♪ >> 7:00 a.m. here>> in hong kong. welcome to daybreak asia. shutdownn reaches a solution. seem indifferent to the drama on capitol hill. investors turn to high-profile earnings. headquartersglobal , the not that raising his outlook. issues in the past present a were a threat.

netflix coming to million dollars ahead of wall street's estimate. good news for netflix. investors are hoping for war news from washington. it passed the senate earlier. there is four minutes left to voting. it is interesting because it is quite a few questions about how much it will impact voters. no voter likes a shutdown. you the amount of out.ive comments coming

it is quite the opposite scenario in the prior shutdown theit shows you how much economy is humming along. >> we have about three minutes left in the vote. it will be interesting to the how this plays out in the next three weeks or so. this issue probably one of the most sensitive ones between republicans and democrats. >> let's take a look at how u.s. markets close. king enjoins us now for more. >> it underscores that the market has really shrugged this drama.

the nasdaq leading the advances and optimism about the economy have pretty much left the markets unfazed. let's go into the market snapshot. change.ot much of the you can see it has held after hours. we are going to jump to some of the most active stocks because this was a megamerger monday. valuellion in total mainly in the drug sector. jump.n see the huge yes toherapeutics saying a buyout offer from so jean and bitcoin on the heels of a big

win. they are betting on a new casino. let's go to after hours. netflix killing it in extended hours. they are adding customers into the u.s., earnings almost tripled from the prior year. we also saw halliburton up. you.ank through, ites me looks like the house has the necessary votes to pass the stock cap funding bill. no confirmation yet, but again getting much closer for the spending bill to hit president trump's desk. we should have less than 30 seconds left on the vote right now.

let's bring in our reporter. surprise,is is no given the fact we saw what happened with the senate and house. where we stand right now it comes to immigration because that is going to be the key issue the next three weeks? >> the house is still voting. the bill will go to president trump who is expected to sign it and this gives three more weeks for more negotiations on immigration and other issues such as disaster recovery funds and budget spending. the immigration is a sticking point and president trump already met this afternoon with a group of republican senators senator, lindsey graham, who has been trying to go hemise said the way to

believes is not to try to put together something that will barely get 60 votes, but to try to come up with something that would get about 70 votes and met may be the better way to move forward. done. said than >> we're just getting is that the vote has ended so it looks like it will go through. >> what is going to have to change the next three weeks or so? >> can democrats cave again? >> everyone is so duggan and also you have huge divisions among republicans about what they are demanding. >> you have president trump who wants money for the wall and he always wants to end family-based immigration preferences and

there are republicans in the house and senate who feel the same way and then on the other hand you have people like senator graham who are trying to work bipartisan. it is hard to say where that will end up. >> three weeks is a lot of time. what are the expectations that we will not face another shutdown question mark >> senator republicans said that he does not affect spending agreements by the next three weeks into expect another stop back -- stopgap bill. .> thank you >> bloomberg news and supreme court editor and the house had the vote and they voted to stop the stopgap spending measure until february 8. has made histrump

first big move on trade, targeting new tariffs and imports on solar cells and washing machines. the solar tariffs start at 30% and declined to -- smashed expectations in the fourth quarter. the streaming service attracted 8.3 million customers, about 2 million more than expected. earnings almost tripled from the previous year. traderttled commodity close at a two-month high on news of a potential buyer from china. it has been us

embattled by losses. china reached a restructuring deal that is due on january 29. >> the international monetary fund is warning policymakers to be prepared for a new discussion. for 2018aises forecast -- forecast. the managing director welcome the report, let's address remain. >> the aging population and on and on and future potential growth. will continue to weigh on medium-term prospects. global news 24 hours a day, i'm jessica summers. this is bloomberg. >> coming up, a former boj

official ways in on the central bank's position. >> that is later this hour, but up next, more on a deal to end the u.s. government shutdown just passing the house. we get the view from a long-term market watcher. this is bloomberg.

>> this is daybreak asia. the war is far from over. >> we did get through one battle, which is the house following the sentence lead and passing the stopgap funding bill . again, this is only going to last for three weeks and then we are back on the table again.

let's start with you. -- he said we thought we would get the government shutdown and then they would come back monday and open up. >> he was right. >> he was right. -- >> nothing at all. article talking about how this stalemate has the fruits in this does nothing to end it because the parties have parched onar ideology and the interesting thing it is not always like this . as recently as 2006, they were only a the percentage point gap on their views about the positivity of immigration and now democrats are more than

twice as likely to think that immigration is good for the country. >> it is fastening -- fascinating how much it has widened. >> there's not much to fight about on the economy. >> when the economy is doing well, you would think people would be less afraid of losing ther jobs to immigrants and white working class has moved strongly to the republican party and that goes along with their views about fears of immigration. >> i want to bring you to this observation to it what you think oil years down the line? >> i think immigration is an enormous issue. the reality is it is a divisive

.ssue it is about globalization and people associate globalization and obviously, immigrants are foreigners and when you think about it in those terms, that is part of the reason you've had this shift into the immigrant cap. there are over 600,000 kids that brought children. because interesting leading up to this vote and the shutdown, we did not see much in terms of market reaction. the you take a look at markets, a little bit of a relief rally and it seems like we have dodged a bullet again. what does that tell us about markets at the moment? answer is we are in

a bull market. it will take a lot more than a shutdown to stop this bull market. there is a huge amount of enthusiasm about the tax cuts and that is every other factor. anticipate we will continue on this path and as long as willility stays low, it climb that wall of lori. >> there's still some dichotomy that you are seeing in the market. i will try to highlighted as much as we can. it rallying at records. those are widening as well. volatilityespecially

usually on happens when the equity market dips. >> that is starting to have a knock on effect for the high-yield market and i totally agree that if we were starting it -- starting to see a trend higher, that is something people would have to pay attention to. the last time was back in 2013 and 2013 through 2014, that is when we got high-yield spreads then. that translated to the stock going sideways.

