in sydneypaul allen where we are under one hour away from the open. shery: i'm shery ahn. sophie: i'm sophie kamaruddin in hong kong. welcome to "daybreak: asia." paul: our top stories this monday, huawei's founder stands defined in the face of u.s. sanctions that threatens the company's survival appeared we speak to someone exclusively. >> i will ignore trump and then we can renegotiate. if he calls me, i may not

answer. but he does not even have my number. paul: eu voters elected new parliament in the shadow of brexit, results from the u.k. may only increase the political uncertainty. trump talks trade in tokyo after a weekend of sumo and sushi. but admits there will be no deal on this visit. shery: let's get you the latest headlines on the eu elections. we are seeing the brexit party of nigel faraj having a great tonight. they are winning the most votes in east and west, in wales, also in east and southwest england, york hamburg. liberal democrats winning the most in london the results in the u.k. could really have an impact for the labour party to change policy for pro-brexit candidates to succeed theresa may. she has also announced to resign last week. let's look at how will -- how the european parliament election results are affecting the fx markets at the moment.

we are seeing in the british pound, slightly higher against the u.s. dollar. this is coming after a gain when prime ministers may laid out her plans to quit on june 7. a second session of gains for the british pound. when it comes to the euro, slightly higher, 1.12 is a level at the moment. not really that big of a movement. against thepound euro continues to decline. the dollar at the moment, unchanged. it was higher. we did see a bit of pressure around weekly lows on the back foot over concerns over the u.s.-china trade spat. just expend -- extending those declines last week. u.s. futures, not a lot of movement on that sector either. let's see how things are shaping up for the asian markets open. sophie, it is a long weekend holiday. sophie: no direction from the u.s. yet. futures narrowly missed after

the regional benchmark cost one third of yield losses that saw the kospi come close to erasing. its gain for 2019. . u.k. futures are nudging higher this morning ahead of the talks being held this monday. checking in on the currency board, on the offshore yuan, looking steady ahead of industrial profits due from china. intoays the one could week 7.13 as negotiations with the u.s. next month fail. the yen is holding below 110 with politics and trade in view. the countdown to the gym first deadline for china's retaliatory tariffs. hundreds could be broken depending on the intensity of the downturn. -- 12.50 on 12:50 the em foreign space. continue tomay moderate after halting a

warnings from the government and the be ok. the central bank is seen having little scope to hike rates to defend the currency at this friday's meeting giving the slowing economy and south korea. paul: thanks very much, sophie. let's check in on the first word headlines. president trump will talk trade with japan's prime minister shinzo abe on monday. this after a weekend of golf, sumo wrestling, and sushi the leaders attended a sumo tournament with trump presenting a trophy. they will meet japan's emperor on monday or the president says no trade deal will be signed on this trip. any agreement will be finalized after japanese elections in july. tuuli: with this deal --pres. trump: with this deal, we hope to address the trade imbalance, remove that, and ensure fairness and reciprocity in our relationship. we are getting closer. u.k. environment secretary michael gove has become the eighth mp to enter the race to succeed prime minister theresa may. other candidates include former foreign secretary, his replacement jeremy hunt, and

former brexit secretary john former brexit secretary. theresa may steps down. this after failing three times to get her deal through parliament. fiat chrysler is poised to announce a tie up with renault as soon as monday. that could lead to a merger creating the world's third biggest automaker. bloomberg forces say the deal could involve an initial exchange of equity. the existing alliance party are not involved. although they would be invited at a later time. shery: the founder and ceo of huawei technologies has struck a defiant tone in the face of u.s. sanctions. speaking exclusively to bloomberg television, he conceded that the trump administration's export curbs will hurt huawei, but it said his company was taking steps to keep its edge in smartphones and 5g. tom mackenzie joins us from beijing with more.

what a timely conversation to have with the head of huawei. what were your key takeaways? in terms of the impact on the business, the key takeaway or what you alluded to. yes, he did can sing -- concede that the impact on the blacklist by the u.s., the cutting off of companies like intel and qualcomm and google from sending their components and services to huawei, that that would have an impact on the company, that it would chip away at this lead that it says it has in times of 5g technology. huawei claims it has a two-year lead on 5g. it admitted its competitors like nokia and ericsson would catch up as a result of this blacklisting. he also said that they did have contingency plans in place. we have been told that they have been building out their stockpiles of chips since the middle of last year after zte faced similar actions from the u.s. he told me that they are developing their own chips that

he is confident can replace many of the components that they got from the u.s. he said this was going to have an impact. another key take away was that hehad earlier said that called president trump a "great president." his tone in relation to trump changing dramatically. in our interview he said that comment he heard from the u.s. president would "-- was "laughable." and he was monitoring trumps its. an impact on the company, they have plans in place. we talked about those allegations against intellectual property theft and whether or not huawei and he would ever facilitate the chinese government in terms of spying. listen to what he said -- what he had to say in this interview. the u.s. has never bought products from us. even if the u.s. wants to buy our products in the future, i may not sell to them. there is no need for negotiation.

i will ignore trump and then with whom can he negotiate? if he calls me i may not answer. but he does not even have my number. i see his tweets and i think it is laughable because they are self-contradictory. companies thatf supply huawei with components but also software that are cutting off those supplies is growing. qualcomm, intel, panasonic, google as well. i guess the question is, for how long can huawei survive without those supplies, both components and software? >> [speaking a foreign language] the u.s.sonaro: manages its own companies. the u.s. is not the international police. they can't manage the whole world. the rest of the world decides whether they should work with us based on their own business interests and positions. if some companies don't want to work with us, it is like a hole

in the airplane. we are working to fix the hole but the airplane is still able to fly. of the chips we have been using, half are from u.s. companies and half we produce ourselves. if the u.s. imposes further restrictions on us, we will reduce our purchases from the u.s. and use more of our own chips. if american companies have permission from washington to sell to us, we will continue to buy from them. tom: what exactly have you put in place in terms of contingencies? >> [speaking a foreign language] translator: we might have contingency plans for the core of the airplanes, engine, and fuel tank, but we may not have a plan for the wings. we need to review the situation all over again and fix those

problems. to interviewback us in two or three years to see if we still exist. if we are gone into or three years, remember to bring a flower and put it on our grave. tom: you have talked about having a two-year lead in terms of 5g on your competitors. does that get eroded? >> [speaking a foreign language] translator: definitely. if we slow down, it is become the wing of the airplane has lots of holes. if we fly slowly but others fly fast, of course they can catch up. but we will keep fixing the holes. of damage, howt much damage do you expect to be felt in the consumer division of the business? smartphones and laptops, which depend on u.s. chips but also u.s. software? >> [speaking a foreign language] we might miss our expected growth target, but we are still growing. being able to grow in the toughest battle environment, that reflects how greatly --

great we are. tom: and you have a bragging rights. you overtook apple as the number two smartphone maker. you saw smartphone sales jump by 50%. you do have that goal of becoming the number one smartphone maker in the world. does that goal now have to be shelved? >> [speaking a foreign language] biggertor: we can become or smaller. we are not a public company. we are not only pursuing growth or profit. it is good enough for us to just survive. tom: there have been calls by some in china for beijing to retaliate against apple. is that an action that china should be looking at taking? >> [speaking a foreign language] translator: that will not happen first of all. second of all, if that happens, i will be the first to protest. apple is the world's latest -- leading company. if there was no apple, there would be no mobile internet.

