three-day break. what are we expecting here. we saw nikkei futures pointing to a higher open. sophie: that is the case. more optimism ahead. enthusiasm may be too much for the likes of pimco.

citigroup sounding the alarm over complacency. japanese investors look ready to build on 2018's game. steadying yen keeping your recent lows while investors wait on first catalyst. check out this terminal chart. g #btv 4955. the euro has lost traction. investors may be engines about the italian elections, which has seen the euro retreat after hitting the strongest level against the yen since october 2015. a last look, betty, at some stocks that may move following announcements out of the ces in las vegas. toyota unveiling the concept vehicle with partners. hyundai teaming up with over. urora.h a betty. betty: thank you so much, sophie kamaruddin. in the u.s., the fed's repeated

failure to meet the 2% inflation target has pushed another top official to the dovish side of the 2018 rate hike debate. here with more on the atlanta fed president. what is he talking about? kathleen: he seems to be joining the doves. yes, he does. speaking today, his best case is two to three rate hikes. he said "i'm comfortable with a sewer moves weren't policy accommodation. i would caution that does not necessarily mean as many as three moves or four moves per year." he is saying he needs to see inflation moving closer to the fed's two percent target. jump into #btv 8948 with me, and you can see the green line. that is the fed 2% target. this starts as the great recession was getting underway. for the last five years -- see the blue line? pce core has only been about 2%

once. most recently at 1.5 percent. yesterday, we were talking about patrick harker from the philly fed saying "i only want to see two rate hikes this year." it is the flat yield curve, the fear that it could get inverted. talk about the simmering debate heating up. a brookings institution conference had john williams, eric, -- san francisco fed president -- pushing for a 1.5% to 3%. the former fed chair says jay powell, the incoming fed chair, is going to look at this very, very carefully, take it seriously. it seems, after this long period of having inflation so far below target, top fed officials are finally ready to say we have to rethink it. if the fed starts rethinking, what will this mean for other central banks like the boj? kuroda insisted

you cannot drop the 2% target. same thing at the ecb. if the fed is moving in this direction, it will be interesting to see if others follow. yvonne: a shift in regime's coming through from the fed possibly in the next year to 18 months. kathleen, thank you. jpmorgan health care or conference is underway in san big names aree gathering to discuss investment in the industry. for more, let's get straight to eric, who is there for us. very much, you yvonne. i am here with the chief strategy officer at gsk. david, hello. david: great to be here. eric: it is great to have you here. i don't need to tell you, there is a growing sense that the company cannot have it both ways. the competitive pharmaceuticals company and on the other hand, a high dividend stocks, so what is it going to be? david: we have three globally scaled businesses.

care,es, consumer health pharmaceuticals. we are great owners of all of those businesses, all underpinned by global reach, and we are investing in all of them, and we have made it clear during the course of last year that she is really going to prioritize the pharmaceutical business. that is born to be our primary source of capital allocation. we think we could certainly invest significantly across all three businesses. eric: the question investors increasingly are asking is how do you do that? how do you innovate? how do you plow capital into innovation, as you say, particularly in pharmaceuticals, where the costs of development are increasingly of the increasingly exorbitant? obviously also pay

a very significant dividend. we take it very briefly. a majority of our investors are very income orientated. we have been clearer that we expect it to the consistent with where it has been for the last three years. going forward, we set the dividend in relation to a framework related to free cash flow. 1.25 times upwards. our cash flow will increase. our cash flow will increase. that will enable us obviously to invest more in business. eric: wouldn't you be more competitive with rivals that don't have these dividend obligations if you were able to plow more money into research and development? david: we are already investing very substantially -- eric: sure, and so are all of your competitors. david: really, what drives our research and development, which is read a big money goes, is the

opportunities. and we have got some exciting late stage opportunities, but quite an early, interesting pipeline in phase one and phase two. we are going to invest fully behind them. maybe over time. there is an opportunity to investors with a little bit more. that will be data driven. we feel the balance is right. eric: how about m&a? david: we will see. i think our primary focus again is really -- we appointed a new head of r&d who is coming in. give him a little bit of time to get his feet on the table. and another will come in from astrazeneca. little bit more as the year goes on into some early-stage deals. early-stage r&d deals. and that will be the priority.

eric: are you interested in the consumer-products business that pfizer want to get rid of? set as a global leader in consumer health. a fantastic consumer health care business. we are very pleased with the scale. novartis is pleased with the integration. in thatry early process. there is not much i can say about that. eric: no preliminary conclusions? david: it is very early in the process. no preliminary conclusions. eric: but it's not a small enterprise. david: it will be a big deal. potentially a good fit with our business. but we would only do it if we still have capital to invest as we deem appropriate. pharma remains our number one priority. eric: what about divestitures? you are at least evaluating options. david: we did a big strategic review of the pharma portfolios. there is one or two areas that we have decided to do prioritize

