frome: we are live bloomberg's asian headquarters. i am yvonne man. welcome to "daybreak asia." asia-pacific markets to open higher after financials gave wall street a lift. a lot of attention turning to the bond market. google's parent may give tech a boost. improving at business. -- ad business. kathleen: i am kathleen hays in new york. pushed the u.s. has been around for too long. china rejects the president's claims of currency manipulation.

beijing says it change rates will be determined by the markets. so many things going on in the world today. president trump was the least of it today. definitely his tweet about amazon. so many people looking at the global bond market. it all started in asia and tokyo. speculation on the meeting next week. governor kuroda will signal some kind of tweak to yield curve control, may be buying fewer bonds, not changing stimulus. just taking some steps that would take some of the pressure ,ff japan's regional banks having a little more trouble dealing with their portfolios, to do, asthey have long as the boj is buying up so

many bonds. yvonne: it really forced the boj to step up and fixed rate operations. calm marketem and nerves at the moment. we have seen it come full circle. kathleen: we sure did. as a matter of fact, travel into treasuries. at u.s.take a look equities because despite all these goings-on, the stock market had amy entering day, closed lower. meandering day, closed lower. nasdaq rallied ahead of the google earnings, and google did not disappoint, so that was a plus. in terms of the global fixed-income market, we can see that there was some action there. the 10 year yield up to 2.95% this afternoon. at bond well above 3% now

3.09. aboutllar gaining up 4.3%. nymex crude -- other things going on with iran. 0.7%,crude down about yvonne. yvonne: a pretty lackluster day when it comes to equities. take a look at how equity futures are pointing. we are seeing the new zealand but we are seeing green across the board, pointing pretty positive at the moment. asian currencies, we did see a lot of moves in dollar-yen. the yen paring its gains. markets trying to figure out what the boj is going to tweak, easing policy next week. 111.41. one of the biggest moves or biggest asia performers out there when it comes to the yen. of aussie and kiwi, a bit

downside overnight. socgen saying these are among the asia fx currencies held hostage for a drop in the renminbi. selloff inthe japanese jgb spreading across the globe when it comes to fixed income, and the spread in the curve steepening to 32 basis points right now, but the aussie 10 year yield, one of the biggest receivers of japanese money, of course. we did see the 10 year yield climbed the most since june on monday and the selloff in germany as well. the attention will be when the japanese markets open at 8:00 a.m.. joining us from new york -- >> president trump says the u.s. will no longer expect add trade deals. a promotion at the white house, he said the u.s. had been taken advantage of for too long. before -- two days the event came two days before trade talks.

may prime minister theresa and her top diplomat preparing for a no deal brexit. the e.u. says it still does not have a clear idea of what britain wants after the split. she wants to sell her plan for keeping close ties with the single market. thaty hine told germany britain will not step back. >> there is a very real risk of a brexit no deal by accident. manyis because i think people in the e.u. are thinking they just have to wait long , and britain will blink, and i will not happen. it has noas repeated desire to boost exports through devaluation of the yuan. beijing says exchange rates are

determined by the market and there will be ups and downs. 2% by thean trade pboc. the rate tends to track it. 29-year-oldf a canadian man who shot and killed two people and wounded 13 others in toronto says he suffered from psychosis and depression. the dead are a 10-year-old girl an 18-year-old woman. it is not clear if he took his own life. his family say their hearts are in pieces for the victims and the city. global news, 24 hours a day, on air and at can talk on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am jessica summers. this is bloomberg. yvonne: thank you. alphabet jumped as much as 6.1% in late trading after reporting a strong second quarter. helping the company move past costly regulatory trouble in

europe. for more, let's get to alistair barr, joining us with more on this right now. alastair, a big beat on revenue. what do you think was the biggest take a whiff of the numbers? this does not damage a company that has been hit with the largest antitrust fine in history. the executives on a call with analysts it. sound -- did not sound perturbed at all. they search for something using google. very, very well. google is continuing to invest a lot in its advertising business, even though the business is one of the oldest moneymaking operations. in addition to that, the cloud business was doing relatively well, although still a laggard compared to amazon and microsoft's is your -- azure. more work can be done there. >> they really discounted this

e.u. fine, which we learned about a couple days ago. itdid see them commenting on during the conference call. take a listen. >> we will always take a constructive approach to appease the commission's position. but we are also looking forward to finding a solution that preserves the anonymous benefits to android users and so on. there is more work to be done, and i think it will become clear as we go along, but i am confident that we can find a way to make sure android is available to use everywhere. >> in terms of the fine, how will this impact alphabet in the long-term? do you think investors will be comfortable with the regulatory oversight? alastair: that was a pretty telling comment from the ceo there. really one of the most concerning parts of the e.u.'s

ruling was this idea that in europe, google cannot basically force android makers to include google search and chrome, two important services in their handsets when they ship them to customers. theirelps google with mobile and. they can come up with some solution which means android will be distributed widely, and we have interpreted that as meaning they will still give it makers,e to handset which means android will be on the vast majority of smartphones around the world. they will have to come up with some solution as far as tying services like search to the android platform. excited.till to be android will be everywhere all over the world. that was maintained by the ceo today. >> i wonder -- they just seem

like a steamroller. nothing needs to stop google right now. can they sustain revenue growth of more than 20% indefinitely? alastair: one of the interesting things from earlier this year was another e.u. regulatory hit was privacy law that came in in may, but we expected to see potentially some impact on the business, but there really was not any. on a relative basis, google may have benefited compared to some smaller players. also going forward, another really big service that a lot of people use -- google maps -- google has not really tried to make a lot of money from that. on the call, some executives said they will start running more ads to google maps so that could get analysts excited, provide more ad revenue growth moving forward. will notent mcneese -- make me stop using it. thanks to alastair.

let's get more on the wider stock session on wall street. bankshares gave a boost to trump. oil futures. su keenan joins us to try to put it all together. digesting the warnings from global leaders that trade wars could hurt global growth. let's go into the market snapshot because the dollar did gain. the bonds were down. what you see is the s&p 500 financial sector, the strongest part of the market, up better than 1%. the nasdaq 500 getting a bump, except given the fact that you probably would have a lower market. let's go to the big movers. stocks.t the middle two hasbro had very strong earnings. are sayingalysts investors should not worry about the collapse of its key rival, toys "r" us. it looks like they heated that advice -- heeded that advice.

