shery: asia could come into your life. haidi: we are counting down asia's market open. the fed made a third straight 75-basis-point hike and signal more might be ahead. >> the very lowest level of what might be restricted. there's a ways to go. haidi: asian stocks set to follow wall street lower. the bank of japan, investors watching for any expansion of its lending program to promote investments. shery: i special volatile session with investors struggling for direction after we got chair powell's

conference. at one point, the s&p 500 was up 1.3% just to end the session lower. tech really taking the brunt of the losses as we have treasury yields rallying. but even treasuries work all over the place. really paring back on most 12 basis points of gains, but still, the deeper inversion across the treasury curve continues, leading to concerns about a potential recession to come. surprising concerns about an economic slowdown leading to oil being pressured. right now below $82 a barrel. haidi: it is really all about what we have seen in the market. the fed raising projections of where we will see rates going from here, but it is not just the fed we are talking about as well. we also have other central banks

following through, monetary policy in hong kong following the fed, but take a look at how broader markets are setting up in asia following this hawkish message we did get from fed officials. we are seeing kiwi stocks, they are the only ones trading at the moment, actually higher this morning. very focused on what we see in the bond space as well, keeping a big eye on what we are seeing in the lung maturation section of the market because we see the biggest moves in the kiwi 10-year this morning and the dollar ratcheting stronger, reflecting what we see in the fx space. haidi: for more, let's bring our cross assets reporter and chief asia correspondent as well. is this the point where markets continuously have been over the past two months yearning for upside? >> exactly, don't fight the fed.

if we look at what happened with u.s. stocks after the announcement, there was this trying to work out what was going, work things going to selloff more, which they ended up doing. one thing that is interesting to note is as conditions tightening, which is really what the fed wants, there are pockets of opportunity in some asset classes. credit, safe credit, even treasuries are starting to look appealing for some investors, so we are starting to see this kind of moves. in asia, we talked to some strategists the other day, and they were really looking for opportunities in high-yield credit and investment-grade credit because of this tightening of financial conditions making some of those asset classes a bit more attractive.

we're going to see asian stocks follow u.s. stocks lower. futures already indicating that. i think for japan equities, not quite 1% but heading in that direction, and in the currency's market, this is really exciting. exciting volatile time. we are seeing the offshore you on trading at two-year lows, the australian dollar trading at two-year flows as well and the japanese yen inching about that ¥144 to dollar mark as well, so there's a lot of weakness, a lot of dollar strength, and we think some strategist notes -- we have seen some strategist notes come true suggesting this could be the final stage of the dollar rally as things tighten in the u.s. we have that differential in our region, in asia. let's not forget two of the three largest economies in the world are in an easing cycle even though wealthy countries

are dealing with inflation, and i'm talking about japan and china, so there is this differential with what central banks are doing and obviously, in japan to a very high degree. haidi: that policy differential is what we continue to focus on. is the outlook actually give the boj more leeway? >> i think maybe, but the real focus is on what is happening with the yen. we do have the boj decision today, and that is expected on the broad policy framework, ongoing support for the broader economy. there might be some tweaks to funding programs, companies might tweak forward guidance and the like, but the message continues to be that we continue to pour money into the economy. our focus remains on growth. that is a very different story to the rest of the world.

to your point about when and why might the pivot come, people are saying we have had the record declining the yen this year. there might be some folks worrying about the yen, and if they sharpen language on that, but it could be quite a surprise if they pivot. the swiss national bank leading to standouts. shery: the swiss national bank is expected to hike rates. what are you expecting from other central banks we have in asia as well? >> about 700 basis points in

interest hikes this week. it is it -- it is an extraordinary period for central banks. i think the unified message from all of these central banks, if it is in switzerland or asia, is they are going full board to contain inflation. they are going ahead and jacking up interest rates. there's no sign of a turning point in that yet. indications from a lot of these authorities are they do not believe rice's are back where they should be and they are still worried about consumers and that's why borrowing costs are going up. >> interestingly, those that preemptively hiked like brazil stayed steady today. thank you. let's get to vonnie quinn with

the first word headlines. vonnie: iranian state media says at least six people have in killed in protests across the country over the death of a woman who was detained by the so-called morality police for breaking the country's dress code for women. the violence has spread to multiple cities since saturday when she was buried. north korean state media say the government has not sold any weapons nor ammunition to russia and has no plans to do so in the future. the u.s. state department had said the kremlin was trying to procure arms from north korea in a sign that sanctions were leading to severe supply shortages. the north korean defense minister strongly condemned the u.s. circulating rumors. the state of new york is suing donald trump and three of his children for allegedly inflating the value of his real estate assets in a multiyear

investigation into the former president his family. the former president called the lawsuits another witchhunt and said the attorney general should instead be tackling violent crime. the government of western australia has outlined new rules to target sexual abuse and harassment in the mining industry following a landmark inquiry which revealed multiple abuses of women. the state government has signed all 24 recommendations including funding for legal advice and improved site security. global news 24 hours a day on air and on bloomberg quicktake powered by one and 2700 analysts in more than 120 countries. haidi: coming up next, we take a look at how much pain the fed may be willing to inflict on its economy with the inflation

spike. a university of maryland economics professor joins us. this is bloomberg. ♪