-- to deprioritize. we have really been the leader. that will not be an outright investment that we think there probably is a different sort of partner that really focuses and prioritizes in that area. more of a partnership arrangement. prioritized. that's true. eric: you mentioned am a, your new -- emma, your new ceo. what has changed out of your leadership? david: some things have not changed. she is very much supportive of three businesses. spends a lot of time having a detailed look at gs k, really reinforced our values that are important to the vast majority across the world. on is extremely focused performance, and she has tightened up how we operate the

matrices, accountability, decision-making rights and brought a lot of some of the consumer health care's discipline on the supply chain. the way we manage inventory. above all, she has put pharma r&d as her number one priority to really get that moving and develop great new methods. a great illustration of that. eric: you have been closely k's work.in gs it has been a growth engine for the company, but there is a lot of competition coming and a lot of pricing pressure, not just from generics, but also gene therapies and gilead. what are you going to do about it? david: it is a $25 billion market around the world. it is growing. probably too much. somewhere around 38,000 americans knew the diagnosed this year. we have been growing very fast.

we continue to invest. we are particularly investing around dual therapy. they are treated with three or four active ingredients combined in one hole or two pills. we think there is a real opportunity of patients potentially living multiple decades. could live five decades, six decades, to really focus on long-term safety. we are investing in dual pills.es, so smaller also, long-acting formulations. i mean, you are right. potential lot of new, science being looked at for long-term cures or even functional cures. they are quite experiment and early at this stage. for thereally makes up foreseeable future the backbone, but we are investing in those research programs, and we will he where they go. i think, for now, it is dual therapies, long-acting.

eric: one that question before i forget. it is difficult to discern what the trump administration's policy is going to be for health care going forward, beyond what they have been doing around the aca. strategyf officer -- what are you anticipating, and how are you planning for it accordingly? very hard to predict what comes out of washington. it is a dynamic environment. even harder for a european like me. overall, i think the environment is a little bit more predictable. we know where we are with the fda. i think we have seen the main pricing pressure in the private sector, the consolidation as insurers come through and so forth. that trend has been there for some years. we are watching that very carefully. the other thing with my hiv hat is givingay happen, states more autonomy.

we want to make sure hiv patients get there appropriate share, but we will see. eric: david, thank you very much .or spending time with us that is david redford, chief strategy officer at gsk. conference in san francisco. that will do it for me today. much more coming tomorrow. yvonne: great interviews and thank you so much. we will be back with eric with more tomorrow. up next, china's central bank may get a new leader. ubs says the pboc will stay the course on interest rates in the next two years. we will talk to their to china economist. that is next. this is bloomberg. ♪

yvonne: this is "daybreak asia," and i'm yvonne may in hong kong. betty: i am betty liu. a rebound to 1.9%. that is well below the government prosecutors and

target. little pressure for the federal bank to tighten monetary policy. expectt guests does not any rate change the 2019. let's cross over have to ubs greater china conference in shanghai where tom mackenzie is standing by with the bank's chief china economist. tom. you.betty, thank joined by the chief china economist at ubs. time thisfor your morning. as but he was saying, we got the inflation data out tomorrow for china. what are you forecasting for cpi and ppi? >> our forecast is cpi will have a bit of a rebound to 1.8%. to decelerate. tom: is that posing a risk for profits? the corporate did pretty well as producer prices picked up last year. is that a risk for corporate china? >> ppi rising was driven by

upstream prices. all materials and commodities. while those upstream companies have enjoyed very good profit, it put a bit of a squeeze on downstream companies. deceleration of these commodities prices or a drop of those prices make a shift? feel asstream may not much of a squeeze. it is not all bad. tom: it is a mixed picture. in terms of the exports we are expecting, exports and imports coming out on friday -- is there a softening trade environment in china for 2018? are those numbers went to edge off, and what are the implications for the broader trade picture? wang: we are expecting exports to grow back by 14%, and imports by 18% are very strong numbers. in 2018, we are likely to see a bit of a softening. we are in an environment of

global synchronized recovery. u.s. growth is strong. trade will still be pretty good. tom: what are you characterizing in terms of moves for greater protectionism, whether that is in the u.s., europe, or china? what is the potential impact? wang: i think the trade protectionism is on the rise. the administration's very focused on the issue. likely to rise. the global economy is on the recovery trend. the benefit of a better global growth is going to be outweighing that protectionism. tom: we are getting money supply data out in the next few days. credit, you are testing to pick up by the 2018, 13%. that is the ubs call. there is crediting compton to

