down toe are counting asia's major market open. haidi: welcome to daybreak asia. our top stories. the tiktok clock is ticking. disposable u.s. as that require beijing's approval as china clamps down on ai sales. aberace to succeed shinzo includes a defense minister and a cabinet member.

critics say he failed to deliver on most of his promises. one of china's biggest conglomerate says it is optimistic despite divisions with the u.s. from the boss involved. shery: we are getting industrial production numbers from the month of july in south korea falling. missing estimates it would only fall by around 2%. we also have the month on month numbers. a gain of 1.6%. that is missing estimates it would rise more than 2%. this is also a deceleration in gains when it comes to those numbers from the previous month. we do have the outbreak in south korea worsening. virus pandemice within south korea and overseas. the numbers are not that surprising. improvingn numbers

and the slump easing for the past three months. when it came to the numbers in august, we saw the number starting to deteriorate. we are seeing those industrial production numbers missing estimates. contracting 2.5% year on year. we do get tomorrow, south korea's second quarter final gdp numbers. we will be watching the very closely. haidi: we have a full calendar this week. we are looking ahead to china pmi numbers as well as the rba policy meeting. we are continuing to see the broad rally rumble when it comes to the u.s. s&p futures up a quarter of 1%. the s&p 500 enjoying its best week out of eight. we continue to see record highs for six straight sessions. the nasdaq finishing at record highs. the dollar continuing to ease. when it comes to asia, we are looking a little bit brighter. the nikkei 225, japanese futures up by seven tens of 1%.

a big? over what happens next as the race to find a successor for shinzo abe gains momentum. we are watching the dollar gain at 10555. a big question as to what a post abe japan means for assets and the direction of the u.s. dollar. we do not expect any monetary policy change, does not matter who the successor is. the sale of tiktok's u.s. operations may have hit a major snag. beijing has added the overseas transfer of artificial intelligence to a list of products it considers vital for economic security. that means any sale will need to be approved by the chinese government. let's get the details from our deputy managing editor in washington. how much of an impediment is this new chinese regulation to

an actual tiktok deal? ros: it seems like everybody involved is trying to figure the out and has spent weekend phoning people to get a reading. i do not think it is terribly surprising beijing would want to have a say in the fate of this jewel of a company. surprise they a come in at the last minute with new demands. the principles involved in these potential deals and we are talking about american icon companies with microsoft to walmart and oracle. some of them expected to spend the weekend in negotiations ahead of a tight deadline coming up. they are trying to find out what it all means. tiktok in the u.s.

is trying to figure this out. haidi: is this aimed at the trump administration? they are saying with a lawsuit and some of these other actions, it seems like an effort to take it beyond the election. ros: i think there is a of truth to that. we never know for sure, but it seems like the chinese government would like to have some way to push back against the trump administration, which has been driving the van on this deal in terms of deadlines and executive orders about what tiktok and bytedance can and cannot do in the u.s. we have talked about so many times the multiple levels of tension between the u.s. and china. this is just one of them. andink going slow on this may stopping president trump from getting his way might be part of what happened with china late last week.

that artificial intelligence, huge and glowing technology, that each country, washington and beijing, want to have their hands on what is going to happen and not let technology float away. haidi: bloomberg's deputy managing editor ros krasny in washington. you can always customize bloomberg maybe setting so you get the news that matters to you. let's get you headlines with karina mitchell. karina: president trump as do many tough action against demonstrators in portland, oregon after violent clashes between black lives matter protesters at his own supporters. one person was killed as he

accused the mayor of portland with having blood on his hands. the president is expected to visit kenosha, wisconsin over the shooting of jacob blake. vietnam says it expects a trade till -- a trade deal to be signed before the end of the year. they agreed mechanisms for certifying the origin of export goods will take effect on september 20. the online talk included china, japan and the u.s. and focused on how to prevent measures that could undermine global trade. global coronavirus infections have risen above 25 million with several regions reporting a surge in new cases. california's.s., case is rose by the most in more than a week. the virus locked down in australia's victoria state has seen consumer spending slump and job losses surge.

india has set an unwanted record with the highest number of daily virus infections. more than 780,000 cases. india's total infections is above 3.5 million with 63,000.es climbing to india is fourth for death. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm karina mitchell. this is bloomberg. shery: still ahead, china's biggest bank posted their worst profit declines in more than a decade amid the looming bad debt and pressure to payout dividends. we will discuss the outlook later this hour. first, the race is on to replace japanese prime minister shinzo abe. we will have the latest on the top contenders next. this is bloomberg. ♪

haidi: the race is on to succeed shinzo abe as prime minister of japan after he is stepping down for health reasons. stephen engle has the latest. no clear frontrunner. lots of names, increasingly being thrown in. what are looking at? -- what are we looking at? stephen: even though the party has such a big majority, they do not have such a deep bench and front runners for the job. shinzo abe has held the second stint as prime minister for nearly the past eight years. there has been continuity. for the most part, stability. there has not been a deep bench. these are the five names that have risen to the front one who has indicated to officials he will put his name in the hat to become the president.

he is the chief cabinet secretary. he is not young. he is 71. abe's right hand man. he is likely to be seen as a caretaker for continuity to carry japan through the next year until there is likely to be an election in the fall of 2021. interestingly, he was the one who told bloomberg news on thursday that he felt shinzo abe despite his health concerns would more than likely fulfill his term as prime minister only to get the bombshell on friday. the whole ldp according to local media in japan was stunned. and big name is the former defense minister -- and another big name is the former defense minister. he will declare his intentions later today. fitas been seen as the most to be the prime minister. pole of thepulist

elect -- populist poll of the electorate and that the ldp electorate. this decision will come down to an internal vote sometime in the next two weeks. september 15 is the date they are talking about an internal poll to choose their president and then the person who will stand for prime minister. it is almost a foregone conclusion with the ldp holding 284 out of 465 seats in the lower house. we are hearing that parliamentary vote will happen two days later on september 17. speaker andlish georgetown graduate is seen as the one person who will not have the continuity of shinzo abe. in 2017, he laid out a plan for the boj to exit its easing monetary policy.