>> time will tell if it's enough, but i do think today is an important move in the direction. they essentially got the effect of that and maybe in a more durable way. >> i don't think you could say we will get out of this with something soft--ish. i think 4.4% as much too sanguine. i think it will probably go beyond 5%, so i think they are still being too cautious in making their forecast. haidi: that was a former federal reserve banker and a former fed

governor. let's bring in kathleen hays, who is standing by with our next guest. kathleen: professor of economics from the university of maryland joins us now. great to see you again. you were in jackson hole a few weeks ago. we are happy you're with us now to talk about this fed decision. let's talk about the message. jay powell said over and over and over they are going to do in -- they are going to keep moving until they get the job done, which presumably means until inflation is down to levels we can live with again. >> exactly. that was the case jay powell gave very strongly, as was the case in jackson hole.

the hikes will continue into the future until they get down to 2%. kathleen: jay powell said they are just barely getting to the point where they are starting to get restrictive. next year, the funds rate at the lowest level is expected to go about four point percent. the highest level nearly to five percent. when and where do they get truly restrictive enough to fight inflation and bring it down? >> yes, this is the part where they keep emphasizing policy is inflation-driven. he said several times they will

look at it and decide at each meeting, and the numbers on the dot plot show their expectations. i think this goes with the idea of soft-ish landing. they have not given up on that completely. they do acknowledge there is going to be some pain. they want softening in the labor market. haidi: tell us a little bit about the later -- labor data because the strength in those numbers has made it really tough for the fed right now. >> that is exactly right.

they said this, and today chairman powell reiterated that are working to understand the labor market tightness and if it is starting to soften. vacancies reportedly showing still a very strong labor market. there are two openings for every single person looking for a job. they want that to come down, and they were clear on that. that coming down is going to mean rising unemployment rate at some point. that is in there -- their projection. they reiterated that the pain of not controlling inflation is going to be much bigger than that.

haidi: when you zoom out to the global situation at the moment, do you see a level of coordination when it comes to inflation hikes? we have seen this extraordinary strength in the u.s. dollar and some pretty major policy differentials. >> this is a very important question, and there will be some volatility down the road for two reasons. first, everybody is doing hiking, both advanced economies and emerging-market, and also, the underlying drivers of inflation in every country will be different.

take the dollar-euro. in europe, it is mainly driven by energy. kathleen: when you look at the exchange rate and look at what the fed is signaling, again, there are people who think at the fed already they have to go to at least 5%, and it seems like since this is if i see 4.4% or 5% next year, i know we will have to keep pushing it higher, which will push the dollar higher as well potentially. how high do you think the fed funds rate will have to get back on what will that do to the dollar? >> the key is the risk financial

markets are going to price in for emerging markets. the way they handle this episode , how much tightening they do, and is it transparent, that will depreciate emerging markets. in turkey, they have a huge domestic inflation problem. that's going to be priced in across the emerging-market

spectrum, and that is where we will see depreciation. haidi: thank you so much for your time. of course, coming up as well, an exclusive conversation with the colombian president. he tells us what is behind the nation's soaring inflation and his plans to reduce dependency on oil. shery: coming up, discussing a potential partnership between arm and samsung. this is bloomberg. ♪ ♪♪ energy demands are rising. and the effects are being felt everywhere. that's why at chevron, we're increasing production in the permian basin by 15%. and we're projected to reach 1 million barrels

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haidi: softbank's ceo to visit japan for the first time in years to discuss a potential partnership between arm and samsung. what is the intent of this visit, and what will he be trying to achieve? >> it is very interesting that son has told us that he is indeed visiting seoul for the first time in three years, but details are very thin at the current stage. arm and samsung are already kind of in a business relationship because samsung has long been using arm's design technology for manufacturing chips, but our understanding is that given that he has told us that it be a -- another strategic alliance, it would be something that would

take angst a step further, but at this stage, it is hard to tell exactly what that will be. of course, there's a lot of speculation -- questions around if this would fall -- involve an estate sale for m&a deal, but there's little reason to suspect it would evolve into something like that, but of course, things could change any time, and we are very closely tracking what is going on. haidi: how does this square with taking public in the u.s.? he has repeatedly said that. >> of course. at this point, we understand there's no change in current plans for softbank to list arm in the u.s. it has always been their intention. they have repeatedly said this, and it is supposed to get them a

huge amount of cash with a successful ipo, but given the current market situation, how markets have been very weak and how ipo markets don't really look very positive for the next several months, there's been a lot of speculation that this may not be as successful as everyone hoped, and there were hints it could be more than an ipo, but we will really have to see how things evolve from here. haidi: here is a quick check of the latest business flash headlines. jp morgan's ceo has slammed cryptocurrencies again, calling them decentralized ponzi schemes . jp morgan is involved in using blockchain's for financial

services such as its own gpm coin -- jpm coin. citigroup's ceo said the bank would likely significantly decrease its presence in china if the country invades taiwan, emphasizing that it was a hypothetical scenario and not without consulting the u.s. government. citigroup has 13 banks across the country. haidi: millions have made the switch from the big three to the best kept secret in wireless: xfinity mobile. that means millions are saving hundreds a year with the fastest mobile service. and now, introducing, the best price for two lines of unlimited. just $30 per line. there are millions of happy campers out there. and this is the perfect time to join them... add a line to your existing plan,

