haidi: a very good morning. we are coming down to asia's major market open. kathleen: welcome to daybreak: asia. our top stories this hour. president biden once russia booted from the g20 as the u.s. and allies won moscow against using chemical weapons. asian stocks set for a steady open with real prices in focus. investors eye the resilience of

the economy to war and fed tightening. our reports toshiba may take itself private. haidi: take a look at the equity open in australia. the cash open being a staggered one this friday. we are seeing some stocks coming online today steady start trading in sydney. just about a 10th of 1% higher. we are watching for some of the more infrastructure investment sensitive names going into the delivery of the federal budget next week. expecting some boost to the typical names. taking a look at the 10 year yield sitting shy of 8%. new zealand as well as the aussie yields, only seeing them drop three times over the past two weeks that gives you another way of looking at how of relentless this global bond selloff has been.

taking a look at new zealand, seeing modest gains of a quarter of 1%. going into the start of trading in tokyo, we are watching the next leg for the yen as well. the dollar-yen set for the store worst month since 2016. we continue to sit at the six year lows. the young falling for a fifth day. we saw the resumption's of the dollar strength and what of the trading themes within the g10. we are continuing to watch some of these key levels for the yen given that past 2022, a lot of the momentum indicators suggesting we are potentially looking at 125. kathleen: there is some talk the boj may be forced to increase the range around the 10 year jgb to give that yen more support. let's take a look at u.s. markets. futures after a gain of 2% today -- 1.5%, it was the nasdaq that

was up about 2%. a little bit of a pullback. it was a nice move up here you can understand and of the futures market they are saying we take some profits and maybe wait to see what comes out of the u.s., that you you nato talks in brussels and what it means for oriole and natural gas. we can see the bond futures continue to show the price, the sentiment. sala and pushed the yield higher. we sell it in the u.s. today. the 10 year benchmark got to 2.37 on the yield. a couple days ago it was 2.41. the 10 year u.s. bricks even going up over 30 perception that is the highest on record. crude a bit lower. it was 112 and 50 when it closed today. continuing to fall. let's go on to president biden in brussels for high-level meetings over the war in ukraine

calling for russia to be removed from the g20. >> my answer is yes. it depends on the g20. that was raised today. i raised the possibility if that cannot be done, if indonesia and others do not agree, then we should in my view asks to have both ukraine be able to attend the meetings. kathleen: for more on the latest, let's bring in our washington correspondent who has been covering the story for us in brussels. if i were volodymyr zelenskyy, i would be saying isn't that nice? you're not going to let russia come to the g20. what i need is all kinds of things. you can put tougher sanctions on oil and gas coming out of russia. he would love to see a no-fly zone. that is not going to happen. what is the response you have heard so far from the context

you're speaking with? >> ukrainian president made it pretty clear this afternoon when he spoke to nato leaders, he scolded them about their plea for a no-fly zone. no rescue -- no western leader has come to the rescue. he called for more weapons deliveries and tighter sanctions on russia. they are getting more weapons but he wants even more. there was a lot of debate and controversy over the tension that could have gone through poland. poland once the unit states to go first to a middle base in europe. there is a lot of controversy around that. there are tighter sanctions and they were announced today especially when it comes to trying to find the loopholes of any state entity or company trying to do business with russia. at the same time the biggest moneymaker for the kremlin, russian oil and gas is still not

sanctioned in europe, which is the biggest export market. this is what the ukrainians are pleading for. haidi: know that austria said they would not support the inclusion of energy. we are also hearing the u.s. is finalizing this deal to provide europe with natural gas support. is there a sense they are trying to create some resilience and a buffer before energy does make it into another sanctions package? >> it is a good question, creating a buffer. maybe it is not even before energy makes it into a sanctions package, which a lot of european countries are pushing for. there is a division between the e.u. on this to let the and president has cut them off. -- on this. the latvian president has cut them off.

and for the actual goods. he was only accepting rubles from these countries he deemed unfriendly. there is potential put in will start playing politics with natural gas. if this happens, the european allies are going to have to find other places to shore it up like doha or the united states. haidi: annmarie hordern in brussels. officials in brussels have said they are ready to announce a deal with washington to replace russian gas imports after european nations rejected vladimir putin's plans for gas payments to be made in rubles. moscow's move is sparking confusion. let's bring in our energy reporter. we sell energy prices come down

-- we saw energy prices come down. do we expect prices to find a bit more of an equilibrium if we get this white house and e.u. deal by the end of the week? >> we can certainly see that oil has dropped down from the incredible highs we saw earlier this month. particularly after the international energy agency had pledged to release more oil from emergency stockpiles. i think we are still pretty far from being out of the woods particularly with both sides seeking to weaponize energy in their favor. europe is in its worst energy crisis since the 1970's and the liquidity crunch remains. severely affected by the lack of certainty over how exactly a deal would be reached. at the same time, we are seeing

not everyone is in favor of the embargo on sanctions. austria has declined to participate. we are seeing asian customers like india and china buying russian barrels at a discount. the market is far from reaching any consensus kathleen: our markets responding to russia's threats of force european customers to pay for russian gas in rubles? >> yesterday>> we saw european gas prices rise to 30 perception it is not clear how each buyer will address the decision coming out of moscow. so far germany and italy, which are among the biggest buyers have warned that the idea would violate existing contracts. at the moment there is a ton of confusion. it is not clear if it is a move that was stated for political reasons or if it will be implemented.

there has not been a huge deal of information about how it will play out. kathleen: that was our energy reporter. let's get to vonnie quinn with the first word headlines. vonnie: the united states says it has sanctioned entities and individuals for aiding the development of north korea's missile program. u.s. is targeting five organizations and persons located in north korea and russia as well as one in china. pyongyang has been ramping up activity at key sites since january. a chinese foreign minister has set with the taliban leaders in afghanistan and his first visit since the group seized power last year. the taliban says improving bilateral trade were on the agenda for talks beijing has embraced the taliban's return to power.

