erare over 20 exercises to choose from. get gym results at home. no expensive machines, no expensive memberships. go to aerotrainer.com to get yours now. haidi: good morning. we are counting down to asia's major market open. shery: welcome to daybreak asia. our top stories this hour, jay powell lays out his exit strategy. he says the fed is likely to taper bond buying before any decision to raise rates. jp morgan and goldman message to

spac's and mean stocks for lenders. we will hear from the u.s. security chief later this hour. haidi: let's take a look at the set up in asia, after u.s. stocks falling from records led by the selloff in tech. a pretty muted start to trading in asia. when it comes australian, we are within about 2% of the record high we had back in february at its peak. new zealand looking soft as well. 3/10 of a percent lower. when it comes to commodities, link currencies go with the dollar weakening. i'll performers and that g10 space where the aussie dollars. looking mildly positive going into the start of trading. futures at about a 10th of a percent. we are watching for some of these markets getting closer to record highs. already at record highs. korea within 1%, watching for

that one when it starts trading as well. seeing other markets like china and the philippines inch ever further away. shery: to our top story, fed chair jay powell says the u.s. economy is entering a. of -- a period of quicker economic expansion. as the risk of covid-19 remains. >> the economy does seem to be at a bit of an inflection point. that makes sense with more widespread vaccination. strong fiscal policy, continued support for monetary policy. you see the economy opening, ridership on airplanes going up, people going back to restaurants. the march jobs report we recently got shows with that can look like. shery: powell also saying the fed will likely scale back its bond purchases before considering raising rates. let's discuss with bloomberg's chief economist. the fed seems to be widening expectations of how they will

eventually exit this very impressive monetary policy. >> eventually is the operative word there because chairman powell, and a whole slew of fed speakers have repeatedly made the case that even though we will see very fast growth in the current year, in fact the fastest since 1983, and we will see a flareup in inflation as the economy reopens, by no means does that mean the condition for the fed to start actually tightening policy. as powell mentioned, first they will taper asset purchases. we expect that not to happen until next year. but there still is a question as to whether they will shrink the balance sheets first or whether they will start pushing on the interest rates. that is the question they pose today and he escorted that and reverted to the tapering. haidi: do we have a clearer

picture when it comes to reflationary, what is our most educated guess as to how this plays out pose pandemic? >> i think the best estimate of how this plays out is with the economy growing as quickly as it is, in the current quarter, we are looking for gdp growth of 11% for the u.s. economy. that's a remarkable number for an economy that tends to grow around 1.8 or 2% over long stretches of time. so, certainly would you grow that fast, you will see some spark and some smoke. we could see as much in the latest consumer price index data where there was an obvious reopening category like hotels and vehicle rentals. starting to show some price pressures. we look into the core of the report, we are still not seeing a material pickup and inflation pressures. i think the fed is on the right path here.

we will see a lot of transitory pressures at the economy reopens. but the real test will be when we get deep into the back half of this year to see if those elevated price pressure stick around or if they start to moderate back towards the trend of wage inflation which has been very sluggish for the u.s. economy. haidi: bloomberg's chief economic economist joining us. all of which points one of the roaring quarter for traders and investment bankers. loans the sore spot on the decline. thanks taking it is a set of economic strength. but get more from sally in new york. it's hard to find any downside, when you take a look at declining loads, it's a pretty good economic indicator, right? >> just recapping what we have seen from the three bank so far.

equity underwriting windfalls, the spac boom. it protects himself against losses that materialize. wells fargo and jp morgan both reported households and businesses. they didn't need to take it. if you speak to bank executives, that means when things start to improve, and the economy goes up again, this will unlace a kind of torrent of spending. because they have this pent-up money. shery: again, the question would be how long will this last? when it comes to what these banks are seeing, goldman's david solomon wasn't making any promises.

>> they have been careful and cautious about what they say about low demand. jp morgan said it was challenging. wells fargo said something similar. they also indicated that they expect that toward the second half, we should see a pickup as people prudently manage their finances. they start to spend again. that is the banks narrative. we can question that, we can question it by looking at j.p. morgan share price which would go down at the end of the day despite the quarter. there have been questions about exactly how much the demand is there versus how much banks are lending. shery: sally in new york. domestic bank interview with bank of america at 5 p.m. thursday new york. for now, let's turn to vonnie quinn with the first word

headlines. vonnie: johnson & johnson's vaccine will remain on hold in the united states, saying more dated is needed before the decision can be made. it will hold for at least a week into the panel meets again. seven people ads. just adverse reactions from the thought -- from the shop. european nations are split over johnson & johnson's vaccine after the reports of where blood clots. france, poland and hungary are moving forward. the drug regulator says there is a review of the vaccine. it expects to issue a recommendation in the next week as well. for now, it says the benefits outweigh the risks. pfizer and biontech will raise covid-19 deliveries to the european union by 25%, bringing forward delivery scheduled for q4. the additional 50 million doses will add to the 200 million the

block was expecting from pfizer through june. this announcement comes after johnson & johnson shot was positive u.s. and the delivery delay for the eu. >> we might boost the jabs to reinforce and prolong immunity. if the state very it occurs, we will need to develop vaccines that are duck -- that are adjusted to the new variant and we will need them early and insufficient quantity. we are now entering into negotiations. this contract will foresee the delivery of 1.8 billion additional doses of vaccine. over a variant of 2022 and 2023. vonnie: global news 24 hours a day, on-air and on bloomberg quick take, powered by more than 2,700 journalists and analysts in more than 120 countries. i'm vonnie quinn, this is bloomberg. haidi: still ahead, resurgent

covid cases in korea. we will discuss the state of the economy. plus, here why we are -- here why one company is blaming the u.s. for the global chip shortage. they will be with us a little bit later. this is bloomberg. ♪ ♪

shery: the bank of korea is expected to release its rate decision later this morning. no changes seen until at least the end of the second quarter. resurgent coronavirus cases are clouding the growth outlook. bloomberg's global economics and policy editor is standing by with our next guest. >> i'm happy to say we're joined now by the imf korea mission