ist you see with amazon reducing its much bigger loss. it was caught in the bull's-eye of trump's. he is concerned about the washington post, co-owned by the ceo and founder, jeff bezos, talking about antitrust issues which concerned investors. fascinating story about papa john's founder, ousted for improper remarks, trying to buy his way back into the company. they are talking about poison pill. very exciting stuff. the stock down in a big way. let's go to tesla. the other dramatic story. it has been a rough ride for tesla. year-to-date, it is down in a big way this month. let's go into the bloomberg because investors were particularly concerned about cash flow. suppliers toits give back some of the money it was given in advanced payments. gtv is where you can find these charts. tesla's cash flow going negative

to the end of last year. the good news for tesla shareholders is that the bears on the street, the big hedge appeared to have reduced some of the bearish bets, so it is not looking that negative as it was weeks ago. yvonne: meanwhile, we all oil --de the lowest in a month saw oil slide the lowest in a month. su: that moves oil higher. below 68.e also oil it has been a pretty big drop. the stronger dollar, the concern about rising supplies. wednesday, we get our big data out. saudi arabia raising output. let's look at the big picture price chart. the warning from trump to iran -- be cautious. if you threaten us, we will threaten back.

that was the essence of his sunday night tweet in large, capital letters. met had the market briefly concerned, but the direction, many believed short-term, lower. gold, definitely lower short-term is what the futures are telling us. hedge funds have run from gold and piled on the bearish bets. yvonne: especially with that stronger dollar. thank you. su keenan with a wrapup on wall street. an agency has thrown in the biggest brands with $100 million in annual billings. how are trade tensions affecting his clients? we will hear from the boss of super union. kathleen: we will dig into a big story. china says it has no desire to devalue it. we will see. this is bloomberg. ♪

yvonne: this is daybreak asia.

i am yvonne man in hong kong. kathleen: i am kathleen hays in new york. china saying it is not interested in devaluing its currency in the middle of a trade were even though the currency has taken quite a beating lately. light on a vital part of our oil chain. we have the bank of japan -- are they going to start tweaking their yield curve control policy? have the advice chairman and former u.s. under secretary of state and former deputy u.s. trade representative. welcome back. bob: great to be back. kathleen: i want to start with iran. transit point for 30% of the world's seaborne trade in crude. iran threatening to close it. is that -- could that actually happen? bob: it is very a mike leach iran would do that. it would be a last-ditch measure if they ever did it at all because we get relatively small portions of our oil from the

countries in that area. we got about 10% over imported oil from the gulf. it would not hurt us that much. it would hurt china. it would hurt india. it would hurt a lot of the developing countries in the asian region, and those are countries iran wants to work with. those are its friends and allies, or at least friends. a lot of other countries with whom iran wants to work will be heard a lot more. >> in the background is what will happen with sanctions. president trump threatening to punish anybody who breaks the sanctions against iran once they are in effect. fill us in on the latest? bob: this is something we are not quite sure of. if he wants to enforce secondary sanctions, the europeans and other countries that do financial business with iran or by oil from -- buy oil from

iran, that would be a big problem for iran, but it would create yet another major source of tension with western europe, major source of tension with euthanasia and other countries, and i was one of the negotiators in the last set of sanctions. we were just able to all them together. if the u.s. pulls out, while you run continuous to adhere -- iran continues to adhere to the nuclear agreement, other countries would say we are adhering to the agreement. you are not. we will continue to trade. we are not going to listen. we could take a lot of tough action using our financial system to hurt them, and then you have a big confrontation. yvonne: it seems we have seen this war of words between the u.s. and iran with president trump talking about the dire consequences if iran does threaten the u.s.. it seems like we are hearing the echoes of the rhetoric the president had with kim jong-un. does that strategy work for

iran? bob: that is a good question. iran's economy is not doing very well and would certainly be hurt a lot more by additional sanctions, but the idea of military action against iran, to me, in the middle of the middle east, with all the other things going on, does not seem like a wiseible or particularly thing to do in the way he is describing it, which is a full-scale attack. i can see that he might decide he wants to toughen up some measures of american policy in the region. but you know, fire and fury or whatever he is calling it, against iran, i do not think would be particularly productive. even countries that do not like iran are not going to want an american fleet blocking the region, blocking the gulf, and a lot of military action on their doorstep. that would be very destabilizing.

yvonne: of course, we have been talking about the ongoing trade tensions with china as well and the latest tweet from the president talking about china manipulating its currency. is there any kind of fact behind that, the basis of what we are seeing from the president? bob: not really. the currency has gone down, but we forget the first year or so of the trump presidency went up eight percentage points, but has gone down 5%. why? in part, because money is going out of china into the united states. in part because we are in the middle or beginning of a trade war. down.as pushed the rmb and the chinese are now becoming open in terms of more expansive monetary policy or at least giving hints. that also would tend to push interest rates lower. it encourages or induces capital

outflow and benefits them on trade, but they do not want big capital outflows. if people think they have a policy of pushing the currency down, then it enhances capital outflows. they do not want that. yvonne: how damaging is all of economy?he chinese we had a guest on who thinks this will backfire on president trump because it could push china ultimately over into a debt crisis, causing recession, hurt the global economy. china has announced steps to , trying to economy promote investment. so many things. where are they now? can they withstand it? bob: i think the chinese can withstand it. it will hurt their economy, slow the growth rate down a little bit. missione a lot of any -- ammunition internally and the ability to create liquidity. they were trying for a period of time to reduce internal leverage. to they were beginning

succeed. there was a lot of deleveraging in the corporate sector. they need to keep the economy going so they are expanding monetary policy. they are going to push it up a little bit. continue toing to do both things, but they have the ability to withstand this for a period of time, and the the united states creates a week chinese economy, it will reverberate throughout all of asia and heard a lot of our companies. energy markets are interactive and interdependent. >> is this a game of chicken? if president xi waiting for trump link? -- to blink? bob: it certainly is not good for him internally because one of his goals is a stronger chinese economy, so they are doing the kind of things we have been discussing to pump it up a little bit, increase investment, expand money supply. on the other hand, if it looks as if he is giving in to american pressure, that is bad

domestically because it looks like china is not playing a strong hand. i think that it is troublesome that there was no conversation between mnuchin and the chinese finance minister in buenos aires, but i would hope their conversations going on behind not goods -- this is for china. it is not good for us. a lot of american sectors are going to be hurt. the overall economy in the united states may not be hurt so agri-terms. i don't think the president wants that. you have to big powers who are both major trading factors. both major players in the financial world. the u.s. may be a bigger economy, but it is not a vulnerable, and china is certainly vulnerable, but it has the ability to withstand this. yvonne: we shall see what happens next. thanks so much.