the system. is it about where credit is going? is it going to be targeted toward the private sector versus the state sector? is that the policymaker's drive now? wang: indeed, that is one of their goals. it's a pump credit into areas that are more needed and less axis capacity sector. also, it is who delivers that credit, right? with the duly averaging -- deleveraging campaign, they are tightening on channels and more through the normal channels as well. we are expecting 13% growth. it is a slowdown compared to the last couple of years. it is a continued gradual deceleration of credit growth. tom: another province in inner mongolia saying they fudged some of that data. industrial production will be revised down. can you take chinese data at face value?

wang: people usually don't. the other thing is that the national gdp data is put together separately for the original data. and also, of course, you can try to cooperate the data from other like trade, profits, and so on. for the investor community, they hardly ever look at just the gdp numbers. a look at profits. tom: you don't expect a benchmark rate rise this year or in 2019. what would change that? wang: if cpi inflation surprised on the upside and at the same time, the fed raised on rates more than they currently envisage, there could be a scenario where pboc would raise rates. tom: your forecasting growth in will saying the sector slowdown down. the developers are not buying into this. their shares are up at levels we have not seen since early january of 2015. where is the disconnect there? wang: the listed developers of

course tend to be more focused on tier one, tier two cities. they have fantastic sales. their share prices have gone up. down.are coming we are seeing a bit of tightening incrementally. the shantytown subsidy scheme is going to become less positive, so we see a bit of moderation. should always be careful that national level aggregated data is different from some listed companies, so this can go hand-in-hand in hand. but i would suspect that developers sort of outlook going into 2019 may not look so wonderful as in last couple of years. tom: thank you very much indeed, wang tao. she expects a marginal tick up

in consumer prices. an interesting outlook for the chinese. steady as she goes from wang tao . plenty more from the conference including a couple of nobel laureates in the cfo of an electric vehicle company as well. yvonne: tom, thank you. tom mackenzie, we will get back to you in shanghai. want to recap the countdown to be seoul samsung is going to front and center, betty. we have been talking about the miss an earnings for the fourth quarter. -- in earnings for the fourth quarter. oneas a 1 trillion won mess. betty: we knew it might be kind of a flat year here for 2018. we suspect it will be. the numbers will pan out through the course of 2018, but sales underestimates.

66 trillion won. the estimates were for 67.6 trillion won. we are heading towards the korea open. much more ahead on "daybreak asia." this is bloomberg. ♪

yvonne: 8:00 a.m. here in hong kong. i am yvonne man. asia." to "daybreak the top stories this tuesday, asian stocks set to build on more wall street records. japan returned from the holidays with the nikkei shooting for 24,000. fourth quarter miss for samsung as it loses its momentum in chits and takes a hit from a somber won. betty: from bloomberg's global headquarters, i'm betty liu in new york, where it is after 7:00 p.m. on monday. president trump said to be close the fed's vice chair. richard is out. toyota unveils a driverless concept car, plus big-name partners from amazon to pizza hut.

yvonne: and betty, we are going to dive into the samsung earnings. chips seem to be the big focus, also the strengthening won, which increased 5% in the first quarter alone. it leaves the question in em overall. is this just too good of a thing right now that could end up eating into earnings? g #btv 4742. we have heard from south korea. regulators and policymakers taking about watching steps in these one-sided moves in the won as the dollar weakens globally in this synchronized growth picture. we were talking to blackrock about how much they can do given

the fact that the dollar weakness seems to be persisting at least for now. some of these companies are renegotiating free trade pacts with the u.s., with tensions and focus in 2018. betty: great point, yvonne. these currencies are going to be a headwind not just for korean companies, and also japanese companies as well. they have been dealing with the weaker dollar conundrum. some analysts out there are saying this dollar weakness we are seeing, it's over. the fed is want to continue to tose rates -- is going continue to raise rates. we will see that play out for the rest of this year. let's get to the first word news with jessica summers, who has got more. iranian an petrochemical tanker could explode and sink, creating an environmental disaster. the body of one sailor has been

found, but 31 others remain missing. the tanker collided with a ballcarrier. and planssent vessels to help in the search. clouds and toxic smoke are hindering those efforts. rafael has president added his voice to dovish comments from officials concerned by low inflation and the risk of an inverted yield curve. he votes on policy this year and two toe base case is three rises this year. the white house says it is close to announcing a pick for fed vice chairman after stanley fischer's departure. bitcoin.n regulators will tighten their grip on the market. authorities in china and south korea are increasing oversight on crypto currency trading and mining. the fcc late last year started cracking down on some digital token sales known as ico's. bitcoin fund as much as 17%, the most in two weeks. china's inner mongolia are mongolia region