chief. from somebody who knows firsthand what is going on here. starting off with the fact that korea did so well. the vaccine rollout has stumbled. i enough stumbled -- upgraded the gdp forecast. this is possible. is it possible the virus doesn't get under control quickly? >> certainly, the vaccine rollout is a component, not flitting 70% of the population for the third quarter. that could affect the case count. it deafly could see sluggish demand. on the other hand, i would say

the authorities do have space to respond. other factors balance the risk. >> will it take to see that? >> on the monetary policy side, the space more limited. there could be some blight on the fiscal side, they have announced an approved the supplementary budget, the recovery will continue to see this unbalanced recovery, growing expert strong and domestic demand running behind. that could be a case to do more the fiscal side as well. >> imf has urged just about all nations not to raise weights -- raise rates for the pandemic is still a problem. what is really expected is

nothing, if anything a rate hike. what you expected to say today and when should they start raising rates? >> we don't speculate about central-bank action. our view on monetary policy is that the current outlook estimates below the central bank targets. remaining uncertainty about the recovery. all of those calls for continued recommendations, this is a recommendation cases well. >> what about growing financial risks of the overheated housing market? the prices have doubled in the past five years. the population is getting angry about this. do you see a need for some kind of modest removal of stimulus?

>> well, we think the primary instruments to address the concerns are policies, sophisticated abroad. they have helped slow in the housing market, i think authorities have to say i'm ready to do more if necessary. in addition to that, it's important to look more structurally at the imbalances of the housing market. there is strong demand and therefore action on the supply side needed to consummate the sectors. they have already done something, they've announced several measures to increase public housing proponent.

we think there are steps to be taken that can stimulate more of a private-sector response, including easing some of the regulatory restrictions on development. also some of the pricing restrictions that exist in the market. >> [indiscernible] the democratic party suffered its worst defeat in the last five years. the population is impatient. you are in favor of more fiscal spending needed in a budget conscious country. people don't like to see it getting bigger. is there risk that the president popularity support received in the event that they need that support to move ahead with more budget spent steps -- budget steps? >> we want our expertise to

judge popularity. certainly what we would say is korea has an advantage with very sound fundamentals. a very prudent level of debt. they have rightfully use that fiscal space. the country has done relatively well compared to others. in terms of growth. that space still exists, clearly it should be used if necessary. there is a case of how to be used, of course, and i think our view is the main issue in korea currently, especially a service sector and therefore target support, we sectors that have

been most affected are the best. >> becoming an issue for the world, currently supporting -- certainly supporting nations in asia like korea which looks caught in the middle between his two biggest trading partners. what is the biggest risk now for korea? where is this heading? >> certainly korea is a big trading nation and therefore it depends on a stable and rules-based trade environment. to the extent that there are tensions about a trade between two of the largest trading part there's of korea. that is of course risk, i think so far we have not seen any impact, in fact across most categories. certainly any intentions were not be a positive news.

>> one more thing i want to ask you about, the imf warning about steps from the federal reserve to remove stimulus to sent shockwaves across the emerging markets and developing nations. korea is clearly not an emerging market, so is this morning something it doesn't need to worry about? the nation and the economy can withstand the inevitable moves the fed will be a comedy not for a while but certainly in the making? >> we all hope for an exit of policies when appropriate. korea is highly integrated. so it can't remove itself from the impact of changes in risk sentiment to global markets. what we have seen in recent years is capital flaws have started to move a little bit differently and korea is less affected in terms of volatility.

risk on episodes partially because we have many korean investors who have positions abroad. a safe haven flow this happens. korea has quite a bit of policy space as. therefore, i think these factors provide quite a bit of comfort and korea should be able to manage. >> think you so much for joining us. imf mission chief or korea. haidi: coming up next, the fed says the u.s. economy is at inflection point. more details about how jerome powell will raise rates, next. this is bloomberg. ♪

haidi: fed chair jay powell says

the u.s. economy is at an inflection point. the growth in hiring. he spoke with david rubenstein about the path to rate hikes. >> we have said we would expect to keep interest rates where they are today until three particular outcomes are achieved in the economy. the first is the recovery in the neighbor market -- in the labor market is complete. the second is that it has reached 2%. the third thing is that inflation is on track to run a moderately above 2% for some time. those are the tests. so, we will focused on the progress of the economy toward those goals. not in a particular timeframe. we get those three boxes checked, that is what we will consider raising rates. until then, we will not. what you're referring to, i think, is we are down these projections every quarter and the march, june, september

meetings. we write down individual projections, we meet those. most members of the committee did not see raising interest rates until 2024. but that is the committee forecast, not something we vote on or act on as a group. it is just our own assessment. so, i think there is a tendency of markets to focus too much on what we call the dot plot. i would focus more on making sure we can achieve those. daivd: based on what you know today, you would not expect to increase rates before 2022 or you are just not saying that yet? >> before 2022 would be this year. that is highly unlikely. shery: jerome powell speaking to david rubenstein. here's a quick check of the

latest business flash headlines. cvc capital partners and bain capital are reportedly joining forces for a buyout of toshiba. the nikkei reports that the cbc will submit a revised proposal for toshiba. that includes participation. private equity firm kkr and canada's of brookfield asset management are also said to consider a bid for the japanese conglomerate. session reports that the tiktok owner decided against listing in the u.s., in part due to risks associated with concept stocks. they were concerned that having shareholders may cause difficulty with u.s. regulators amid heightened tensions. facebook faces a former -- a formal probe by the main regulator in the european union

following the leak of personal data for half a billion of its users. they said the probe will determine whether the company has complied with eu privacy mandates. up next, a company says the u.s. is to blame for caught -- four causing the global chip shortage. this is bloomberg. -- and here's a picture of asian stocks right now, we are seeing stocks gaining 7/10 of 1% or moving rally stocks. this of course after we saw keeping study and asset purposes as has been for quite a while because of the pandemic. users at the moment under pressure. s&p futures are gaining ground politely -- quietly. this is bloomberg.fell.