you could also has the defense minister, have him being a bit more hawkish towards china. hasrmer banker and minister abe's support but does not have a national profile. and then there is the finance minister -- sorry to say for all -- may a-year-olds bit too old for the job. turn in 2008 to 2009. he had a big chore ahead of him. that was during the global financial crisis. shery: for investors, a big question is what happens to abenomics? global policy look like going forward? -- what will policy look like going forward? stephen: there is an article in the bloomberg terminal examining that. you have to look at the success rate and the various three

arrows of his policy. monetary easing, fiscal policy as well as structural reform. all of the three arrows had some additional -- some initial success. said hasavirus as abe taken all of his attention. it has decimated the japanese economy. what the japanese have had to do is throw more stimulus into the pot if you will because household and companies are not spending through this economic downturn. we are almost back at square one. do we need to have the continuity or do we need radical change? most pundits are saying continuity is the name of the game for now. stephen engle, our chief north asian correspondent with everything on japan as prime minister shinzo abe steps down. we will have more perspective on

japan's political landscape ahead. we will hear from j.p. morgan's finance minister. this is bloomberg. ♪

shery: we are taking you live to the cape canaveral air force station in florida. that is the falcon nine rocket that will be launching the earth observing satellite. it was supposed to be a busy day for spacex. aey have already delayed launch because of bad weather. we are looking forward to biz one launching -- to this one launching very soon. haidi: it is the first satellite launch into a polar orbiting trajectory from cape canaveral

sense the 1960's. they usually come from the west coast. this has been delayed multiple times. it was meant to be happening in the first quarter of 2019. the delay for weather as well as the pandemic. here we go. 8, 7, 6, 5, 4, 3, 2, 1, zero. left off. off.fift

>> we are now 40 seconds into flight. falcon has taken off. we are throttling down to prepare for maximum q. it is at one minute, 12 seconds. haidi: there you go. 1bcex launching its saocom satellite. a busy week for ages economists. we not expecting rocketing numbers when it comes to india's second-quarter gdp. that is expected to be the worst reading since 1996. china's latest pmi data will show the economic recovery starting to level off. diana.et a preview with let's start off with china's pmi.

we routinely watch that as giving us an indication of how robust china's economy is. >> thank you for having me on the program. i think the recovery in the chinese industrial sector has been phenomenal over the past few months since they hit their bottom at the end of the march quarter. you can tell the fiscal stimulus concentrated torn the -- concentrated toward the industrial sector of china has worked to speed up the recovery. the consumers sector has been underperforming. in the advanced economy, it has been the opposite. huge rebounds in consumer services activity since the weakness in the june quarter. the industrial sector has lagged behind. haidi: that is the thing because -- asna, as instructions restrictions and inbound tourism

is expected to stay at a standstill, they are relying on the recovery in the consumer. is that to be expected? fora: the biggest reason why the consumer sector has been performing so well in advanced economies since the june blue point -- the june low point as the fiscal stimulus has been focused toward the consumers whether it be from unemployment benefits or from a program like we have in australia or specific handouts to those on welfare. that has boosted consumer income at a time when the unemployment market has taken a hit. in china, they have not had that same level of erect handouts to household -- of direct handouts to households. i guess what we are waiting for is you want to see this transition from strong growth in industrial and manufacturing sector in china towards that trickling down to the consumer sector.

that has not happened yet. shery: so many economies depend on the chinese economy. just now, we had the south korea industrial production numbers for july. what is happening in south korea? we have seen an improvement when it came to exports slumping. now, we are seeing a little bit of a step backward both in exports and production numbers. korean economyh is reliant on what happens in the rest of the asian economies around. your clearly seeing a lot of weakness in regards to travel around the area. even though china domestically is in a strong position compared to the other asian economies around it like japan, that strength has not translated to places like south korea because you are not seeing that same level of travel you have seen

before the coronavirus. shery: talking about levels of travel, we are seeing this type of three speed dynamic across the australian economy. for those parts that are under lockdown or virus free or having restrictions, we have a big week for aussie eco-data. what will you be watching? australia is delayed in releasing its gdp numbers. we get the gdp -- we get the june numbers on wednesday. when need to see the impact of the shutdown, what actual impacts in terms of numbers it had on the economy. we are looking for a 6% fall in june quarter quarterly growth. that would compare favorably to the rest of the world if you think about the u.s. they had a fall in the june quarter of about 9%. european nations had falls of 15% or more. in the u.k., they had nearly a 20% decline.

in india, they are looking for a 20% decline as well. is the morenow forward-looking indicators because melbourne and victoria are not in as broad a shutdown. in november quarter will be weak as well. the recession has dragged on. a lot of the other advanced economies like the u.s., they are much stronger. shery: always great having your insights. latestet a check on the business flash headlines. a company is offering the equivalent of $3.5 billion for a 30% stake in its french rival. acquire the holdings more.11% -- for 27% if the initial offer succeeds,

veolia will try for the rest of suez. bp is reported to be selling its london headquarters. , 6500 staff in the u.k.. bp bought the building for $156 million in 2001. just 13% of london workers have returned to the office. top chinese broker see a as losing another top executive. the ceo is leaving after less than 18 months in the job. the latest departures. an internal memo seen by bloomberg confirms his partners saying he has enjoyed working with his team for the past 50 years.