if there was no apple to help show us the world, we would not see the beauty of this world. apple is my teacher. it is advancing in front of us as a student, why should i oppose my teacher? i would never do that. tom: the critics of huawei with say you got to where you are through intellectual property theft and government support. what is your response to that? >> [speaking a foreign language] the u.s. has not developed the technology. from where should i steal it? it is more likely they steal our technology. now we are leading the u.s. if we were behind, trump would not meet -- need to make so many efforts to attack us. he attacks us because we are more advanced than them. the ceo and founder of huawei they are, denying role in intellectual property theft. this is a company that has faced

lawsuits from the facts -- from the likes of cisco in the previous years. he said those have been resolved but never condoned -- but he never condoned intellectual property theft. we asked him whether he would facilitate beijing, he said he would not do that and denied the chinese government owned any stake in the company. as you heard he said a comeback in two or three years and see if as a company we still survived this onslaught, this campaign from the u.s. paul: all right, china correspondent tom mackenzie, inc. you very much for that. very interesting and timely interview with the huawei cost. you can watch more of tom's interview with huawei's ceo. it runs on saturday at 12:00 p.m. sydney time, and then friday 9:00 p.m. in new york. don't miss that. we are expecting projections for the final eu wide results any minute now. bloomberg news eu government reporter then shows joins us from brussels.

here?re the key takeaways it looks like the populist tide was held back in the eu, right? ben: yeah, the revolution did not materialize. of seats the populist party will have at the end of the process looks like it will be similar to the number they had in 2014, despite all of the rhetoric and all of the noise that we have heard in the interim. the big winner so far has been the green and liberals. toward a more progressive emphasis in european politics. shery: now the european parliament estimating the christian democrats and socialist will remain the two biggest groups. and what position does it leave the third party right now, the pro-business liberals? could they be the kingmaker here? are actually, they candidate to running the next

position is margrethe vestager, the danish competition commissioner. she has been coming out with a very bullish set of statements since the results have started to come in. she is making a big pitch for the job. she has made clear she is a candidate. she feels like she has a strong the conservative candidate has been much more cautious in his comments. the game is now on to see who will be getting those jobs. will not bepulists completely absent from this parliament. marine le pen's party performed well, better than any others. and then of course there is nigel faraj's brexit party in the u.k. which has performed better than his predecessor. what fun is he going to have in the eu parliament? gets his way,he he will not be around very long to have any fun in the eu parliament at all. whether he will, whether the

next leader will indeed managed to deliver brexit, i don't think anyone really knows. in the meantime, faraj will be there with a big delegation and he will remain a thorn in the side of the eu as they try to go about their business. shery: the first casualty of europe selections seems to be greece. ben: yeah, exactly. has beenipras teetering on the edge for a while. he faced a string of no-confidence votes. he is up for reelection anyway in the fall. it is as much a tactical decision for him to go now as it is that he is forced by these results. it was a bad night for him and he is trying to limit the damage as he looks probably set to be pushed out in this a vote by new democracy, the center-right position. paul: eu government reporter ben

sills in brussels. we will get more reaction to the eu elections with tp w investment j velasquez. he will join us later on the software. shery: first we will spink -- speak to head of economics tuuli mccully about the economic data we are expecting this week from china, japan, and korea. this is bloomberg. ♪ ♪

paul: the week ahead is likely to deliver more negative news on china's economy. friday's official pmi looks to contract as pressure from the trade war mounts. for more on what the week's economic data may hold, let's go to singapore where we are joined there by head of asia-pacific economics, tuuli mccully. thank you for joining us today. before those numbers come out, we will have industrial profits as well. if we have a look on the bloomberg, we can see a chart

that is slowing wholesale inflation, really weighing on profit growth for china. to what extent does -- is the trade war weighing as well? the trade conflict, and the reason escalation is putting downward pressure on the economy. especially on the manufacturing side. it is also impacting business confidence more broadly in the services sector as well. we will likely see a further weakening in the pmi that had this week to reflect that. see: we are expecting to that weakening as you described. how entrenched the you think it will be? how long will this situation last? the near least in term. i do expect that the chinese central bank in the government will announce further stimulus measures to support the economy.

on the fiscal side, we will likely see further tax cuts and few reductions. and on the monetary policy side, we will likely see cuts to banks requirement ratios, especially targeting the private sector to promote lending in the economy. that should stabilize the economy at least over the next few quarters. shery: how careful does the pboc have to be when they have repeatedly emphasized that they do not want to flood the markets with excess liquidity? definitely a good question. they are trying to find a balance between supporting the economy, but not repeating the same kind of flood like stimulus that was taking place after the financial crisis. they really have to be mindful of the financial risks that potentially could come after a very strong credit stimulus. shery: when it comes to

supporting the private enterprise sector, we have seen very targeted tools in order to help these private businesses. but this gtv chart on the bloomberg showing there seems to be a discrepancy between where these large companies and medium-size and small companies are, the slower the company is, we are seeing their pmi is in contraction territory. how successful have they been in these targeting -- targeted policymaking so far? we are still waiting to see successful results. but i do think that will be something that the policymakers are really focusing on now. we will likely see further stimulus targeting specifically those companies. paul: i just want to get your thoughts on south korea as well. we have a rate decision coming

up from the bank of korea. probably going to stay on hold, but as one of the countries most exposed to the risk of the trade war, how long can the be ok sit on the sidelines do you think? is a very interesting situation in south korea, given inflation is low and economic growth is weakening because of this global trade uncertainty. definitely there is an argument for monetary stimulus. at the same time, financial stability has become a priority. and we have seen that the korean won has been depreciating lately. i do not think the bank of korea is able to ease monetary policy anytime soon. they really need to focus on that financial stability aspect over the next few months at least. shery: tuuli mccully, thank you so much. scotia bank head of asia-pacific. we have an update on the latest eu elections.

nigel faraj has been reelected as member of the european parliament. nigel faraj's brexit party has had a successful evening, they have won the most votes in the u.k. in the east end wet midlands, wales, south and east -- southeast england has just been confirmed, east and southwest england as well. northumberland is low. we are seeing the opposition leader, jeremy corbyn, saying that brexit must go back to the people and that the u.k. needs an election, or a second brexit referendum. you can get more on the eu election in today's edition of daybreak. dayb on your terminal. this is bloomberg. ♪

check oft's get you a the latest business flash headlines. the pboc says it will give an injection of liquidity to bausch on bank. they took over on friday for 12 months because of what it called serious credit risk.