♪

haidi: you are watching daybreak: asia. vonnie: u.s. by testified before lawmakers for the first time in more than two years, with congressional leaders brazenly alarm on china's rise in power. intelligent heads label beijing an unparalleled priority for the community, the fbi director revealing it opened a new investigation every 10 hours. hacking and troop withdrawals from afghanistan were areas of concern. >> we have over 2000 investigations that tied back to the chinese government.

on the economic espionage investigation site alone, it is about a 1300% increase over the last several years. we are opening up a new investigation into china every 10 hours, and i can assure the committee that is not because the folks have nothing to do with their time. vonnie: the head of global climate talks joins the u.s. in calling on china to accelerate efforts to cut its greenhouse gas emissions. japan's environment administer says air pollution controls could directly impact the health of japan's residents and urges beijing to move ahead of its pledge. leaders from 40 nations will attend the virtual summit hosted by joe biden. iran's supreme leader has the best offers to salvage the 2015 nuclear deal as quote, not worth looking at. world powers in vienna were upended after a suspected israeli attack on iran's main nuclear facility, with tehran

vowing to enrich uranium near weapons grade. the words come ahead of the resumption of talks later on thursday. global news 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. shery: this week, president biden pushed for more cooperation and pledged government funding to help the global chip shortage. highway says u.s. should take much of the blame. joining me to discuss this is the chief security officer for hauwei. let me get started on the latest comments at your analyst meeting. we heard him talk about how the sanctions imposed were hurting the global semiconductor industry, that it has led to some stockpiling by all of these chipmakers. we have seen global chipmakers shutdown factories since the second and third quarter of last

year, because they are anticipating a macro downturn, something that did not happen. is this just more about a lack of visibility? >> there were a number of factories that have contributed to the chip shortage, and you cited some. the semiconductor industry reported that we have a fragile global supply chain, that can be disrupted by natural disasters, storms and so forth. we think the emphasis needs to be on collaborating and trying to address the problem in the long-term, not being worried about what is directly causing it. haidi: let me ask you about bidens infrastructure plans for the u.s.. it includes a lot of funding for u.s. chip manufacturing. will that shifts the balance of power when it comes to chip production over the longer-term? andy: i think it can make some changes, but the united states, rather than concentrating on chinese companies, trying to look at major supply chain risks

that the united states faces. let's look at some of the challenges we have found in semiconductor supply. they are trying to build the capability, the direct investment and incentives. at think it is likely the u.s. and europe will create some high-level manufacturing facilities, like that are right now in taiwan and south korea. the u.s. may at some other things like packaging. from the u.s. perspective, it makes sense to make these kind of investments. how they do it is something that the president is getting quite a bit of input from private industry. haidi: what is the survival plan for hauewi when it comes to making the chips that it needs? stockpiles are waning. are you looking at suppliers to invest? what is the game plan? andy: we certainly are not going to make chips ourselves. we have put a lot of money into r&d, we are investing $21

billion this year in intelligent automobiles. we are reaching out and collaborating, and working on prioritizing our products and our roadmaps to try and use less sophisticated chips, that are not subject to the limitations from the u.s. government. interestingly, one of the biggest impacts in our business are chips for mobile devices. the argument that national security is related to blocking those chips really doesn't hold water. haidi: the future looks challenging for the company. what is next in terms of how you reassure survival? has there been a change in tone, what other opportunities that make leaders optimistic at the moment? andy: we have done prioritization and adjustments to the efforts to produce particular kinds of products, and prioritization products,

shortening the lifecycle of some. so we can concentrate on others. we are really pleased that despite all the pressure, we were still able to support the work that we do with 1500 networks in 170 countries. where also involved in 3000 five to innovation products with industries around the world. our automotive service is going to be very important. diversifying, strengthening our bench, and hoping that companies are going to be able to create the higher level chips that are necessary. we also hope that there are some things the biden administration is already doing definitely, we are hoping they will talk with the industry about what is in the best interest of the united states in the long-term, not just in building manufacturing capacity, but the fact that the u.s. is going to have customers to sell to. china is a $400 billion market for buying computer chips.

hopefully the biden administration will look at this issue as what is in the best interest of the united states, and hopefully they will decide it is ok to grant some or licensing. shery: in the meantime, it seems right now it is not just the biden administration, but the sentiment in washington has been firmly against china. have you sensed any change in bidens rhetoric so far, any actions that might be different? are you holding out hope? andy: for the very long term we are holding out hope. we do see a lot of things happening. there are some major things happening, clearly the biden administration is going to take a more multilateral approach this issues. they are not trying to block companies, they're trying to build capacity. it looks like they're going to want to help strengthen the competitiveness from the u.s. technology business, be 70 china.

-- the 70 china. that is exactly what the united states should do. what is the other big thing we see? we see these recent cyberattacks, solarwinds and microsoft exchange, historically significant cyberattacks where the country does not know the full range. it is clear that the u.s. needs to raise the bar with our allies for real cybersecurity. in both of those cases, trust that suppliers -- the bar needs to be raised. we love coming up with -- hopefully they come up with a system where there are very strong standards, independent testing that you can verify. when you really raise the bar, we are ready to compete to meet those requirements. haidi: always great to have you with us. we will get more on the outlook for checks coming up -- outlook

for chips coming up. coming up next, coinbase looking at a valuation above $100 billion before pulling back. investors and the fed are taking notice. >> when people call cryptocurrencies, they are really vehicles for speculation. nobody is using them for payment. they are using it to speculate. it is a little bit like old. >> expect tremendous volatility. this is going to be unstable in terms of investors and analysts understanding what coinbase actually is. >> i believe that most of the people who are the most deeply invested in this company, and in this economy, this crypto economy, are really long-term thinkers about what is going to be possible. i think this is going to be a really interesting one for decades to come. >> this is clearly a successful direct listing. a lot of investor enthusiasm, a

watershed day for coinbase and crypto in general. when you look at the price action, there is a tremendous amount of enthusiasm. ♪

shery: let's take a look at japan and south korea. be ok holding a board meeting thursday, while economies saying that the central bank will keep rates on hold at half a percent. we have an emergency economic

meeting, the situation in major strategic industries such as chips, ev and shipping be reviewed. where also watching hyd e -- hybe. this company was rebranded. it is the korean agency behind the ts. over in japan, tokyo is urging china to reduce greenhouse gas emissions faster. talks will take place later this month. the imf also said that the boj still has to shift its yields targets to a shorter maturity. the fund sees more ways to enhance sustainability. toyota working on powering heavy duty long-haul vehicles with hydrogen. is planning a project in south africa. haidi: let's get to another big corporate story that we have been following.