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vonnie: this is "daybreak: asia." protests broke out in russia

after president putin declared a partial mobilization of as many as 200,000 military reservists for the war in ukraine. around 1200 people were arrested in cities including moscow and st. petersburg. putin also renewed hints of a nuclear threat, vowing to use all means to protect russia and its people. president riding is calling on the world to maintain support for ukraine following putin's threat and the kremlin's military escalation. speaking to the united nations miller -- united nations general a simile, biden slammed russia's actions and said the war aims to extinguish ukraine's right to exist. >> putin claims he had to act because russia was threatened, but no one threatened russia, and no one other than russia sought conflict.

vonnie: the company santos has been ordered to put a hold on its $3.3 billion gas project after a court ruled in favor of indigenous groups that they were not publicly told about the plan. the minor says it is a disappointing outcome and it is planning to appeal. football superstar tom brady reportedly plans to take every wednesday off this nfl season. the 45-year-old quarterback has said he has worked weekends the past 25 years so deserves one day off a week. the announcement has triggered talk of quiet quitting and great resignation. shery: persistent high inflation

is widening the gap between rich and poor and fueling anger around the world over long-standing inequalities. columbia -- colombia is one country that has opted for radical change, electing a former guerrilla. >> obviously, hunger leads to despair, violence, etc., politics, but the first thing we have to solve statewide is to federally empower, bring food and nutrients to the population today. >> you are planning to reduce fuel subsidies. that is unpopular. will that be a problem? >> week fragmented it not -- we fragmented. we will not make increases in

oil and gasoline. at the same time, i'm considering subsidizing fertilizers. if we achieve a sufficient subsidy with public money, we could reduce the price of food and produced right now in the country. >> what do you make of the level of the colombian peso? >> inflation is a deep flaw in the colombian peso, but we have the strengthening of the dollar because of the fact that it made its internal interest rate row and still intends to do so more, and that caused a spike in the value of all currencies. the colombian much more. then it becomes more expensive for us. unfortunately, the price doubled for us due to covid policies two or three decades ago.

>> is that going to change? >> it has to change. it is what i call sovereignty. we have to guarantee producing a minimum of food for the entire population. we have the capacity, the land, the water, but we must take that leap to recover agricultural production in columbia -- in colombia. >> we have an energy crisis but also a climate crisis. how do balance exporting oil and carbon? >> we have an energy crisis but also a climate crisis. it is a dilemma when you have so many oil and coal exports, too. they are linked. the war is linked to the climate

crisis. the rise in food prices is linked to the climate crisis as well. we are producing fewer and fewer nutrients per square meter. that is one of the effects. colombia depends too much on the export of oil and coal. what i aspire to is to replace the oil and coal economy with a tourism economy in the short term because colombia is a beautiful country. >> your the first leftist president in colombia. we have seen new leaders in chile and peru from the left, but they have seen some political crisis. are there any lessons you can take? >> well, about the word "leftist," like any relevant geographical point and i would say progressivism, there is a certain latin american

progressivism that maintains the idea of distributing wealth, things that were not under our control and were not sustainable. i propose a latin america that can sustain a development process aiming to link the korean model with the latin model. shery: the president of colombia speaking to us exclusively on bloomberg television. we're talking about the peso down more than 10%. a lot of jitters about policies as well coming from the left. the dollar moving pretty strong. the bloomberg dollar spot index is pretty high. we have also seen a bit of weakness for the brazilian real. we saw the central bank of brazil pausing interest rate hikes.

they have preemptively hiked already. emerging market currencies really on the broader downtrend. plenty more to come. this is bloomberg. ♪

>> my colleagues and i are

strongly committed to bringing inflation back down to our 2% goal. at today's meeting, the committee rate -- raised the target range to 3.75% and it will very likely lead to softening labor market conditions. what we think we need to do and should do is move your policy rate to a restrictive level that is restrictive enough to bring inflation down to 2%. if we just move into the lowest level of what might be restrictive, we probably have to go through a correction, the median for the year and suggestion of 125 basis points of rate increases. >> the fed reserve chair jay powell underscoring that hawkish message we got from the fed and casting a spotlight on the growing diversions we see between the united nations and policymakers, but take a look at what we are seeing with the pboc, in particular this effort

we are getting to try to shore up the losses we do have in the currency. a stronger fix here, now at a record, back to levels we have not seen since 2019. we do see today i stronger fix than the estimate, and that will take us to a rush record, and also the magnitude. these are really big differences between what we see in the actual fix and the estimate as well, but also looking at what's happening in japan. we have the boj meeting coming up later as well. no change expected, but that growing divergence is leading to losses in the yen, now within 3% of that key level. shery: our next guest says the search in inflation cannot be sustained. great to have you, as always.