china is said to have won the green light for a second listing in hong kong. we are told china's largest restaurant company will gauge investors. it could raise 2 billion u.s. dollars. andis listed in new york has been working with goldman sachs and others on the potential listing. sinopec posted its first ever half yearly loss since the lockdown weight on earnings amid china's fragile recovery. it reported a shortfall of just over $3 billion through june compared with a profit of 4.7 billion a year ago. it has never reported a half-year loss since the custom-made listed dachshunds the cuts that -- since the company listed 20 years ago. coming up, our interview with the founder of one of china's biggest conglomerate.

he remains optimistic about the economy even amid escalating u.s.-china tensions. this is bloomberg. ♪

shery: china's biggest banks reported earnings over the weekend. the big four taking the biggest hit to profit growth in more than a decade. let's bring in david ingles. how bad were the numbers? 10% drop forst a the big four. we are still seeing some growth. if you measure it over a longer time span. if you compare to what they did manage to turn in in terms of profits the first half of last year, it was a double-digit drop.

it does not come as a complete surprise. when china was hit and they shut down large parts of their country, thanks at that point in february -- banks at that point called to keep as much of the economy afloat. perhaps this is why we are seeing that recovery in china take lace. the collateral damage -- take place. the collateral damage. for hundred million renminbi across the big four. divvied up in different ways. about 100 billion. this takes as into what the full-year looks like. city has a 13% drop for the full-year. jeffries sees it at worst case 25% for the full-year. into whattic take you moody's is saying. if you assume the economy still

grows roughly at about 2%, then pressure should continue to be in place for the second half of this year. a lot more loss provisions coming to place. big plans for expansion in china. what are the plans? david: what we know is they plan to increase their revenue in china. just looking at my notes here, 100% increase. i would assume that is over the five years they are expected to double their head count in china. doubling the headcount over five years. when under percent increase to supplement that. this is the jv. the securities measure, which back in june, they took a majority control of 154 staff. in terms of where they plan to hire those people, the objective is to essentially double the

contribution to revenue growth from the ultrahigh strategic client over the next three years. it is the strongest fork is -- jobless focus may terms of headcount, infrastructure growth compared to any country in the world. asia-pacific earnings season just wrapping up. give us an overview of the second quarter. the revisions to forward earnings to full-year estimates actually stop falling. we are still pretty much in the hole. is usd.that we are still looking at roughly an 8% drop in full-year earnings. by the end of this week, we should be done virtually with some of the large companies across the region. haidi: are bloomberg markets

coanchor, david ingles. the billionaire founder of one of china's biggest conglomerates is optimistic. uphas also eyeing opportunities in southeast asia, brazil and africa. mackenzie. tom >> a ride range of business -- fosun covers a wide range of business. our business is very focused. we have been more focused in a recent years. i am confident in china's economy. china has a large middle class. there is huge domestic demand. china's industrial chain is strong in global competition. for the future, our chinese business will be the most important. we sense there is huge growth potential.

>> we are seeing tensions between beijing and washington arising. there is also trade friction between beijing and australia, canada, also india. how much of a headwind are those tensions for businesslike yours? believe some extreme voices during the election campaign can represent the future of the u.s.-china relationship. i believe they will find a solution in future. sun complies with local laws. all of our business development are welcomed. in terms of investment, will focus more on strengthening our industry into the future instead of expansions. we will concentrate on strengthening our existing businesses in regions we are already in. >> you have debt to capital 60%. of

it is not at dangerously high levels. are you comfortable with debt levels around that ratio and are you looking to raise additional funds either by bond issuance or loans? prudentll maintain a financial policy so we are comfortable with the existing debt ratio. we will not aggressively change our financial strategy. we will not be too conservative. over the past for years, we have tried to get a balance between investment and debt, which means we have investments but we also have exits. in terms of multichannel financing, we have both bonds and stock. haverms of currencies, we and theg in the yuan u.s. dollar and financing overseas.

one of the most important development strategies for our future is to maintain prudent finance and adequate cash flow. >> which parts of the world look most enticing to you right now as an investment opportunity? >> we have taken a position in brazil. we are optimistic about its future development. southeast asia is a place where we do not have strong investment, but we will strengthen. the treatment for malaria has made a great contribution in africa. it is called almighty medicine. africa has been facing a huge challenge from the coronavirus pandemic. we hope we could do more for africa. >> 10 years down the line, where do you expect, where do you hope fosun to be? sun has a plan to grow 10 times in 10 years.

we hope to see big growth in the customers we are serving. we will also bring them better products and services. shery: that was the fosun chairman speaking to tom mackenzie in shanghai. breaking news in australia, a company has agreed to acquire the mlc wealth from national australia bank sang the takeover will be funded by debt and sub loan notes. we are reporting that just over $1 billion placement and entitlement offers for that deal. this is the melbourne based wealth manager seeking to raise that money. is at the second multimillion dollar acquisition for ioof. many are trying to exit the industry that has been plagued

by scandal and inquiries. continuously shifting with earnings as well as customer remediation claims. we are hearing a deal has been made. acquire forg to 1.04 billion dollars. the united nations seeing an historic opportunity. we'll be speaking with the additional financing. this is bloomberg. ♪

karina: this is daybreak: asia. the race to succeed shinzo abe as prime minister includes the former defense minister, longtime cabinet secretary and the former foreign minister. -- foreign foreign minister the former foreign minister is seen is best suited. a new leader is expected to be chosen in parliament on september 17. the sale of tiktok's u.s. operations may stumble over approval from china. we are told government permits will be required for transfers to safeguard national economic security.