toshiba finds itself in the middle of a bidding war. bain capital will join another company. kkr and brookfield are also said to be considering rival offers of their own. joining us now is our asian technology reporter. overlaying all of this is the knowledge that this is a nationally, strategically important company. does that mean we are likely to see domestic players coming to the fray as well? reporter: this whole situation is being kicked off by cvc capital's unofficial bid. at that time we knew that there was no time cvc could go it alone. just a few hours ago, it was reported that japan investment corporation might be considering a japan only bid. the way these things go, if there is a buyout, it will

probably be a complicated consortium. pain -- bain's own bought toshiba's memory chip business. japanese companies included. all of that is likely to have an impact on the price. cvc's initial offer undervalued the company quite a bit by about ¥5,000 per share. clearly these are just starting prices in the early days. shery: the cvc connection could lead to some sort of deal, but we now saw the head of toshiba resign. what does that mean for potential bidders? reporter: he has been on thin ice for quite a while, but

yesterday's resignation masonic quite a turn -- was certainly quite a turn. internally, polls have shown that employees confidence in him have fallen to 60% in january from 90%. clearly management has been under pressure from internal and the outside, from activist shareholders, and from investors themselves. just last year, he held the position by a slim margin, when only just over 50% approved of him holding the job. [indiscernible] there is now an investigation and process. yesterday's briefing, he was not threatened. the chairman who will step in as the ceo. was there he made all of the

right -- [indiscernible] talking about the company's willingness to entertain this at all. haidi: at the same time, the flash memory chip unit is preferring a public offering as early as this summer, as opposed to also navigating potential acquisition plans from farm players. how does this -- foreign players. how does this fit into a possible buyout of toshiba? reporter: this was the ground jewel of toshiba conglomerate. they delay the ipo once last year, clearly it is never a better time to list for a semiconductor related company. . quite a bit of speculation that the business might fetch a higher price if acquired by one of its rivals. western digital is a manufacturing partner has been consistently interested. a korean rival already owns a

stake in might be very much in play. all of these companies would love to get their hands on the company, because it would be key to taking on the real dominant player which is amazon. the price that they will fetch will directly impact the value of toshiba, and how much money the bidders would have to raise to take it private. haidi: our bloomberg asia technology reporter. shery: coinbase finally went public on wednesday. the highly anticipated listing shunning the traditional ipo market, as well as the trendy spac market. they look for a $100 billion valuation. it was the biggest direct listing ever, a close today at $328, 14% below its opening price. joining us now is, cross asset team editor. what does the listing of coinbase and its slump actually

mean for the crypto world? >> it was a bit of a surprise that it slumped, but the valuation have been all over the place, and so there was a lot of anticipation, crypto places have risen in the past seven days. look at bitcoin and eager, they are still up from where they were a week ago. it was a somewhat solid debut, even if it is down from where people thought it might be initially. people were looking at somewhere like $350, it closed at $328. it is a fairly solid debut and puts this company on the map in terms of a public listing. haidi: very interesting if you happen to be another crypto company considering going public. >> definitely, this is now -- coinbase is now out there,. you could see other companies

saying i want to take advantage of crypto prices, so definitely other companies are looking at this and thinking they might want to do something similar. haidi: we have seen a bloomberg opinion piece saying now everyone owns crypto, given that because coinbase is profitable, it could be taken up by the s&p 500 as well. what does it mean for the crypto world going mainstream? >> it is interesting. you now have a way that is easier for the average person to own crypto, in an indirect way. yes. it is another step in the development. we have the trust, futures from the cme and all of these other things develops just in the past couple of years. this is another way. a lot more options for people who don't necessarily want to go out and buy bitcoin directly, they could take advantage of the growth in the industry.

haidi: our cross asset team editor. lots more to come next on daybreak asia. this is bloomberg. ♪

haidi: china and south korea are bowing to take action against japan's water plant, bowing that the administration announced it

would release radioactive water into the pacific ocean. our asia government reporter has been tracking this in tokyo. tell us about the different not a follow-up about this plan -- the diplomatic fallout about this plan. reporter: what happened now is that japan made this decision after many years of delay, that it was going to dispose of this slightly contaminated water at sea. initially, we so responses from a whole -- we saw a responses from a whole source of countries around the region. china objected, south korea objected. taiwan also objected. we have seen reports that russia is objecting to this disposal. it looks as though at least china and south korea are set to work together to oppose japan's plans, and they are also willing

to incorporate other countries into their plans. i think japan could see it -- considered oppositions from countries friendly and less friendly, to this plan which is set to start in two years from now. shery: washington seems to approve, the international atomic energy agency seems to be ok with it. any chances that japan would reverse course? reporter: yes. in scientific terms, i think most people who look at the evidence, given that japan is set to retreat the water, to dilute it until the contamination is at a pretty low level by international standards, and to release it very gradually over a period of decades. that means that most people, i think in the japanese government and the u.s. government, see it as relatively a safe move.

at think it is interesting to look at the timing of this strong opposition to what is going on. the prime minister of japan is setting up tonight to become the first foreign meter -- foreign leader to meet joe biden in person in the u.s.. this is a diplomatic, tramp that moment for japan, -- triumphant moment for japan, and a country less friendly with japan could be interested in casting a shadow over that moment. whether that will lead to a delight, i do not think -- whether that will lead to a delay, this is something that will happen gradually over decades. there could be a reset at some point in the future, but at this time i do not think japan is heading in that direction. haidi: bloomberg's asian government reporter in tokyo. that's get you a check of the latest business flash headlines. hedge fund managers in asia are searching for the next valuable

-- firms including asset management pumped hundreds of millions of dollars from plastics recycling to renewable energy storage over the past few months. this comes as u.s. regulars are clamping down. amazon has outlined a hiring and promotion target to boost the number of women and black employees and its senior ranks. and includes a 30% rise in the number of women in technical jobs this year, as well as doubling the number of high-level black employees in the u.s.. it says its commitments are unusual for the company, which rarely discusses its workforce makeup. bytedance is said to have chosen to go public in hong kong and will follow an ipo perspective in the second quarter. and says the owner decided against a list in the u.s. to impart to the increased risk associated. the report says bytedance is concerned that having shareholders difficulty with

regulators would mean heightened tensions. shery: south korean companies -- [indiscernible] watch securities as well. we are seeing a bitcoin premium play out, trading at a premium of around 18% in south korea. we just had the direct listing, of crypto exchange coinbase although it did fall below the opening price. we are watching those stocks very closely. kakao also on watch, given they resumes trading today. coming up, more market allowances -- more market analysis at the top of the hour. plus, we speak to a researcher who has become a cheap source of data of labor programs in china.