you can get a roundup of the stories you need to know to get your day going in today's edition of daybreak. bloomberg subscribers go to dayb on the terminals and it is available on mobile in the bloomberg anywhere app. this is bloomberg. ♪

yvonne: a quick check of latest business flash headlines now. boss lost aysler colleague. the chief has quit after being passed over as excess essar -- a successor as ceo. the departure of alfredo deprived him of vital management experience as he tried to study the shift following the sudden loss of marchionne. kathleen: new questions about the future of tesla after suppliers were asked to give back cash. elon musk insists the new model

three will pull him in. the appeal could be a sign that something has gone wrong. tesla spend billions trying to ramp up production. it may be disappointed. em.e tensions in the this is bloomberg. ♪

yvonne: 7:30 a.m., tuesday in hong kong. seems to be a pretty decent day today. it was quite lovely, yvonne. i am kathleen hays in new york. the s&p 500 gaining .2%, lifted by banks, lifted by microsoft. google, knocking the skin off the ball. underpinning stocks around the world. i am kathleen hays in new york. yvonne: i am yvonne man in hong kong. you are watching "daybreak asia ." first word news with jessica summers. jessica: mexico is said to be stepping up efforts to clinch a

nafta agreement by the end of august as president trump is talking about a "dramatic deal in the works." he said he is having positive talks with the new mexican president. lopez told reporters he is not aware of any deal. he says he is open to talking to the trump administration about one. he has called for legislation coolool the fastest -- to the fastest inflation in five years. he asked congress to rush a measure to remove caps on rice imports. he called for tax reform and constitutional changes to establish federalism while vowing to continue his violent crackdown on drug sellers and users. more -- warrugs will not be sidelined. instead, it will be relentless, if you will.

talks at the hp -- bhp heading for a possible showdown as the company prepares its --al offer and union leaders rejected bhp's first offer, which included no real pay rise. about half of what workers were expecting. friends and fans of guardians of the galaxy director james gunn are urging disney to reinstate him. they say he has been targeted by conservatives. he was fired after daily caller drew attention to tweets he wrote eight years ago, including jokes about the holocaust, overweight people, and violence against women. or than 200,000 people have signed a petition backing gunn. @tictoc on twitter, powered by more than 2700 journalists and

analysts in more than 120 countries, i am jessica summers. this is bloomberg. you.e: thank we are counting down to some of the major market opens in the asia-pacific. let's go to sophie kamaruddin. we have seen the jgb selloff to global bond markets right now. are we seeing more damage here today? sophie: the question is whether we will see higher japanese yields. a looks like the boj and pboc are grabbing attention among central bankers. benchmark jgb's surged to the most in almost two years to a february high. check out the aussie benchmark as well. treasuries near 3%, so we are seeing the steepening of the curve. it will come down to the july 31 meeting of the boj. most economists do not expect this given week inflation, slowing economy, but it looks like the boj is starting to lay the groundwork for a possible

move. should jgb yields push higher, that could lure funds away from other markets. currency hedging costs for high. investment remains that is what we are looking at for the global bond markets. we will see how the equity session could shape up this morning. modest gainspating this tuesday. banks can continue to rally. we saw the push higher for japanese banks on monday. with tech shares, very much of focus given alphabets strong sales to boost sentiment, kathleen. kathleen: big news out of china. policymakers demonstrating a willingness to tweak policy. even then, it was a subdued rally on monday. why? bob: chinese stocks managed to scrape through. policymakersfrom including relaxation of asset management products.

ed some worries and boosted thinking stocks in china. yuan weakness. given the ongoing trade seesons, goldman sachs more from asia to latin america that could suffer in the coming months with the biggest losers to be determined by the focus of u.s. trade policy. should china be on the receiving end of more tariffs, goldman sees the biggest impact on the korean won, the taiwanese dollar, and commodities currencies like the chilean peso. kathleen: sophie kamaruddin checking the markets from top to bottom and bottom to top. china -- it has no desire to boost its exports. it is determined by the market. tom mackenzie is watching this in beijing. i take the chinese at their word. we want them to let the markets

-- we do not want them to inflate the currency. far?is the response so >> that's right. this is from the briefing yesterday. they said, as you outlined, that this is a market-driven exchange. it is disingenuous, given that there is a fix. they said they were not using this depreciation of the remedy to support the export sector. it is very likely given you have seen a 6% drop over the last four weeks or five weeks. nonetheless, you know, you have economists talking about this yesterday, saying that given the rate environment is raising or being raised in the u.s., given that the pboc is doing this easing, given that you have the weaker economic data points out of china, it does justify a slightly softer yuan. it all ties into the trade war

and we heard a few days ago trump saying that he was ready to go ahead with an additional $500 billion worth of terrorists. not be threatened and intimidated. it just will not work, and saying the u.s. should be rational and calm as the trade tensions continue. yvonne: there is more evidence chineseary easing by policymakers. we learned about the package yesterday that runs the gamut tax breaks. can we call this a shift in policy? unofficially, potentially. officially, the pboc says it is pursuing a prudent and neutral monetary policy, but as sophie touched on, you have seen a number of measures. you saw this record injection of medium-term funds into the system, about 500 billion yuan. 74 billion u.s. dollars. sophie touched on the changes

around these rules for the asset management industry. a softening of those regulations that have seen them pop. you have seen that this year rrre, the trump are -- the could be cut. it could be cut additionally this year. you have had reports that the banks are being told by policymakers to buy some of the low grade corporate bonds as been about has trying to offset the tightening, particularly in the shadow banking sector. we saw shadow banking fall to a record low. there is a concern that private investment will slow because some of these corporate cannot get access to credit, so they want to offset that. suggestsalso data that the banks are just loading up on this chip liquidity from the pboc and not passing on to be real economy, so if that continues, you have economists forecasting you will get

potentially to more cuts. you will not get the benchmark rate this year. certainly, you could see another one or two rrr cuts. yvonne: tom mackenzie joining us from beijing. branding agencies super union says tariffs will not be a game changer for strong bands. jim prior will be with us, next. this is bloomberg. ♪

yvonne: "daybreak asia this is "daybreak asia." miami yvonne man in hong kong -- this is "daybreak asia." i am yvonne man in hong kong. inhleen: i am kathleen hays new york. 70% of his company's products will be affected by the trump tariffs. bloomberg technology reporter in selena, has been covering this. why is it hitting small