searchers at the chinese crash site have found more than 180 pieces of wreckage. officials say at least one piece was found 10 kilometers away suggesting a may have broken loose before impacted all 132 people on the doored -- on board are presumed dead. nearly half of the european companies in hong kong are planning to exit the city according to a survey from the local european chamber of commerce which found 25% of responding firms intend to fully relocate in the next year and a 24% expect to partially move away. it is a sand that tough covid restrictions are eroding business confidence in hong kong. 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. vonnie quinn. this is bloomberg. kathleen: still ahead, in our upcoming equality segment, we look at efforts to keep artificial intelligence

trustworthy and free from biases that could lead to discrimination. that is later this hour with ai institute. up next, a boutique investment firm discusses its market strategy including its shift to defensive stocks amidst geopolitical and policy uncertainty. this is bloomberg. ♪

>> it is likely to require significantly greater interest rate hikes than the fed or markets are now expecting. we need clear signals that we are prepared to accept some slowdown in economic activity if that is the price of reducing inflation. kathleen: that was the former u.s. treasury secretary larry summers print some parts of emerging markets are showing the first signs of stress from the fed's rate hike. our next guest had already moved more defensive last summer. with us now is a partner at nigam capital to i might add

that some of us were starting to pound the table last summer with inflation getting out of control. now the fed has even said we have got to move faster. they have admitted they are behind the curve and we have the war in ukraine and surging commodity prices. you need to get more defensive then you were? >> we are. for us, the thinking is volatility is coming from a multitude of sources. there is ukraine crisis inflation issues. -- there is the russia ukraine crisis. inflation issues. we have gotten more defensive throughout the last six months. kathleen: how do you in suppressed -- how do you express that? >> we are looking at a cross-section of site errors and

countries -- section of sectors and countrie. we're looking at sectors in three major countries. these countries and of these sectors represent greater clarity in cash flow. haidi: how are you gaining exposure when it comes to materials, energy commodities in terms of playing the inflation story in an advantageous way? we have chosen to build diversified exposure to the point of being defensive as opposed to commodity. we have a position in an industrial conglomerate in the middle east where they do a bunch of things including some oil, some commodities h.

. in taiwan, we are investing in a government-backed fertilizer company but has diversified into manufacturing materials that get incorporated in lcd displays. other example of finding an intuitive company diversified across sectors. kathleen: i went to get your thoughts on china because you said the turning point was the state action, the national team and there is further upside to growth. take a look at this chart, which shows the nasdaq golden index. so much volatility appeared at top levels of we saw in the financial crisis where at the end of march, the index has now moved less than 1% just once this entire month. when you look at those levels of

volatility for jenny's assets, do you dip in or is it something that you avoid because you don't know where the highs and lows are going to end up? >> i think that is a good way to look at it. if we head to the next level, we see volatilities spike and that is coming from a subset of stock . how momentum stocks are one close to -- our one cluster leading to high volatility. another cluster is cap stocks . the sectors, we remove those sectors and what is left is what i would think of as more investables. in china, a shipping stock has done very well for us. shipping is one of those sectors where the benefit is from the global supply chain shock. container prices have gone up

kid near-term earnings look strong. much of months ago, these were -- decomposing the fellow tea and fatty areas of opportunity is worked well for us. kathleen: you have some interesting moves in currency pin look at the yen at a six year low. it is always away 125, which could trigger a steeper drop. we were just reporting one of the big firms as saying it could go to 150. what does that mean for where your assessment of money right now, investing when you are looking at asia em? >> the fed raising rates cycle can have multiple implications across emerging markets to if the rate -- emerging markets. if the rate increases, that is a net positive for em. i think there is a net negative

for em in two ways. whisk appetite comes down. investor sentiment turns negative. that is always negative for em. the second thing is the real problem that these countries have dollar debts to the cost of service -- dollar debts. these countries end up with weaker balance sheets. countries that stand out are brazil and india. maybe even tokyo and argentina. maybe less so because foreigners are not present in those markets in a big way. india continues to show strength even though it is done for the year. those are countries that have big balance sheets and that is what i can see more implications. -- where i can see more

implications. haidi: always great to have you with us. coming up next, sources tell bloomberg apple is working on a monthly subscription service for iphones and other devices. this is bloomberg. ♪

kathleen: buyers scrambling for reserves of uranium are looking to canada to fill gaps caused by

the were any ukraine should canada's natural resources minister says the country has been approached by those seeking to secure stock. our colleagues at bloomberg intelligence think japan carmakers may be hurt by rising research and material prices and supply chain woes due to the ukraine warping it is in addition to suspended sales in production . . haidi:haidi: i love this ability to be able to see this data. congestion in the key chinese ports of shenzhen and hong kong. that is due to the covid-19 lockdowns 10 having risen to the highest level in five months pin the congestion spin posing possible -- highest level in five months. the congestion that is. apple is said to be working on a subscription service for iphone

and other hardware products in move that could make ownership similar to paying a monthly fee. let's discuss of the significance with mark hermon -- mark gurman. tell us about this. how it works, with the concept is and hasn't worked in the past? >> if you know about how you lease a car, it is busily that. you are paying monthly. when you want to stop leasing the car, you have to give it back. that is the same. he would pay a monthly set fee -- you would pay a monthly set fee. when you want to stop paying off the phone, you give it back so you are not really owning the farm. how is this different? today, you can buy a phone out so pay the $1000 plus or you can buy an iphone in installments both through apple and through the carriers. you can take the price of an iphone and you can split that up

over 12, 18, 24, 30 months depending on the plan you choose. this would be a new way of having an iphone. it would be less expensive for people in the short term. kathleen: so what part of the market are they trying to get? are they going to get more iphone users or they're going to keep once they have? >> i think it is going to get more iphone users. you can probably afford 30 to $40 a month without having to put anything down. when the iphone 14 comes out or the iphone 15 or 16, you will be able to replace your phone for that one at no extra charge. you will continue paying that monthly rate. kathleen: if you're somebody who always have to have the latest, it sounds like a good deal. up next, the u.s. slaps sanctions on entities and

individuals connected to north korea's weapons program. more on the missile launch ahead. this is bloomberg. ♪

kathleen: some breaking news for you. inflation in japan, tokyo to be specific. the tokyo year-over-year cpi is up 1.3% after rising 1.2% the month before. if we look at the number that really matters, tokyo cpi fresh food and that rose more than expected. it was 0.5% in february. expected to come in at 0.7.