the market opens in sydney, tokyo, and seoul our next. -- are next. this is

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♪ >> welcome to "daybreak: asia" from bloomberg world headquarters in new york, i am shery ahn. haidi: and i am haidi stroud-watts in sydney. asian markets just open for trade. asia is set for a big day after u.s. equities closed at an all-time. traders in korea are awaiting a decision from the bok, that is expected to hold its key rate.

investors in china are unsure how to trade them after a sell-off accelerated this week. markets across asia were rocked. china hits back at claims of human rights abuses, as a court accepts a defamation lawsuit from a business which claims he was wrongly accused of using forced labor. we will be speaking to the german researcher adrian zenz, the target of that lawsuit. shery: japan, south korea and australia coming online. the nikkei led higher by utilities and energy companies. watch out for toshiba, which remains untreated right now of course, after we continue hearing more news about the potential buyout offers on the table. the japanese at the moment holding at the 108 level. we continue to see incredible strength for the japanese yen this week, rising to a three week high. watch out for those jgb's as well. we had the boj -- we are

focusing on the 20 year change in the auction next week. look at what the kospi is doing at the moment, no changes at the moment. investors on the sidelines given we have the bank of korea's rate decision today. not much expected from that decision, they are expected to keep rates at half a percent. the korean won now unchanged as well, not a lot of movement in the korean markets, this after the korean won saw its best day in about a month. we have south korea reporting the first jobs great is the pandemic began. we have seen a little bit more of a risk-on sentiment across the country, haidi. haidi: we are about 50% away from the february peak for the asx 200.

kiwi stocks also up about 0.5%. we know that the economic outperformance, the handling of the pandemic has not really translated to equities, much of a boom in new zealand, largely thanks to the rate differentials there. looking at the oil market. we are seeing a pullback when it comes to brent crude, trading 1% lower. he jumped almost 5% overnight, adding to signs that the demand outlook post-covid is improving. and finally a look at bitcoin. we had the massive coinbase, highly anticipated direct listing which came off the frenzy. feeding through to a pullback from bitcoin, which was trading at an all-time high after the biggest u.s. crypto exchange sold more than 50% from the listing price. and currently we are seeing extended gains when it comes to

both the aussie and the qa . dollar. haidi: and finally we are seeing toshiba starting to trade. we are seeing the stock rising for the fourth consecutive session, at the highest level since 2015. this on news that the potential buyout offers on the table, including from cbc, and kkr. there was an abrupt leadership reshuffling. we will. be watching the stock closely. our. next guest says that when it comes to asian stocks, he is only positive when it comes to places where he sees strong earnings momentum. let's bring in frank benzimra. where are you seeing earnings growth? frank: that is a very uneven picture, you can see especially

in asia. generally we are seeing some earnings rebound, but again, i would say it is very much led by what we are having in east asia, taiwan, and korea, leading momentum in earnings. why we are seeing the rest of asia being a little bit more softer picture. that is actually what is driving the allocation that we are keeping for the year. the most cyclical part of asia, the most exposed to the recovery

. shery: what about japan? that is also a very cyclical market, isn't it? frank: japan is a very interesting market. we are still pretty far from our target, which is 32,000. we are seeing the markets struggling to rise above 30,000. i think we have some interesting makes of domestic -- interesting mix of domestic demand, a huge rise in household savings which should support domestic demand, and you are seeing japan being one of the beneficiaries of fiscal stimulus plans that you have in the u.s. so at the moment you have a pause in the value momentum, and this is something being threatened in japan, but this is the market in which we are very much positive about. haidi: we are seeing something

of a divergence both in terms of the handling of the virus, the rollout of the vaccine strategy here in asia, as well as how markets are reacting. some market are close to record highs and others fading away when it comes to india and china. in some of the selloff, where do you see opportunities there? frank: i am remaining rather conservative at the moment. i am not really wanting to get some exposure to the reopening of the economy. at some stage -- we are fortunate that we are in the very much and of asia, indonesia, malaysia, thailand market, which are trading historically at quite low levels of valuation. at this stage it is probably a bit early to come back -- to comment on the market.

then you have india, which is a very interesting case. it is not very much a valuation story, because the valuation is pretty rich. we're not expecting any collapse in output as we saw last year, but it is taking a hit with this new wave of contagion. there will be an opportunity to look at the banking sector in india, which has corrected quite significantly. so at some stage, that will be interesting to reposition. haidi: you also have a call on being long oil versus copper. tell us about that. frank: that is arrested asset-allocation point of view, we are very much looking at the positioning of the market, and

we have this long position on copper, which is close to 9000. not the same as oil. looking at how the supply constraints, we think at this stage, it makes more sense to position on oil versus copper, and one of the themes in our asset-allocation is the multiple overshoots which has rebounded from the pandemic. [indiscernible] haidi: frank, always great

to have you with us. let's get to vonnie quinn in new york with the first word headlines. vonnie: u.s. secretary of state antony blinken met with european leaders discuss the end of the war in afghanistan. he was joined by defense secretary lloyd austin, who met with nato counterparts to coordinate withdrawal, would -- which would begin in may and conclude on september 11. iran's supreme leader has dismissed initial efforts to salvage the 2015 nuclear deal as , quote, not worth looking at. negotiations were offended by the attack on the nuclear facility in the weekend, with iran subsequently vowing to enrich uranium to weapons grade. the comments from the ayatollah, head of the resumption of talks later this thursday. egypt has seized a giant container ship that blocked the suez canal last month. the authorities want more than $900 million in compensation

from the manager of the ever given. the shape's insurer -- the ship's insurer says that the damages are not supported. logjams are expected to continue at major ports in the coming weeks. global news, 24 hours a day, on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn. this is bloomberg. shery: still ahead, china bonds are in no man's land as they remain rated investment grade even with yields over 40%. bonds, some of them below $.80 on the dollar. we discuss how much lower they have to go later this hour. first, the blowout quarter for the big banks on wall street. this is bloomberg. ♪