what happens on high yields is going to have a knock on effect. .t could be a six-month lead and it doese chart show a little uptick. on the other hand, it is tied spread.- tight if anything, you could argue that markets remain -- again stepping .ack of it the president is going to be signing this funding bill and flying off to the swiss out. what kind of reception do you think is going to get of all this harness and bickering. >> i think he will get a cool

reception. isa way, it is because he fallout and unpredictable. the shame is he has a point. the united states should have border patrol and force of law. you hear from, trump-pence shop in some of the people. ,ets dismissed by world leaders whenashionable people there is a reason to think that immigration -- >> they must be feeling pretty good right now. --there centralized synchronize growth.

a lot of people were even that.oning the wisdom of >> the stock market is high. geniuses. like there will be a lot of champagne glasses. >> what we have been seeing, first moverump, his here in imposing tariffs on solar panels and washing machines and what not. a lot aimed at asia. what do you make of these headlines? argue it the more concerned about the market impact it could

have? thinghink the important is that china is not going to anticipate we can this is potentially going to escalate. i think this is a risk, but mostly it is a risk for china. the stock market there has been doing well. a lot of issues might arise as a result, but when we think about means you will have greater potential between -- it is justhina

we are getting trade, but also geopolitical. greathink own made a point. i think china could certainly get hurt. it is not good for anybody. they are thing is, taking turns, but definitely china is a brooding presence. closereally haven't gone to a trade war, but we all have nafta negotiations. what you think about the outlook for negotiations with canada and mexico? nafta, theund of

irony is nafta is likely going to be renegotiated along the lines of the transpacific partnership. it is likely to be a template for the new nafta and it is a good template. bloombergou from businessweek. plenty more to come on daybreak asia. this is bloomberg.

-- daybreaktable asia. >> let's do a quick check of markets here in asia. the senate and

house agreed to a short-term spending bill. getting a brief rally, but the focus is shifted back to the boj as well. looking a little better when it comes to equities. seeing a little bit of resistance right now, yields -- ing highly flyer futures slightly lower. there will be some indication later on this year. >> thanks so much. a quick check on the latest business headlines.

a unit of the aic will buy beijing electric vehicle and become the first state backed manager on the mainland. it will compete with warren buffett and other electric car companies. backing the u.s. in 2015. -- says theport minister --rent standard authors offers no margin oxide -- welcome president male macron to northern france with the announcement of a new $360 million investment. the money will be used to expand and create 800 new jobs by the end of the decade. promotes key to

business friendly policies to attract foreign investors. coming up, this is bloomberg. we use our phones and computers the same way these days.

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>> 7:30 a.m. tuesday in hong kong. already warming up here. asia'stes away from first major market open. >> and 6:30 p.m. monday here in new york, where markets closed considerably higher at those see by the you can s&p, given that we look like we're opening the government tomorrow. >> i'm in new york. kong. i'm in hong >> let's get to the first word news now with jessica. >> u.s. stocks set yet another record as lawmakers accepted a the government's shutdown. the move towards a short-term spending bill that would fund agencies through february 8 sets the stage for the government to reopen after three days.

mostlyrs have appeared indifferent to the drama on capitol hill, weighing in andnst optimism over growth corporate earnings. meanwhile, protest erupted in the israeli parliament as the u.s. confirmed that it will move its embassy to jerusalem before end of next year. israeli lawmakers protested. the state department has been told to begin preparations immediately. the palestinian president called on europe to step forward and replace the u.s. as the leading middle east arbiter. brexit backer is warning the risks being left behind if it ties itself too closely to union.opean the telegraph report says that a vhsn will become economy has the rest of the world makes better use of technology. u.k. from business for the to remain in the customs union should be ignored, he says. and the asian infrastructure

bank says it's open to considering currencies and other currencies. china-led bank has expanded and7 member nations from 57 it wants to raise that figure to 90. the president said he's ready to go to market now but the tenor of the offering isn't yet complete. the u.s. air force says it retains confidence in spacex the loss this month of a classified satellite. officials say available data change theng can program's military certification status. they said their rocket did everything correctly and may increase scrutiny of the satellite builder. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. is bloomberg. >> and we are coming down to market opensajor here. let's get more with david. takeally seems like -- you

a look at these bull markets. nothing seems to stick. well.'s much harder as >> because they're far and few between. a lot of these dips. is goodaustralia example of something that investors now are taking advantage of. longestming off this losing streak in 10 months. we're down for six days. now. up futures indicating a pop in japan as well. south korea, the reason i have we're getting some lines now out of south korea that they're basically andng state-run banks companies to not issue or raise debt overseas unless it's urgent. a lot of this comes down to the fact that they want to minimize unnecessary impacts on the markets, which i imagine would trying to -- of course, singapore comes out with inflation. and the philippines comes out with the g.d.p. later today. >> you mentioned about the b.o.j. everything,ot to bonds right now, what's going to be important coming up today? it's going to be this tough

balancing ask, rising yields globally and -- >> it's -- so no change is expected as far as the overall policy is concerned. but to your point, and we have a chart that highlights that for you, it's the split where we're seeing dollar yen move down. treasuries.ad on and they're on the way up. past.all broken up in the splitting up hurts, doesn't it? wrotell they -- i mean, i this morning in the morning newsletter that it's almost like before breakfast, right? it's too early! times. the best of speaking of the bond market, very quickly here, comments coming through. the u.s.omes to treasury market, have a look at our chart here. 2.65%. yes, it's cheap, attractive. saying thatsts are you know what? that leg up we've seen, that has a lot of momentum.