microsoft, walmart and oracle are known to be interested. of arguably the best soccer player in the world remains uncertain. messi failing to report for preseason health checks in barcelona. 's apparent determination to leave a club where he spent two thirds of his life. his contract has a 700 million euro buyout clause. he says he can leave for free. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm karina mitchell. this is bloomberg. shery: the united nations says covid-19 is an historic opportunity to transform finance into the digital age. a new u.n. report says it could harness trillions of dollars towards a more sustainable global economy. is chair of the

task force. great to have you with us. digital finance has been a lifeline for the millions of people that have been under lockdown. how will this provide an opportunity to reshape finance and why is that needed? achim: thank you for having me. as you say, finance had begun transforming itself with digitalization and technology. what the pandemic has shown in these few months is held rapidly government but also financial markets consumers have adapted. digital technology has allowed us to amplify the ability to reach people and for finance to reach people. what is a cutera general said, he established a -- what secretary-general said was he established a task force to explore could this revolution in finance also be a revolution for development finance? the pandemic has shown

extraordinary programs being set up to stabilize economies. it goes much deeper. it is cryptocurrency with small wealth platforms. shery: digital finance also presents risk like it is vulnerable to manipulation and exploitation. how important is that you have effective oversight while you are trying to achieve the sustainable development in digital finance? achim: it is critical to understanding the ecosystem in which financial players and citizens -- there is a reason -- it is alsoow to remember one of the challenges is misalignment where people want to see their money invested. i think that is one way in which we can look at this ecosystem being brought together.

the second is government regulatory and policy is critical to shaping this market as it evolves so rapidly. withcting rights and intellectual property, it enables fair competition transparency. governments have a critical role to put that foundations in play -- to put the financial ins decked with a foundations in play. it is the kind of public investment and policy needed to recover but also lays the groundwork for a much more inclusive digital financial revolution to become possible. haidi: is there enough global and regional coordination? now, it is one of those frontier moments. i think in many contacts, governments have decided to catch up with the possibilities.

take the issue with cryptocurrency such as blockchain. is it a risk to the system? [indiscernible] theificant numbers of population by certain criteria. with the report presents are fantastic examples of lending -- [indiscernible] using the data technology available to us in the midst of the pandemic. being able to provide 20 million loans to enterprises, the backbone of our economy. as a matter of transaction. these are the opportunities that require solid incentives, regulations and alignments that protect citizens but also create the opportunity for revolution to occur, which is the front tier of what we are seeing right now. haidi: which countries are you most optimistic that you see

this convergence of opportunity as well as the adequate government oversight and initiative? in india and in china. one of the most fascinating things we have learned is the frontier for experimentation and innovation is not confined to traditional technology centers of the global economy. to take an example such as kenya. the mobile platform has become an integral part of the economy. every citizen transacts on it. you can go to bangladesh where government bonds are being set up. you could go to brazil where the social security and welfare programs are and look at the extraordinary amount of money government has -- [indiscernible]

more efficient government. more efficient markets. more inclusive financial economies. one of the great breaks has been that hundreds of millions who did not exist on the radar of credit,ncial system, no -- [indiscernible] these are the kinds of examples that will transform our economies and hopefully with a strong emphasis on equity and sustainability. these will ultimately ensure a more stable political and financial system. shery: great to have your insight. thank you for your time. cochair of the u.n. task force on digital financing. we have breaking news. a companyring from statement that berkshire hathaway has taken a 5% stake in five japanese trading companies.

the stakes are slightly more than 5%. company saying they may increase their holdings up to a maximum of 9.9% in any of the five investments. this according to berkshire hathaway statement. also, they are saying they intend to hold the japanese investments for the long-term. we have seen that berkshire has held major stakes in coca-cola for more than 30 years, american express for more than 29 years. berkshire hathaway saying holdings in these japanese trading companies were acquired over 12 months. berkshire acquiring slightly more than 5% in these five japanese trading companies. they have acquired these stakes for the long-term according to a company statement.

haidi: all right. we will continue to watch the market reaction in japan. interesting timing for berkshire hathaway given the political uncertainty we are dealing with. we are seeing the aftermath of a pretty negative market reaction on friday after we had the speculation that had been going on for a couple of weeks. concerns of shinzo abe leaving. we are getting japan industrial numbers out at the moment. we are seeing a star contraction of 16.1%. slightly better than expected. month on month, a gain of 8%. also a beat. , we are seeing a year on year contraction of 2.8%. month on month, a contraction of 3.3%. when it comes to the department stores and market sales, that was pretty much on expectations. seeing a contraction of 4.2%. plenty more to come on daybreak asia. this is bloomberg. ♪

haidi: sifting to the hurricane threat. traders are looking for the broader outlook on demand. let's get more from our energy reporter in sydney. what is the outlook looking like for oil now that we have gotten

past the worst of hurricane laura? >> what is interesting as we have seen the depth of volatility in this crude market. has seen last week when we had the twin hurricane threats. we started around 40 to 50. we ended at -- 42.5 year. we ended it 43. looking at the sheer amount shut in but hurricane threat, 84% of production in the gulf of mexico shut down. barely made a flicker in the market, which shows you people are waiting to see how this pandemic plays out and what the economic recovery is going to look like. 'su could say that opec settings are probably right. i cannot see them adding too much more supply. prices down to the low 40's. that is another factor the market will be watching out for. shery: the uncertainty causing itsher oil giant to post