the story has not changed much, though i suppose there is an extra element of deteriorating outlook. what are your expectations going into the meeting today? >> i don't think there will be any major changes. the banks have come under increased pressure as the u.s. and japanese long-term yields, but it had to by an increasing amount of bonds. at the moment, the pace of buying is still.

inflation is about to hit 3% with even the core underlying inflation above 2%. it will not be sustained because it is driven by extreme devaluation of the yen. [indiscernible] haidi: the yen already the worst-performing currency of the year. it has lost 20% against the dollar. how much more downside is there? >> we think that u.s. inflation will turn in the next few months

and prompt a pivot from the fed toward less policy tightening. also the yen is now extremely undervalued. at some point, a in back is likely -- a bounce back is likely. >> we have seen deterioration in oil prices. back then, japanese yen were going quite strongly. the current environment is quite different. we do not expect the economy to go into recession, but there will clearly be a slowdown. japanese households still have

room to absorb this. at some time, there will be a slowdown. energy prices are rising even more sharply with some of japan's trading partners. >> we have talked about how other global central banks are really tightening. this chart on the bloomberg showing thursday afternoon, expected to hike rates with the boj really being the loner out there when it comes to negative rates. we have talked about the pressure on the markets, the pressure on yields. what about the reputational

pressure on governor kuroda and the fact that a lot of japanese people are not happy with how cheap the currency is? >> i guess unhappy people is not what kuroda cares about this moment -- at this moment. [indiscernible] i think japan has had a very long history of deflation, and the bank is worried this would continue if they hike

prematurely. haidi: what does governor kuroda want to see? jay powell talking specifically about wage pressure that the fed wants to see. >> recently, they communicated that they are watching the distribution of supply chains. the latest development reading was 0.7%, which is obviously a long way off. clearly in the u.s., there is a rise in prices whereas in japan, it is just half the target.

we probably need to see wage growth of at least 2%, maybe 2.5%, maybe 3%. the same pickup in service inflation and you need to have stronger wage growth to meet targets. haidi: thank you so much for your time and thank you for previewing the boj decision. you can look at your bloomberg for more on this topic. we will have the latest on japan. plenty more to come on "daybreak asia." this is bloomberg. ♪

shery: here's a quick check of the latest business headlines. softbank's son plans to visit seoul for the first time in three years to discuss a combination of arm and samsung.

samsung reportedly may visit next month. second quarter package tour revenue fell 57% from a year earlier, and corporate travel was down 46%. china's travel scene has been crushed by the ongoing covid lockdown. the adani group has been tapped to develop india's west bengal state as it has been tapped to boost its presence in the important economic zone. the state government expects to create on hundred 25,000 jobs through the project. >> the diminishing chance of a soft landing when it comes to the broader economy is causing whiplash across the markets.

let's bring in our senior reporter for fx and rates. it is boj decision today. are we expecting fireworks? >> we have seen fireworks overnight. i think you could see some big swings in the yen. the boj is expected to standpat in the wake just hours after a very hawkish fed message. absolutely we should expect to see volatility in dollar-again and just to keep things in perspective, bny mellon is expecting the yen to head to 160 . between now and then, definitely expect to see some fireworks.

>> are you expecting fireworks in japanese stocks as well? >> yes, possibly. the so-called terminal rate after the current fed tightening cycle has risen to 4.6%. if you look back just three weeks ago, people had been expecting a rate hike of less than 4%, so that's going to put pressure on valuations on japanese stocks as well as stock markets around the world. there have been times when -- people are also starting to worry about the earnings outlook

as well. we have seen ones from major u.s. companies like fedex increasing worries that the downturn might be more severe than people had expected. >> we don't do it that often anymore, but i remember when we had these surprise decisions from the boj like a halloween treat years ago. we would go on betting about when the decision would come out because depending on when it comes out, we will get something big out of the central bank. when are we expecting this decision? >> any time. it is definitely talked about, and because of so much global intervention and jawboning that we have seen, the timing of the announcement is something highly on people's minds, and there will definitely be traders,

passing through previous times when the boj would release its announcements, and if it is delayed, what that could mean. keep a close eye on options as well as spot. we could see some large swings to come. >> i want to ask about china because in these uncertain times, the deteriorating global outlook, chances of a soft landing fading, do we return to onshore china as a pocket of opportunity? >> actually, some people are starting to think of china's onshore market as a possible haven against global headwinds. onshore chinese shares have done better than offshore chinese shares this month. of course there are a lot of

reasons people have hated chinese stocks, which is property prices and the zero covid policy. those are still there. shery: are your top stories and what to expect in the asian markets. this as we head toward the japan and korea open. this is bloomberg. ♪

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>> this is daybreak: asia. we are counting down as we await

the bank of japan decision. that much is expected in terms of policy changes but this is on the day when we have the 75 basis point hike that led to a market selloff. >> we saw that selloff. what if you generations before that. you can see that resurgence. we can get annabelle here. they are really starting to take the fed seriously when it comes to the inflation. >> that is right. we have the open here in japan. checking in at the start of trade and what we are seeing with the yen action this morning. markets are saying that the move to 145 is inside. this is the head the boj

decision. all 49 economists here expecting the boj to keep rates unchanged. we are just checking what is happening in the bond yields base as well because we have seen yields moving ahead of that meeting. the topics are a little bit weak at the start. there is a reflection that traders are paying attention to. this is piling into the banks index. you can see that it is still weaker. the banks could be one of the big winners in a rising rate environment. changing out to what we see. we are looking at the korean won here. it did just touch the key level at the start of trade. that is the first time since 2000 and nine -- 2009. the be ok can try to stem the declines that we are seeing in the currencies.