companies the hardest? have relied on chinese manufacturing and equipment, but it hits small startups especially hard because they do not have the same ability to be able to offset rising costs from paris and levy it with other products, and they also do not have the infrastructure in-house of customs experts, trade experts. i spoke to one company out in 70% ofnia, and they said their products could be hit by tariffs if the latest round of tariffs go through. if their large competitors like apple decide to observe the cost, they can be completely crossed out of the markets. they cannot afford to do that. startupto another small that has a smart home products and they spent over two years testing their products based on

the one part of their product that is made in china. it is an automatic thermostat subject to those tariffs. they do not want to increase prices. yvonne: what kind of hardware startups are getting hit? how could the threat spread to other companies? selina: the tariffs list does include some big product categories like cell phones and laptops, but if you are targeting half of all trade with china, you will hit consumer electronics products. the first wave of tariffs that went through on july 6, half of those were in the consumer electronics category. the proposal process right now, those hit startups in interesting spaces like e-cigarettes, vaporizers, companies that make electric scooters with part in china. the $200 billion round of tariffs include a wide-ranging area in the consumer sector, and when it comes to technology, it

includes a bunch of parts that go inside technology. it is going to be very difficult for startups to figure out where they fit into it. the tariff code that includes earbuds and speakers is written so broadly it could theoretically include almost any device that connects to the web, including bluetooth speakers as well as virtual home assistants. yvonne: what steps can these companies take now to minimize the impact? is there anyway to cushion the blow? selina: several of the startups i spoke to were acting fast enough to be able to buy a bunch of inventory so for the foreseeable months, they can stave off any price increases or having to put pressure on her margins. some of the other startups i spoke to are taking a wait and see approach. they want to see what their competitors do. if competitors decide to increase costs, they will do the same. it is better than them having to absorb the costs and potentially

being very severely hurt or having to lay off employees. is most better mental for companies is they are having to divert resources away from the very early stages for some of these companies product rollout, investing in sales, marketing, and they are having to stockpile products they would not have had to if there was more stability. yvonne: thank you. selina wang, bloomberg technology reporter in san francisco. let's discuss how the trade tensions may impact global brands as well. our next guest runs super union. their clients include the likes of diageo, ford, bank of america, merrill lynch, and vodafone. joining us is jim prior in hong kong. thanks for joining us. what is the biggest question you still get from your clients about these trade tensions, and have serious should we take the president latest development about the tariffs on $500 billion of chinese goods?

jim: the biggest question we get is how do we become more competitive and how do we get an advantage and how do we do commoditize in the world -- de commoditize in the world? that is the question businesses should be asking. how do we put ourselves in a position where a 10% or so hike wecost prices is off issue are facing because the strength of our brand, product, or services, are sufficiently strong that we can absorb that kind of thing and still be something that consumers want to buy? that is the big question. how do you differentiate, get advantage in the world, regardless of fluctuations in cost prices through tariffs or any other factors? yvonne: we were talking about what we have been seeing when it comes to smaller companies. the clients are able to withstand 10% tariffs. have we seen any change in behavior, whether it is hesitation for investment,, and whatnot? -- could that in capex, and

whatnot? jim: any fluctuation in pricing is a big issue. whether or not the companies are in a better position to observe changes in their product margin is a question in itself because big companies in some ways are governed by many more factors that affect stock price than a can have a big impact on enterprise are you, so i am not sure it is necessarily the case that big companies can just absorb it. of course, big companies have got more room to maneuver. smaller companies may not have that. i think this is part of the general discourse and general toate that businesses need have now, which is about how do i establish myself as a differentiated product or a differentiated service and a differentiated brand that is competitive in the eyes of consumers or in a business-to-business environment, competitive in the eyes of all audiences? how do i build a proposition that is unique and

differentiated, and how do i stop myself from being subject to variations? you're in the automotive or airline industry and oil prices are flexing all the time, that is the same kind of thing we are seeing here. in cost ofng changes goods that happen for all sorts of reasons. it is not just about tariffs. i do not know that the dialogue and is -- dialogue is any different, but it does create an impetus to take place. origin, notuntry of a barrier to success, and you help global brands. this is a global economy. we buy things from all over the world. but in a trade war, when people look at chinese brands, japanese cars, people say they are way better than u.s. cars. you are working with gac motors. tell us about how you apply your models. it seems to be an next relay or of challenge for a chinese

company trying to establish itself in the u.s. now. jim: i do not know that the trade war -- trade war feels like a brand created around this. i am not sure trade war's necessarily are even a thing. debate thatolitical is happening and of course an impact on business, but i do not think it changes the fundamentals about what it takes for a business such as gac or huawei to be competitive. to be competitive, you have got to have a strongly anderentiated proposition you have to understand the markets you are looking to build your business and. you have to adapt and manage the way the brand delivers itself. you have to do that in a way that is appropriate. i do not think it is a different conversation than before, but it gives it's a nuance. kathleen: let's say, looking at zeawei trying to premiumi

their brand, what is an example of how you work? jim: first, it starts with understanding what are the business goals that need to be achieved, who are the audiences you want to target, and what are the strengths and qualities within the organization that will be best deployed to hit that? we work with organizations to set strategy around how their brand shapes itself, how that might influence product strategy, how that might influence the way the brand , etc., across a wide range of disciplines, so we set out a strategy and help out organizations to organize itself so we can best deliver that, and it will manifest itself in the forms of various types of experience. it could be an online digital experience, the brand identity, advertising, etc.. set of consulting services that help to drive competitiveness for an organization.

it is best to align them with each other. principally, what we create is a bridge between organization capabilities and audience needs. yvonne: we have seen beijing boycott goods from certain countries. how real is that threat this time around? jim: there is threat around that. you have to separate the mechanics of how consumers behave from how governments behave, and consumers do not necessarily share the view of governments when it comes to decisions that get made. yvonne: it seems tougher to convince chinese consumers to boycott u.s. brands. jim: because the world is global. consumer demand is becoming increasingly global. consumers have access largely through digital channels in order to make choices for themselves. it is consumerism at its best where demand is driven by what people want and they are able to

find that information for themselves to influence policy, to some extent. governments need to be aware of what consumers want and what drives their decisions. but it still comes back to creating it. china is apple's third biggest market. it is the case already that brands can operate in china with great success. if they get it right and they understand the market. yvonne: who will be the easiest target in a chinese trade war? is there any company that is actually safe? jim: the vulnerable companies are those business-to-business commodity type of businesses. that of course will be very challenging, and if you are an industry that buys raw materials and the impact of tariffs is not something you can transfer into a quality-based conversation, then you are vulnerable. politicians will look for victory in it. i do not know that consumers