first ever loss. how bad was that? >> i do not think it was any worse than any other major around the world? they are oral struggling -- they are all struggling. there was widespread expectation it was going to be an ugly result. -- in aing also to note line with the rest of the industry paring back the discretion know spending in term of the growth outlook. with majors around the world delaying their growth plans, that is going to have an impact on supply in the longer-term. i do not think anything was too surprising in terms of those numbers. let's get a check on the latest business flash headlines. saudi aramco says it found two new oil and gas fields in northern saudi arabia near the

border with iran. neways it intends to drill wells to evaluate besides. the new fields are tiny compared to aramco's existing assets that may help the company achieve its goal of raising nonoil output. cutting airlines is capacity by 55% from a year earlier as the holiday season ends. the carrier says it will end services to 15 u.s. cities in the first week about tober and more airlines could follow if the government does not offer additional help. the airlines had agreed to keep all service destinations in place through march as part of the u.s. payroll package. itsed airlines is to drop $200 fee to change domestic tickets immediately, scribing a long-running source of traveler angle -- traveler anger.

passengers will be able to fly standby for free if ac is available on the same day. u.s.d will be the first airline to cancel change fees as it and rivals seek to coax passengers back on board amid coronavirus restrictions. coming up on daybreak asia, a preview of chinese pmi and india gdp data. plus, perspective on the resignation of shinzo abe as the race to succeed him heats up. we will speak with j.p. morgan. market is next. this is bloomberg. ♪

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>> welcome to daybreak asia. major markets have just opened for trade. our top stories. defensebe includes a minister and critics say he failed to deliver most initial promises. the tiktok clock is ticking but there could be new obstacles.

any disposal of u.s. abscess -- assess -- assets -- one of isna's biggest conglomerates --e will hear debts are on as to who may replace shinzo abe and what it means for continuity in japan. scrutiny by the impact of economics and boj policy. japanese stocks opening higher more than 1% amid rising volatility. yen trimming friday's gains. output this morning rising a percent month on month amid reopening of the sunday -- over the summer.

a focus on boj bond buying. steepening of the treasury curve will be a key factor. local media and south korea reporting the government is preparing extra steps to help small businesses as social distancing rules have been week.d for one kospi opening higher at 1% while korean won is gaining ground below the 1180 handle. factory output edge tire in july but consumption waned as retail --es jumped x percent dropped 6% month on month. trading near aar 74. hi edging towards

in wellington bc stocks reduce -- resume trading. -- in wellington, we see stocks reduce -- resume trading. another development for new zealand. andding out august, asian 80 set for the best august performance since 2003. vietnamese stocks have been in the lead this month. this is a topic of second-best performer in asia in august and managers are saying the shifting tide politically in japan could be a buying opportunity for japanese stock. let's discuss what is happening in japan. our next guest says shinzo abe's departure is unlikely to resolve policy shift but politically -- political uncertainty might have

long term implications. we are joined in -- joint from tokyo. post abe japan mean for assets in japan and abroad? i think there is -- the stable u.s. and japan relation and stable domestic policy. [indiscernible] it will change the domestic policy. in thisbasically is probably making

.he japanese market unstable shery: which could lead to japanese yen strength. but this chart showing the japanese yen has not seen much strength past the 105 level. in the past they have spent little time there since 2017. so if we get japanese yen strength, would be expected boj to step in if they are willing to continue with the monetary policy stance? continue using monetary policy stance that it todifficult for boj intervene in the foreign exchange market. because of the meeting of prime the relation with the u.s. will be the key. intervene which means

some sort of discourse with the u.s. government so i think for japan to intervene. yeni: do you expect volatility to be a sustained payment once a replacement is chosen of a have a chance to settle in? the boj is staying the course and that is the more impactful element the market. the boj monetary policy has been one of the marketnt factors for anduse of the interest rate the effect of exchange rate of the yen declined 16% but at the

the close relation with president trump has been an important factor and also the stable domestic politics is also an important factor. prime minister abe has been serving as the prime minister for several years, the longest in the history. face ane are going to unstable situation with the relation with the united states and domestic politics. -- notink that may cause short-term impact, but we have to be careful about medium-term impact. seei: do you expect to japan long-term rates continue to rise? >> i do nothing so. ,he japanese industries

[indiscernible] mergerwe just got news hathaway has taken a 5% stake in five japanese trading companies. makes these trading companies so attractive? i am not sure. a broad foreign investor perspective. what makes a japanese asset attractive? probably [indiscernible]

basically they are likely to continue the economics and maybe that will be short-term relief, probably we do not have to worry about the change of the policy. for the currency market, the important point is the relation with the united states and the domestic market. so we have to see that is likely to continue under the next administration. haidi: let's take a look at softbank shares. cutting the stake in the company. this is what we are seeing. the downside trend when it comes down 2.7%. corp.

let's get to karina mitchell. >> coronavirus infections have with above 25 million several regions reporting a surge of new cases. u.k. posted the most affection since early june. in california, cases rose the most in a week. russia recorded almost 5000 new action. more to -- more than 10% in moscow. the lucked out in australia's victoria has seen job losses rise. president trump is demanding tough action in portland, oregon after violent clashes between black lives matter protesters and his supporters. accused the post of portland mayor of having blood on his hands. he is expected to visit kenosha, wisconsin this week after the shooting of jacob blake but multiple reports have said the governor has told him to stay away.