tokyo inflation is always important but it is usually important because it stays so low and the boj cannot get anywhere near the 2% target. as we see fresh food prices rising, other components coming into the cpi expected to rise and raise it further, is it going to put pressure on the bank of japan to remove some stimulus? the governor said this is bad inflation because it is being pushed by energy prices and that is going to hurt the economy. that is the context for this number. it is not as big as the broad national cpi but is a reflection of an important part that is representative of japan. haidi: we are hearing from our mliv experts that we could see the bank of japan buying bonds as soon as friday to curb the advance in yields. when it comes to the young, that

could cause further weakness. that does not seem to deter the boj pin governor sing the weak currency -- the jeep -- the boj. the governor saying the boj will not hesitate to add easing even if that means another leg lower for the yen, which is possible given we have had speculations on the next milestone number that could be 125. burling passed 122. a lot of analysts are seeing it as undervalued. it could drop by close to a fifth. we are getting these more bearish bets of a potentially unraveling yen to these 1999 levels. self jen was saying it is because there has been such a lack of volatility in these

pockets. traders could choose the yen as a bit of a target to pile in further. let's get to vonnie quinn. vonnie: president biden is calling for russia's removal from the g20. he told reporters in brussels if other members don't agree then ukraine should be allowed to attend leader this year. biden's comments come after russia confirmed putin is planning to attend the meeting. >> my answer is yes. it depends on the g20. that was raised today. i raised the possibility that if it cannot be done, if indonesia and others do not agree, then we should in my view ask to have ukraine be able to attend the meeting. vonnie: china says the u.n. charter is the bottom line for its cooperation with russia. the ambassador to the u.s. said

while there are no limits to the partnership, norms of international law still apply. president xi faces international pressure to distance himself from vladimir putin. russia is set to erase 15 years of economic gains. new assessment says the russian economy is set to contract 15% this year. due to sanctions and the exit is corporations from the country. the report added after the initial hit to the economy, growth will suffer in the long term. 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 vonnie quinn. this is bloomberg. haidi: south africa's president says his country's troubled history means a complete a part in mediation efforts between russia and ukraine. in an interview with bloomberg,

he discussed the global impact of the war and how it is affecting south africa's economy. >> we are in the commodity boom. when it started, i thought it was going to taper down. with what is happening in the world, we are seeing a resurgence. for us, it is really great news because our revenues go up. we are able to put money to a number of issues. capital investment, which has been going down over years. able to put money to social projects to address poverty. >> your people are grappling with a cost-of-living crisis as well. i want to understand and the global investment committee was to know, the political capital you have, will you deploy that to protect credit ratings or to

deliver subsidies? what is the priority for the political capital you have? >> we have always sought to be balanced even as we had a real inflow of revenue recently. rather than put it all into social concern. we decided to balance so we can balance our books. we can reduce our deficit. at the same time, the issue of social needs that our people have. we create that balance and the country moves on. >> the bond markets go with you. you have a fair wind. we talk about political capital. you have a neutral stance on the ukraine russia war as i understand it. is there pressure for you to hold a neutral stance? to the people of south africa support you? -- do the people of south africa support you? >> people in south africa do

support this dance we have taken. the dance is largely born out of our own dna. dna that says we resolve problems through negotiation, mediation and trying to bring people together. that is how our democracy was won. we carry that dna forward even into global issues and conflicts. the issue will be resolved through interventions, negotiations and mediation. >> i understand that is your position. you said on twitter i have been approached to play a role in mediation. did putin ask you to do that? who has requested your mediation scale? >> when i spoke to president putin, i told him we were being approached largely by the united

states institutions who believe the experience south africa has can be brought to bear. in my discussion with resident xi jinping, -- with president xi jinping, i informed him we are being approached. those approaches are slow in coming forward and we are saying we are being approached more positively. >> does it take biden to lift the phone? >> president biden has not called. whoever would be willing to place a call to us, we would be willing to see what role we can play. kathleen: the south african president speaking exclusively with bloomberg. the u.s. says it has sanctioned entities and individuals for aiding the development of north korea's missile program after pyongyang confirmed the launch of a new long-range ballistic missile.

let's bring in bloomberg's politics reporter. how have its neighbors and the united states responded to the launch? >> deliberately or not, this lunch came as the u.s. and much of the world was otherwise occupied. the japanese prime minister was on a plane on the way to brussels for the summit with the g7 and other summits about ukraine. as you just mentioned, the u.s. has acted quickly in terms of sanctions and has put new sanctions on the entities. we have seen statements of condemnation from president biden and the japanese prime minister and the outgoing south korean president. looking forward, what we can see is a tighter cooperation between

those three governments on this issue because of the incoming president of south korea has promised a tougher line on north korea. haidi: this is representing the and of the trump moratorium. what is the context of this and what was unusual for yesterday? >> there were several things that were unusual about yesterday. this is representative of the breaching of the moratorium. this is the first intercontinental ballistic missile launch since 2017. that moratorium was what enabled the famous trump summits with kim jong-un. it was a new title and we have seen some details revealed today. it is capable of holding multiple warheads and traveling

a great distance. it represents a new degree of threat. not just for the region but to a wide portion of the world. all of this comes against the background of seeing renewed activity around nuclear testing sites in north korea which is another worrying development. speaking from tokyo, it landed relatively close to the coast of japan this time. that clearly adds to the degree of nervousness about the missiles in this country. haidi: our bloomberg politics reporter with the latest. coming up next, we will speak with the global deloitte ai institute about the ethical challenges posed with artificial intelligence technology. this is bloomberg. ♪

kathleen: as the use of artificial intelligence increases the risk of it going awry, and aia learns from data sets come our next guest says if these datasets contain