china construction bank will have custody of the businesses, the pboc is promising to monitor the liquidity of other smaller banks and use open market operations and monetary policy tools to maintain ample liquidity and stable market rate. paul: global payments sent a total system may announce a deal as soon as tuesday in what could be the payment industry megamerger this year. shares of both companies jumped friday after bloomberg broke news that global wants to buy it in an all stock deal worth about $20 billion. they are paring up to diversify has consumers move away from using cash to make purchases. securities and exchange commission is investigating whether boeing properly disclosed issues tied to the ground at 737 max. are set to be examining whether boeing was adequately forthcoming to

shareholders about material problems with the plane. boeing and the fcc declined to comment. we will get a reaction to the eu pelosky. with jay this is bloomberg. ♪ his is bloomberg. ♪

shery: this is daybreak asia. the founder and ceo of chinese tech giant huawei blasted president trump and the u.s. over sanctions he admits will damage his country -- company. he spoke to bloomberg technology , dismissing restrictions are part of a trade deal with fishing and calling the president's tweets laughable. he said despite the damage inflicted the company is still growing. we might miss our expected growth target but we are still growing. being able to grow in the toughest battle environment, not

just reflect how great we are. shery: china's top financial regulators says escalating trade tensions will create volatility in global markets and hurt the world economy. in a weekend speech, he said higher u.s. terrorists will have a limited impact on china's economy and would hurt the u.s. about as much. they want speculators shorten the yuan could see them suffer great losses. vietnam has called on 1.7 million pigs as african swine fever spreads across the country. this could next penetrate large commercial farms. about 5% of the peak population have been culled as the number 42 provinces. to a british man taking the 10th to die on mount everest in a week as a record number try to reach the summit in a brief window of

good weather. this has led to an extraordinary traffic jam. issued 381the spring everest permits this season and 11,000 [indiscernible] a check on what is happening in the markets with sophie kamaruddin. inhie: i want to highlight new zealand which has erased gains in wellington, unchanged after a two-day drop. they agreed to buy eight boeing upgrade as to fleet's. they will buy as many as 12 more. bitcoin traders are looking at the cryptocurrency surging to the highest in a year, climbing 8700, extending a run with bitcoin rallying 66%. the report coming through as fidelity investments will sell

crypto for an institutional climate -- clients. this one snapped a five-day decline as they take a brilliant -- breather in australia. the pound has trimmed gains as the brexit party takes again in the e.u. elections with nigel frost being elected. there could be a no deal brexit more likely. the euro steady above 112 after opening lower in the early session, set for a third day of gains. there is plenty of uncertainty factored in to the common currency with the polls suggesting it is business as usual for the eq and it could see the euro firming in the near term. let's get you the headlines. we are seeing nigel farage's brexit party has won the most votes in northwest and southeast england. he has had a successful nights. we have seen him get reelected

as a member of the european parliament. he and comments saying the brexit party wants to be part of negotiations with the you and is ready for -- the e.u. and is ready for a general election. of -- us is a cofounder thank you for being with us on this long holiday weekend. let's get started with the headlines. the brexit party doing well in the e.u. elections. investors thinking this could mean we get a hardline brexiteer to succeed prime minister may. >> if you look at the headlines you think assets would be down horribly year to date and in fact the sterling has been quiet and stable and u.k. stocks 10% in dollar terms. markets hate uncertainty. they hate surprises. brexit has been with us three years.

what investors want is clarity. what we are getting is some hope of clarity as we move toward the end of october. shery: we are getting the british pound not strengthening much. when it comes to the broader european elections, we are seeing mainstream parties are holding their ground. what does it say for european assets? >> it is bullish. what the liberal party did well, their candidate for ec commission is very bullish for a european assets, particularly if it can be paired with the german for the ecb head. the combination of those two will be bullish for european assets which we have seen the populist fever break. all the headlines and news, what are the results? from fiveormance years ago. unemployment has gone from 10.5%

the last time that you have an election to 6.5% today. people are doing reasonably well. we are quite bullish on european global overweight in our equity portfolio. the upside with significant in terms of earnings growth, room for multiple expansion and the euro strengthening. those three factors could give european equities the chance to outperform over the next couple of years. points on the euro strengthening. we have a chart on the bloomberg library that sees the euro finding a strong base against the u.s. dollar, strengthening. output bullish on the for europe. what sectors do you like? european equities have become the most widely hated short and european equity mutual funds have seen outflows in 58 of the

last 60 weeks. we are alone but all others are going to come join us as the dollar weakens, the dollar -- euro appreciates. bones to back up going into positive yielding territory and we think that is quite positive for european banks. our single big, single biggest is to be overweight the european banks. we like germany in terms of specific countries as well as spain and greece. awake to are surely the risks that remain in europe. one of the outcomes of today's elections, there will be a snap poll increase in june, the league performing well in italy. where are you seeing the key risks? jsy: politics will be with us. to me markets hate surprises.

the fact that there is political risk in europe is not a surprise. anyone who doesn't like the politics is part of those people selling european assets the last 58 of 60 weeks. to me the upside is earnings bottoming, the economy bottoming, we have widely hated assets, valuation to your point, valuation for european equities versus the rest of the world is as attractive as it has been at any point in the last several years. we see a low growth world. is a lower for longer global growth world. we need to see not only earnings but markets with room for multiple expansion and price in a cheap currency that has room to appreciate. d are three factors combine what will allow them to outperform. shery: can you remain bullish if we see this trade war continue between the u.s. and china and hitting the u.s. economy?

the trade war has been the thing dominating all of us. if we don't get the full monty, 25% tariffs on the full $500 billion of chinese exports to the u.s., most of the issues are priced in. montyt expect the full they have both sector that will be attacked and hurt most is the u.s. tech sector. the real risk is in the u.s. equity market. it is in u.s. tech stocks which are the ones most badly hurt by the full monty and you have to understand china is going to benefit from this process and china will strengthen itself over the next several years as it will focus more on its production. is pretty well in the price. longer-term medium to long-term china benefits from this trade war, is not hurt. the u.s. is most exposed to the tech sector and it -- the u.s.