shery: fed chair jay powell believe the u.s. economy is that a standpoint. speaking with david rubenstein, he says that levels were sustainable for now, but the coronavirus is still a major risk. >> the economy at this point seems to be at an inflection point, and that makes sense with ever more widespread vaccinations, with strong fiscal policy, with continued support for monetary policy. you see the economy opening. uc ridership on airplanes going up and people going back to restaurants. i think that jobs report which shows that can look like which was close to a million jobs in a month, soy think we are going into a period of faster growth and higher job creation, and that is a good thing. i would point out there still risks, in particular i would say the main risk is another spike in cases in one of the virus strains that may be more

difficult to treat. we don't see that yet. see cases having moved up a bit but that is something we need to be careful about. david: the fed does its analysis of the economy and now has to look at things like vaccination rate. do you have internal experts that give you that kind of information, of whether the vaccination rate is going the way it is supposed to, order you consult outside people for that information? >> we have experts now. a year ago -- we have had to learn. this was a important economic policy, it has been the treatment of the disease and the success of measures to suppress its spread and ultimately vaccination. that has been the most important driver of the economy. all through this, we have consulted externally with lots of experts and also developed significant expertise.

we do monitor that carefully, of course. david: let's talk about the president's stimulus bill, that $1.9 trillion stimulus bill. at the time it was proposed, larry summers, former secretary of the treasury, thought it might be somewhat inflationary. the output gap is roughly $500 billion. you, i believe, supported the legislation, but it was appropriate for the economy -- you thought it was appropriate for the economy. do you have any concern that we will increase inflation as a result of the stimulus bill, or are there other things that might have you worried about the economy because of the size of the stimulus bill? >> at the fed, we are a creature of statute. . we have very specific jobs that we handle that congress have given us, and that is monetary policy, stable prices, and one thing we don't do is give

congress or the administration advice on fiscal policy. we don't take a position in favor or opposed to legislation. we did not do that for the tax cut and jobs act and we didn't do it for any of these acts. that is just not something that we do. we have a narrow mandate and precious independence, so we try to stay in our lane and not comment on things that congress might do on fiscal policy. david: ok, are you worried about the deficit? that that is pretty high, $27 trillion or so. the annual deficit is 2.5 for $3 trillion or so. is there a concern for the fed in terms of impacting inflation? >> in the overtime and in the longer run, the u.s. federal budget is at an unsustainable way, meaning that that is growing meaningfully faster than the economy. it is a different thing to say that the current level of the

debt is unsustainable. it is not. the current level of the debt is very sustainable, and there is no question of our ability to service an issue that that for the foreseeable future. i would also say that as a nation, we will have to eventually get back to a sustainable path. that is something that is best done in very good times, when the economy is at full employment and when taxes are rolling in. this is not the time to prioritize that concern. haidi: fed chair jay powell speaking with david rubenstein. we are getting breaking news. this company almost quadrupled the record it just said. profit in the unit was supercharged by the successful ipo of a south korean e-commerce leader which debuted in new york last month. that makes up and share of what

is expected to come in, 25 billion to 30 billion in reported gains three months ending in march 31. this is the strongest validation yet. we will get more details on that story as they get to us. turning to a on wall street today, wells fargo, jp morgan pointing to another boom for traders and investment bankers. let's get more from our correspondent. sadly, what out of these very impressive results stood out to you? -- sally? -- so it doesn't seem like we have sally at the moment. we will get more details on the bank earnings.

of course, very impressive across the board other than the fact that loans were declining. much more to come on ""daybreak: asia"." this is bloomberg. ♪

>> i expect the bones to continue declining. i expect the whole chinese bond to continue selling off with credit spreads widening. that the adl environment to come up with a newborn. some fluid but some will hold off -- some might do it, but some will hold off. >> credit within asia has been very robust over the last year. it is really only the last month or so that we started to see the dashcam on. the has been a little bit lower demand. >> there is a risk of contagion. short-term, it is probably going to be harder to create new issuance, the market --

>> even if you are a large or important player, it is not automatic that the government will come in and help you out and bail you out just automatically. haidi: guests on bloomberg tv reacting to the chaos over china. bonds are trading at the kind of price where investors don't know how to treat them. the selloff has below swift -- the selloff has been very swift. china credit reporter rebecca chon joins us now. rebecca, how much worse could it get for huarong? >> the expectation is that it could get uglier. we are seeing a rated investment in bonds trading at a par or above par a few weeks ago yet they have fallen everyday for the last two weeks.

most are trading in the 60-cent range, putting them firmly in area of level. haidi: who owns these bonds, and who could potentially buy the dip? rebecca: this additional investors, those previously have seen institutional investors get. it has particularly been a favor of the carry play. the issue now is, it is sort of in a no man's land. at $.50, it is trading at junk. at the same time, it is still quite a bit expensive for the investor who will be looking at below $.50, possibly even in the $.20 range.

haidi: china credit reporter rebecca choong wilkins with more coverage on huarong and the rising credit concerns in asia and china on friday at 8:30 a.m hong kong time. let's get to the softbank earnings. our reporter will bring us more. sally, great to have you again. take a look at what was a very strong numbers. what impresses you? what stood out to you? sally: the picture was one of a redhawk quarter driven by investment banking fees, equity underwriting, spacs boom, which created a buffer against losses. but the losses never came. what has stood out for everyone is the slump in loans. it was anticipated, but the very fact that for example, wells

fargo and jp morgan both reported drops in their lending. it is? over the horizon for the economy. the bank executives today would explain it by saying that people use stimulus money to pay down their debt, or they saved it. that meant they did not need to take out new loans. and also because we have programs on rent and mortgages, it meant they did not have to rely on new debt to pay those, but ultimately, we don't know if their predictions that once the economy starts opening up again and people have this pent-up cash, this pent-up demand, their predictions that people will start spreading again and demand will bounce back, we can say for certain that it will go like that. shery: we have already seen people spending those stimulus checks when it comes to trading in the market. we saw a lot of retail investors

making headlines with the likes of investing in gamestop and other stocks. what did the bank leaders have to say about that? sally: that is a one of the surprising takeaways, no one could top the trading bonanza from last year, which was because of all the pandemic volatility in the market. actually, they did do that, and partially, as you say, down to the fact that we have this read raided mania -- reddit mania. shery: bloombergs sally bakewell. next, we discussed labor and human rights violations in xinjiang with adrian zenz.