yields up mean further from here. and just very quickly, let me and have ahings up, look at a similar one over in australia. 3%,efore we talk about we're at 2.88%, there is that here,at you see back where we sort of just have to get over -- in fact, let me zoom how thatve a look at looks. we went from 2.91% down to about 2.83%. that's a fairly big gap, until we start talking about 3%. dave, what are the stocks that you're watching this early on? >> well, president trump, of course, as you guys have been imposing tariffs. we're watching a lot of the washing machine producers. le electronics up. overall revenue in north america. revenue, by product category, it gets from home

appliances. what exactly the exposure is when it comes specifically to washing machines that's one. fanuc getting a downgrade. got a hold from jeffreys. massive writedown, 1.2 billion because it revised the carrying value of its good will in the u.s. a down side for the stock. and, of course, solar stocks, these names start trading, and on the chinese main land here in hong kong. >> thank you so much. well, the bank of japan, as we upe talking about, winding its latest policy meeting and will also release its outlook inflation.and our policy editor in tokyo, meeting.g the b.o.j. and tell us what we can expect today from kuroda. >> well, kuroda, of course, is

to be wrapping up the two-day meeting. his second-to-last meeting in current term as b.o.j. governor. many, of course, expect that reappointment. if theld waiting to see speculation in currency markets at least that there could be tweak coming to b.o.j. policy, is what hangs over this market. a formers now is b.o.j. board member. economist, writes frequently and internationally about the b.o.j. welcome back! you.ank >> so first of all, this whole view of a b.o.j. getting on the cutting back bond purchases and trying to do predicated on progress on inflation and a stronger japanese economy. doubts aboutt of the real strength of inflation sustainability. why? >> yes. the inflation, it's 0.9%.

what is important, they usually food and energy, because those are highly directed to exchange rates. so once you exclude all food and energy, inflation is still only 0.1%. you don't really see inflation there. it's -- even still the next five years, very difficult. >> do you think anything is going to be done in march of 2019? it wasn't too long ago that inflation was deflation, fall of 2016? it may be low still, depending on which measure you look at, trajectory is higher. what in your view is not happening that needs to happen, strongly produce sustainable rising inflation?

leadss most important and to the higher inflations. but in the case of japan, the very low, near 0%. so 2016, we had the deflation anduse of the oil prices the yen. japan'sis moment, inflation, exchange rates and commodity prices, nothing to do ability. so you have to look at the cpi, food and energy. so therefore you don't see any to inflation there. so we have to face it. it's --to accept, if [inaudible] >> what about bond purchases? the -- we know the b.o.j. is already purchasing bonds than they did, but they argue it's because they don't need to buy as many bonds keep the yield on the 10-year, just around zero? >> yes. they are cutting this from

to september 16. because iturpose is was becoming very difficult for quantity,continue the right? and then at this moment, it's they buy likeif 53 annually, still -- [inaudible] also from foreign investors. so the japanese market is highly segmented. so, you know, insurance 20,anies, they want that 30-year bond, long-term bond. goingat means finance is to reduce the supply. here.re's a high demand the b.o.j. have to cut it. that was the reason why, on that b.o.j. -- [inaudible] the treasuryr end, deals, want to buy those bond shorter-term bonds because they get them very cheaply.

so therefore, both on the short term and longer term bonds, the to reduce, inhas to stop it from going downward. >> in other words, getting less than zero? >> yes. >> but the issue is that if the b.o.j. wants to reduce it even more, like completing -- that would be very difficult. going to be more demand. so sometimes, you know, between find zero, the b.o.j. may it very difficult to -- [inaudible] that this saying policy is a failure? >> i think eventually it will become very difficult for b.o.j. the qe.ain they have to reduce it more and more. time, there might be the impact, and look at b.o.j.'s policies. very complicated.

know, more sustainable issue is that this year, the economy grows very high, and year, so it's time for b.o.j. to do more normalizations and reduce and raise the target for the future, which is likely to happen next two years after. >> but aren't they in a trap? theiry start reducing purchases and yield drives and the yens rise, they're going to in inflationrowth they're trying to create? how can they do that? >> because at this moment, b.o.j., they want -- as long as kind of --hat [inaudible] >> markets say, oh, it's the b.o.j. will continue to do it. but what kind of infrastructure do they have in terms of economic growth? it's not, right? so it has to be more realistic. it's better for b.o.j. to have a market accommodation for

longer period. more importantly is how to accommodations in order to prepare for the future position. right? >> all right. well, thank you so very much for joining us. coat!t a warm she's one tough tokyo resident. interestingvery thoughts ahead of this b.o.j. meeting. you know that everything she us, these are the kind of issues that b.o.j. has been talking about since yesterday. meeting wraps up this afternoon. of that have full coverage as well. professor at the university. i'm going to send it back to you and i'm going to go someplace keep staying warm. >> all right. tohleen, we look forward your next conversation. always giving us that fresh perspective, more realistic percentive. coming up, netflix blows

estimates out of the water as up.subscribers keep signing this is bloomington. ♪

>> this is "daybreak asia." new york.lue in >> extended trade after posting a big beat in fourth quarter earnings. smashingr numbers expectations. they're seeing a record, the company's biggest quarter and ever. the market value is pushed $100 billion. it closed in 2016 at a market $53 billion. aboutk a little bit more those earnings. seems like all directions point up for netflix. is this subscriber growth coming from? >> well, it's coming from all

over. the biggest portion of subscriber growth is outside the u.s. numbers are really good too, a little bit more than 8 million in the quarter. i think a couple million were in the u.s., which is above expectations. really sustained growth. comes from bringing new people in. but it also comes from keeping subscribers. about, as netflix has spent more and more on content, they just have more shows for you to watch and less reasons to end your subscription. it too.art of the churn is impressive as well as subscriber growth. >> i'm more of a fan of the two. season but it's interesting. netflix talking about they're gonna spend as much as $8 programming this year. another $2 billion more marketing. spending worrisome? >> yeah.

is., to some people it that's sort of the bear case for this, right? obviously in after-hours, it's going to be a 100 billion it opens in the morning. but the bear cash is look, this coming out of free cash flow. the budget means they may bleed cash inas $4 billion in 2018. that's the number they projected today. so, you know, that starts to sound like some pretty big numbers and can get worrisome if reason they don't have as much access to capital, if the market.ppens in but look, as long as they're growing, they say they're going to be able to fund everything spending and they'll have this nice library of content. >> so, the next area of subscriber growth, we're looking overseas, right? continuing to look overseas? >> yes. overseas,lk about they've done nicely in europe

and latin america. sort of the underpenetrated market for them. competitive market but it's sort of the next big netflix, if they can succeed there. they've had positive comments on the call, particularly about india, that they're seeing traction there. it may take off in those places. they have an additional leg of growth. the other thing to look for is deals they do with cable providers and with wireless providers. they're doing more of these have netflixally in your bill as part of the package. that's been helping the growth as well. >> all right. thank you so much. our bloomberg technology netflix.there on certainly one stock to watch in the trade tomorrow. ubs, it was a swift miss. the firm kicked off european bank earnings. give us a glimpse of what could be in store, the numbers were underwhelming in u.s. trade shares, ended majorly higher.