economy is slowing and it will be clear in the next five weeks before the president meets with president xi and president trump meeting with president xi, it will be clear the u.s. economy is soft and u.s. tech is exposed. that means he doesn't do it. we probably have kind of a can kicked down the road and markets will unfortunately have to live with that uncertainty for the next several orders. any areasl there be you won't touch? european banks are not doing well. they had their share of scandals but they are not doing great competing with their u.s. peers. jay: european banks have struggled. u.s. banks were more aggressive dealing with the post 2009 financial crisis. we have to look at price and backdrop. european banks probably speaking

sell -- u.s. sell at 1.5 times book. european banks are not perfect but they are also probably the cheapest banks in the world. we have really dealt with the nonperforming loan environment. if the economy bottoms and if bonds which yielding minus 10 basis points start to have 10, 20, 30 basis points, positive yield the banks are the single most exposed to that. i think that is what will take the banks higher. our race case is european economy is about to bottom, bund yields will reflect that just as china long-term bonds have gone up in chinese economic activity. the banks are the ones that here to that. we are long europe on a regional basis. we are long germany specifically. andre long european banks

also have positions in spain and other countries. right, tbw investment management cio, thank you for joining us. want to get you across to some breaking news in australia, a voice and data network has a proposal from another company -- five dollars.20 per share $5.20 per share. they say the offer is nonbinding. it is subject to due diligence but will grant nonexclusive due and itce access to eq t has named ubs as his advisor. proposal 5.25 per share from eqt infrastructure. as per minister trump -- president trump and prime minister abe meet, we will discuss relations with the

former japanese trade minister. this is bloomberg. ♪ this is bloomberg. ♪

shery: japan futures are higher by .1%. this on the back of two sessions of losses. japan's yen has been near a two-week high and we will continue to see concerns over economic data around the world. this is daybreak asia. i am shery ahn. president paul allen. trump played golf, attended a sumo wrestling match and had dinner with shinzo abe at a restaurant over the begins. the real business starts monday. the leaders sit down to resolve tensions over trade and defense ties. let's get over to our chief north asia correspondent. stephen: we are in front of the

guesthouse where donald trump limit -- will meet with shinzo abe. it has been moved back to 11:00 jay. in the next hour he is meeting with the emperor and empress. paying his respects to the new emperor in japan. we want to talk about the ramifications of the state visit and whether a trade deal can be hammered out between the u.s. and japan. let's bring in our guest here. we are honored to have -- you are a former trade negotiator with the ministry of foreign affairs, also dean and professor at the on-site university. -- kansai university. the could trigger dissolution of the lower house and general election. >> thank you very much for having me. i would think this is very important moment to further

deepen the personal relationship between shinzo abe and president donald trump. just one month before the meeting of g20, japan is going to host in osaka. also the trade front we have a issues, howunting the united states good resumes -- could reduce the trade deficit. there was increased $140 billion u.s. trade surplus. i think this time, it is very interesting to see how japan can wish to reduces the trade deficit. mr. abe should look at the political reality he is being faced with because maybe in july the upperng to have

house elections, and that will be coincided with lower house elections. this is very important moment for both side of japan and the united states alike. stephen: what is at stake whether -- donald trump is saying the right things so far, maybe not to toyota. he sparked concern about the level of japanese car exports to the united states, but what happens if donald trump does not return the respect the japanese nation is giving him? see japan exports 1.7 million units of japanese cars to the united states market where japan produces, thefactures, manufactured autos in the united states the 3.8 million units. enormous investment going from

japan to the united states and that will certainly increase job opportunities for u.s. workers. that is an important factor we should not ignore. if the united states imposed any sort of upward limit in terms of exports of japanese cars, that will go against japan's obligation under wto, namely the the restrictions of autos. that is very important. stephen: who do you think has the upper hand? donald trump will use this as access to the market. he wants more concessions for u.s. beef which some of those restrictions go back to the 20 -- 2003 mad cow scare. japan has been reducing that but need to open up the beef market. who has the upper hand?

yorizumi: as long as the united states can offer what they have previously agreed -- the duty-free entry of japanese car parts into a united states, that will be kind of precondition for japan to make any concession in agriculture including beef. stephen: but tpp was negotiated by a previous white house. yorizumi: that is correct. but the united states has more than 87% of car parts out of duty to export from japan to united states. that was a kind of precondition to get better market access in terms of beef, rice and other agricultural products. that is a starting line for the trade negotiations this time. stephen: how detrimental with the increase in auto tariffs be?

yorizumi: it would be detrimental because the car industry has a lot of supporting industry. that involves millions of workers in japan. at the same time that will damage international trading system. do you think the trade deal is achievable? >> not at this time. mr. trump has made clear trade after the upper house election in japan. this time it is a populist building, then we will see what will happen in the g20 summit meeting, then maybe later after the upper house elections [indiscernible] how important is it for the japan-u.s. alliance, if you want to call it that, to show solidarity given the trade war with china, given the increase in rhetoric from north korea and tensions there, given the iran

situation? yorizumi: particular for iran, a week ago, the foreign minister to tokyo and had a meeting with mr. prime minister shinzo abe. i would assume he got the message from iranian government. how he will convey this message to mr. trump, that is very interesting part of discussion this time. stephen: thank you so much. yorizumi: a pleasure for me. stephen: it is quite an honor. we will be here in front of the state house most of the day astana trump will be here later this morning where his official state visit to japan. shery: think you so much. --was there with k thenasai the kansai university professor. for more on the trade talks between japan and the u.s., go to tliv for commentary and

analysis. this is bloomberg. ♪

statement from south korea that could be followed with the government lowering its forecast for 2019 when they announced policy direction next month. looking at -- a $2.3 billion takeover offer from infrastructure at five -- 5.23 australian. they have launched proceedings today with the federal court of australia seeing mergers with vodafone. they will not likely have the effect of eroding competition in the industry. in seoul korean carmakers are on view after the government and the ruling party are in talks to extend cuts to passenger cars. it was reduced to 3.5% from 5% in july. it will expire soon. beingng japanese autos held do is talks between trump and abe. and the anticipated announcement to tie up renault that could lead to a merger of the companies and see nissan and mitsubishi invited to join at a later time. paul: still to come on the next hour of daybreak asia, we are live interview with robert feldman of morgan stanley.

to discuss the japanese economy and president trump's visit. the market open also coming up next. this is bloomberg. ♪ is bloomberg. ♪

paul: i'm paul allen and sydney. asia's major markets are about to open from trade. shery: good evening, and shery ahn. sophie: i'm sophie kamaruddin and hong kong. welcome to "daybreak: asia." >> [speaking a foreign language] paul: our top stories this s stance to find. he spoke -- we will speak exclusively to him. >> i will ignore trump. then who can he negotiate with?

if he calls me i may not answer he does not even have my number. paul: eu voters elected new parliament in the shadow of brexit. euro skeptics pulled strongly in england, italy, and france. trump toxic trade in tokyo after a weekend of golf and sumo wrestling on but admits there will be no deal on this visit. -- the brexit party will win 29 seats in britain. the liberal democrats will win the 16 seats in the eu elections. the latest -- the labour party will win 10 p the green party will win seven pair the ruling conservatives will only win four seats in the eu elections.