they are saying that is unlikely. it is a difficult to reverse plunge. we can now see that red they're dropping with the korean won. to the stock space now. we are seeing the tech heavy index there. we are looking to replicate those losses there in the nasdaq. amazon is down 3%. the kospi is still down more than 1% at the start of trade. changing to what we see in the treasury space, we have seen the risks of recession here. this is what we see in the two year yield. this is a sensitive one above that key. that 4% level had not touched those highs since 2007. certainly, this is all about the

reactions that we had to that very hawkish message that came through from jay powell. >> look at the 1400 level. i don't remember seeing that level ever. our next guest does not think investors will be compensated for taking on a lot more risk in their portfolio at the moment. this was the global market strategist, j.p. morgan asset management. good to have you with us. although taking risks in this volatility and uncertainty is tough, sitting here is not any better. what are you doing? >> good morning to the both of you. it has been a very challenging environment. all because of the high levels of inflation. at the same time, there are very high costs holding cash.

what we have been trying to do a j.p. morgan is find a way for income investing to focus on finding high-quality investments. this is looking at things like chair ties and the high-quality here. >> how much of the hawkishness has already been priced into the bond market? >> judging from the response yesterday, the 10-year yield seems to be constant. there was already quit a bit of hawkishness. i think it was a little bit of a different story from the equity market.

there are more growth sensitive factors like tech. i do think there is a good level of hawkishness. >> bond markets are becoming more relevant again. there is no alternative to equities or is that changing? >> the yield levels actually look a lot more interesting. i think it was a very unique set of factors that drove bonds to underperform alongside equities. this will allow the fed to be more dovish. >> china appears to be less

correlated to global data. >> i think that is a good point. this is the economic cycle. there is investing on china here. this is coming up. between now and then, we will not shoot any form of lactation. that has really been the biggest part of the more efficient monetary policy and fiscal policy operation. once we get over that hump, hopefully we can see broader correlation here. that will really help to start growth again.

it makes equity more interesting from that perspective. >> the korean won just touch to that 1400 level and we are getting all of these here. they are closely monitoring the markets according to the bank of korea governor. they are trying to provide new forward guidance at the next rate meeting. when you look at all of these headlines coming from korea and also from japan, the week japanese yen, the chinese yuan against the u.s. dollar. are there any sectors that would benefit as we see these weaknesses coming in? >> a strong u.s. dollar will be

good for emerging market stocks. there are still opportunities in the space. if you can leverage as it management for these companies, that can really benefits from the broader view in the asian region. that macroeconomic headwind has traditionally challenged this region as a whole. >> great to have you with us. the global market strategist at asset management here. we are getting policy markets responded to that drop. this is the 1400 handle for the

first time since 2009. they are taking necessary steps as needed. they will be active measures on one side. we will see her reaction. we will hear from the bank of korea governor monitoring the impact on the market. and also to provide new guidance at the next rate meeting, talking about how this may change during the civilization of the fx market we are seeing the korean won continuing to see the downside there. this is performing against most asian currencies. this is performing against the life of the chinese yuan. we are seeing these major fx headwinds. we talked earlier about the potential for the swap line from the back of korea. that would not set up for the sustainable one if the global

macro have put doesn't change. let's get you to vonnie quinn now with our first word headlines. >> protests broke out in russia as president putin declared a partial mobilization of as many as 300,000 for the were in ukraine. one human rights group says 1200 people were arrested. and announcing the escalation, they are going to use all means to protect russia and its people. president biden is calling on the road to maintain the board for ukraine. speaking to the united nations general assembly, biden slammed russia's actions. saying it would be a shame if they violated the core tenets here. they aimed to extinguish ukraine

. >> russia was -- put in said that he had to act because russia was threatened but no one threatened russia. no one other than russia sought conflict. >> the government of ukraine says they have not sold any weapons to russia and they don't plan to do so in the future. the kremlin was trying to secure north korea and they were leading to severe supply shortages. north korean defense officials condemned of the u.s. for circulating rumors. i of any state media said these people have been chosen here. they have been detained by the morality place. the violence spread to multiple studies since saturday. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries.

i am vonnie quinn. this is bloomberg. >> let's get you straight to some of the early movers. we are watching the downside when it comes to tech stocks. >> that is right. maybe because we did not see those moves to the nasdaq. we are seeing a drop for the megacap stocks. also, chip sectors reflecting those rate beers we are seeing. we are looking at what we are seeing with energy stocks as well. brent crude is trading fairly flat. we had seen it dropping in a previous session, all of these hawkish measures we got definitely overshadowing political consent as well. as bonnie was just mentioning, president biden really slamming this effort from the russian leader, vlad reported to escalate the conflict and bring ourselves into it. they are keeping an eye on the defense play as well. defense stocks were one of the

beginners in the s&p 500. we are also seeing that reflected this morning. this is one of the few sectors that will be rising today. >> still ahead, we will be talking about one big order, how inflation is impacting the biggest in the industry here. first, a look at how the currency markets are reacting after the fed because hawkish hikes. this is bloomberg. ♪