this is bloomberg. ♪

>> these are the headlines, the j&j vaccine remains on hold after a panel ended the review without a vote, saying more data is needed. they will hold for at least a week until the panel meets again. seven people experienced adverse effects, recommending the suspension. before climate talks next week, japan has called on china to accelerate efforts to clean its

omissions. they said that air pollution controls impact the health of japan residents and urge beijing to move ahead with its pledge. some 40 nations will attend the summit, hosted by president biden. u.s. spy chief testifying, with congressional leaders raising the alarm on china. intelligence has labeled beijing a priority for the intelligence community. the fbi director is opening a new investigation into china every 10 hours. russian hacking and afghanistan were also areas of concern. >> we have over 2000 investigations tied to the chinese government, and on the economic espionage investigations, it is a 1300% increase over the last several years. we are opening a new

investigation in china every 10 hours. >> global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. >> companies around the world have come under pressure to cut ties or shows supply lines are not tied to claims of human rights abuses. that is easier said than done. the government has denied the use of force labor and says it is rivals intent on sabotaging the country. our guest joins us now. he is a senior fellow in china studies. great to have you with us. at the center of the story, these reports, claims against

you. have you heard anything about this case or have you been notified? >> no. the company in question featured in my research and report -- haidi: we know that beijing denies many of these allegations. our own reporters went to check out these companies within the solar space. it is hard to get access. what is it in your research that makes you convinced these claims are founded in truth? >> this research relies on an extensive evaluation of the policies and processes that arise from the government using an approach in what is a police

state, internment camps to coerce ethnic minorities to change their livelihood permanently. we have been history not that many president --similar issues that preceded this. in china, we have similar systems, but we have for those in the southern region, where there is a different form of manufacturing, and something else that affects a wide range of industries, and this evidence connects them to specific pieces of evidence, linking directly to some of the largest producers of silicon. haidi: we have seen a number of western brands and companies distance themselves, and also suffer the\in china -- back lash

and china. what can be done, given the evidence you have presented? what would you like to see more from governments and corporations and individuals? >> i think governments around the world need to speak up clearly. the u.s. government has done that. other governments, especially the eu, need to follow britain, australia, and the world has to act in common, and the imposition of multilateral sanctions on officials, which was coordinated by the administration is an important step. you mentioned the olympics, look, everybody knows how hard athletes work, but i think we have to do the right thing here. what is going on is a huge

state-sponsored system of forced labor, and the u.s. government has designated this as genocide. we have to speak out. we have to take action. economic sanctions, import bans on products, including manufactured items, have to follow. this has to go hand in hand with some action on the olympics. we can't just pretend this is not happening. we have to send a signal to beijing that there is a cost for these human rights violations. haidi: beijing pushes back. they are saying this is an elaborate hoax, by jul -- a lie , because they're trying to sabotage their economy.

how do you respond to that, given this human rights issue seems to be framed more as a geopolitical issue? >> beijing's propaganda got off on the wrong foot to begin with. they lost the battle over the narrative. the internment camps, when you could see them on satellite, dozens of eyewitness accounts, documents, government documents describing it run like a high-security prison, mounting levels and players of evidence from birth prevention, sterilization, to forced labor, coercive cotton picking, internment camps, imprisonment, even torture, rape. beijing is on the defensive. all they have is denial, attacks , slander, and disinformation, and it is not working for them. haidi: it is also about your

method of research these documents, did you have access to government archives are whistleblowers? >> no, my research, 95% of it or more relies on public documents from government websites, official statistics, state media, propaganda, or company websites. in this case, we got some of everything, government records looking at the labor transfer implicating these companies, evidence from the government website. we know the system. we know the policies. i have done so much research on the structure and nature of the system that we can now plug in pieces of evidence and implicate one industry after the next. it started out with the internment camp labor, with textile sweatshops, then we have evidence on compton, and now on polysilicon -- cotton, and now

polysilicon. the industry needs this problem -- needs to understand this problem is not going anywhere and they need to get the supply chain out of the region. haidi: if moving supply chains is not supporting business and the local economy, does it do anything to change the broader direction, why do they care so much, supporting and funding terrorism in the region, is this already done, in terms of what beijing wants to do? four the forced labor -- >> the forced labor is part of beijing's long-term strategy to increase its control over minorities who have been heavily concentrated in one region, who have been doing their hurting, farming -- herding, farming. it is easier to put a batch of

minorities and effective with camera security, indoctrination, no fasting, no mosque, a highly centralized government controlled environment, if they are private companies. it is really about long-term control. it is about putting the parents to work in this factory complex, well educated the children in the full-time boarding school over here in the government's ideology, and that is why they are not budging. beijing is not budging on this. it is a long-term part of cultural assimilation, cultural and demographic genocide, that it is trying to secure the heartland, the heartland of the belt and road initiative. beijing would do anything to secure this. if we pull supply chains out, we will not hurt the people, but we are hitting those who are profiting, the top profit

margins of those benefiting on the suppression. i think western businesses need to wake up and realize that it is time to act. haidi: at the same time, some of those products made in those regions are so pervasive in everyday life when it comes to these products they go into. how do you get around that? how do you avoid unwittingly supporting forced labor in your supply chain? >> it is not enough to simply tell your suppliers not the source from the region. because lack of cotton or polysilicon, if a product comes from the region if everybody does it, it will not work. companies have to look very closely within the chinese domestic supply chain, but they also have to look for alternatives. there is no way around it. for global consumers, this will

mean rising prices. if we are not competitive, we will have to pay for the values we believe in. haidi: the chinese embassy in australia launched a condemnation of some of these accusations and warned them, and they played a mix of videos and materials for two hours with officials. i'm wondering if you think a platform should be given to this kind of content, if that is a fair thing to do? >> this is like 1950's soviet commonest propaganda. this is like things that happen 60 years ago or 70 years ago. this is not dissimilar to nazi germany's sophisticated propaganda machine, pioneering at the time, putting on dancing