european trade, they fell the most since july, down more than 3%. exactlylk about what went wrong here. raymond has the charts that we need to know. >> thank you very much. when ubs c.e.o. spoke to bloomberg, he really, as you would expect, emphasized the positives. getting clarity. two, on taking down legal costs. buybacks. more on buybacks in a little bit. first, the negatives definitely cons. to 3.3%.wn by as much as but because there were all these misses for this swiss bank, right here we're taking a look at the investment banking income here. earnings missing estimates by 63%. look at this little purple bar here. that.n almost hardly see 49 million swiss francs was what pulled in. now, relative to the quarter year, down by about 85%.

i'll repeat that again. 85%. that wasn't the only miss. the wealth division missed by 14% on the order of $100 million. management also missed. people saying it's unambitious in terms of the targets, because lowered.e on buybacks, they're saying because herwhelming said there's 2 billion francs interms of buybacks, butd more. it's too small. take a listen. >> if you look at the size of buyback, it's very -- it's aligned with our capital our needs fornd growth and regulatory requirements. benchmarkn't really it in that way. what we do is physically having flexible capital return policy with an attractive dividend and also an opportunity to compliment it with a share buyback.

>> there you go. said it, right? now to price to book. 85. now, ubs is trading at a higher price to book than its peers. credit swiss also. after these earnings, will people still want to pay this premium? that is the big question. 855.ly, a general look as to where ubs peers.relative to its ubs is in white. not the best performer year on year. credit swiss is up over the past year. is aboutbank in yellow flat. barkley is in the negative. if this is the bellwether for anything, the swiss miss harbinger of things to come. >> yeah. very different from what we saw from u.s. banks as well. coming up, the i.m.f. warns forcy makers to be prepared a new recession. where are they seeing bright

spots? we're going to hear from maurice, next. this is bloomberg. ♪

>> well, the international monetary fund is warning policymakers to be prepared for itew recession, even as predicts global growth will accelerate. chief economistic discussed the outlook for growth and u.s. tax reform. emerginglook at the and developing markets, we've seen them open up. seen them reform. we've seen them introduce and fiscal frameworks that are consistent with stability. we've also seen many of them, all, converge toward levels. country income not always that close but it's gotten better.

markete, you know, friendly reforms do definitely work. an tax policy, you have to be careful on what you tax and what you don't. and you have to be careful about revenue and what you spend it on. saying tax cuts alone, that's not a recipe for growth. a recipe,e part of but there's a bigger picture there that you don't lose sight of. get back to the study today. which countries stuck out today? story of ahe real better economic growth? which nation surprised you? >> well, you know, at some level, the eurozone has just because the, theknow, recovery from global crisis has been punctuated by a euro area crisis. even, you know, not that long wereback in 2016, we worrying about deflation. now we've seen a very widely

based upsurge in growth in europea --france, germany goes m strength.o so at some level, that is a very pleasant surprise. japan too. lift.oticed that, real >> well, japan has benefited aom, you know -- there is temporary budgetary support, but environmente global and the recovery of world trade. and asia in general, you know, growing strongly. was the i.m.f. chief economist speaking to bloomberg forum inworld economic davos. we'll be live all day in davos of course. by big names, including uber's c.e.o. and chairman.'s stay tubed! >> it's riches when it comes to great guests.

hour, up in the next "daybreak asia," more insight into the b.o.j.'s upcoming policy. outlooksng to get you from sony financial holdings. this is bloomberg. ♪

yvonne: 8:00 here in hong kong and we are at the bank's headquarters. i'm yvonne man. top stories this tuesday, battle over, but the war goes on. u.s. lawmakers agreed to end the shutdown, but funding still runs out in three. -- three weeks. new highs andhit the asia-pacific looks to extend the rally. betty: from our global headquarters, i'm betty liu in new york, just after 7:00 p.m. after -- dark cloud president trump slapping panel --

disappointing numbers in las vegas. ♪ yvonne: of course, still waiting for the president's signature to finish these -- shut down. the short-term breakthrough we saw in congress in the last couple of hours, i'm not sure when that will come through. in the meantime, asia seems to be more focused, shifting the sentiment towards the boj. that decision is coming in the next couple of hours. no big changes expected, but it comes down to communications from kuroda. it seems like it differs on where they think the boj will go in 2018. the bloomberg chart. ever since january 9, you are seeing the red line here, when the boj decided to reduce purchases on the long and. --

end. we've seen the market shift a bit. the yen has shifted eight out of the last 10 days versus the dollar. but if you look at the 10 year yield, it is only up to two basis points in the same period. we've come down a bit as well. this is why we are seeing that kind of direction. i'm not sure we will get much more clarity here after that boj meeting. overall, you've also got to watch where the dollar goes when you are looking at the japanese currency. what's been surprising is to see that continued dollar weakness, despite the rising equity markets here in the u.s. asia, let's get to david ingles, who has more on the boj. david: absolutely. to get to your point, part of

the dollar weakness is why we are seeing dollar yen trading below 111. let's look at the equity markets in japan and south korea. australia is snapping a six-day decline. lots to watch today. philippine gdp coming out. 10:00 a.m. local time. singapore with inflation. the boj will be the first one out and the most important, coming up in three and a half hours. a press conference coming out later. the south korean won. south korea was out with some guidance earlier on. what they are basically saying, state backed companies who don't need to raise debt abroad, don't do it for now. if it's not urgent, avoid it. some strength coming through in the south korean currency. a quick spot check here. year to date asian currencies against the u.s. dollar, every single currency has a gain with

the exception of the pesto. -- peso. it is arguably one of the best-performing economies in in fact, but at some point it is going to hurt. it is starting to her in the currency. looking at dollar-yen, i will look at that in a moment. medium forecast have been strong. 113 is where analysts expect this to be by the end of this quarter. same chart, but this one is on dollar pesto -- peso. see, lower in the blue line, that is the forecast for strength coming through after substantial weakness in the currency until november. as not quite got in line. lots to watch out for today.