>> this is all when it comes to emerging and here are the fx markets here. as we get that reaction to a more hawkish outlook from the fed. this is the cash, when it comes to the dot plot as well. look at the dollar-yen. that is actually reasonably steady. we are waiting the bank of japan decision and whether more of that policy divergence is going to create further downside pressure for the yen. the big moves seeing in the

korean won. 1400 for the first time since 2009. we are seeing a flurry of reaction as well from the be ok. the be ok governor really talking about what is on notice now for the currency and other policymakers. that price is the most important factor from the be ok. they will be discussing the issue of currency going into the next meeting but also, south korea saying their external competitiveness is not weakening all of this. all of this as we see that u.s. dollar rising to a record high. we will also continue to wash the likes of the u.n. -- the yuan. we talked about the big moves in the dollar overnight. how much further is there in this rally? >> plenty more to go.

a lot of people out there in the world. it did touch the bloomberg dollar spot index. briefly going into the central bank meeting this week. the thing is that hawkishness is expected to just turbocharge it a lot higher. for a look at how much further we can go, just looking at the currencies. the dollar yen is once again under pressure. the indian rupee all touching new records this year. as long as the fed keeps hiking, the delegates can still keep going further. i spoke with david earlier this morning. he said -- >> we mentioned some of the

asian currencies touching record those. who are the most vulnerable? >> absolutely. it is definitely a rate story. the dollar yen in particular is under immense pressure. extensively, every single day with the boj expected to maintain the dovish monetary policy. it is very sensitive to global growth. as long as the fed is here with the hiking interest rate, -- lastly, do not forget the chinese yuan. once again, the divergence is playing out with the dovish pboc. this is all still entrenched in china. we could expect to see a lot more selling on the yuan.

>> that was the latest on the asian currencies. check out futures in europe opening. it is a little bit of a mixed picture. all of this after we have the stocks of the index rallying in the previous section. that was before the fed rate decision. we are headed to the central bank decision in europe. all of this including the central national bank of switzerland. we are setting up for more central-bank action there as well. president biden will accuse vladimir putin of making an update on the russian leader military escalation in ukraine. this is bloomberg. ♪

>> president biden is looking to

rally international support for ukraine following what he calls led mapleton cost nuclear threats. let's bring in clara. how isolated is put in on the global stage right now? will this embolden him further -- how isolated is putin on the global stage right now? will this embolden him further? >> remember that last week, we had the meeting where he should have expected support from like-minded leaders but instead he got the cold shoulder from china and the telling of from prime minister modi of india. and in particular, this is a pretty strong response to the speech that we heard yesterday. >> it is just a speech at the

end of the day. you see the winning impact of the sanctions, the russian economy -- waning impact of the sanctions. >> i would disagree that the russian economy is doing well. we see oil and gas revenues shrinking. there was an increase in eu sanctions. it will bring up costs for russia and bring down revenue. the important thing today is to show unity in president putin's speech. i feel that we have seen that. >> the nuclear threats, mobilization, could there be more?

what is next for letter mapleton? >> it is hard to say. it is difficult for him to go from a partial mobilization to go to a full mobilization. even at his speech yesterday, he made a point of saying that the army was being taught by professionals. this brings back memories of the first check work. it was very unpopular. whether he can get 300 people -- 300,000 people is questionable. >> let's get you a quick check of the latest business flash headlines. visiting seoul for the first time. he has repeatedly said that his focus is to take the chipmaker

public in the u.s.. samsung leader says that they could make it next month. jamie dimon has planned cryptocurrencies again, calling the digital assets a decentralized ponzi scheme. jp morgan is involved in using blockchain for financial services. a loss for american repositories coming in at an almost double of the average analyst estimate. revenue fell 67% from earlier and corporate travel is down 46%. the travel industry has been crushed by the ongoing covid lockdown. take a look at how asian markets are trading in the equity space. we are actually saying health care consumer discretionary leading to decline.

there is very little green on that board. utilities are holding steady at the moment. they are mostly in the red. -- assets are mostly in the red. u.s. futures at the moment taking a beating. even despite the fact that stocks finished lower in the new york session. they struggled to find -- the s&p 500 was higher. they are trying to divert -- digest what chair powell's message was. this could be a higher hawkish pivot. but we have heard that the pivot is dead. the pivot is dead. >> this could all play out in a very interesting way when it comes to the treasury market as well. we had that big move when it comes to the two-year. all of that is just ahead of the

fed. we had a number of guest say with the rising yields and the potential payoff, we are starting to see treasuries becoming more relevant to the portfolio there. we are seeing bond traders guarding for the risk that we are going to see, just that willingness for the fed to plunge the u.s. economy into recession with the downside just across every part of the curve. coming up next, we will get a preview of the other imminent central-bank decisions coming up next. this is bloomberg. ♪