real-world buyers, then ai systems can spread it at digital speed and scale. we are joined with executive director of the global institute -- global deloitte ai institute. great to have you with us. this is such a fascinating topic. give us a broad overview of what is most problematic to you as we stand on the cusp of this technology becoming more widespread. >> that is a great question. i think the most worrying thing for me is there is a lot of discussion on ethics and bias and it is all at this high level. what is happening in organization is not much. i think that is what worries me the most and that is what prompted me to write this book because we tend to think about ethics as just about bias and fairness but that is not all. if you are not using human data,

if you are not using any personalized data, bias and fairness does not come into play. there are other implications you need to take care of. safety, security, accountability. there are a number of different dimensions and any organization that is building ai or using ai needs to think about it and medicate it within their organization. haidi: how much of it is also then seeping through to the issue of diversity in tech in the talent pool? it matters who is programming the ai, who is doing the training, who is compiling the datasets and their own personal human biases. >> you are absolutely right. the easiest way to solve bias as by having a diverse team. when i say diversity, i include

not just gender or racial diversity but ethnic diversity, different educational backgrounds. absolutely crucial to bring those diverse perspectives because ai is a lot about human intelligence. human intelligence as biased. we all are biased and that is what makes us unique and beautiful but when we encode it, it is not good. bringing those diverse perspectives is the only way for ai to reach its full potential. it cannot only fix the bias problem but it can help ai go further in helping all of humanity. kathleen: could you give us one of the most frequent examples of how aia is negative and works against diversity? what if you have data that shows women of a certain age like to buy shoes and men of a certain age like to buy tools?

that sounds sexist but if the data are there and you reflect that, is that prejudiced? if that discrimination? if it is, why and what do you do about it? >> it is nuanced. it is going to depend. categorizing somebody for culture relies marketing. if you are capitalizing for health care, it is a terrible thing. our history is biased. ai has inherited the problem of lack of diversity in tech. i feel there is an opportunity to fix it because ai cannot just be fixed by the data scientists. you need the designers. people who understand -- if we can get more diversity into ai, -- kathleen: i want to follow up on

something you mentioned. if it were a situation looking at personalized health care, what do you mean by that? i don't know much about ai. what are you saying that somehow -- how is that data used the story and what is ai doing that it should not? what are you fearful that it will do? >> machine learning is learning from historical data and predicting future behavior. for health care, it is being trained to diagnose certain illnesses in certain races. it could leave that population behind. if you train that data only on male data, then it may not identify the same illness in women because it has not been trained. providing that personalized health care becomes highly biased and it works only for men in that scenario. so how do you make sure your

data set is very diverse and you are making sure every ethnicity is captured? using that similar process to provide the right personalized add the wrong adds to the wrong person is not as big of a deal has the wrong diagnosis to a human being. being able to think through and prioritize is super important. kathleen: thank you so much for explaining that to us. that is a great crystal clear example of what is at stake. it is the executive director of the ai institute and author of trustworthy ai. coming up, what is next for toshiba after shareholders reject the suppose oh -- reject the proposal to split into two? this is bloomberg. ♪

kathleen: bank of japan intervention of some kind after the jgb, the 10 year japanese government bond rises to zero

.235% pure that is the highest since january 2016. importantly, the last time it was this high, it was that 0.23 percent, he hit that level on february 10 and the bank of japan came in saying it would buy an unlimited amount of bonds. member the band is from -- it is a 0.3 band around either side of zero. when i get to this high, it is definitely suggesting the bank of japan might want to come in and do something. everyone is watching this closely. not just in japanese markets. not just watching the young but i think traders who are awake and watching around the world are watching to see what happens now. haidi: as you say, if the boj does come in to buy more bonds to rein in the yield, that could weaken they can even further but the governor last week saying he is ok with that because he sees the weakness as being a broad positive for the economy and

they would not hesitate to add more easing pit this is what we are seeing when it comes to dollar-yen. a more than 6% advance in the month of march. it sets up the pair for the biggest monthly gain since november 2016. a lot of analysts suggesting we could see a further decline to levels last tested in the 1990's. it sounds like an outlandish question of whether we are going to see 150 against the dollar but we have seen the six year lows. we have seen a quick and steady decline. take a look at ozzie yun. -- at aussie yen. the kiwi really getting supported by the commodities boom this week. a quick check of the latest headlines. apple is working on a subscription surface -- suppression -- subscription

service pin sources telling bloomberg the new service would be apples biggest push into automatically recurring sales allowing users to subscribe to hardware for the first time. phillip morris is working on objects -- on options to exit the russian market. the cigarette makers saying it intends to leave. philip morris has reduced manufacturing operations, suspended marketing and canceled product launches in the country. softbank is said to be seeking a valuation of $60 billion when the chip designer goes public. it is aiming for a higher amount. kathleen: toshiba says nothing has been decided on a plan to take itself private after media reports say it was weighing just

that. let's bring in bloomberg's tokyo stocks reporter. this is such a fascinating story. did it sort of come out of nowhere? what is going on and what is next? the initial reporting was based on a nikkei news story. the possibility is quite new. i don't think it was as expected. you will see how shareholders and investors will react in a couple of minutes but it is very difficult to say if this is something that is going to happen because like you said, toshiba shareholders yesterday rejected proposals to either split the company or consider alternative options including a

potential sale, which brought everything to ground zero. many had thought toshiba would push ahead. haidi: we'll be watching that at the market open next. this is bloomberg. ♪

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kathleen: welcome to daybreak asia from bloomberg's world headquarters in new york. i'm kathleen hays. haidi: i'm haidi stroud-watts in sydney. asia's major markets have just open for trade. asian stocks set for steady open. oil prices in focus. investors eyeing the resilience of the world economy. president biden wants russia booted out of the d 20 as the u.s. and allies war in moscow

against using chemical weapons. the white house strikes a deal to help europe pay for gas imports from russia. the agreement set to be announced later on friday. kathleen: let's take a look at what's going on in the markets in japan and korea. japan opening higher on the nikkei and topics after the s&p 500 closed up 1.5% and the nasdaq gained 2% in the u.s.. dollar-yen. 122.28. it's continuing to fall. this seems to be much more of a yen stories in a dollars story even though the dollar is stronger against many g10 currencies, or at least holding its own. the concern grows that japan's economy is going to be hit by surging energy prices, all kinds of things. the war in ukraine. what does it mean for exporters and manufacturers?