vietnam expects the trade deal to be signed by the end of the year. virtuale house had discussions and said they agreed mechanisms for certifying the origins of exported goods that will take effect september 20. china,ine talks were japan, the u.s., and talked about measures to undermine global trade. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: still ahead, we act -- we ask for in trading and get their outlook on the economy. the clock is ticking for tiktok u.s. operations for the last minute rule change in china could delay transactions until after the election. the very latest, next. this is bloomberg. ♪

shery: shares of japan's five leading trade companies surging in tokyo. jumping the most since february, --er bircher half of the way uskshire hathaway and joins on the line from new york. why did warren buffett like these shares? >> it's a big statement these companies he is interested in. close to home often with investments. wants to invest in american companies but he has talked for years about how he wants bircher to extend globally

and i think this signifies they are willing to put money in different companies abroad nowadays. haidi: does this mean this is just the beginning in terms of him diversifying his holdings in a mobile scale? -- global scale? >> i think it signifies that. he has said in a statement, we ane seen berkshire has investment in an electric car company and he seems willing to say, we want to take an investment in companies we think will be the next stage for these different countries. i would not rule it out we might see him step even more into investments abroad. shery: berkshire saying they intend to hold japanese investments long-term. what does that generally mean for them? >> buffett is a long-term

investor. he likes to hold them for many years. he has held coca-cola stock for 32 years. it signifies they have done their research on these companies. they know what they are investing in and putting their money behind and they are for the nexty, couple of decades, we are willing to back them. we have plenty more to come on daybreak asia. this is bloomberg. ♪

they: we continue to watch pandemic as global cases top 25 million. john's house jens -- john hopkins professor spoke with bloomberg about coronavirus

infections and the cdc shift in guidance on testing. >> this is a bit of a head scratcher too many in the public health field. we know from data that asymptomatic infected individuals are responsible for a large amount of the virus spread globally. guidelines emphasize testing. the reason we recommend wearing masks is to limit asymptomatic individuals from spreading the virus. so it is still not clear what science is truly driving this recommendation. it seems to be counterintuitive to many public health individuals. we learnedhe things more about is reinfection. there has been a reported case in hong kong we learned more about that.

is that the only case? suggestt is, does it reinfection is abnormal? what do we know about the risk of reinfection? >> the hong kong case has been well characterized. it is a very unique case and that they were able to have samples of this individuals enables was -- nasal swabs from the first and second infections. intense screening at the airport in hong kong allowed them to cap the second -- to catch the second infection. they had no symptoms. what is unclear is whether or not that person was able to transmit virus from the second infection. there are now two other cases. one in the netherlands, one in belgium, of similar situations. so we are just starting to ofatch the surface oh --

what reinfection czar. it is an important topic because we need to know how long immunity from an infection and vaccine will protect us from reinfection. it is also important to know that even if you are infected, you will probably get more mild symptoms. the question we need to answer is, even with the mild infections, can you spread the virus in a reinfection? why would you not be able to spread on a second infection the same way as you do on the first? viruses like influenza, when you are infected, you have strong immunity that prevents you from being infected again. but we know from work on the common cold viruses, which cause a mild disease in humans, the

immunity only lasts for a small time and you can be reinfected and shared infectious virus, which is a surrogate for your ability to spread infections. so because so many of these covid cases are mild, we tend to look to the common cold viruses in humans, immunity and reinfection will apply. that is why we are concerned. -- will imply a. that is why we are concerned. what do we know about symptoms in children? some work in the u.k. says we might see different symptoms in children. what do we have to watch for when sending children back to school? mild thans are more in adults or the elderly. they are able to produce and

shed virus. so transmission within children and children to adults is the area now a primary focus. hopkinshe johns bloomberg school of public health is supported by michael bloomberg. of the latesteck headlines. united airlines is to drop the $200 fee to change domestic tickets immediately. next year, passengers will be able to fly standby for free if a seat is available on the same day as their trip. united will be the first u.s. airline to cancel the fee as they try to coax passengers back on board. china's biggest banks have suffered the worst decline in profits and more than a decade as a wave of loans goes sour. the big for all posted falling and loss provisions as much as 97%.

lenders are asked to put sheep earnings ahead of profit. os -- ioofnds -- i/o will need to raise two thirds to complete the deal and will sell shares at three dollars 50. tiktok u.s. operations might have hit a snag. beijing has added the oversee -- ofer of ie -- of aei ai. any sale will need the approval of the chinese government. let's go to jodi schneider. we are looking at how the new rules could potentially impact tiktok sale. >> it could potentially delay it.

we have been talking about this trump in sale since march said first he wanted to basically ban the use of tiktok in the u.s., and then he said, the sale needs to occur within six weeks. we are at the end of that and microsoft and oracle have to buy theal bids tiktok business in the u.s. but asset management is said to have made a pitch this past friday to buy the operations. while the bids are pending we bytedanceews that will be required to get approval to sell the u.s. operations because of the export of artificial intelligence technology. mean forat does this the ongoing negotiations in

order to make a deal with tiktok? any other implications here? >> yes. the restrictions, they ,pparently cover technology bytedance and tiktok, it would require government approval for the deal and you could see this happening in the future as well. if there are other situations continue tod trump have strong rhetoric and sometimes action like this against two chinese companies doing business in the u.s., you can see this coming up again. so it really depends on how they choose to interpret this. as we have been saying, the additional approval could take time to get done. this deal was done very quickly, it happened very quickly compared to how long one usually takes this and this could delay and undermine the transaction and we are now hearing the

tiktok deal could be delayed until after the u.s. elections in november. that would buy them time to see what the political environment is like. haidi: what have we heard from the u.s. in response? >> we have not heard from the trump administration on this potential new restriction and requirement, although trump tweeted over the weekend other things about kenosha and the protests in portland. but obviously this is something the administration is concerned about, having taken this action. we would expect we would hear something about this. the clock is ticking on the steel. president trump -- taking on this deal. president trump said he would ban within if the deal was not completed. that was earlier this month.