accused of manipulating economic data. itsregion revised down output by 40% to $45 billion. fiscal revenue for the same year was 26% lower than first reported. last year, a province said it had fake data for three years from 2011. oprah winfrey says she has no plans to run for u.s. president after a rousing speech at the global globes -- golden globes fueled rumors. after accepting the lifetime achievement award, the billionaire media mogul told bloomberg sheet of all plan to run. the speculation helped drive up shares in weight watchers, in which winfrey has a state. mobile mays, 24 hours a day, powered by more than 2700 journalists and analysts in more than hundred 20 countries. i'm jessica summers. this is bloomberg. yvonne: let's get a market check here.

a look ahead to that market open. japan coming back in a big way. we are expecting the 24,000 level as well. in korea, not just samsung earnings, but the talks between north korea and south korea happening pretty soon. bit to keepe a korean investors busy. we are seeing the kospi under pressure, leaving .1% us samsung shares are falling over 2%. the korean won, near the psychological level, eyeing the 1069 mark against the dollar, raising alarm bells for perhaps exporters. we have japan coming back after a three day break with the nikkei 225, adding .9%. a quick check on the broader market action. excepte equity markets for career. the asx 200 is rising for a fifth session with minors and real estate leading gains. . slide in bullion

golf lighting about 20% this morning. new york crude adding about .7% back above $62 per barrel for new york crude right there. the trading for south korea has warmed up. checking in on the kospi. the i.t. segment weighing the down .9%.e index, offsetting the rise we are seeing elsewhere. the best-performing industry group so far this morning. when it comes to other things to watch in south korea today, watch stocks that may be affected by the cryptocurrency crackdown. being expected by south korean regulators. we do have samsung under pressure. a boon forbeen samsung. we have the stock falling the most since december 26. 20 17, bear in mind, betty, was a good year for samsung shareholders.

hitting record highs the sliding in november after morgan stanley's downgrade. some of the hurdles facing samsung and the wider chip industry, the question is if 2018 will be just as good. betty. betty: thank you so much, sophie kamaruddin. we are going to stay on samsung. we are joined by bloomberg intelligence's senior tech analysts. we were just talking about these results, and the impact of the stronger south korean won. is that likely to continue to be a big headwind for samsung? is totallyaid, won out of the companies control. all the company can do is strengthen the production costs by advancing the migration. at the same time, if you look at ,he earnings and the guidance

it is very positive on the yuan demand. come -- thecould currency becomes stabilized. samsung earnings may not have peaked. we do see that there is a potential for earnings to trend higher, especially in the first half, given that the demand for it remains quite robust. and like the old days, that once demand weakens and the suppliers -- with more capacity, samsung is in a situation that they are -- they continue to be the leader. the market has consolidated a lot. it is not in the companies interest to disrupt profits for the whole industry. betty: so what does that all mean then in terms of looking

ahead to this year? ?ave profits peaked anthea: again, as i point out, although something that we can predict on the currency front, if currency stabilizes from here , the company is in a very good position to control how much supply they want to be without in the sector. and in terms of demand, it is more diversified now, yes. smartphone demand, demand from slowdown in terms of growth, but we have other for cloud providers to continue to need a lot of chips for their storage solutions. betty: i have a chart here which shows what you're talking about when it came to the spot prices. we have seen the gradual rise, the surge we have seen pretty much in the last year or so.

that seems to be edging off when it comes to the prices. and the blue line is what you are seeing here, the ratio of samsung electronics in relation to the kospi, which is starting to edge off as well. you are thinking that the strong prices -- they are still able to offset this moderation we have already seen? anthea: correct. at november, december prices kind of picking off, it is not about the prices. it is about margins. . once the company transitions to the next generation, they get more advanced, if they have more production in the advanced technology, they can cut down on the cost, so in terms of margins, they may be able to sustain. the margin in 2017 was abnormally high, i would have to

say. samsung would have new capacity in this year. if you think about it, as long as prices don't correct too much, it is a healthy consolidation. and the company managed to cut production costs. with a little bit of -- with some new growth, profit wise, they can so, you know, give some sort of, like, low single-digit growth. yvonne: all right. shares down close to .9%. joining us here in hong kong. coming up next, a plan to dominate the driverless economy. its new concept vehicle a little later on this hour. betty: up next, the fed plus 2% inflation target sparks fresh. which official has turned dovish on hikes in just a few moments. this is bloomberg. ♪