the bank of japan saying, we are not going to come in and intervene, inflation is going up but it's bad inflation. this is what's happening to the dollar-yen. what's interesting is that the 10 year jgb cash rate got up to 0.235 and that's the highest it's been since february 10. 2016 hi. when this happened in early february, that's when the bank of japan came in to buy unlimited numbers of bonds to protect the top of the range. it's actually a little bit above the top of the range, if you take that five on the end. will the bank of japan tolerate that? we don't know yet. it seems like a very dynamic situation for the boj, maybe even for the ministry of finance as they see the yen weakening so

much. let's move on to see what's happening in korea. let's see what the kospi is doing. looks like a good sign for the rest of the asian trading day. again, the kospi has been down for a couple days now. the s&p 500 has fallen. it's gaining positive sentiment there. we actually see the lawn trading at a little bit weaker now, 1219.80. we got the bond futures. interesting. the yields are actually rising a bit. it looks like the yield -- green on the screen. the big focus today in major bond markets isn't the korean tenure. it's the 10 year jgb and whether or not we are going to see the bank of japan coming in and doing something about it. haidi: we were seeing losses when it came to treasuries as well in the open. this is what we are seeing.

the two year yield as well as the 10 year seeing a pickup. s&p futures off by 1/10 of 1%. it was a very solid session for stocks overnight. just about every sector gaining except for energy on account of a lot of this volatility when it comes to energy sanctions and supply. taking a look at crude. downside in the asian session, $112 per barrel. a kenai on that rate story continuing with the session ending lower after pairing declines. we still did see those immediate yields higher by around five or six basis points. take a look at the scenario when it comes to australia. losses being tracked by the aussie tenure. the kiwi tenure as well. we've seen yields drop just three times for those two regional benchmarks. if that tells you a big part of

the story there. the equity session, modest games to the asx 200. very telling that were seeing energy as one of the underperformers as we continue to wait for more clarity as to the supply situation, given expectations. when it comes to the aussie dollar, holding above $.75. that milestone resistance level being held. that other popular trade, the aussie yen rising to the strongest level in more than six years this week. a lot of strategists are saying that there's a real risk of turning around. the aussie is the best currency, gaining 8% against the yen so far this year. a lot going on in markets. a lot of action and volatility. let's talk to our next guest. joining us now is mahjabeen zaman.

with so much going on, let's start of our conversation with how you are viewing this. what is the prism through which you are viewing all of the volatility and news flow and responding to it? mahjabeen: looking at the news flow, we know markets are moving in a very high volatility manner right now. what we are doing is looking to increase inflation hedges across our portfolios. just to brace ourselves for the upcoming inflation. we are expecting it to go to 8.5% in the next couple of months in the u.s. particularly. haidi: it's really interesting to me that that goal has a part of the portfolio for you. mahjabeen: yeah. the reason is because it's less volatile. it still provides a hedge to the tail risk in the volatile world

ahead that we are looking at. following real rates are historically the most consistent driver of gold. it's almost that protection that is being offered to us and that's why we've, overweight. kathleen: what are you doing today? look at all this volatility in the yen. i think a lot of equity investors are trying to figure out if they should jump on the bullish train that we see reemerging in the u.s.. led by tech. you are talking about looking at offensive high-quality stocks with companies who have a strong dividend policy. in a way, dividends seem to be so old-fashioned or something. what exactly are you looking at? mahjabeen: sometimes, it pays to be more traditional when the markets are upside down. i think going along game, what we see investors do is try to time the market, panic sell in

times of volatility. when you are positioned in such quality names come a long term gold with a stable dividend flow, that plays out through this volatile time. we are also looking to add commodity producers just because we think that these commodity producers outside of pressure are going to capitalize in terms of making up for the loss of supply from russia that we are expecting ahead. kathleen: the government in china, their recent statement that they wanted to get over this tech reform as quickly as they can with a positive signal, it spurred big moves there. you are positive on china. more broadly, there are so many people in the u.s. who say china is basically a festival market. where they wrong? mahjabeen: china being one of the two largest economies in the world, you can't ignore china.

having said that, when you look at china, one is the economic side of things. they are looking to target very optimistic gdp growth of 5.5. we think that's going to be softer, 4.5%. when we look at the valuation side of things, given the recent selloff in the tech space, we think there is significant value here within the company. we want to look at those companies that have quality, strong cash flows, strong cash balances, shareholder value and the rest. having said that, more recency with the policy announcements, we have to see if these policies are effectively implemented in the coming weeks. that's a key thing that we are focusing on. haidi: always great to have you with us. mahjabeen zaman. take a look at some of the

movers we are watching early in the session when it comes to tokyo. we are watching toshiba. they are weighing going private with domestic backing. that's in talks with financial institutions for a buyout plan. toshiba has said that nothing has been decided. toshiba saying that it hasn't made any decision to consider privatization according to the spokesman. saying they are considering all strategic options to boost corporate value and to rebuild chill holder trust. toshiba shareholders rejected the plan by management to split the conglomerate into two companies. they voted down the proposal by an activist investor to reconsider alternative options including a sale. we saw adrs rising as much as 12%. we are seeing a have to gain so far in the trading session. 3.5% higher. softbank is on watch. trading lower today after

reports that it was seeking a valuation at least $60 billion for one of the business growth. they are aiming for a higher amount than it would've gotten from that failed sale of the chipmaker to nvidia. we are hearing that softbank is poised to pick goldman to lead a loan transaction ahead of a planned ipo offering. we are also, in terms of the analysis of this, it's a gambit for softbank. more than 60 billion. it would mean having to convince investors that they deserve that higher valuation. let's get you to vonnie quinn now with the first word headlines. vonnie: president biden is calling for russia's removal from the g20. if other members don't agree, ukraine should be allowed to attend the groups summit later this year. the comments come after russia confirms that putin is planning