one seat in the eu elections. clearly as we can see, the brexit party winning 29 seats, please elections showing the success for nigel virage's brexit party. he made recent comments an hour or so ago talking about the brexit party wanting to be part of negotiations with of the eu, that the brak -- the brexit party is ready for a general election. the latest bbc projections brexit party is winning 29 seats in britain in the eu elections are let's get straight to the market action with sophie kamaruddin and hong kong. sophie: kicking it off with the action in japan, seeing divergence for the nikkei and topics. the nikkei 225 could set to snap a two day drop. preventing the booze so far. auto stocks under pressure. honda off more than 1% as we wait on trump's bilateral talks with abe to kick off today.

the end consolidating after a three-day gain with politics in view. checking in on the kospi lowering by one third of 1%. the korean won continues to gain momentum after halting a four-week decline following warnings from the government and be ok. the central bank has little to hike rates, giving the slowing economy. check in sydney. much to the too start of past trade, despite to the upside while the aussie dollar is rising ever so slightly. we are seeing bonds on the retreat. markets make room for this largest supply of the tenure sector. in new zealand, stocks extend friday's decline while the kiwi dollar is holding onto a two-day shery: advance. shery:thank you for that. let's get to the first word headlines. president trump will talk trade with japan's prime minister shinzo abe on monday after a weekend of golf and sumo wrestling, the two leaders attended a sumo championship

with trump presenting a trophy. he will meet japan's emperor on monday. the president says no trade deal will be signed with any agreement to be finalized after japanese elections in july. pres. trump: with this a deal, we hope to address the trade imbalance, remove barriers to, the united states exports, and ensure fairness and reciprocity in our relationship. we are getting close. top financial regulators as escalating trade tensions will create volatility in global markets and hurt the world economy. the banking and insurance regulator said higher u.s. tariffs will have a very limited impact on china's economy and will hurt the u.s. as much. shorting the yuan would see them suffered great losses. fiat chrysler is poised to announce a tie up with ray know as monday. that could lead to a full merger

creating the world's third-biggest automaker. bloomberg sources say the deal could involve an initial exchange of equity. bruno ared room no -- not involved. but they would be invited at a later time. the founder and ceo of huawei technologies has struck a defiant a tone in the face of u.s. sanctions. that threatens his company's survival. it speaking exclusively to bloomberg television, he conceded that the trump administration export curves will hurt but says the company is taking steps to keep the edge and smartphones and 5g. tom mackenzie joins us from beijing. there was no sense of panic from a man who has found himself thrust into the center of u.s.-china tensions. tom: absolutely. the center of those u.s.-china tensions and running a company that has gone head-to-head with the world's most powerful company. the most latest, recent move

from the u.s. was blacklisting huawei, cutting them off from supplies of components and services from companies like intel and qualcomm and google. despite all of that, he was pretty relaxed, pretty confident, he was joking and laughing, a fairly charismatic figure. we asked him about these issues. he did conceded that they will see their lead in five new technologies eroded as a result of these actions from the u.s. the other major part of the business, the smart phones and laptops, will be pressured because they are reliant largely on components and ships from the u.s. also services like google's android. there is a question mark over the future releases of huawei phones and whether you will use those android services and everything that comes with it. he says it will impact them but they are building out their contingencies, developing their own chips. they have been stockpiling since the middle of last year. he was pretty strong in his words and references to

president trump who he had previously described as a "great president." in our interview he said what he had seen from trump was "laughable." take a listen to what he had to say about these issues when we step -- when we sat down with him at the headquarters in san jen. >> [speaking a foreign language] has never: the u.s. bought products from us. even if the u.s. wants to buy our products in the future, i may not sell to them. there is no need for negotiation. i will ignore trump and then with whom can he negotiate? if he calls me, i may not answer. he does not even have my number. i see his tweets and i think it is laughable. they are self-contradictory. wouldhe critics of huawei say you have -- you got to where you are through intellectual property theft and government support. what is your response to that? -- ren: [speaking a foreign language] translator: the u.s. has not

developed that technology. where should i steal it? it is more likely they still our technology. now we are leading the u.s.. if we were behind, trump would not need to make so many efforts to attack us. he attacks us because we are more advanced than them. tom: there have been calls by some in china for beijing to retaliate against apple. is that an action china should be looking at taking? ren: [speaking a foreign language] translator: that will not happen first of all. second of all, if that happens, i will be the first to protest. apple is the world's latest -- leading company. if there was no apple, there would be no mobile internet. if there was no apple to help show us the world, we would not see the beauty of this world. apple is my teacher. it is advancing in front of us . as a student, why should i oppose my teacher? i would never do that. tom: and you have bragging rights.

you overtook apple is the number two smartphone neighbor -- maker. it jumped by 50%. you do have all up -- that goal of becoming the number one smartphone maker in the world. does that goal have to be shelved? ren: [speaking a foreign language] translator: we can become bigger or smaller. we are not a public company. we are not only pursuing growth or profit. it is good enough for us to just survive. tom: the founder of huawei, facing this blacklist from the u.s. is also facing the department of justice and their 23 indictments for issues ranging from intellectual property theft to sanctions busting by its people -- by its cfo. he says he is confident that they will work out those issues through the court, through the legal system. he is also saying he hopes avella bank their own chips and looking for other sources and supplies will mean the company can carry on. he ended by saying come back, speak to us in three years time

and see if we have survived. shery: thank you so much for that. our china correspondent tom mackenzie. much more -- watch more of tom's interview this weekend, huawei connected uncontested. it runs saturday at 12:00 p.m., friday 9:00 p.m. in new york. mainstream european union parties held their ground against the assault from populist and elections for the brought -- for the bloc's parliament. notablee some exceptions. our reporter ben sills joins us from brussels. a notable one is what is happening in the u.k., the bbc projecting the brexit party will win 29 seats. there seems to be some clear preference for parties with a clear stance, whether it is for the brexit party or for the liberal democrats who campaigned on stop brexit. ben: that's true. we were just talking about the

numbers. forbrexit party is heading 35% of the vote which is about the same as the three parties with a clear stance. divided andains both the labour party and the other have paid the price for getting themselves into a real mess over the brexit policy. it was one of the contenders for the head of the of he ben moaned the erosion centrist views in the eu parliament. as i going to be a problem for the parliament going forward? ben: it might be problem -- a problem for him. he is the candidate for the commission's top job for the epp. groundty has really lost in this election. it does not really mean the

center is under attack. both the liberals and the greens have made a big gains tonight. we are looking at a different kind of center, rather than a center which i think is narrow or reduced in any way. shery: of course, we saw the first casualty of the elections in greece. tell us what is happening there. alexis has been limping towards his reelection bid for several months now. he has faced a series of no-confidence votes. and he suffered another defeat tonight. that has prompted him to trigger an early election. he was due to go to the polls, it is not a massive departure for the greek politics. but it does probably mean the time inis eventful office with the center-right new democracy, very clear favorites