very quickly, some stocks we are watching. australia.e in of course, washing machines, lg electronics, 2.3% down at the open in seoul. yvonne: we'll talk about the trade tensions in a bit. thank you. the three-day federal shutdown is coming to an end, lawmakers passing a stopgap till to pass the government for the next three will -- weeks. jodi schneider has the latest. it seems like there's a term here sticking in d.c., the schumer shut down. what can chuck schumer do now to help immigration? reporter: the democrats got very little in this deal. they had held out and this is why the government was shut down because the democrats said, we need to do something about restoring protections for undocumented

young workers in the u.s., who came as children. we can't let them be deported. they decided to put the fight on this ending bill on this bill. once the government shutdown, the blame game started. the schumer shutdown seems to be one of the hashtags that's sticking. the democrats now have to try and push when the spending bill comes up again on february 8 or before then to get this immigration issue on the floors of both chambers and also to get a spending bill passed. the interesting thing about spending is this will be the fourth short-term spending bill congress has passed the new fiscal year began october 1. people are now saying they will probably need a fifth one. as you mentioned, democrats got very little we've got a three-week respite before we are back at it again. progress you think

we will make in the next three weeks? reporter: it is hard to see, isn't it? there are some republicans who want to deal with this. senate majority leader promised the democrats they will get to bring this issue up on the senate floor. there are some republicans that allowing youngs, people to stay in the u.s., amnesty. it would be hard to get a deal. now tensions are higher than they were even before. it's hard to see how they can make progress, but this is a key issue for the democrats and they say they are going to negotiate with people on the other side of the aisle. yvonne: the president made his first big steps when it comes to trade. learning in the last couple hours, he's imposing taxes on solar payroll -- panels, washing machines. reporter: the president has made good on a campaign promise, one he has talked about but not done

a lot about, to really take on what he calls unfair foreign competition in the trade space. it looks like, from what we hear from the u.s. trade representative's office, that they will be slapping sanctions as high as, tariffs, as high as 30% on solar panels made overseas and 50% on washing machines. act,ction 201 of the trade it allows the president broad authority to take action against what the u.s. views as unfair trade practices. it will be interesting to see the response he gets as he goes on the plane to davos. he will almost certainly get reaction from foreign governments. betty: thank you so much, jodi schneider. everything happening in washington. let's get the first word news with jessica summers. you.ter: thank

netflix surged in extended trading after smashing expectations for new sign-ups in the fourth quarter. the service attracted 8.3 million next to customers. that's about 2 million more than analysts were expecting and it now has almost 180 million viewers worldwide. third to 3.2 a billion dollars, while earnings almost tripled from the previous year. tradertled commodity noble closes a two month on news of a potential buyer from china. is saidate conglomerate to be keen, although sources say they are not yet in contact. noble has been battered by losses, write-downs, and controversial accounting. it is trying to restructure a deal before payment you -- due january 29. a brexit backer is warning that the u.k. risks being left behind if it ties itself to closely to europe. britain willsays

become a vhs economy as the rest of the world has better technology. the u.k. to remain in the customs union. 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: the bank of japan governor kuroda faces a communication challenge on tuesday. he needs to show his usual confidence that inflation is headed in the right direction while also pulling off speculation about policy normalization approaching. our policy editor kathleen hays is in tokyo for us this week. talk about how tough a balancing act this is really going to be for governor kuroda. as i am listening to you introduce me so eloquently, i'm thinking, this is the absence --

essence of modern central banking. think of bernanke, janet yellen, as he hashi, kuroda, to choose his words so carefully. not just in changing the economic forecast or the policy statement. act a delicate balancing because he wants to stress the success of. whatthe boj has done he wants to stress progress on inflation. he doesn't want to give markets the impressing -- impression that he's ready to move the door towards less stimulus. that's the question for him today. all economists surveyed by bloomberg say no change now, but almost have say they will be some kind of a change over the course of this year. wrapping up eight today meeting, meeting, i two day will have a press conference live on bloomberg television.

there is a lot on the boj and their chief. in the second to last meeting in his term as head of the bank of japan. betty: looking quite chilly over there as well, kathleen. what is expected on economic forecasts? will it continue to look brighter in japan? reporter: you know, there are two things they will do at the meeting. one is make no change in the zero interest rate policy. that's what's expected. the other is to do as they do four times a year, changing the inflation forecast. it is expected to say the same best stay the same. -- it is expected to stay the same. to a former boj board member. she is now a professor. she is a little concerned about the sustainability of growth

-based so much on exports, .epending on depreciation of the yen she says there's enough growth now that it's time for the boj to start signaling it is ready to move. let's listen to what she said. thate sustainable issues this year, the growth will be very high over last year. it's time for the boj to do more normalization, maybe more qe. then prepare for the future inflation, which is likely to happen next year or two years after. very interesting big picture point she's making. the fed normalizing raising rates, even though inflation happened at the u.s. target. ecb getting ready to reduce bond purchases. they have not hit their targets either. she said why not the bank of japan? that's one thing people are not seeing it. it's time to make that space available for a future recession. some people are saying it will

be after the 2020 olympics. it's interesting, and something the boj has been debating over years.t couple of a lot more coming up. a former senior adviser to the boj will share his thoughts on where they are headed next. betty: that's right. we'll be back with you in a moment. we will have more on the bank of japan. she will be joined by a former senior adviser to the central bank, sunny financials chief clyde -- economist. yvonne: later, we talk about the -- who says of policymakers will remain cautious. this is bloomberg. ♪

yvonne: this is "bloomberg daybreak: asia." i'm yvonne man in hong kong. betty: i'm betty liu in new york.