to attend the meeting. >> my answer is yes. it depends on the g20. that was raised today. i raise the possibility that if that can't be done, if indonesia and others don't agree, that we should ask to have both ukraine be able to attend the meetings. vonnie: the u.s. says it has sanctioned individuals for aiding the development of north korea's missile program. pyongyang confirmed a new long-range ballistic missile. the u.s. is targeting five organizations located in north korea and russia as well as one in china. john yang has been pursuing activity since january. the chinese foreign minister has met with taliban leaders in afghanistan. the taliban says including

bilateral trade and alleviating poverty was on the agenda for talks. beijing has embraced the taliban's return to rule, allowing it to tap into the mineral resources and expand its belt and road project. the china eastern crash site has found more than 180 people in the wreckage. officials say at least one defect was found. it may have broken loose before impact. all people on board are presumed dead. the flight data reporter has not been located. global news 24 hours a day on air and at bloomberg quicktake, powered by 2700 journalists and analysts in 120 countries. this is bloomberg. i'm vonnie quinn. haidi: how china central banks are encouraging controllable risks in the fintech sector. coming up next, the u.s. announcing new sanctions against russian lawmakers in an effort

to ramp up pressures on moscow over its invasion of ukraine. this is bloomberg. ♪

>> my answer is yes. it depends on the g20. that was raised today. i raise the possibility if that can't be done, indonesia and others do not agree, then we should ask to have both ukraine be able to attend the meeting. >> vladimir putin has already crossed the red line into barbarism and i think it's now time to consider together the crisis in ukraine, the suffering of the people of ukraine. to see mo -- what more we can do to help the people of ukraine to protect themselves. kathleen: world leaders speaking in brussels earlier. we will take a look now at how futures in europe are opening after a mixed day in european

stock trading. i think it's reflected in what were seeing now. you can see this green on the screen. they are unchanged on the euro stocks futures. msci europe is up fractionally. you can say futures are unchanged and that's how europe closed earlier. it was down a little bit but there's been mixed forces and dynamics. we got this plan by the u.s. and the eu to get more natural gas to europe from the u.s.. that will play out over time. meanwhile, there was a very negative number from s&p global on europe's manufacturing. they say it faces an unprecedented rise in cost. no end to the war currently in sight. some hope on natural gas.

so important as sanctions on russa have cut down natural gas. it looks like this is still something. all these meetings in brussels, whatever comes out of them being watched closely. the u.s. announcing new sanctions on russia with president biden. the pressure comes as pressure the -- president vladimir putin. he won't be the last official to leave. this was so fascinating that this happened a couple days ago. this is a very important man. he was almost like a mentor a vladimir putin. a very respected russian policymaker. >> you can say that there is some strain. we've been looking at the situation within the elite. it's what is required for a change in leadership. it's not just a change of

regime. it is something we are watching closely. it's been dismissed as a personal decision. he is a very important figure. he gave putin his first kremlin job. his departure assisting. he's in the orbit of the kremlin. still a very preeminent figure. i think significant that we are not just seeing economic elites speaking out. the political ones. wednesday, we heard bloomberg news reporting that the central bank governor had tried to deny the invasion but was not allowed to. kathleen: -- haidi: you wrote that nothing is impossible in a crisis of the scale. as we get these leaders meeting in brussels, is there a better

idea of the scale that we are talking about? the likely outcomes and how things could play from here? clara: it's difficult to tell. we are at a moment where putin is increasingly under pressure. both domestically in his circle and with the incident this week of the disappearance of his defense minister. now seen briefly on screen but still a lot of questions about his whereabouts. some reports of strains in the security services. under all that pressure, it becomes harder for us to predict exactly how the military situation will develop. the domestic pressure will also influence how eager vladimir putin is to reach any sort of compromise or just to go all in. that's the danger here, that there's no way out. he has nothing to lose. haidi: president biden and the eu set to announce a deal on

friday that will help europe replace russian gas with supply from the u.s.. let's get more from her energies and commodity editor. is this a game changer in terms of the sanctions that may be able to be applied after this? what does that tell us about u.s. supply and the ability to tap more supply? clara: -- >> hi heidi. it's a game changer but over the longer term. the deal is set to be announced on friday and it paves the way politically for commercial transactions which will take place. it's important to bear in mind that this isn't going to happen quickly. europe will find it difficult to wean itself off of russian energy gas.

that's been reflected in the negotiations in the last day or so with austria in particular. being particularly resistant to any sort of embargo on russian oil and gas. you know germany, italy come of some of the eastern europe economies within the eu are heavily dependent on this. some sort of abrupt halt would be incredibly disruptive. yeah, in the longer term, they can move more to u.s. gas. in the shorter term, very difficult to achieve. kathleen: absolutely. a big question for europe. energy commodities editor andrew james, thank you. up next, relations between russia and beijing could be set to worsen as there's a boeing jet at the center of the country's worst aviation disaster in over a decade. details just ahead. this is bloomberg. ♪

kathleen: no clues are emerging about the china eastern plane crash. we are joined by stephen engle. what's the latest you can tell us? stephen: authorities have indicated that they have found a potential piece of the aircraft about 10 kilometers away from the main wreckage site, about six miles away. that potentially indicates that something came off of the aircraft midflight. the questions now are, did that cause the plane to go into that nosedive and crash? did it simply come off during the nosedive? the nosedive was highly unusual and at speeds of upwards of 700 miles per hour, nearly the speed of sound. pieces could fly off the aircraft as it was notes diving

to the earth. it's about 1.3 meters long and 10 simulators wide. it was found on farmland nearby. of course, that will be part of the investigation. they have the cockpit voice