to win that election. paul: let's take a look at that turnout. that is a story in and of itself. 51%. the highest turnout in 20 years. the years of declining turnout in the eu will elections -- eu elections. why are people suddenly interested in participating? ben: i think there was a sense that this election mattered. struggles to make itself relevant through national affairs. and that is the reason for the historically low turnout. on this occasion, you had a raft of parties, france, italy, the poland, whogary and were all attacking the european project. that has spurred a lot of voters who may not necessarily have proved the mainstream parties but do support the project to come out and find a pro-eu party to vote for. shery: thank you so much for

joining us at a very late time in brussels. eu government reporter ben sills. let's check in on what is moving in the markets, a mixed picture. sophie is in hong kong. thise: i want to highlight area, easing the drop, continuing to fall. 2012 lows after friday's announcement that the ceo will take a 30% pay cut for three months to assume responsibility for the improper handling of stock market information by employees. this is the latest setback for the struggling firm which has been dropped by honda, and komatsu as manager further plans . to close its sales department that was involved in the data leak. shery: thank you so much for that. stella headed, we will be live in tokyo with robert feldman of morgan stanley securities to discuss his outlook for the japanese economy. atl: up next, we will look

the week ahead for markets with principal global investors binay chandgothia. this is bloomberg. ♪

paul: this is "daybreak: asia." i'm paul allen in sydney. shery: i'm shery ahn a new york. asian stocks are having a mixed start to the monday session following three weeks of declines on u.s.-china trade tensions. joining us from hong kong is binay chandgothia, global investors managing director and portfolio manager. always great to have you with us. we have seen the selloff in asian markets, particularly in china. does that mean potentially valuations have come down, that it is cheaper to getting to the action? binay: yes, hi, good evening. valuations have definitely come off after the selloff from the third month of this year. clearly, valuations which are

at the end of this month. having said that, we realize that valuations by themselves are not a trigger unless they reach extreme levels. we have not reached extreme levels yet. which means it will depend on the economys up and growth. in both asia and the u.s. shery: we continue to see the latest headlines on china-u.s. tensions, affecting huawei, and potentially other chinese tech companies. is this a sector you would be particularly worried when investing in asia? binay: yes. clearly technology stocks, not just in asia or china, but also in the u.s. have felt the brunt. and investors have the concern on if the trade tensions escalate further, or if they do not find a deal, what happens to the supply chain? what happens if the chinese restrictivet

measures to curtail the flow of goods and services in the u.s. into their markets. in the whole supply chain in asia, that could be a threat in terms of margins. technology is clearly one sector which has got the brunt of it. i would also say if an investor believes that the trade tensions will happen over the next few months, this is one sector which is changing the lines which i think should be bought. to get your thoughts on u.s. bonds. the 10 year have been drifting to its lowest since 2017. is this a safe haven trade or is there something else going on? binay: it is largely a safe haven trade. because the markets have been discounting a fed rate how -- rate cut. and of course, trade tensions mean that people go back into defensive assets by selling

riskier assets. on the fundamental side of things, we think the value should be about 265-270, if growth recovers which is our base case. if not, and if things get worse or if growth suffers, you could see the it dip -- see it dip lower on technical reasons. paul: i'm wondering how much of a role do you think china has to play in all of this? if we jump into the bloomberg and have a look at the chart, it shows you that china has a track record when it comes to selling off u.s. treasuries to defend the yuan, and defending the yuan is indeed the game that is being played now. what is your opinion about that? binay: if the chinese are selling u.s. treasuries aggressively, they should have gone up. clearly, what is -- whatever selling that chinese is doing because they may be facing outflows and they have to sell their u.s. flowing's have been absorbed by the markets.

bear in mind, you look at all over the world and developed markets, the u.s. is the highest. there is a natural propensity for investors to go into that as a class, getting risk off in their portfolios. shery: how about indian comparative to u.s. 10 year? we are also seeing the reason trade tensions, potentially affect india less, given they are less export oriented. binay: yes, clearly the 10 year treasuries in india is about seven quarters. they offer different values in alliance with historical averages. 500 basis points over u.s. treasuries. india is driven by growth the more than carry trades. this is where in dsa favor nature in terms of global trade, election cycle, they both turn out to be positive. having said that, i would prefer

india. acause of the fact that it is market driven largely by growth and not driven by carry. europe, weing to continue to see the results coming out that the european brexitns, nigel faraj's party has had a very successful day. investors are worried that might lead to a hard-line brexiteer succeeding prime minister may. our u.k. assets appealing now as we continue to see ongoing uncertainty over what is going to happen with brexit? binay: there are two things to factor in when you analyze the results for the european parliamentary elections. one is whatever wins the brexit party is one that will be short-lived. the second element to be kept in mind is that many pro-european

were not able to work. my senses they were rewarded for the parties. you have to take the result with a grain of salt. having said that, on u.k. assets, we feel the pound is fairly cheap. technically it is weak. it does not move up unless you start to see some increased probability of a deal, which is anything other than no deal brexit. it is very cheap on our valuation measures. therefore, at some point in time, we think the pound will catch a break. technically, weakness will remain. the solution is not going to be easy for them. paul: all right, binay chandgothia, principal global investors investor, thank you for joining us. just want to get you a cross a story we are watching now. we have just seen president trump's motorcade arriving at the imperial palace grounds. we will be there as the president himself steps out on

his way to the imperial palace. we will keep -- be keeping an eye on that story as trump prepares to meet the new japanese emperor. you can get a round up of the stories you need to know to get your day going in today's edition of daybreak. bloomberg subscribers, go to dayb on their terminals. also available on mobile on the bloomberg anywhere app. you can customize your settings so you only get news on the industries and assets you care about. this is bloomberg. ♪ this is bloomberg. ♪

check of the latest business flash headlines. sources say the u.s. securities and exchange commission is investigating whether boeing disclosed issues tied to the 737 max. officials in the sec enforcement division are said to be examining whether they were forthcoming to shareholders about material problems with the

plane. boeing and the sec declined to comment. shery: the pboc says they will give an injection of liquidity to a bank, the lender took over on friday for 12 months because of what they called serious credit risk. china construction bank will have custody of their businesses, the pboc is promising to monitor the liquidity of other smaller banks and use open market operations and monetary policy tools to maintain ample liquidity and stable market rates. paul: global payments in total system may announce a deal as soon as tuesday and what could be the payment industries third big merger this year. shares in both companies jumped friday after bloomberg broke news that global wants to buy total in an all stock deal worth $20 billion. payments firms are paring up to diversify and grow as consumers move away from using cash to make purchases. let's get you back to those live pictures of president trump at the imperial palace in tokyo. getpresident and first lady

to participate in the welcome ceremony at the imperial palace followed by a stake call with the emperor and empress. plenty more to come on "daybreak: asia." this is bloomberg. ♪

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paul: this is "daybreak asia." i am paul allen. nigel farage's brexit party have lled strongly in england. the anti-immigrant meagan madeley has won 30%. marine le pen's eurosceptic national rally appeared in france. the christian democrats and socialists will remain the two biggest groups. u.k. environment secretary michael gove has entered the race to succeed theresa may. other candidates include former foreign secretary boris johnson and jeremy hunt and former brexit secretary dominic rob.