we were just talking about the bank of japan wrapping up their latest two day meeting. observers see no change in policy, however there are expectation there will be changes to the future strategy. economics and policy editor kathleen hays is in tokyo for that meeting. tell us more. i know you have a great guest coming up. reporter: i certainly do. we are in the communication business. central bankers nowadays have to be concerned about communication, too. particularly if you are governor kuroda wrapping up a meeting at the boj knowing that traders and investors around the world are waiting to hear what you said not about where the boj is and where it is heading. we have a special guest. he is senior fellow chief economist at sony financial holding. he's a former senior adviser to the bank of japan and former chief economist for j.p. morgan here. good morning.

what is the challenge today? >> probably the boj was surprised by seeing the markets reaction to when the boj cuts the purchase of -- in january. we expect the boj or governor kuroda to play down the importance of this action by saying this is just a technicality, focus on the rate rather than the boj's action. become the market has quite sensitive, even a small boj --hink they've [indiscernible] otherwise, the yen could be strengthened. that is possible. that could undermine what

happens in the boj, so that would be bad for inflation. the boj probably wants to see the market sentiment stabilized and the yen stabilized. that is on the condition of the boj will be able to move toward the exit. reporter: this reminds me a little bit of a magician or someone saying, "don't look there, look over here," because they don't want you to look there. there are many complications. successful, if they keep buying more available jgb's, there will have to be a point. it is getting closer when it will have to move to some kind of exit. why not start laying the groundwork now? >> the key is the yen.

if the boj will let the markets can be, the boj could move today or in the new future, then the yen can be strengthened. the market position of the yen the short-term position will turn into the long-term position. if that happens, that will control 10% to 15%. -- in my view, the dollar-yen should be at 116 are above 115. even if the dollar-yen falls itause of the boj's action, should be remaining above 100. reporter: communication. you think that the boj has more

challenges. did they make a mistake with the bond purchases? did they learn something that now we will see the boj doing something they have not done in the past? >> yes, i think they learned 9 whenesson from january the boj reduced the amount of the jgb purchasing. the boj will remain quite patient, especially in terms of the communication with the back and -- the back. they should be patient with monetary easing. openings by prime minister abe, 3% increases. will they get anything like that? >> the company has already announced that if a company raises wages by 3%, they could get the benefit of the corporate tax rate cut. a rise in basee

wages to be a little higher than the last one. i think the government initiative is good, but that is not enough to raise rates. reporter: in terms of the decision now coming from prime minister abe and his team, it is not just whether or not they reappoint governor kuroda. it is intertwined with the question of the next deputy governors. well governor kuroda be reappointed? who do you see stepping into those seats?why is it important? >> i also expect the boj, that kuroda will be reappointed as a governor. currently, we have iwata, a good academic person.

the other is supportive of financial stability. .t is a very well-balanced someone from the boj to be a candidate. the remaining question in who one, it couldher be an academic person or someone from the mls -- mof. on track for three rate hikes this year, maybe ecb starting more normalization. does that make governor kuroda's job tougher? >> i think the key is what will happen with the ecb. if the ecb will raise the rate thathe bonds rise, then

will raise the bond yield of the u.s. the dollar-yen will rise. -- governororrado's kuroda's job easier. reporter: we shall see. thank you very much for joining us. sony holding financial group senior chief economist and senior adviser. we will send it back to you guys. a lot more coming up. yvonne: great interview there. thank you. don't forget, you can always find in-depth analysis and the days news breakers on bloomberg radio. you can also download the app. this is bloomberg. ♪

betty: this is "bloomberg daybreak: asia." i'm betty liu in new york. yvonne: i'm yvonne man in hong kong. getting a response here to the president imposing a tariff on companies largely affected by this. samsung is one of them. they say the u.s. position is a great loss or u.s. workers and consumers. a lot of this -- the headwinds from this could actually be huge. a lot of these u.s. manufacturers rely on so much of some rely onroad, 80% of their supplies internationally. that's quite a big some. betty: it is. some companies will be quite unhappy. one of president trump's major moves to combat what he sees as unfair foreign competition, 30% to 50% on

solar panels and washing machines. many of these companies in asia like samsung. up, marketing casinos paying off. this is bloomberg. ♪

yvonne: tuesday morning in singapore right now. we are hathaway -- half an hour away from the open of trading. i'm yvonne man in hong kong. betty: i'm betty liu in new york. you are watching daybreak asia. -- "bloomberg daybreak: asia." let's get to first word news with jessica summers. reporter: u.s. stocks hit another record as lawmakers grudgingly accepted a deal on ending the government shutdown. the move towards a short-term spending bill would find federal agencies through february 8 and sets the stage for the government to reopen after three days. investors have appeared mostly indifferent, weighing it against optimism over growth and corporate earnings.

meanwhile, the white house officials say president trump became frustrated with commerce secretary wilbur ross last year over the pace of trade action against china. we are told they were at loggerheads as the president sought quicker and aggressive action. they have reconciled some of their disagreements. the white house says trump "loves wilbur" and has full confidence in him. fundnternational monetary is warning policymakers to be prepared for a new recession, a even as it predicts global growth will accelerate in the next two years. to 3.9d raises forecasts percent in 2018, up 2/10 from the protection -- projection in october. managing director christine lagarde welcomed reports that says threats remain. >> from the crisis, low-carb you -- activity, aging trip -- population, and future potential growth. all of that will continue to weigh on medium-term prospects.

reporter: the asian infrastructure investment bank says it wants to sell dollar bonds and is open to securities and other currencies. has expanded bank to 84 member nations from 57 when it opened two years ago, and wants to raise the figure to 90. the president says he's ready to go to market now, although the size and tenor of the offering is not yet complete. 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. president trump has made his first big move on trade, targeting agent with tariffs on solar and washing machines. samsung just responded, saying the decision is a "great loss" for u.s. workers and consumers. let's bring in america's power and gas editor from san francisco. what does the president expect to gain from all of this? >> thank you for having me

today. what does the president have to gain? i believe the idea behind it least the theory is, if you raise the cost of imported solar panels from other bigger manufacturers in asia, you level the playing field for manufacturers in the u.s. that have factories here. this will spurt and manufacturing in the u.s. as opposed to having all these panels coming in from, from the most part, from china. yvonne: but a lot of these companies rely so heavily on parts that are made abroad. who exactly wins here, and who loses? >> that's right. u.s.ding to bloomberg, the solar industry imports about 80% of its supply right now, largely from china.