haidi: let's take a look at some of the fx movers in the day session. the story continues to be dominoes with the japanese yen trading at a six-year low. some pretty outlandish things. we could potentially see a return to levels not seen since the 1990's. that means ¥150 to the dollar. we will be waiting to see what the bank of japan does as well. governor kuroda thinks that the weaker yen is still a positive

for the economy. if they go in and do bond buying to get yields under control, we could see further weakness. we are seeing pullback when it comes to the aussie as well. kathleen: we are joined now by our senior fx rates reporter ruth carson. this yen story, i feel like i'm back in the 80's, 90's. we haven't seen anything like this -- it's not bad that -- that bad yet. what is the boj going to do? it's an exciting market story. ruth: absolutely. all eyes on the yen regardless of where you are in the currency train. we are talking 6% down against the dollar. it's only march. a couple things that are really driving it, the dovish boj. a time when everyone from the

fed to the rba is looking to raise interest rates. the war in ukraine is driving up inflation risk everywhere. the boj still saying, no, we like our monetary policy. how low can the yen go? you were talking about it earlier. soft and is saying that 20% lower from here against the dollar could well happen. it sounds extreme. it shows you how bearish people are on the yen right now. haidi: given that we've seen so much weakness in such a short time, this is going to be a difference for traders. there's been such a dearth of volatility. traders are going to keep feasting on the yen. ruth: absolutely. it's a good observation. quite a few analyt there saying that there could be opportunities.

by far, the majority is saying that this relentless yen fall has some way to go. traders might be welcoming this opportunity of volatility to once again get onto the short yen bandwagon. haidi: ruth carson there in singapore with so much action. take a look at the aussie as well. let's get you to the first word headlines with vonnie quinn, in new york. vonnie: china says the u.n. charter is the bottom line for its cooperation with russia. ambassadors to the u.s. said that there are no limits to the partnership but international law still applies. a chinese official as he faces international pressure to distance himself from vladimir putin. russia is set to a race 15 years of economic gains.

a new estimate shows the russian economy is expected to contract 15% this year. the report added that even after the initial hit to the economy, growth will suffer in the long run because of this. the european companies in hong kong are planning to exit the city according to the local european chamber of commerce. it found 25% of responding firms have to fully relocate in the next year. negative results are another sign that post-covid restrictions are potentially eroding business confidence in hong kong. one of the prosecutors who led new york's investigation into donald trump insists that the former president of -- is guilty of felonies. he quit the manhattan district attorney's office last month. he says the office had more than enough evidence for conviction

but the attorney didn't want to go forward. a spokeswoman says the probe is continuing. global news 24 hours a day on air and at bloomberg quicktake, powered by 2700 journalists and analysts in 120 countries. this is bloomberg. i'm vonnie quinn. haidi: china about to sign a security deals i could see a chinese naval base established less than 2000 kilometers off australia's coast. our next guest says the agreement is very significant. great to have you with us and we appreciate your time. this is a draft agreement. we are not clear how far the negotiations have progressed. we for concerns from a number of senior government officials in australia expressing concern about this happening in australia. >> thank you for having me.

it has raised alarm bells in wellington. i imagine also in washington as well. kathleen: go ahead. i'm eager to get in but i didn't need to jump on you. haidi: [laughter] what are the implications? we've seen a real bravado over regional security. what are the real concerns here? anna: that's a great question. i think we also need to be clear, this is a draft document. the language is very opaque and clumsy. quite vague.

my guess is that it's the first, perhaps an early version of what's being negotiated. it obviously does raise a number of concerns with respect to the potential request for logistical supplies to be made available, to be situated in the solomon islands. potential visits by chinese naval vessels. there are deeper questions here at play. how other aspects of the scope of cooperation as is outlined in the agreement could potentially impact government -- democratic government, the resilience, the role of the free media as well as civil society. there is great ambiguity around

the document and the consequence of very opaque language in it. it's raising significant concerns, raising long-standing concerns held in australia. haidi: china's playbook when it comes to soft diplomacy and these overtures in the region are not new. could this be the first of other deals as well? anna: i think china has been deliberate with respect to the broader context of its financial relationships in solomon islands. off of the back of china's offer and provision of policing advisors following the riots in november last year in the solomon islands. so there's a context specific element to this. that doesn't suggest we wouldn't see the same arrangement elsewhere. we also need to keep in mind that the solomon islands

government will be negotiating hard as well to usher that it needs their agenda and their national interests. kathleen: you know, when you think of belt and road, china wants trade and economic purposes. many people see it as part of a political or power-play, right? bring more countries into their orbit. have more control. build the region up. how important is it? it's one thing to make a deal to build a bridge or something. when you put a naval base so close to australia, that seems to take it to another level. anna: we need to be cautious about -- even if it comes into form, whether it would result in any kind of base in the solomon islands. the question remains.

this is part of china's global law enforcement push that we are seeing elsewhere internationally and also its objectives in terms of securing the belt and road investments or protecting chinese citizens and businesses as well as the influence which is a critical element to this. even if it doesn't result in a military base per se, there are important questions to be asked about the degree of influence it reflects. kathleen: thank you so much for joining us to look into this very important story. anna powell's. up next, fitch rating gives us their china banking sector outlook as earnings kickoff. that conversation just ahead. this is bloomberg. ♪

kathleen: investors expecting further stimulus from the bank of china. our next guest doesn't expect large-scale credit stimulus. earnings season begins. joining us is grace fuji. grace, if you take it face value, the state council, what

they indicated, the fact that china has a 5.5% growth target, that was always going to be hard to meet this year. commodity prices and the war in ukraine. why do you think they won't go ahead and take the kind of steps like cutting the reserve requirement ratio? grace: i think it's possible for them to reduce the rrr. bearing in mind that rrr is a necessary means for monetary policy to ease significantly or that banks are aggressively increasing. what's different now compared to 10 years ago when rrr was quite effective in terms of channeling more credit into the system, it's because at that time banks had ample capital where now with banks leading to reach requirements, that constraint really prohibits any large-scale