betty: this is "daybreak asia." i am betty liu in new york. yvonne: i am yvonne man in hong kong. itsfed's failure to achieve 2% inflation target has pushed other top officials to the dovish side of the 2018 rate hike debate. kathleen hays is here with the latest right now, so kathleen, why is the atlanta fed president cooing with the dose? kathleen: he is giving his outlook in atlanta on monday. he says the base case for him is two to three rate hikes in 2018. let's look at what he told his audience. "uncomfortable moving with slower policy accommodation, but i would caution that does not mean as many moves per year as the fed consensus is for three rate hikes in 2018. "

he says he needs to see inflation closer to the fed's 2% target. that is what a lot of officials would like to see. but look at #btv 8948 to see how our way they are and how difficult it has been for the fed, spending the last 10 years, the main index, has been above that level, and the recession went far below. for the last five years, it has only been above 2% once. now, it is stuck at 1.5%. bostic echoing the philly fed, saying he is an advocate of two rate hikes, monitoring inflation. he is concerned about week inflation. both of them worried about the yield curve. too much fed rate hiking could invert the yield curve, potentially. brookings debate. this is where it gets so interesting. the debate was called. should the fed stick with the 2% target or rethink it? a lot of rethinking already starting in academia.

here is what eric rosen, president of the boston fed, had to say. the cost of view, hitting the effect of lower bound for a prolonged problem should cause us to have maria a -- we should be having those discussions. kathleen: he thinks the fed should move to an inflation range, 1.5% to 3%. the san francisco fed wants price level targeting. bernanke, former fed chair, same one of the people who push for inflation targeting got it going. he thinks jay powell is going to be very serious about studying this issue now, studying new regime's in the next year to 1.5 years. a further interesting question is what does this in front of the global central banks? governor kuroda was asked many times -- i think it is time to drop the 2% target? "o no, we can possibly do that."

i wonder to what extent is it going to reverberate to central banks around the world? betty: it absolutely what. kathleen, thank you so much. kathleen hays, our policy editor. our next guest has a very bullish view of 2018 and expect asia and emerging markets to open for joining us now is a audible core -- our guest. i know you say they are going to double in the next few years. what would it mean for asia at large, and even for your own outlook if we see more fed officials turn more dovish? >> hi, betty. yeta i thinkh it is clear what the impact is going to be,. asia likes a lower interest rate regime.

we certainly don't like an inverted yield curve. i don't think any market likes that, especially in asia. if this new moved to dovishness fewer than theet market is expecting, i think scenario,goldilocks which means global growth could remain strong and we don't have any inflation or interest rates to deal with. that is how you get euphoria and bubbles. i look forward to that. [laughter] betty: you look forward to that. how could you say that? don't strikes fear in the hearts of many. well, obviously, the global factors are very important. so to me, our valuation looks pretty decent.

is key story going forward our earnings power is going to come through finally. january, we probably got more like 23 last year. this year again, analysts are waiting for 11 to 12. we could have doubled that level. just the beginning of a new earnings, a new return on equity cycle and a new bank loan in asia and emerging markets. the cycles don't get over in a year. to five years to fully form, and markets respond to that. aonne: of course, china plays big part in the whole em picture, ajay. i have a chart which shows putting rain on your parade. btv 50 ow09. a 12 month change in the credit impulse. the bottom is the city emerging markets economics price index. and usually, history suggests the credit impulse data usually

leads what we are going to see when it comes to the economic surprise. and compared to last year, i mean, we were still able to yield a little bit of growth from the credit that was generated out of china. seems to be a very different picture now as well as we start to see these economic surprises be a little bit more of a letdown. is this a working fine for you orrying sign for you? ajay: you're absolutely right. the bloomberg china monetary conditions index, if he could bring that up, it is an indicator. things ares that going to get a lot better in terms of growth. we like cyclical sectors and 2016. going forward, those indicators, applying to a moderate deceleration in the cyclical sectors in china. having said that, the cyclical sectors which were 52% of the msci china index are only 10% of

the index right now. the exchange changed dramatically. if you look at the new , consumer discretionary, that sector is 50% of the index. cyclicall cign indicators we look at tell us nothing about how many teenagers are going to be on tencent right now. [laughter] yvonne: you are thinking tech is going to be the big win for 2018, and financials as well? ajay: the two big sectors. analysts have done a great job on that. late last story since year has been that you have got to look at financials in asia and emerging markets. i look at countries like indonesia, india, and even singapore, or other emerging markets like brazil or:. low growth in these countries -- or poland. low growth has led to collapse. need the money.