want out of it necessarily. i do not know that business really wins out of this, but it forces organizations to be competitive. yvonne: jim pryor, global ceo for super union. joining us now on "daybreak asia ." ♪

kathleen: this is "daybreak asia ." i am kathleen hays in new york. yvonne: i am yvonne man in hong kong. let's find out what stocks to watch. men generally -- our reporter joining us from tokyo. financial,nks, rising on reports that the boj may tweak its monetary stimulus program. are there more legs in this rally? >> we will see. like you said, they had a huge rally yesterday. rallied big names yesterday. we will have to see if the rally

does continue today because expectations for any substantial change to policy is low at this stage. we will see if the rally continues today. yvonne: earnings. what are you watching on that front? min: we have quite a few earnings this week. among the ones released see they, you want to one expected to merge with another japanese company. it was almost double what they said they expected, so we will see if investors like this one today. kathleen: thank you so much, min jeong lee. a creek check of the latest business flash headlines. latest iphones are said to come up short against their main rivals. $1000 devices from samsung and google, especially mobile internet speed. the iphone is lagging behind. is created by users,

not in the labs. nike is raising pay for more than 7000 staff around the world after an internal review of compensation. , it will boost the salaries of 10% of its global workforce across all job levels. they are changing how they determine bonus payouts. primarily on companywide success. yvonne: we're counting down to the market open in japan, south korea, and australia. not too exciting on that front. it will really be about the bond market, especially when the jgb market opens. are we likely to see a further rise up in yields? it seems like markets are calling the boj's bluff that they may not actually tweak their policy. perhaps later on in the year. still ahead on "daybreak asia," a banking head tells us his outlook for asian junk bonds. alicea discusses

the risks and opportunities that affect the property market as some are calling for corrections in hong kong. we will see if the bears once again get the fight -- defied. this is bloomberg. ♪

here init is 8:00 a.m. hong kong. we are live. welcome to "daybreak asia." the top stories -- asia-pacific markets feeling modest gains despite a jump on wall street and strong earnings from googles parent, alphabet. and i am kathleen hays in new york. china rejects president trump's claim of currency manipulation. beijing says exchange rates are determined by the market. smooth sailing? we look at the courses for dry

shipping. yvonne: it looks like we are seeing a lot more damage when it comes to the bond market with and the speculation that they may be tweaking their policies. we did a survey from bloomberg and they said the boj will not change policy at any time but the bond markets and traders there are thinking otherwise. kathleen: the challenge will be for the bank of japan, and the governor of -- and governor kuroda, to tweak the policy. there are concerns for regional banks. can they tweak the policy and above zero ande still explained to the markets and the investors that we are not backing away from aggressive

stimulus and we will not do that until we reach 2% inflation? that is what governor kuroda said over and over again. that will be the big challenge for him. the yen is still at a big disadvantage. that will hurt the inflation further if they do so. let us take a look at japanese markets. let us bring in sophie kamaruddin. : the nikkei 225 set to snap a three-day decline. onuming gains that they lost monday. the debate continues as to whether or not the boj will tweak policy. we have seen the yen weakened back to 111. yields aresured eyeing the 3% level. that is likely to confirm said hawkishness.

in japan's newly awakened bond bears are pushing the jgb 10-year gilts to a high. watch,s of stocks to tech stocks including yahoo! japan and neighbor in seoul they move back to japan. itslpool is cutting full-year forecast. and we are watching the reaction in japanese consumer related stocks here in sales tax above 10% may be needed. kathleen: sophie kamaruddin checking the markets were as. let us take a deeper look at the markets with wes goodman in singapore. this is such a big story. japan bond yields. the yen jumping on monday. everyone has priced it in or will this build on itself? wes: hello and good morning.

you know, i think the bank of then lost control of narrative over the weekend with these articles speculating about how they might tweak their policy. in onnk of japan came monday and reasserted control over the narrative with its bond buying operation. they are signaling that they will not allow a big spike in yields and they will counter that. we have a 40 year option today. i think that will go well. it is now up to 0.9. i think that is high enough to in buyers.raw i think the bank of japan will continue with its program of keeping yields at super low levels. that will continue to put pressure on the yen. yvonne: exactly. that is still pretty low. the yield curve over the past two days, what are we learning from that? wes: talking about the u.s. yield curve? kathleen: yes.

steepened over the past few days. it has been flattening like crazy. nothing goes in a straight line. i think we can see the flattening curve reasserting itself. yields are down. supply is on the short end which can lift short-term yields. we have to your, five-year, and seven-year treasuries being auctioned this week starting today. there has been some steepening over the past couple of days. trend cane flattening reassert itself this week. i think most people agree that we will see flattening through the end of the year. yvonne: the selloff of the chinese yen paused yesterday. what is the outlook now? have we hit the bottom? wes: i don't think so. the chinese currency will allow

more weakness. it does not want to see a disorderly selloff. it does not want to see things tumble out of control. from time to time, the authorities come in and do a smoothing operation. dids like that is what they yesterday. there was a finance ministry official who said they would not weaken itthe yuan or and make it a weapon in the trade wars. that said, i think everyone agrees that they don't mind seeing it weaken and they don't mind seeing a disorderly selloff. wes, thank you for joining us from singapore. let us get the first word news from jessica summers. she joins us from new york. jusco: president trump says the u.s. will no longer accept bad trade deals and the era of economic surrender is over.

beenid the white house has taken at -- speaking from the white house, he says the u.s. has been taken advantage of for too long. his anger over trade deals has led to disputes with allies and opponents for across the world. mexico is stepping up efforts to clinch a nafta agreement by the end of august. that is with the president trump talking about dramatic deals in the works. he is speaking to the president-elect from mexico but the client give details. the president-elect for mexico says he is unaware of any deal but is open to talk to the trump administration about one. theresa may and hurt top diplomat admit they are preparing for a no dealbreaker. talk with brussels has stalled. they still do not have a clear idea about what they want after the split. jeremy hunt told germany that britain will not step back.