the clock is ticking from the administration side. up, we will look at the impact shinzo abe's resignation might have on the japanese economy. that conversation, next. this is bloomberg. ♪

continuity isicy key from a market standpoint. overwhelmingly dovish orchestrated by the bank of japan, he still has another couple of years on his term. >> i do not think that will be a [inaudible] room from thisch

mainstream reformed strategy. >> i think he has done a terrific job. >> whoever takes over for prime minister abe is likely to maintain the crucial relationship between the government and central-bank. shery: reaction to the resignation of shinzo abe. let's turn back to sophie for a check of the market. -- topicse stocks gaining ground. the best august since 2003 for asian equities. up.ee cyclical play catch let's check at the commodity

this morning. above 46. as focus returns to demand recovery as the hurricane threat receipts. norwegian krone is leading. goldrising for a second -- rising for a second day. u.n., we have cnh trading 686. flashing.is jgb are rebounding. u.s. yielding of the curve will be a driver for jgb action. u.s. 10 year yields regaining.

the yen the focus this morning, trading study after earlier easing the friday gains. whatrs are watching to shinzo abe's resignation means for yen strength. let's get more insight when it comes to the implications of the resignation and who might replace him. stephen schwarzman joins us from hong kong. great to have you with us. situation is that the bank of japan will stay the course when it comes to monetary policy, we have kind of given up , likecial elements structural reforms never came to fruition. finally -- fundamentally change japan economically? >> thank you for having me. instance, the

resignation brings forward the political policy uncertainty we had anticipated would occur anyway later this year or next year and an election has to be held by october 2021. so political uncertainty itself is not surprising, it's just happening a lot sooner. we did put japan on negative outlook last month because of the coronavirus and the impact it is having on the rising public, so that is something we will be watching with whoever the new prime minister is, eventually will date clarify plans for consolidation. haidi: is continuity the name of as japan continues to navigate and self out of the pandemic driven slowdown? broad policycipate

continuity. certainly this political uncertainty may raise concerns and markets about a revolving door and japan's leadership period where-abe in as six prime ministers many years. a big achievement is staying in power for the eight years he did. we do not see big shifts in the near term policy simply because the new prime minister is expected to come in strong from the party. for us we will be looking at ofium term and clarification eventual plans from this consolidation. one thing about structural reforms not having taken hold,

we have to give credit under his administration some significant reforms,ket participation rates are way up, more flexible working practices, more women in the work force. agenda, a lot of work needs to still be done but there were some reforms to take note of under the abe administration. haidi: some included raising the sales tax but they had a big hit to the economy. lingeringf those effects will you continue to see right now, and when do you expect the japanese economy to bottom out? height lasthe tax thater, from 8% to 10%, has been a long overdue hike and been twice to -- twice delayed.

this is a key ingredient toward the median term debt consolidation i mentioned. there is political noise about possibly reversing the tax height -- tax height. that would be negative for medium-term prospects. unpopular,e was very temporarilymption but policies were put in place to minimize that, having learned from back in 2014, the damage you can do to confidence and consumption. by early this year, consumption impact was over on the big plunge in outflow we saw in the first two quarters was because of coronavirus. momentum toowth turn positive in the third and fourth quarter, setting the stage for a decent rebound in 2021. with -- shery: with some

corporate tax cuts under shinzo abe, do you believe they should be reversed given the pressure on the physical side of things? fiscal side of things? ofthe corporate tax, one abe's priorities was revitalizing the corporate sector. for us it is about policy to boost medium growth potential. japan faces challenges of shrinking population and an aging population, wewak potential -- weak potential groove. so they have to be oriented toward boosting productivity and medium growth potential. that is the key. haidi: the problem is a lot of them are politically unpopular. leader, is, a new there a chance we will see

structural reforms on things like immigration? structural reforms take a while to be implemented. i mentioned labor market reform. no doubt a -- there is greater use today of foreign workers in japan's labor force than ever before. still it is small. there is hope to continue down that route. i think priority for the prime minister will be to continue with the support of fiscal policy in light of the coronavirus. we think it is appropriate for there to be stimulus in the pipeline this year and next when it comes to fiscal policy but japan has to deal with the medium term debt challenge. those are the unpopular policies politically and they need to be put on the table eventually but in the immediate term the focus will certainly be on support for the fiscal policy.

great stephen schwarzman, -- schwartz, great to have you with us. next, india records the worst quarterly growth in more than two decades. we will get the outlook, next. bloomberg. -- we will get the outlook, next. this is bloomberg. ♪

>> this is daybreak: asia.

new zealand's largest city has emerged from lockdown after the government said an outbreak is now under control. schools and consumer businesses have reopened and the ban on traveling outside the city has been lifted three weeks after cases prompted a return to health restrictions. everyone over age 12 is required to wear a mask on public transport. of arguably the best soccer player in the world remains uncertain. he will not be with the team for training ahead of the new season. an apparent determination to leave the club where he spent two thirds of his life. he has a buyout clause and he says he can leave for free. india set a record with the highest number of daily virus infections. cases, topping0 the previous record holder, the

u.s. fatalities over 63,000. india is third in the world in terms of infections behind the u.s. and brazil and forth for death. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. haidi: we are going to stick with india. gdp growth is expected to come in the worst since 1996. chinese manufacturing data had lighting the week in asian economics. , great to have you. let's start with india. what are your expectations? is this because of the pandemic or other factors that resulted in growth potential not being realized? india hasw down in