consumers need the money. it is a bit like when we embarked on a new loan cycle after we restructured after the crisis of 1997-1990 eight. we are seeing financials participating on the sale. if you look at indonesian , and others happen to like it, let's by an indonesian bank. you see a lot more of that going forward. betty: we just -- broke the samsung -- yvonne: we just broke whereamsung earnings we saw the strengthening of the won -- it tracks the won against samsung stock price, and we see those two tracking quite -- i guess there was a bit of a salesation given how much samsung's reliance on when it comes to earnings. this is a very, i guess, you can

say, a likely picture. many of the earnings coming out of tech and asia as well. the strengthening of the em currencies through south korea jumping and right now talking about these one-sided moves. do you expect other central banks to join in? ajay: as a consequence of stronger global growth and massive surpluses. yes, either asian currencies should strengthen, but i would rather take that scenarios and have a weaker global growth scenario and weaker currencies, so you cannot have everything helping you all the time. you have got to choose. and i think this environment has strong global growth and contained inflation. it is actually a great environment for asian equities, including tax. yes, on the margin, you will get hurt a little bit on the currency, but i think people will be by more phones. that's a good thing.

kapur, thank you, ajay head of em strategy. you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak. for bloomberg subscribers, go to dayb on your terminal. the bloomberge in anywhere app. look at the news on the industries and assets you care about. make sure you check it out, dayb . this is bloomberg. ♪

betty: this is "daybreak asia." i am betty liu in new york. yvonne: i am yvonne man in hong kong. two major apple investors have urged the iphone maker -- the california state teachers retirement custodian wrote an open letter to apple saying the company must offer more choices and tools to help children fight

over use of its devices. the two investors collectively controlled $2 billion worth of apple shares. said to beus, offering china a production role on its a380 superjumbo for the first time as it seeks a program extending order for the slow selling double back all -- double-decker jet. the playmaker is in talks on granting finishing interior work to china if it commits to a significant new order for the model. further discussions are expected during this week's visit by the french president. yvonne: hong kong exchanges considering all changes and increasing trading volumes. charles lee says measures may include rebates for market makers, simple if i rules for using collaterals, and the removal or reduction of charges. the exchange operator is eyeing the changes as it battles for business with its international rivals. betty: coming up, more oversight. cryptocurrencies sliding. we will have those details, next. this is bloomberg.

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under pressure like never before. and it's connected technology that's moving companies forward fast. e-commerce. real time inventory. virtual changing rooms. that's why retailers rely on comcast business to deliver consistent network speed across multiple locations. every corporate office, warehouse and store near or far covered. leaving every competitor, threat and challenge outmaneuvered. comcast business outmaneuver. >> 8:30 in singapore.

he have to number away from the anding of trading you -- half an hour away from the opening of trading. welcome to "daybreak asia." >> north and south korean officials are due to open in a few hours. that will be the first in more than two years. top officials on the order will encourage percent rotation the olympics and south korea.

founder of saudi arabia are said --be among a group of 11 is arrested for what authorities said was unlawful protests over the government's decision to stop paying utility bills. another saudi prince challenged the official account of the arrest. banks are to be appointed, including goldman sachs and citigroup. jpmorgan and morgan stanley are expected to be named global coordinators. as soon as the banks -- the banks are tentatively valued between $1.5 trillion. the prime minister of thailand has avoided media questioning in an unusual fashion, referring to tout.inquiry to a cu if reporters have any questions on politics, they should ask -- a militarywer in

coup and has threatened to execute journalists who criticized the government. projected profits have been reported. to 14ing income rose point $2 billion in three months in december, compared to average estimates of $3.1 billion. prices leveled off after a year of gains. global news, 20 four hours a day, powered by more than 2700 journalists and --analysts in more than 120 countries. i am discussed summers. this is bloomberg. -- jessica summers. this is bloomberg. >> we are seeing a costly recovery after being knocked down by samsung.