theresa may is still trying to sell her plan to keep close ties with a single market. >> we are making sure that we are prepared for no deal. we are stepping up our preparations. it only makes sense to be prepared for all contingencies. i am working for a deal that parliament will support. jessica goldman the greek government has called -- just: the greek government has asked for help with wildfires. on either side of the capital has -- have destroyed up to 100 homes. firefighters from across the area are battling the flames. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. i am jessica summers. this is bloomberg. output at shares jumped

in late trading as the company posted strong second-quarter numbers. google still raking in marketing dollars. technology's emily chang reviews the numbers from san francisco. >> numbers were soaring 20%. out forf relief from that investors. revenue continuing to grow on strong global search advertising, shopping search advertising despite troubles in europe. european officials did fine google. google is appealing that fine. take a listen to the google ceo talking about how they are approaching this ruling as of

now. >> we will always take a constructive approach. we will appeal. we are also looking forward to finding a solution above all that perfect -- that preserves the in norma's than a fit to android users. there is more work to be done. i think it will become more clear as we go along. i am confident we can find a way to make sure android is available at scale to users everywhere. bely: the big question will will handset makers start charging google to reinstall apps on handsets like samsung handsets for example but that remains to be seen. i did speak with the alphabet ceo and she strongly attributed the growth to mobile. whereso talked about google is investing. she says they continue to invest in growth. see capexng up -- we going up again this quarter. she says it is newer business and search and ads.

for additionalg acute capacity given the outlook for growth. i also asked her about the new regulations about privacy and how google will handle our data. from the outside, it would appear that they have boosted google's bottom line because smaller companies have had dr compliant. g she said it is still too early to tell the impact of gdr on google. she says they are working on additional tools to be transparent. google is just like a machine that does not stop. when you look at the quarterly revenue increase jumping into the bloomberg library with me now. nearly 26% gain on top of what looks like another 26% gain. this is really something.

one of the questions is --can it continue? it shrugged off the general data protection issues. fine., the big eu we asked another bloomberg technology reporter and he thinks one of the things they need to consider at google is selling ads on maps. place,trying to get any it is the gps on your phone. i think it would succeed. i am not going to turn it off just because there is an ad there. they seem to not be running out of ways to make money. yvonne: and talking about the gdpr and the transparency concerns. it plays into googles strengths. make up twoants thirds of the ad gains when it comes to advertising revenue. they are insulated from the privacy concerns.

seen on established a platforms that they benefit from that. issue.ll be a key can google and out for that take the drivers seat now and drive things further. kathleen: we shall see. still ahead, we will hear what -- are talking investment strategy with bank of singapore cio johan jooste. he talks about what is at stake when it comes to the japanese market from here on forward. this is bloomberg. ♪

yvonne: this is "daybreak asia." kathleen: i'm kathleen hays in new york. global bond markets may be the next to feel the biggest impact

from the japanese 10 year yields. this came on the back of media reports. joining us now is bank of singapore's cio, johan jooste. let us talk specifically on the boj because governor kuroda has made a pretty clear that they y more bonds to keep the gp g around zero. around zero. is it possible to have technical tweaks? is that possible from the boj at this point? johan: it is extremely difficult to tell. even though it looks like a small tweak, it is quite a departure from what has been a fairly consistent line for a long period of time. i think that is more why the

market is reacting in the way that it has rather than an objective assessment about how it might change things. it is just the fact that it is such a departure from what we have seen for a while. yvonne: let us put this bond selloff we saw in the last 24 hours in some context because in the u.s., people are saying it is not only what happened in the market but it is also the crumpton tweets from friday showing his displeasure with the rate hikes. some bond investors has take -- have taken this pretty seriously saying it will have some influence on the fed. how does the u.s. treasury market look to you? is it vulnerable to a further selloff? our view is that it will go above 3%. we do not believe it is

justified to be below their given inflation so far. you raise an interesting point that i don't think the fed will say that much attention to the tweets. i think they will be steadfast in their independence and they will do whatever they can to ignore that. whatever comes from the political side. and look to operate the policy as they would have operated the policy without any undue influence from outside. what does this mean for the treasury yield curve? we have seen it steepen in the last few days. can that last or could we see more flattening resume? flattening to the some at least is somewhat of a conundrum. a bit more steepening in the near term does not look out of the question. wee i said, at some point might drift above the 3% again,

we have been higher i think in april. i think that could quite possibly happen. and keep in mind, at least some of the feedback might well have been some flight to quality with concerns about the trade war and how it plays into the economy. when you focus on the fundamentals, some might concur with us and think that it needs to get a bit higher again. roilingwe have seen the in the bond market given speculation regarding the boj. when do we need to factor in a tighter monetary environment? how much more of a longer-term view can i have for eddie's? -- for equities? point arein, at what you going to see a downturn in

the economy? discount?ill stocks somewhat in the future still. from the point of view of risk, we have a cautious stance but we are not overly bearish. we think valuations are starting to ease. and gain traction. that is the case outside of the u.s. more so. the level of concern for stocks really comes to will there be an extreme outcome on the back of trade war? will we go to an outright recession? if we don't, i would take the view that there is still more than enough growth to keep earnings at the level where stock investors should perhaps not start to worry yet. yvonne: president trump says he wants a weaker u.s. dollar. we heard steven mnuchin talk about that and downplay that.

should we worry that the trade tensions could evolve into a currency war now? johan: i think maybe from the ..s. side some rhetoric from the point of view from asia and specifically china, the chinese currency has weakened a lot. we think it is counterproductive for china and others to try to use currency actively as a toll in a trade war. in the short run, they are probably quite happy to allow some depreciation to occur. it might soften the blow. longer-term, you have a series of competitive devaluations and you get back to where you started in the best case. no, we don't think from the point of view of this part of areworld that policymakers that happy with the view of using currency as a tool. from the point of view of mr. trump, i think it is more posturing than a long-term view

that the dollar should be that much weaker. it is a short-term solution. not something in the long run that will make anyone better off. it is quite easy to go to this competitive set of devaluations. a race to the bottom. kathleen: given china, i think it is a surprise that its currency would not be worsening. where do you go right now? we had a guest yesterday who said that donald trump's pressure on china will backfire because it will help push china to full-blown debt crisis. she specifically mentioned the junk bonds. with that in mind, i bring up a chart from the bloomberg library showing chinese junk bonds, the white line, shooting out. where do you go at a time like this with your investment? do you say that has to be the

top -- i will purchase things like junk? where do you put your money? johan: the specific answer to the chinese junk on question is you have to be careful. the chinese government over the last 12 months has been more than happy, happy might be a strong word, but it is certainly part of the policy process to allow some of the weaker ones to go bankrupt. that was pre-trade war. the is now a feature of 2018 landscape. these funds have been allowed to go bust. that will be a part of the future landscape. they could use a bit of state intervention in the market to dampen the effect and keep some of these alive longer than they might have. generally -- we spoke about the dollar. if the dollar weakens, some of