been ongoing even prior to the pandemic but this quarter is definitely because of the pandemic. india had one of the most stringent lockdowns in asia. we are expecting a fairly big hit to the industrial side of the economy and the investment side. having said that, the expectation is gdp will be about -50% year-over-year. -15% year-over-year. i think it is a pretty dismal number. shery: we are seeing record single day infections. until such time as we get more the curve is at

least starting to come down, is it still dire in terms of an assessment of recovery? 65,000 infections a day. >> this is definitely a challenge to the growth part lockdownfter the relaxed the economy normalized but below the pre-pandemic level. the government does not want to impose a nationwide lockdown so what we are seeing is intermittent and local lockdowns leading to an uneven base of toovery and leading sequentially growth might slow down as we move forward. uneven recovery, same thing for china. manufacturing see

as opposed to services. what are you watching that will give us clarity on where the chinese economy is headed? as far as the pmi is concern for august, rx dictation is there should be a mild improvement over july numbers. -- our expectation is there should be a mild improvement over july numbers. august, floods have receded and covered cases oft take up, the reopening cinemas, a lot of that we think pickupad to a slight [indiscernible] risk for chinahe is a slight slow down and recommitting -- weakening in the

momentum going forward. we have to distinguish between china and india. it is india or china, we continue to see the banking sector under pressure banks, they chinese have given a mandate from the government to try to support the economic recovery. does the financial sector in these countries, what is the outlook for them of this year, given the pressure on the macroeconomic side of things? >> it is similar in terms of the financial sector. the shadow banking crisis india went through was some -- was similar to what china went through. the risk of the nonperforming asset for the bank -- the

simulators -- similarities between the two countries. india [indiscernible] china, the starting position is weaker. but the impact of covid on the banking sector will not be visible immediately. as we go forward, i think this will play out in the next one or two years, we will see banks raising the provisioning requirement, needing to raise more capital, and the risk then is perhaps the banking system could turn more risk-averse all. this is something to monitor closely. shery: always great having you with us.

up next, our exclusive interview with the chairman and founder of one of chinese biggest conglomerates. he will talk about his outlook for chinese economy and their expansion plans around the world. this is bloomberg. ♪

shery: the billionaire founder

of one of china's biggest conglomerates is optimistic about the country's economy, even admitted escalating signs of u.s. tensions. he spoke with tom mackenzie. first of all, we cover a wide range of business but concentrate on family consumption, happiness, health, wealth. in recent years we have been more focused. i am confident in china's economy. they have a large middle class so there is huge domestic demand. the industrial chain is strong in global competition. with the future, our chinese business will be priority. we sense there is huge growth potential. >> there are tensions between beijing and washington rising and trade friction between beijing, australia, canada,

india. how much of a headwind are the tensions for business like yours? i do not believe some extreme voices during the election campaign can represent the future of the u.s.-china relationship. i believe they will find a solution in the future. ofpliance with local laws the global positions, we are friendly to local communities although our investment and business development are welcome. in terms of investment, we will focus more on strengthening our industry in the future instead of expansion, although we will concentrate on strengthening our existing businesses in region we are already in. capitalave debt to ratio of about 56%. that has increased a little bit. it is not a dangerously high level. are you comfortable with the levels around that ratio, and

are you looking to raise additional funds by document or bond issuance? we will maintain a prudent financial policies to we are comfortable with the existent debt ratio. we will not aggressively change the financial strategy but we will not be too conservative. in the last few years we have tried to get a balance between investment and date -- and debt. we have investments but we have exits. in terms of multi channel financing, we have bonds and stocks. in terms of regional currencies, we have finance in the chinese one in mainland china and u.s. dollars overseas. that gives us more and safe sources of funds. one of the most important strategies is to maintain prudent finance and adequate cash flow. globe,ou look across the

which parts of the world but most enticing to you right now as an investment opportunity? >> we have taken a position in brazil. we are optimistic about future development. southeast asia is a place we do not have strong investment but we will strengthen their. -- there. the treatment for malaria has made a great contribution in africa. it is called almighty medicine there. africa has been facing a huge challenge from the pandemic. we hoped we could do more for africa. >> 10 years from now, where do you expect, where do you hope to be? >> there is a plan to grow 10 times in 10 years. we hope over the next decade the overall business will see 10 times big growth in customers. we will bring better products and better services.

haidi: that was the chairman speaking exclusively with tom mackenzie in shanghai. you can catch more on the program that airs september 12 in hong kong and sydney. let's get a quick check of the headlines. oil way on earnings amid china's fragile recovery. top chinese broker is losing another top executive. the ceo is leaving after less than 18 months on the job. the latest in a string of high-level departures since security began tightening the grip on hong kong. said itnal memo acquired seven years ago.

headcount inouble china over the next five years. normalizedrgely following the accounting scandal and slowdown caused by covid-19. shery: some stocks to walk. china's megabanks are in focus after posting the worst profit declines in more than a decade. expects specs shares -- shares could react negatively. watching small and medium-sized banks as the pboc warns of a risk and line expansion. coming up, with japan expecting a new prime minister to be named examinember, we will

shinzo abe's policy legacy. later, former japanese finance speaks with bloomberg market as we hear abe and trump will be speaking on the phone. this is bloomberg. ♪

>> good morning it is 9:00 him in beijing and shanghai. come to "bloomberg markets: china open." we are counting down to the open of the first trading session of the week and the chinese mainland and here in hong kong. a top story today, the tiktok clock is ticking there could be new obstacles to a sale. disposal of u.s. assets may require beijing's approval, as