>> this is daybreak asia. a check on markets, 30 minutes into the trading here for japan.

a lot of the action at the start of trade and what we are seeing in the fx markets here. the korean won pushing above that peak 1400 level for the first time since 2009. a lot of concern going into the market about fx reserves and whether they have been inflated as the government and central bank tried to swap out. the decision is around $400 billion. the government commenting and saying could change the fx reserve as the fx market stabilizes and the account balance, that could be concerning. the bank of korea also coming out and saying they are monitoring the fed impact as a reaction they are having in the korean won this morning. they will be deciding on where rates go from here as they do continue to assess that reaction that we are seeing. the bank of korea said it would be preferring a 25 basis point hike over the coming few meetings. they would be providing new forward guidance when the next meet in the next meeting. in terms of other assets, the

japanese yen also in focus. we are eyeing that key 145 level. you can see that at the bottom of your screen. we are seeing some positioning coming into bank stocks over in japan. they could be forced to shift their guidance over the coming few meetings. this is building into the losses, the topics are here. this is particularly in the tech stocks following what we saw in the nasdaq overnight. let's take a look at what we are seeing in the treasury space. bun trade is really starting to reference that we could see the fed really willing to be plunging the u.s. economy into recession in terms of what we are seeing in the longer dated securities.

the short and was really leaving higher. officials are seeing the terminal rates reaching 4.6%. they are now looking the most inverted since the beginning of the millennium. >> let's dive into the fed rate decision. they made it pretty clear they will keep hiking rates this year in order to bring down inflation. that puts pressure on the asian central banks. for more, let's bring in our global economics and policy editor. let me start with you. there was much more hawkish than expected. >> it showed. it puts some meat on the bones of what jay powell said when he said the fed will do enough. enough. people are saying they should do whatever it takes.

they are signaling much more aggressive rate hikes. all of this by the end of 2022 depending on which document you look at. the medium -- media. forecast is 4.6% but there are six members of the fomc that see that rate going up nearly 4.9%. this is conditional. this is conditional on them getting inflation coming down. they have to start having it come down or they may have to go even higher. and there we have another try to show you. you can see what will happen for the dot plot. by the middle of the year, they should get to the point where the real fed funds rate becomes positive. this has been the problem. you can see the far right-hand side as inflation comes down even a little bit. that is where they start to

become restricted. you can have the economy contracting. he is finally sending that signal to the markets, the american people. the job market is strong. maybe you can stay ahead of that recession. but he is willing to take the risk and that is clear. >> in light of what we just heard from the fed, this could change things for the -- does this change things for the boj at all? >> they are not going to change policy. they still have an economy coming out of the covid. inflation is rising in japan. the problem is a lot of this is due to unsustainable rises in commodity prices.

he doesn't expect wages to go up. he is not going to move. when it comes to the exchange rate, he is concerned about these big moves, quick moves but he thinks intervention is a step that could be on stabilizing. that is what we are going to wait to hear tonight. what does he say about the exchange rate? does the boj change the tone at all on that? when you look at what he has been saying with inflation, jackson hole and beyond and before, he is going -- he dug his heels into the sand and that is what they are going to say. >> kathleen talked about the japanese yen but it is not just about that. when you have the boj so heavenly -- heavily involved in the markets, you are compressing basic market moves. tell us a little bit about the consequences of what the boj is doing right now.

>> it is going to help the boj this morning. it takes pressure off the yield curve. that does continue to show the pressure of their to enforce this policy of keeping yields low at a time when the market doesn't want to go the other way. the big variable when it comes to the bank of japan, it will surely be on the yen. it is the purview of who gets to call an intervention but only a sharp turn will change the rate expectations. that will have indications on the markets as well. >> we are not done. when it comes to a plethora of asian central banks, what are you focusing on given the amount of downside pressure we are expecting on the asia? >> there is tight

indonesia, thailand. they expected interest rates higher. the slowing growth story. despite the slowing exports and external trade story, the focus is all about inflation. there will be about 700 basis points in three days in terms of banks around the world. it is all about inflation. they are putting the slowdown in growth there. that is our top central bank story. let's get to vonnie quinn with the first word headlines. >> thank you. >> the state of new york is suing donald trump and three of his children for inflating the value of his real estate company assets. it follows a multiyear investigation by dealings of the former president and his family. donald trump, jr., ivanka and eric are also named. the government of western australia has new moves to

target sexual abuse in the mining industry. notable cases of abuse of women have come through. there are all 24 recommendations here. they have been ordered to continue a hold on the $3.6 billion gas project. -- projects. they said they were not properly consulted on the plan. they have two weeks to shut down the operation or remove their veins. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn, this is bloomberg. >> a persistent time inflation is widening the gap between rich and poor and feeling anger around the world. columbia is one question -- country that adopted real

change. >> obviously, hunger leads to violence but the first thing we have to solve statewide in columbia is to bring food where the population is hungry today. >> your planning to reduce subsidies, is that going to be a problem? >> we fragmented. there we are not going to make increases only in gasoline. it will help the drivers, it will reduce the impact on most people. i'm considering subsidizing fertilizers. if we achieve efficient

subsidies, it could reduce the rising of food being reduced -- produced in the country. >> what do you make of the fact that this worsens inflation? >> inflation is a product of a deep law in columbia. what we have is a strengthening of the dollar because of the fact that it made its internal interest rate grow. it still intends to do so more and that caused a spike in the value of other currencies. the colombian peso much more. then it becomes more expensive for us. the price doubled for us due to public policy two or three decades ago. columbia decided to import more food to produce it. >> is that going to change? >> it has to change. it is what i call sovereignty.