the pressure on high yields in this part of the world will ease to some extent. we keep telling clients to be super selective. it is still very positive -- very possible to find more than enough high-yield in the right places to pay you properly without excessive risk. we are not particularly invested in the u.s. but certainly in asia and the rest of em n. . there are exceptions. on the whole, we are trying to stay selectively engaged in the market. that is the best way to put it. as opposed to pushing too many panic buttons and going to cash. you do need to see something fairly bad in the macro, a recession, and you need to see something that will drive defaults before you get overly

bearish on high-yield. kathleen: there are opportunities that. thank you so much. johan jooste, bank of singapore's chief investment officer. we have teamed up with twitter to launch tictoc by bloomberg. it is the first global network on social media offering hourly top news reports verified by us. if you are on twitter, the sure to follow tictoc. this is bloomberg. ♪

yvonne: -- yvonne: this is "daybreak asia." kathleen: now for a look at some of the stories trending. bloomberg terminal subscribers are reading about a salary boost for nike. plenty of hits for the chinese eight equity investors -- chinese equity investors. on tictoc, donald trump's attack

on jeff bezos is getting attention. check out those stories on bloomberg online or on the terminal. this is bloomberg. ♪ retail.

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yvonne: it is 8:30 a.m. in sunny singapore this morning. we are a half-hour away from trading there. i am yvonne man in hong kong. kathleen: and i'm kathleen hays in new york. let us get ready for the bloomberg first word news. jessica: china has repeated it boost exportsto through devaluation of the you want. that is after president trump took issue with the month-long losing streak of the currency. u.n. can traithe -- the on can trade --

the filipino president has called for legislation to cool the fast disinflation in five years as well as spread wealth and power beyond the capital. in his annual address, he asked to lift to rush a move caps. he also calls for constitutional changes to federalism. the war will not be sidelined. relentless will be and chilling. bhp's copper mine in chile is leading to a possible showdown. the labor union is bracing for a fight. the position of the company and the union remain far apart after

six weeks of talks. union leaders rejected the first offer which included no real a rise and a bonus half of what workers were expecting. friends and fans of guardians of the galaxy director are urging disney to reinstate him. they say he was targeted by conservatives. he was fired after a website drew attention to tweets he rose -- he wrote to your's ago. more than 200,000 people have signed a petition backing him. global news 24 hours a day on air and on tictoc on twitter powered by more than 2700 journalists and analysts in over 120 countries. i am jessica summers. this is bloomberg. time to see how the asian markets are setting up so far. we are seeing a bit of a relief rally on the nikkei. sophie: among the segments

gaining ground is japanese banks. calling a bluff on the boj. elsewhere, we are seeing korean stocks fluctuate as there is a drop in energy and discretionary's. we are also seeing the global bond selloff with aussie and dropping. and japanese bonds opened weaker i had of a 40 year debt auction and that is expected to drop strong demand. let us check in on currencies. the offshore yuan is extending losses moving towards 683 and weakening toward a one year low. i want to check in on some movers in korea.

on because be, we have heavyweight samsung leading the drop on the benchmark. and highlighting some of the earnings. 10% after sales missed estimates. this has -- a gas pipe explosion in june cause troubles. alsoe have shipbuilders falling this morning after second-quarter operating losses came in wider than forecasted. let us check in on the leaderboard. rising.hold expected to have weighed on margin growth. the company is likely to ramp up advertising for its cosmetic as morethe second half chinese shoppers are due to visit korea. china says it has no desire to boost its exports through competitive devaluation

rateting the yuan exchange is determined by the market. our correspondent tom mackenzie is watching this in beijing. there is still a lot of action in that currency. this is the first official response to president trump's claim of manipulation. tom: this is china's attempt to push back the perception that they are intentionally cynically using their currency as a will in the trade war to support their export sector. it is something they have designed and that they would refrain from doing. the foreign ministry came out again and said it was market moves pushing the yuan lower. and economists would say that though it is a managed currency, that you do have these macro economic reasons that justify a weaker yuan. you have an easing move in china.

you also have the higher rate environment in the u.s., you have the pboc's actions as well. overall, the weaker data point in the chinese economy. and the determination in china that it has long been stated to have the market play a greater role. wet is the context of what heard from the foreign minister yesterday. reiterated that he stands ready with an additional round of terrorists. tariffs.of he says it is taking away the key competitive advantage for the u.s. and china is reframing the argument in that context. has dropped offshore at about 0.4%. will move quickly through these media reports. china is pulling levers to support the economy. what more do we know?

tom: much clearer signals. we had a cabinet meeting yesterday and they came out with a statement that was reported by the news agency saying they would step up fiscal support particularly to boost domestic demand. they did not want to see a delucia of stimulus -- a deluge of stimulus and they would continue to tackle risky areas. that was reiterated again from the statement issued by the state council. these moves look like edging towards an easing from policymakers here. whether that is the looser rules around asset management, whether that is the record injection of media -- medium-term funding. there has also been reports that banks have been pressured to

purchase lower grade corporate bonds to try to ease some of the pressures that china's corporate's are feeling. in june, we saw the number that the shadow banking was dropping. and there is a sign that private investment may start to fall off. there is also data suggesting that chinese lenders are not passing along this additional liquidity which is a potential concern for policymakers. now atbeen codified least from the premier and the state council that they do want to see a step up in fiscal support. and in that statement, they mentioned they would continue a neutral policy and the wording around that the was slightly changed. more of an easing environment here and a determination to get credit for the real economy. this is a will see if

real relief rally. mackenzie, again thank you for joining us from beijing. moving on to the shipping industry. is battlingipping to stay of float especially among increasing divergence markets. gent markets. tell us a little more about why we are seeing this diversion's right now in shipping -- divergence right now in shipping. reporter: where investors are building in -- they are advising protectionism. on the dry build side, that seems to be holding up well.