the rooftop solar industry is definitely not a winner. but they do have factories in the u.s. solar, the u.s. solar so doesurer, and also tesla, making their own rooftop panels in new york. we've heard from chinese manufacturers have -- who have talked preliminarily about moving some of their operations to the u.s. betty: is the impact going to be that immediate? we can see the refraction -- reflection in the stock price, but what about the company's bottom line? >> right. the stock price impact has definitely been immediate. the interesting impact you have seen to the shares of rooftop solar is instead of dropping on this news -- you would think that they would, considering they will face higher costs -- they are actually rallying tonight.

the expectation from analysts is that the tariffs are lower than what the companies had factored in and what they had expected. the impact may be less for them than originally expected. we are already hearing from some analysts about what the cost might look like for them after place.iffs are in we are hearing anything from 3% increase in cost for rooftop solar installations, and 10% increases for utility scale larger solar bonds because of the tariffs. betty: can you go into more detail? outcome fore the these rooftop solar installers and solar farm builders in the u.s. outside of the price increases? aside from the price increases, the solar industry association has already put out some projections today as to is and theb loss

limitations to solar investments might be as a result of trump's decision. the first thing they put out is the fact that they think 23,000 jobs will be lost in this year alone due to this decision, because of the rising cost. they also warned they believe billions of dollars in solar investments may be killed altogether or delayed. yvonne: we have to leave it there. bloomberg's power and gas america editor joining us from san francisco. solar is a big story today. are we going to see reaction in asia? let's take a look with david ingress. -- ingles. david: there are lots of details here that we have to be aware of. this was excellent highlighting things. these a lot of these companies are listed across the world. some are in asia, but they don't necessarily make them in china. a lot of them are made in malaysia.some are exported into china. i will show you that in a

moment. just to give you a sense of the larger players, this is our bloomberg large solar energy valuations. this is the index that tracks these stocks. not really doing a lot so far over the past 12 months. and bmb is the function. -- mbmb is the function. any sorthese guys have of large exposure to the united states. it doesn't mean outside, of these names you won't have a few but as far as the big names are concerned, stock reaction? maybe not. maybe it will get a little kick, but they might not matchup. the bigger picture is this. have a look at this. we have essentially put on a map the operational solar plants across the world. a lot of that capacity is actually on the chinese mainland. yes, there are many in the u.s.

as well, but as far as where the exports go, china produces a lot. it also imports a lot. maybe the impact won't be as big as what the headline suggests. have a look at the chart. you consume in as well. in as well.oom china, europe, so on and so forth. washing machines is the other one we are following very closely as well. on that one are higher. as much as 50%. lg is a big player in that market. we are down 4% over three days. just to give you a sense of what the exposure of lg is -- bear with me, lots of numbers. lg just coming out with a statement that they are disappointed. expected.tty much north america, 30% of the revenue, but they make more than

washing machines as well. they don't break it down by washing machines into the u.s. home entertainment, i think we have it here. appliances. a breakdown of revenue for algae, 30% to the u.s. lg, 30% to the u.s. as we said, they put out a statement saying they are fairly disappointed. stock is down at the moment 3.7%. very quickly come a look at the macro space. stocks are up. dollar and majors mostly on the rise. lots of things to talk about. gdp,ve the boj, philippine singapore inflation coming out as well. and the chinese markets, we are watching casinos. betty: thank you. byying with casinos, surging the most in nearly two years in new york after quarterly erred -- earnings. here's bloomberg intelligence

gaming analyst margaret wong. the us through some of biggest drivers and what this means for some of the competitors like sands. reporter: thank you. it was a great quarter for wynn, due to the exposure they had in the premium sector, which they've always been good at, and has been a pioneer in the industry in terms of leading with an excellent product in the market. for that reason, the fourth quarter was excellent for them. we believe with additional enhancements on the property that steve wynn has planned for phase two, that will accelerate market share in terms of revenue market shares that they have over the entire market. , if you take aer step back and look at the overall, macau gaming revenue. mass market surprisingly up 17% as well. it has always been in the background.

it's not the headliner, but it's coming back a little stronger than anticipated. what does that say for the rest of the market? this is reporting later week that they are heavy in the mass market exposure. again, they deliver a very flagship type of property with a very mass oriented product. that says a lot to what we expect for the company later this week, and likewise for the home market. this year will be a very remarkable year for them, i think. betty: and that's what steve to suggest during the post-earnings call that he expected good times to continue to roll in macau. reporter: that's right. there are a lot of drivers for that. you can think of the two segments of the business, the high-end in the mass-market -- and the mass-market. most of the high-end rollers are coming from china, driven by the junkets, the middleman that

bring them back into macau. they are coming back. there is less of that fear to go a good time. have there are more premium products in the market. we are not just seeing wynn. there are other players getting involved. sands is rebranding their property, which means they are we doing the same regis hotel, adding more suites on the property. even the mass oriented players are trying to get a piece of the business. at the same time, across the board, there are non-gaming amenities that are increasing. mgm opened a new group -- opening a new resort next week, more will include non-gaming attractions that will bring more of the mass-market to come back to macau. yvonne: and it's not just a competition in macau, but also other regions.