defeatps down, admitting . has killed more than 1.7 million pigs as african swine fever sweeps the country could it may penetrate large commercial juan. 5% of the nation's take , aslation has been culled affected provinces and cities increases to 42. shery: let's get back to live pictures of president trump at the imperial palace in tokyo. he is participating in a welcoming ceremony. you can see the first lady melania trump and the emperor who succeeded his father earlier this month and also he is accompanied. president trump in japan to meet with prime minister abe. they already met over the weekend.

not to mention attending a sumo wrestling match. you can see the welcoming ceremony happening right now with president trump at the imperial palace with japan's new emperor and empress. keep you updated on what president trump is doing in japan. we are coming up to his meeting with prime minister shinzo abe. let's get a check of the markets across asia. sophie. sophie: it is overall a muted session after the benchmark capped a three-week decline. energy and utilities providing a boost. auto shares broadly higher. the kospi is recovering after opening lower, up .1%. looking to wipe out -- potentially while the korean won is building on recent gains. auto stocks gaining ground in seoul. , they arelaggards

sliding after the world health organization on sunday adopted new classifications of health problems including defining game addiction as a disorder. there will not be an immediate impact on sales but negative public sentiment could result in an overall industry slump for gamers. the local korean media are reporting they are to exclude using huawei equipment and setting up their new networks. they have -- both jobs under pressure this morning. sydney will search shares and are falling in the wake of the resignation of the papua new guinea prime minister. they don't think that will affect all searches. present this morning. the stock was downgraded. we have learned from the group saying its off market share buyback has been completed. paul. paul: thanks very much. huawei' billionaire founders says his company will find ways to keep its lead in the smartphone and 5g arena.

in an exclusive interview with he cold us how the u.s. ban will impact china's largest tech company. the u.s. manages its own companies. the u.s. is not the international police. they cannot manage the whole world. the rest of the world decides whether they should work with us based on their own business interests and positions. if companies do not want to work with us, it is like a whole in the airplane. the airplane is still able to fly. of the chips we have been using, half are from u.s. companies and half we produce ourselves. if the u.s. imposes further

restrictions on us, we will reduce output from the u.s. and use more of our own chips. if american companies have permission from washington to sell to us, we will continue to buy from them. >> what exactly have you put in place in terms of contingencies? we might have contingency plans for the core of the airplane. the engine and fuel tank, but we may not have a plan for the wings. we need to review the situation all over again and fix those problems. you can come back to interview us in two years or three years to see if we still exist. if we are gone in two years or three years, please remember to bring a flower and put it on our grave. damage do you expect to be felt in the consumer division of the business? smartphones and laptops, which

depend on you with chips but also u.s. -- u.s. chips and u.s. software. >> we might miss our expected growth target but we are still growing. being able to grow in the toughest battle environment reflects how great you are. -- we are. having alked about two-year lead in terms of 5g on your competitors. does that lead get eroded? >> definitely. if we slow down, it is because the wing of the airplane has lots of holes. flye fly slowly and others fast, they will catch us up. we will fly fast again once all the holes are fixed. and you can watch more of tom's exclusive interview with huawei's ceo this weekend. one way connected and contested runs on saturday at 12:00 p.m. 9:00 p.m.e, friday at in new york. australia's guest industry is in

-- gas industry is in a relatively sweet spot. surprise reelection of the conservative government in australia means producers face less immediate pressure to cut emissions. despite that, the industry remains concerned about its growing contribution to climate change. joining us now to explain is aaron clark, so aaron, what is behind the concern? aaron: it is one word. it is really shareholders. when we spoke to shareholders and industry executives ahead of an oil and gas conference in brisbane, starting today, it is australia's biggest annual oil and gas conference. the theme that kept emerging is how are they going to deal with climate change? how are they going to navigate it? how are they going to cut emissions? they heard that from both sides. one of the groups we spoke to asks are these companies investing more research and development for technology to cut emissions?

that was their big question. you know, from the industry side, you heard an acknowledgment they need to do much more to engage with these groups. you know, shareholders as well as sort of outside claimant groups as well for the public. so i think there is an understanding from industries that global conversation is changing and they have to engage more and think about how they are going to navigate, you know, sort of this, you know, this difference and are you going forward where there is much more scrutiny on their emissions and contribution to climate change. shery: how much are we going to see in the conference in terms of chatter and the price of domestic gas? aaron: i think there's a couple other things people are going to talk about. the price of energy in australia is something that always comes up. australia is one of the largest natural gas exporters. they export a lot of gas to china, korea, and japan. that lifted the price of

domestic guys and there is always a debate about how much should beustries regulated. should they supply more to the domestic market? that will be a topic that will be discussed as well. another issue that the market is talking about isreourerererererd natural s l l l l l l l l l l l ofs yearrrrr. focafofofofofofofofofofofofofofr summer in asia this year, so you can see less demand than you saw last year. you have new supply coming on from the u.s., from russia, from australia, so there could be a supply overhang and you could see prices a lot weaker this year than last year. both of those are two bank additional topics people will discuss. shery: aaron clark, thank you so much. with australia because sophie has a big stock number in sydney. sophie: we are seeing them served as much as rallying the most in more than nine years after the company reached the age of $20 billion takeover

offer. the telco stock engine closer to the aussie shares bid in that all-cash deal. shery. shery: think is a much for that. coming up next, we will be in tokyo as president trump sits down with prime minister shinzo resolve tensions over trade. you are taking a look at live pictures at the moment of president trump at the imperial palace. this is bloomberg. ♪

paul: this is "daybreak asia." i am paul allen in sydney. shery: president trump at the moment in the imperial palace in tokyo. right now with the emperor and empress, participating in a welcome ceremony of the imperial palace. this after weekends spent

playing golf and sumo wrestling. right now headed for a state call with their majesties, the emperor and empress. let's head back to tokyo. is standing by with our next guest. as donaldes, as soon trump is finished at the imperial palace, he will be coming here to the state guesthouse behind me where he will have that official state and awith shinzo abe working lunch and other meetings in the grand palace behind me. more about the economic impact and ramifications of this state visit. we will bring in our guest. the securities senior. pseudo-diplomacy, is it working for abe as it is working for trump? >> we will have to see what happens in the trade and investment negotiations.