credit loosening in china. kathleen: tell us more about that. what is the healthiness of the chinese bank at this point? one of the things you brought up in your reports is looking at wealth management products and how much banks are holding those now. bottom line, how would you broadly say the sector looks? grace: in terms of the reported numbers, we are unlikely to see any significant uptick in terms of reported --. part of that reason, despite the stress with chinese developers in the past couple months, it's because there's an impact in terms of the timing of requisitions. also the fact that property development in china is often project base. it's possible that as long as the projects are still ongoing, even if the ball were experiencing signs of distress,

banks may not necessarily be facing that upfront. what we will be looking next week is guidance on growth going forward and also on margins given that the authorities have once again indicated to banks that they should try to lower borrowing rates in order to support the economy. yes, the 5.5% is going to be quite difficult to achieve given all that's happening. we still think that it's possible for china to impose fiscal measures instead of putting that entirely onto the banks. haidi: we know that with a lot of these transactions, they are off-balance-sheet. whether you're talking about nonperforming lines or just questionable loans. they get moved around a lot. what are they not seeing that's under the hood and do we need to be concerned? has it been working, given that

these issues have been a concern for china for many years? grace: yeah. with regards to off-balance-sheet activities, in terms of the growth last year, the record for gdp hasn't been quite stable for the past two or three years. a lot of that has to do with the regulatory crackdown which began in 2017. we think wealth management products in particular, the portion of what we call nonstandard credit assets which are the ones that we perceived with higher credit risk, that has significantly come down. it's now 8% of total w mp at the end of 2021 compared to a peak of almost 16%. more importantly, the interbank cross holdings among banks have fallen to less than 2% at the end of last year. that really helped reduce contagion risk within the financial system. haidi: always great to have you

with us. grace will stay with us. a great check of the latest business flash headlines. neil has posted a fourth-quarter running -- loss in its reporting. they have faced intense supply disruption across several markets. it did see gdp jumped, rising 49% on the year with around 25,000 vehicles delivered. apple is working on a subscription service for iphone and other hardware products, a move that could make the mice -- device service similar to paying a fee. it is there biggest push into automatically recurring sales. it will help apple generate more revenue. softbank is set to be seeking evaluation of at least $60 billion for art. softbank is aiming for a higher

announcement. more to come on daybreak asia. this is bloomberg. ♪

kathleen: what a month that has been for chinese equities and

assets. nasdaq golden dragon index volatility topping the highest since the 2008 financial crisis. we are almost at the end of the month in the index has moved less than 1% this entire month so far. more of that huge volatility. the roller coaster and chinese stocks continuing. we look ahead to the market open in mainland markets and in hong kong. let's bring in our chief china markets reporter to join us. happy friday. what are you looking at for today? >> that's a key measure. record volatility. how do you pricing chinese adrs? the risk around this sector is really so huge. you have short-sellers getting squeezed. the loans getting burned. even jp morgan's team can't on whether the stocks are buyable

or not. this is a key question in the market. state media from china in the front page commentary today saying that they want to improve dialogue with the u.s.. also improve communication with hong kong regarding listings here. you have the regulators in the u.s. warning that the deal is very much still not on the table. grappling with a lot of risk here. looking at the property market, we have more and more property developers saying that they won't be able to sell their earnings on time. that means that if you are expecting or hoping for some kind of transparency on how this industry is doing, you are unlikely to get anytime soon. kathleen: apart from what governments are doing, regulators and that kind of

thing, if this golden dragon index seems to reflect that the trade has gotten more international, certainly a lot of people are watching the golden dragon index every day now in the u.s.. if it goes up, does that affect china at all? when china stock moves, it affects what happens with the adrs in the u.s.. it has become a more interesting and traded part of the u.s. day. it didn't used to be. >> i think that's exactly right. the story now is very much, how is china perceived in international investing? how is the china story reflected in global funds? it started last year when china's regulation on everything surprised markets because it was so unpredictable, unexpected,

and not well communicated. they are trying to rectify that. it really accelerated with russia's invasion of ukraine. because that risk of a part of your portfolio being written down to zero overnight. people really started looking at china in that light, with those concerns. geopolitics and the relationship between china and the u.s. really saturating in here. adrs are the best way to reflect that. what's interesting is that we are seeing record flows into leveraged etf's and chinese shares. including the web index which is the internet fund that's highly traded. at the same time, you are seeing a buildup of short positions. very strong demand to hedge. a lot of caution but also a lot riding on a rebound in these stocks. people can truly decide whether now is the time to buy or

whether it's too soon. kathleen: just so interesting. markets have a force that goes beyond what the governments are trying to do. we just have to talk about japan. we have to talk about the tenure jgb. the yield got up to 0.235%, the hottest since january 16. it's also the last level pretty much where the bank of japan said, that's it. you are too far at the top of that range now. we have to come in and buy bonds before you go there. obviously, this is something. it's a big deal for the rest of the trading day and we can asia. it will be interesting to see what happens. there's plenty of time for the boj to do something. this is all happening as the yen continues to weaken. haidi: it's a real dilemma, isn't it? the bond bulls may be trying to count still on the boj intervention to rein in those fields. if they do that, there's further weakness for the yen.

we know that the yen doesn't need to get more cash flows. also, north korea i see p.m. test, the first since 2017 not helping matters much. haven demand for the yen amid all these different factors as well. one to 2.4 is where we are at. it's careening towards the weakest level since grote's entire nine year tenure. one to 5.86 per dollar, the lowest since june 2015. kathleen: this is a year so quickly where the worn ukraine, surging commodity prices, what it means for manufacturers in japan, you could ask that question in different forms for every country. it is so fascinating. seeing things we don't expect and can't control having a big impact. haidi: traders seizing on that

opportunity. markets coverage continues. we are looking ahead to the start of trading in hong kong and shenzhen. bloomberg markets the china open is up next. this is bloomberg. ♪

david: happy friday morning from the asia-pacific, it is not a clock a.m. in hong kong, beijing and taipei. welcome to china open. i'm an english with yvonne man. yvonne: oil prices fall after european union leaders failed to agree on fresh action to cut imports of russian crude. china's friendship with russia has limits. beijing's washington envoy says