is demand out there to drive multiple markets like the philippines, singapore, and potentially japan? reporter: that's a great question. people are optimistic about macau. it's truly because there is so z going that was -- buz around. there's more reason for people to go. if you look at the overall asia gaming destination. the big advantage macau has is it is so connected to china. ep's perspective and infrastructure perspective, it is easy for people to have a good time. have excellent products. if you look across the board, it services all parts of the business from the high and to just family leisure and entertainment. markets,look at other like singapore or the philippines, they have a segment of the chinese business, but due to the location and currency and visa restrictions, they also

have more diversity when it comes to gamblers. they cater to the high-end southeast asian players. yvonne: all this leading up to the chinese new year, a lot of happiness and money flowing. margaret huang, thank you. coming up, earnings and growth. how asia-pacific stocks extend all-time highs. how long can this continue? market strategy next from ig markets. this is bloomberg. ♪

betty: this is "bloomberg daybreak: asia." i'm betty liu in new york. yvonne: i meet on man in hong

kong. asian stocks getting a strong start to the year. optimism on earnings. also, the u.s. government shutdown appears to be about to finish. seems like all signs point to green. let's bring in a market strategist from ig asia. it is hard to be a contrarian these days, but if you look at the pace of the stock market rallies this year, the consensus is enjoyed the party while it lasts. are the alarm bells ringing for you yet? >> the mining. i -- good morning. i think we have a general consensus in the market that nobody wants to be too optimistic, but at the same time this trend is one that nobody is fighting. onceng at the s&p 500, again on monday, it went up. if you look at the market internals, the core ratio is something we see hanging onto subdued levels.

, there has market been various doses of optimism from growth or earnings feeding into the optimism, so it is one that the margaret is not -- market is not interested in fighting right now. yvonne: yes, you can't really fight the trend. i want to put up a chart for the viewers to see. if you think the u.s. is overbought, take a look at what's happening in china. the difference between the u.s. two-year yield and chinese h shares is a little blip in u.s. two-year. on that note, valuations are exceptionally high with the exception of financials and energy, which is typical this late into the cycle. given this overshoot, does that make you change? do you have to go lower when it comes to valuations? >> i'm looking at the markets in

at theally broadly components. it is carried through to 2018, whether you are looking at the expectation for the u.s. dollar to remain weak, and in terms of how you are expecting growth. overall, the trend is not going against asian markets. i think the markets right now are looking a lot more into asia, emerging asian equities. i think given that scenario, this is not the time yet, yvonne. betty: we are seeing another gauntlet thrown down in u.s. asia trade disputes. we have transitioned trump imposing new -- president trump imposing new tariffs on solar imports and washing machines. lg stock now down 5%. you mentioned trade risk. do you think it is ratcheted up

now more with this move from the u.s. president? >> i think definitely this is movingng of a risk of forward. to start off this year, we have seen a little bit more in terms of the price for the u.s. come in china a showing some of the ammo they might have in the treasuries. there was an expectation for trade disputes in early 2017. we are at the point again. -- play out,yout i'm not sure if it will benefit each other. one thing to monitor moving ahead, i think at the moment the market is just having a look at how things are going. bd as tot is still t

what the final results are going to be from something like this, but speaking about trade, we have to look at the currency angle. you say to short the u.s. dollar. certainly seems like the right call given the behavior of the despite the interest rate differentials and where the fed is headed compared to, say, the boj. at think looking at how the u.s. dollar is moving, it is accelerating in decline faster than what the market has been next acting -- expecting. i do think there are still downsides. this week we had a bit of consolidation. watching the policy from the central banks including the bank of japan and the ecb. they could actually have a little more dovish rhetoric coming through from central banks, given the type of

reaction we saw earlier when there were expectations for more hawkish moves in the near-term into the end of this year. i think the market is saying moving forward, the market is still expecting frontloading through policy expectations in the u.s., and eventual expectations of the other central banks to join the fed in ness.sh betty: thank you. jingyi pan, market strategist at ig asia. we keep getting headlines, south korea seeking to reinstate u.s. products, retaliation against president trump and what he has done with solar panels and washing machines, imposing tariffs up to 50%.

south korea seeking to reinstate those on u.s. products. we were looking for some kind of retaliation from the likes of china and south korea. seems like we have been hearing that. we have to see how things will develop. coming up next, years and no tech outlines. a closer look at the technology behind amazon's go store. this is bloomberg. ♪

yvonne: this is "bloomberg daybreak: asia." i'm yvonne man in hong kong. betty: i am betty liu in new york. years, no registers, no money changing hands. that's how amazon sees the future of shopping. they launched a store in seattle with no checkouts are no staff. we went to see how all of this is working. reporter: we are here in front of amazon go, the online retailer's new convenience store concept that allows you to enter the store, get what you want, and leave without having to stand in line or pay a cashier. customers have to download a smartphone app, and they use a code when they enter the store. from there, the machines takeover. they can take from sandwiches, salads, wraps, drinks, typical convenience store fare like milk, eggs, bread. all of those conveniences. get what you want and walk out

without paying anyone. feel youeature is you were charged for something mistakenly or you were not happy with something, there is a refund button you can press to have the charge illuminated from your account. we were here today. monday.ned it is at seattle's new downtown headquarters. there was a line around the block at lunchtime, people waiting to get in. the $550 taking on billion convenience store industry. this is just one store. there are 150,000 around the country. we will see where this goes and whether they bring this concept other markets as well. eronne: that was spencer sop in seattle at the new amazon store. that about wraps it up for "bloomberg daybreak: asia." we were talking about the fallout coming from president trump slapping tariffs on solar panels and washing machines. we have seen the fallout in

south korea this morning. absolutely. shares of samsung and lg are down considerably. south korea coming out saying they are seeking to reinstate tariffs on u.s. products, south korea asking the wto to suspend trade concessions. those companies, samsung and lg, basically saying they are disappointed. samsung shares are actually up, excuse me. lg is down by around 2.3%. thand been down a bit more that, so it is kind of retracing some steps. looks like there will be a lot of news on the trade front throughout the asia session. much more ahead. standby for "bloomberg markets." ♪

♪ rishaad: president trump slapping tariffs on asian imports. samsung and lg, so disappointed they may impose their own duties. makers approve the end to the shutdown, but there is still drama on capitol hill. u.s. equities are high, and the asia-pacific is extending the rally. i'm rishaad salamat in hong kong. i'm haidi lun in sydney. sticking to the script. netflix smashing forecasts. 2 million ahead of expectations. this is "bloomberg markets: asia." ♪