yuan is trading below for a third straight session. we are seeing telco and materials in the industry higher . the i.t. segment is easing somewhat. theg the stocks providing biggest cost today, you have lg electronics gaining almost 5%. among the laggards, you have cacao, investing into one of the main exchanges for cryptocurrency and south korea. the korean market has decided to exclude korean pricing data. that is perhaps affecting those stocks. shares have eased declines after declining 8/10 of

a percent. hold, and5 buys, one one sell-call. let's talk about bitcoin and the latest slide, bringing other cryptocurrency rivals down over concerns regulators will tighten their grip in places like china and south korea. joining us is our bloomberg markets reporter. what should we say to regulations? what is the state of regulations right now? spectrum between places we know have clamped down on cryptocurrency, such as china, and south korea to a certain extent. flurry of regulatory news recently. itsouth korea, we have heard is inspecting banks that provide virtual accounts related to

cryptocurrency, to clamped down on money laundering risks. we heard that china is considering limiting power which to bitcoin miners, is a huge deal. chinese miners still dominate the bitcoin mining space. fever?could this end the justina: we have seen china banning bitcoin trading, in exchange. the cryptocurrency world has really weathered these challenges. the secret of prices falling, and that is exactly what happened overnight. ripple is down 27% over the past day. optimists in the space are saying is that what they are really waiting for is regulatory clarity. people might be more comfortable trading cryptocurrencies, launching an initial point

offerings, so that could be good news for the space. -- initial point offerings, so that could be good news for the space. >> thank you. >> switching to china as well, the french president says he hopes to boost mutual trust during his three-day trip into china. he has pushed for stronger collective security and joint as hes in climate change met with the chinese president. our bloomberg government reporter joins us for more. macron wants to get these deals, but also wants to have a hard stance on china when it comes to market assets. >> that is right. -- he is with airbus executives doing contract signings. people find out the details later on.

his message yesterday was a sweeping vision of what china-e.u. relationships look like. his message was not that different from trumps when he was in beijing, saying, you have to open your markets and really embrace some of these things, intellectual property protections that are companies need to thrive and compete with a level playing field. >> how could you describe the level of trust between the two leaders? they are supposed to meet today. macron was criticized a little bit for waiting too long to go to china. partner in potential the security areas. they are set to discuss north korea among other things. he needs to wave the flag for

france and for the european union, to say, china, we want to do business with you, but we need reciprocity, a term that trump used as well. it has to be fair for us. talking tough to china -- has that proved to be successful? even when trump went to china, we did see a of assurances when it came to policy -- did not see a lot of assurances when it came to policy. foreign companies want the access, to be treated fairly. whether that will happen remains to be seen. china is operating on its own pace with these things. end, what ise going to be so -- defined as a successful trip for the crown -- macron?

he says he will visit china at least once a year. daniel: he will view this as a start of building long-term relationships. he talked about helping out on the belt and road initiative. the united states has been skeptical of these initiatives. the french president is saying we want to shape it as we know about it. he is trying to build that relationship and then try to shape how china engages with the rest of the world, europe in particular. the fact that he is going there and balancing this relationship and meeting the chinese president will be a success. some deals will be signed later today, looking for a partner for its a-380 line to keep that going. much, r asiayou so

government editor. you can always find in-depth analysis on bloomberg radio. tune into "daybreak asia," from 7 a.m. hong kong time. you can download our app or axis it with bloombergradio.com. this is bloomberg. ♪

betty: this is "daybreak asia." yvonne: north and south korea will kick off high-level talks at the top of the hour, the first in more than two years. seen as anng opportunity to ease tensions after a tumultuous year in with the north korean regime accelerated its nuclear weapons program and where president donald trump threaten to strike back with fire and. -- fire and fury.

we go to the unification bridge on the south side of the dmz. the south korean delegation passed by you not to long ago. -- not too long ago. >> that's right. they drove up from seoul, past m unification bridge that heads into the joint security area between north and south korea. that is the south side of the thezone, that separates koreans since the armistice was signed in 1953. this is a signpost of the cold war. it has warmed up a little bit. the sun is out now. want tohe table, we know when they meet and start talking. the first direct talks between north and south korea is december of 2015.

pursuit to join the south korean olympic team, high on the agenda. that is the backdrop for these talks. the olympic the -- the olympics begin exactly one month from today. the north would like to participate. have to north korea and figure skaters that have qualified for the olympics. but the ioc says they will get a grace period to allow them. they welcome north korean person -- precipitation if they agree to join the south koreans. the other thing that can be discussed include the possible resuming of the industrial complex, the one that was shuttered a little more than a year ago because of the north korean missile program. know whatecessarily

will be on the agenda. japan and the un security council would like to see if the north is ready, given the sanctions that have been in place. if the north is ready to at least be opened to discussing -- pen to discussing the dismantling of their nuclear program. betty: i believe there is going to be a five-person delegation from each side meeting shortly. tell us about the makeup of these delegations. to be there not going leaders of the two countries. but this will be the highest level face to face since december of 2015. there will be senior ministers in the reunification delegation and the ministries that represent those claims.