it is affecting different shipping markets differently. container shipping is moving downwards. yvonne: we heard from the iron ore majors and they are recording record production. it means more good news for dry bulk then. reporter: yes, indeed. others -- they are producing record numbers. margins are still pretty robust. that is feeding into viable demand. , weifically for dry bulk have talked about the growth there. we have seen though a marked slowdown in the fleets. is supporting opening the freight rates. in bulk is looking to be much better state than in the

last 10 years and that is why we are much more positive on that than the container shipping. yvonne: you remain positive in the midst of the trade war. we think about ships carrying things around. we would think the trade war would disrupt that --maybe not? reporter: this ultimately plays in dry bulk demand. that means higher demand for bulk to my duties is also important to mention the situation in china. it is leading to high quality iron ore and coal going into china. the second half looks much better. we are going into a strong season for dry bulk. sounds like almost this is a hedge against trade war impact. how about the china-korea rivalry? reporter: i think if you look at

the shipyards -- that is where it is playing out. what japan did to europe, korea did to japan that is what china is doing to korea now. they are introducing much more and they are also catching up on the high-tech ships. over the next few years, china will take market share away from korea. there are plenty of challenges for the next few years. kathleen: how about beijing's maritime operation? there has been a lot of pushback even within china about "made in china 2025." reporter: china now has the world's biggest boats. that will effectively make them one of the biggest shipyards in

the world. what has happened is the european banks have shied away from lending fresh money to shipping and the chinese have filled up the gap. they make up a big cluster. have the frontrunner to become one of the biggest shipping container companies in the world. they are working towards their strategy and i would say they are executing well on that front. so very: thank you much. now, let us get a big -- a quick check. insist the new model three will pull his money loser into the black but observers say the appeal could be a sign that something has gone wrong. tesla has spent millions ramping up production and third-quarter numbers could be disappointing.

feedback -- al potential listing. sources say institutional investors think the carmaker is between $12 billion-$18 billion. rival cars in 2010, they were planning to sell shares in stockholm and hong kong. kathleen: mike mele started work having lost a crucial senior colleague. quits aftere has being passed over. colleagueure of that denies mark manley that steady support. looke: coming up next, we at the prospect for property in hong kong. this is bloomberg. ♪

kathleen: this is "daybreak asia ." i'm kathleen hays in new york. yvonne: i am yvonne man in hong kong. hong kong has been rated as the least consistent property market. the hongguest says kong market could be at risk although she is not expecting any substantial correction in the near term. joining us now is elysia tse. thank you so much for joining us. elysia: thank you for having me. bears: we have seen the called this time and time again. is now any different? our rates going higher? of aa: obviously, the odds downsized case or a geopolitical event are increasing. real estatect

fundamentals to remain relatively healthy for the next 12-18 months. i just want to pull up a chart that we have that shows what we have been seeing in property stocks. some skeptics say this is a good signal that some correction is coming. that likelythink trigger could be for correction? are you looking more at external factors? elysia: external factors will certainly be one of the key warors and an all out trade which is unfolding in front of our eyes is likely to continue. and that could have a substantial impact on not only the markets in asia pacific but mobley. higher than expected or faster than it interest rate increase -- that could be a another factor. major central banks in asia-pacific are expecting the

rates to increase but gradually. they are informing the market relatively well so far. yvonne: what is your outlook for prices now? you are not calling for a correction but could we see some sort of soft landing? elysia: we agree that a capital market appreciation is mostly behind us. what is ahead of us is focusing on the fundamentals. the supply and demand mechanism in most markets in the asia-pacific are relatively healthy. rentalct continued growth although it space could be decelerating. as long as rates don't increase abruptly, some of these rental growth could offset the gradual rate to increase. obviously, uncertainty is a key risk. if we were to see any abrupt

liquidity withdrawal, that could be a risk. but if that were to happen, that could give us a window to come back to the market with a very attractive opportunity. yvonne: could we do a lightning round about the areas kinds of real estate you're looking at. office space.ith will that do well? elysia: the office market is probably a sector where we see very diverse market fundamentals. select markets in asia-pacific for example, resource driven economy. we are seeing early signs of recovery but we also have --kets such as sydney, tokyo the market fundamentals are very healthy. we continue to expand rental growth. retail.:

everyone is worried about online shopping and what will happen to brick-and-mortar retailers. what do you see their? -- what do you see there? elysia: e-commerce is a key risk. inre will be a divergence terms of retail versus performance. for those that are very well located with strong fundamentals in terms of consumer base, those will continue to do well. in a weakerers market, they will suffer. ask youi just have to about residential housing. all of my friends in hong kong are wondering what will happen to them. agree thatcan all several residential markets

including hong kong is at an all-time cyclical peak. -- fundamentals in hong kong most of the homeowners are not highly leveraged. of -- thea lot chinese buyers are still in the market. could we see some short-term pullback because of the recent proposed housing policy from the government? probably. pricingl slow down the growth. but, if we were to look into the fundamentals, they are still relatively healthy. yvonne: it is interesting because we have seen some of these government measures to cool down the market. you could argue that it has had the opposite effect. is there anything that could potentially cool down the exuberance? the vacancy tax?

elysia: that could be one reason why it slows down a strong pricing momentum growth. see aunlikely we will strong demand and pricing. homeowners are relatively healthy on their balance sheet. if there is an abrupt liquidity , mostawal in hong kong likely triggered by external shocks, that could be a trigger. is it first-time homebuyers that will be spooked out by these markets more? elysia: first time have been saving. i think it is more the opportunistic investors purchasing properties as their second or third home. they could be a little more stressed. if there is any liquidity withdrawal, they will be hit harder. tse, thank you for joining us from list all

investment management. catch up on past interviews like the one we just had with elysia tse. you can also see some of the functions that we talk about on tv . this is bloomberg. ♪

yvonne: this is "daybreak asia." kathleen: a quick check of the latest business flash headlines. nike is raising pay for more

than 7000 staff around the world after an internal review of compensation. it will boost salaries for 10% of its global workforce. bonus.lso looking at they will be said on company production. please is considering returning to consumer banking in india. the bank withdrew from the business in 2011 but we are told the aims -- we're told aims to rebuild this sector. they opened an office in australia in april 2 years after walking away. the latest iphones are said to come short -- to come up short main rivals. they trail the latest devices from samsung and google especially in mobile internet speed. okla says the iphone is lagging behind.

yvonne: before we hand over to bloomberg markets: asia, let us look at some of the markets trading. --see some of the equities the nikkei 225 snapping out of a couple of days of losses on the speculation that the boj will be tweaking its easing policy. a sex 200 up about 0.5%. still a lot off -- let us take a quick look at futures. .cross the board there is red a sign that some of the positivity from the u.s. is not carrying forward. forne: that is it from us "daybreak asia." ♪ phones have made our lives effortless.

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after a positive rose in new york. investors are watching the alike fine. rejecting china president's claims of currency manipulation. this will be determined by the markets. alphabet sees wall street shares climbing. better than anticipated sales and improving at business. in hong kong, i am rishaad salamat. haidi: i am haidi, instead day. -- in sydney. how much are volvo shares wort