instead of having the global food security entered into a crisis. but we have to guarantee is to produce the minimum of the food for the entire population. you have the capacity, the land, the water, even the farming culture of the country could help us. we have to take that leap to recover agricultural -- agriculture in columbia. >> we have an energy crisis but also a climate crisis. how do you balance exporting oil and carbon? >> we have an energy crisis but also a climate crisis. it is a dilemma when you have so many oil and coal exports. they are linked. the war is linked to the climate crisis. the rise in food prices is linked to climate crisis as well. they are producing fewer and fewer nutrients per square meter. that is one of the facts. convio depends too much on the export of oil and coal. today, it can get dollars

because international price is high but if it ends, the world collapses. i aspire to replace the oil economy in the short term because clumpy is a beautiful country. -- columbia is -- colombia is a beautiful country. >> you are the first leftist president and -- in colombia. are there any lessons you can take? >> about the word leftist, like any relative geographical point, there is a latin american progressivism that failed to serve the task precisely. mainly because of fossil and raw materials, that was not under control. it was not sustainable.

-- under our control, it was not sustainable. we are increasing this in a certain way. >> coming up, how inflation is impacting the world's biggest dairy exporter. all of that is next. this is bloomberg. ♪

>> take a look at this downside we are seeing. we have australian markets closed to mark the morning day for queen elizabeth's passing. the kospi is very much there. this is the dairy exporter. revenue is up 11% at 23.4 billion kiwi dollars. this is on $13.7 billion into the country economy this year. this is the apex year. it is always great to chat with you.

i wanted to gauge your view of the global inflation situation and how it has been impacting your business. >> it would impact the volatility. i think it really reflects on the fact that we have seen inflation pressure, this proper packaging and that on the back here of 25% year-over-year, a record payout. we have also seen the impact year-over-year. this takes away from some of the unpredictability. all and all, there is definitely volatility. this is allowing us to do this.

>> the earnings result was volume driven. is there a way to balance that? do you see prices holding up? how do you see demand coming from major markets like china? >> i think we continue to see great demand. particularly in our protein portfolio. that has really been the mainstay of last year. this is something very volatile that we are living. we are focusing on value. we had a challenging start to the season. no violence.

we are deftly forecasting the driving the price at the moment. we started this year strongly. >> what about demand coming from china? we are concerned about the economic slowdown we could see there. >> the profit was up 7% in china. that is a very challenging covert scenario. we continue to see demand in china. i think as we say, it comes to the covid lockdown. i would say that is the main thing about china. it seems to do that rebound some more. >> could you tell us a little bit more about how you got to the decision not to sell stake

in your australia business? >> i think the new strategy that we came out with a year ago is really driving sustainability and when we look at the economy, we optimize that business over the last few years. it has the potential to be a good supply base. this is particularly through that australia figure. it is the export option into some of those markets that are really optimized.

request that also means an impact on the return to shareholders. can you tell us how much that would be? >> we are in the sales process. that will be the bulk of that billion dollars. i think we need to wait to see what the options are in terms of the shareholders. >> thank you for your time. always good to catch up. this is bloomberg. ♪

>> this is daybreak asia. we have a check on stocks. we are nearly one hour into the trading session here. one of the sectors we are focusing on in particular is the tech sector. very red sensitive. this is a very hawkish message. we are still pointing to further losses here. we did get that index down 2% and the previous session. led by those megacap's. apple is one. we are keeping our eye on taiwan futures as well. they will be opening in about seven minutes from now. very correlated what we are seeing happening in the u.s..

this index here really outpaces those losses we did see. taking a look at the chart here. some of that is that buyback we are seeing from the company here. really not extending investor sentiment here. in terms of what we could see over the near term, we could be seeing more volatility ahead. investors are really recalibrating their expectations for the fed. >> let's bring in our chief china market correspondent. sophia, really telling us about the pressure we saw in the u.s. listed shares. even before they came out.

>> this is a risk of environment now. if you want exposure to china, the onshore you want to dominant market -- it is selling off faster than onshore. >> it would be very interesting to see the onshore reaction. efficiency a bit of an alternative there. the young very much in focus. it is hard to see any alleviation of that pressure given policy diversions. they would maintain strength after briefly touching the record. the korean won, we have seen

that 1400 handle for the first time since 2009. this is from both the bank of korea and other policymakers about wanting to see stability and a one-sided fx moves as well. that is with the currency swap. the pension fund will happen. take a look at futures. we are seeing a downside of over 1% of the nasdaq 100. clearly the pain being felt most by tech. that is it for daybreak asia. our market coverage continues. this is bloomberg. his -- ♪

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