level.ill be a very high the south koreans are going to be coming to the table, wanting to know how far the north koreans are willing to discuss their he contentious issues that have brought us all -- very contentious issues that have brought us all to unification, including the nuclear program. the olympics are very high on the agenda, the deliverable,, if youw will. to south koreans are willing discuss the inclusions of the north koreans on the lipid team. the -- on the olympic team. the big elephant in the room is the nuclear program. drivers,to the taxi and asked our south korean taxidriver what he thought about the north of joining the south korean team.

he says, we don't want that, we want reification. the north koreans on our team will just drag it down. that was one man's opinion. discussions,these are we likely going to see any breakthrough? what are the expectations, here? is it low, in terms of what will come out of this? the olympics give an opening for kim jong-un. i am not going to say this is the sunshine period between the north and south, but this is an opening to at least have the two sides discuss. the bigger question is how lasting this will be. beyond when the olympic games will wrap up and all the goodwill of the games

has evaporated untold he gets back into the cold war, -- u ntil we get back into the cold war. and how far does north korea try to drive a wedge between the u .s.? how will china keep this dialogue going? will we have party talks with russia and japan getting involved? we will take baby steps right now, to get these two sides, the north and south, at least discussing common interests and touring participation in the joint participation in the liv-ex. -- in the olympics. yvonne: we will get an update with steve later. we have seen dismissed that we haven't seen for some time. -- this myth we haven't seen for

some time. we talk about how the strengthening yuan represents the search in currency in the fourth quarter. sales as well. sees arg intelligence little bit of upside when it comes to the super cycle in c hips. oledise in demand for will fuel demand as well. also have the direction of the currency and that samsung will be launching new initiatives at ces, going on right now in las vegas, where all the big tech companies unveiled their latest partnerships and gadgets. quite important for samsung. we will be watching continued stock reaction. don't forget tv .

you can watch us live and catch up on past interviews and dive into any security or bloomberg functions we talk about. become part of the conversation by sending us instant messages during shows. this is for bloomberg subscribers only. this is bloomberg. ♪

betty: this is "daybreak asia."

gopro has hired jpmorgan to advise on a potential sale. shares have declined as much as 33%. opro would consider partnering with a larger organization to scale up. financials have stopped selling securities since selling billions of dollars of debt last year. $37 --as been a record $37 billion in 2017. requiredders have been to consolidate asset-backed securities into their balance sheet. and advanced negotiation

has been discussing a price of $700 million. owner said it was reviewing options to focus on the food and beverage business, which includes krispy kreme and carry the coffee -- caribou coffee. betty: tokyo has a new strategy for the driverless economy. we are joined by bloomberg's automotive reporter in tokyo, kevin. is planting the flag and what the automotive world is calling ability and service. what does that mean, exactly? what is toyota bringing to the table? kevin: they are making their claim to be the driverless economy of the future. they have been slow to adapt to driverless.

they have been instrumental in battery electric vehicles but have been slow there. toyota is now partnering with heavy hitters, amazon.com and hut tod didi, and pizza service,s kind of which is both hardware and software. -- some are side giant and others are small. you can stick a pizza in small ones and they would drive on sidewalks to homes. --y are customer customizable on the hardware and software fronts.

companies would put their autonomous driving software in it. toyota's examples include rolling medical clinics, hotel rooms, shoe stores, as well as people carriers and cargo movers. it is hard to wrap my head around all these possibilities. how innovative is this? are they catching up? >> not everyone is saying what they are doing and who are partnering with. and a lot of people are keeping the cards close to their chest with autonomous driving. wants to test in 2020 and

hopes to have something similar on display at the tokyo olympics. i.d. iteself,e next in san francisco has pods that are segmented so you can do people-moving or ups package delivery. you have companies which offer mobile convenience stores. the idea of a store that comes to you is not new, but the cloud of toyota and its partners is new. -- clout of toyota and its partners is no. >> kevin bachman, joining us live from tokyo. of what isquick look coming up the next few hours on "bloomberg markets." we are heading to shanghai. >> we have a nobel prize winner

in economics and we will be talking to him about the u.s. economy. and we have a briefing on the 2% inflation target. hong, talkingng about china east and new groups with delta. david mann, joining us from singapore in about 15 minutes. betty: a lot of great guests. that is it for "daybreak asia." this is bloomberg. ♪ rishaad: live at the korean

border. the highest level talks in two years. asian markets continue to build on record gains, but could political risks when the party -- ruin the party? chips are down. a stronger one, below expectations -- yuan below expectations. heidi: crypto crumble. bitcoins lighting. -- bitcoin sliding. this is "bloomberg