ethnic minorities. it is entirely inappropriate. i think western countries, we are too slow to realize what we allow, allowing them on twitter, western media, facebook. chinese nationalist telogen is purchasing facebook ads, some of which -- television is purchasing facebook ads, and they can freely do it. it is time to look into containing this propaganda and not allowing them to humility piece -- these ethnic minorities. haidi: adrian, thank you very much for joining us today. take a look at the broader markets now. we are seeing some upside when it comes to japanese stocks and korean stocks. the nikkei gaining zero point 3%, reversing some losses in the previous session. the yen continues strong against the u.s. dollar, after rising to

a three-week,, strengthening all week. the kospi gaining ground before we get the central-bank decision. the estimate is to hold steady. the governor has called for tightening policy. also, we had the rbnz holding steady. the asx 200 under pressure after the australian dollar touch the highest level in three weeks against the u.s. dollar and continues to see some strength. take a look at the movers in the asian session right now. we have a more than 10% gain, after the split in the previous session. they about 8% in another company, which we are watching because it has rallied as they update the exchange, and we saw the coinbase direct listing in the u.s..

toshiba shares railing. we have the resignation of the ceo, and more news about who could be on the table for a buyout offer. softbank gaining more than 1%, after its vision fund said profits could near $30 billion. this is according to people from they are with the matter. plenty more to come. this is bloomberg. ♪

haidi: taiwan semiconductor expected to report strong earnings, giving it a fresh catalyst. joining is now is our bloomberg asian tech reporter. what are we expecting? >> good morning. we are expecting to see the company to report net income growth of 16%. companies are fighting for the limited chip production capacity. the company said it expects first-quarter margins to slip, compared to the fourth quarter. in a recent letter to customers, the ceo said the rate is over

100%, and demand outpaces supply. that gives the company a boost. haidi: very much watching the production capacity. what else could investors find interesting during the event? >> so the capital expenditure will be in focus today. in the last earnings call, they said they will raise it this year $28 billion, record. the ceo told customers that the company is looking to spend $100 billion over the next three years, so we expect them to raise the capital expenditure this year. meanwhile, investors will get progress on one side.

u.s. president joe biden proposed a boost for research and manufacturing at home. that incentive may give projects a boost in arizona. haidi: we have the chief security officer for the u.s., and this is what he had to say about the global chip shortage, and where the blame lies. >> we think the emphasis needs to be on collaborating to address the problem in the long-term, not what directly caused it. haidi: the argument we heard from the leadership was some of the shortage is because of these sanctions against the company and everybody is stockpiling ahead of more sanctioning of chip companies, what do you make of this? >> actually, determine said

recently that the chip shortage stemmed from the u.s. sanctions against the company, pushing competitors to stockpile chips, so they tried to take the market share from him after the sanctions good that is only part of the reason. the other one major factor is poor planning by carmakers over the year as they calculated their needs or the consumer demand for cars amid the pandemic. that led to an mismatch in supply and demand, so a number of factors have led to the shortage not just one single factor. haidi: we have breaking news out of south korea.

the bank of korea rate decision is out. there is no change to the rate, which has been kept at 0.50% could be heard from the governor before, where he dismissed calls to tighten policy prematurely. let's get more with our global economics and policy editor, kathleen hays. what are you watching out for today from the bank of korea, when it comes to the rate decision, nothing much was expected? kathleen: exactly, the survey talking to economists, that it is not a good time to think about raising rates, because even though the economy has strengthened, the imf raised their 2021 gdp forecast to three point 6% from 3.1 percent. exports are surging. the unemployment rate has come down a good fit, nearly under 4%. that is all good. virus cases is the big problem. they have more than 500 cases

per day. the government has mandated masks full-time. people are expected to do more social distancing, and people think that will hit the economy, so that is not the time for the rank of korea to think about raising rates. let me paraphrase jay powell, was we spoke earlier -- when we spoke earlier with the korean mission chief, he said he does not think 2.6 gdp growth is at risk. he thinks there is enough momentum from exports and other things for the economy to keep moving ahead. he says the imf has been recommending for some time now that the bank of korea should maintain accommodation. he thinks there is more need and more scope to make a difference on the fiscal spending side. here is what he said. >> on the policy side, i think the space is more limited.

there could be more. on the fiscal side, they have announced in approved a budget that is a certain percentage of gdp, and the recovery, we continue to see this unbalanced recovery with exports strong, but domestic demand running behind. there could be a case to do more on the fiscal side as well. kathleen: when we hear from the governor of the bank of korea in his press conference in the next hour or so, we want his outlook on the economy and his outlook on the need for more fiscal spending and hear what he has to say about overheated housing market, and it is the governor skeptical it off, rather than expect the bank of korea to remove stimulus to cool it down. there will be a lot to learn from this press conference potentially. haidi: you can get all of that here on bloomberg, but also on the terminal. we have commentary and analysis

from our expert editors up right now. ♪

haidi: here is a check of the business headlines. softbank's vision fund reporting a massive profit of up to $30 billion, almost quadrupling its record from the previous quarter. most of the windfall comes from the successful ipo of a south

korean company. softbank is scheduled to report official results on may 2. coinbase, a 100 trumpian dollar valuation, before -- one under $12 billion -- $112 billion valuation, before falling back. bitcoin, which along with the theory is made up 50's -- another coined made up a percentage of the revenue also dipped after hitting a record of $65,000. bloomberg learned dell technologies is looking into a potential the best picture of its cloud business in its latest effort to trim down. sources say a sale could be valued at up to $3 billion. the company specializes in integrating cloud platforms for

companies. dell has been cleaning up its balance sheet, including spinning off its stake in vmware , its most valuable asset. this is bloomberg. ♪ this is bloomberg. ♪

♪ david: this is my kitchen table and also my filing system. over much of the past three decades, i have been an investor. the highest calling of mankind, i've often thought, was private equity. [laughter] david: and then i started interviewing. i watched your interviews, so i know how to do some interviewing. i learned from doing interviews how leaders make it to the top. >> i asked how much he wanted. he said 250. i said fine. i did not negotiate with him. and i did no due diligence. david: i have something i would like to sell. and how they stay there. you don't feel inadequate being only the second weal m