it is good to have leaders be friends with each other. stephen: is the charm offensive working for shinzo abe? he has the potential of getting auto tariffs slapped down at a time when the prospects for gdp growth are a little bit dim given the prospect of course of waning external demand. robert: it is always better to be talking them not to be talking. port is a big plus because it makes the atmosphere easier to handle. back channel diplomacy is often very important. the fact that they are friends makes negotiations easier. stephen: do you expect a deal to get done that has been delayed until after the upper house elections in july which could turn into the dissolution of the lower house in general elections? robert: i do not expect the guilt to be done before -- the deal to be done before the elections. there is a real opportunity for the two sides to change the competition of tariff hikes into

a competition of tariff cuts. japan can say we will as of today cut tariffs on agricultural goods to below where they are in tpp for a year. during that year, please discuss whether you will eliminate tariffs on japanese autos. if you do that, we will make our japanese tariffs on american products lower. stephen: that will not go over well in michigan. robert: but it might go over well in the mid-west. politics are very interesting. similarly really, the u.s. could come to japan and say we will cut auto tariffs to zero as of today but within a year, we expect you to cut your agricultural tariffs below where are inre -- where they the tpp agreement. if you do that, then we can move into a tariff cut. stephen: we have both been following what japan has done to open up this economy and it has not done a lot.

there is protectionism and cultural issues with rice and beef and everything. who has the upper hampering? who has right now -- the upper hand right now? stephen: the trump located. prime minister abe a magnificent thing. in early 2013, when he came to office, he said japan will go into the tpp negotiations because it is in our national interests to do so. constituencies a bad message by saying we are not going to support you the way we did. they did the negotiations and then the u.s. decided to draw from that. prime minister abe put his neck on the line. stephen: you are one of four economists who met with shinzo abe ahead of tpp that was out a week ago today on may 20. the gdp was surprisingly higher than we were expecting. increased tohe vat

a potential trade deal? if they get a trade deal done, does that increase the likelihood we could get a vat? robert: it has a lot to do with the way they are thinking of fiscal reform. japan has large fiscal deficits. archives of things. two thirds of spending is on social programs. what is left to fund the growth programs? we need to get that issue settled. that does not have too much to do with trade. stephen: what is your advice to shinzo abe? cut on make a temporary agricultural tariffs and see how the u.s. response. there should be some movement on make -- on pensions to make the age of retirement dependent on average life expectancy. we have 20 plus years of life left to go.

that is a little bit longer relative to what you put together. we should link those two things together. stephen: .3% growth this year and next. with an election coming up, is there more fiscal stimulus needed? .3% growth is really not a lot of wiggle room to recession. robert: it's true, however, given the population growth has acome negative, 0.3 looks little bit different compared to other countries. that said, it would be wonderful if we could spur growth but more fiscal spending is not the right way to do it. more tax cuts is not the right way to do it. we need a lot of structural reform. if these tariff cuts were to come in from the japanese side, that would bring more competition as in the 1870's when caught in tariffs and talk cotton tariffs and access were different. stephen: how important is this

for donald trump as he is going into an election cycle in the united states to up use not only farmers in the auto consumer? robert: politics is complicated in both countries. it takes some political judgment to figure out which way is the best. what i would love to see is this tariff issue become a competition to make things better. i think that is in the area where the united states has a little bit of homework to do. stephen: given the trouble with china, north korea, iran -- robert: japan and the united states have always needed each other. we are better off together. ,tephen: robert feldman securities senior advisor, thank you so much. ok. paul, sending it back to you. we are on track watch at the state guesthouse in tokyo. paul: thank you very much for that. conversation with morgan advisor, robert

feldman. still to come on bloomberg, you can get more on the trade talks between japan and the u.s. can get onto tliv on your terminals. you can get commentary and analysis from bloomberg's expert editors. this is bloomberg. ♪ oomberg. ♪

shery: this is daybreak asia.

i am shery yen in new york. paul: i am paul allen in sydney. a report in the financial times says bankrupt british steel has drawn the interest of several potential buyers although no former offers have yet been made. a wide range of suitors have expressed interest for the business since it was put into liquidation on may 22. it is said to include gsw. an oilit oil giant -- giant. it translates into less drilling and fracking work. the rating was cut one notch. tworevised the outlook negative from stable. piper says shares of amazon could hit $3000 within two years to three years, about 65% above where the stock is trading now.

growing off the rapidly cloud business would help the low valuation placed on amazon the units. the outcry -- amazon's other units. your chrysler possibly merging chryslerult -- fiat possibly merging with renault. why is this happening? >> this is all about the forces of change we are seeing in the global auto landscape right now. obviously, that is putting greater pressure than we may have asked that did on companies particularly in europe like chrysler.theirt moving much quicker than expected. this deal seems to have accelerated in the past couple of weeks. it has been a much more long-term thing, but this is about them reaching scale and volume to be able to deal with these forces when it comes to electrification of the auto industry that we are seeing, the rise of autonomous vehicles, and

also car sharing. to theombined threat traditional business that they are trying to adapt to, and they see consolidation as part of dealing with that. of course, we have seen nissan being really opposed to that merger. what will this mean for nissan? nissan has been very opposed right now until further integration with renault. and a condition of this tie up between fiat chrysler and renault is that renault start pursuing the merger overtures they have been making to nissan in the short-term. that will probably make nissan happy. they want to focus on revising profitability with full-year profit expected to fall to the lowest in a decade and things not really tracking a long they would like amid all the turmoil. carlos ghosn as well.

this probably is something that is a silver lining for nissan. they are not particularly happy with this idea of further consolidation. they do not see scale and volume right now as being the answer to this situation right now. in beijing,'brien thank you for joining us on that very. let's get a preview of what to watch in markets later on this morning. get over to sophie kamaruddin. we are watching shares of china construction bank and others state-owned lenders as bernstein anticipate they will come under pressure in the near term after chinese regulators took over the bank, citing credit risk. they are to manage the smaller lenders business for the year. may havebailout concern.

jpmorgan and credit suisse joined morgan stanley in upgrading the stock after the company narrowed accordingly losses and margins are seeing improving further. today, we have chinese industrial profits plus april trade data from hong kong. continuing with flat export growth seen for april compared to a 1.2% drop that was clocked in march. keeping an eye out for the data in hong kong. paul. paul: thanks very much. before we hand over to bloomberg markets: asia, let's get a quick check on how markets are trading right now. it is really only new zealand this week. markets stronger. we have the nikkei higher by almost .5% and the cost to buy .25%. the coffee up by -- kospi up by .25%. they received a takeover tgreement from eq

infrastructure. shares in focus, up 21%. shery. ofry: let's get a check futures trading at the moment. not a lot of movement when it comes to u.s. futures. we are in a long weekend in the u.s. for memorial day. on thursday, we did get out preholiday gains. the taiex futures, up .2%. industrials profit growth, coming out this morning, and of course, all of the latest headlines out of the european union, not to mention president trump in japan. that is it from "daybreak asia." this is bloomberg. ♪

beijing.9:00 in i am tom mackenzie. >> i am david ingles. we're counting down to the open of trade in hong kong and mainland market. our top stories this monday, huawei's billionaire founder stands defiant. we speak exclusively to him. with whom can you negotiate? if he calls me, i may not answer. tom: china's banking regulator warns traders they face you losses -- huge losses.