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asia live new york, sydney, and hong kong. we are counting down to the market opens in tokyo and seoul. australia just came online. a wave of aero incursions as a fourth object was shot down over north america. china prepared to take down a craft flying over its borders. a surprise choice for the next boj governor sees the end rising and stocks falling as investors bet on the path ahead under ue ba. and capital group seeks to build investor confidence. >> at the start of the session we are online flap with little moves in bonds and fx, unsurprising given we have a wait and of the key inflation print do in the u.s. tuesday, the true litmus test of the fed's ability to knock over inflation. now it is really about the

feds's path ahead and what happens with the bank of japan, the other big story this week. the nominations for the next governor are due tuesday. we had been expecting amamiya to take the helm and it has changed to a surprise move towards ueda who has been interpreted as having a hawkish tilt. some traders say that is overblown. the yen is starting to steady in these early trading hours. >> a steady start to u.s. futures, pretty muted after we saw u.s. stocks gaining ground friday. this is of course after a weekly loss, the biggest loss since december. we are talking about the new year's bullishness quickly fading. we continued to see the global equity outflows as well. the nasdaq 100 is really underperforming given it yields continuing to rise with that treasury selloff, the worst in 2023 on a weekly basis. look at crude prices extending

those losses towards low 80's dollars per barrel. -- below $80 per barrel. >> another i -- unidentified object shot down over michigan, the fourth time in eight days a highflying balloon or other craft has been brought out over north america. chinese media is reporting that an unidentified object has been flying close to a major naval base in qingdao let's bring in our china editor and d.c. editor. tony, we have been hearing from the pentagon giving more detail as to the craft that was shot down. what do we know so far? is there that china connection? do we have to wait until that debris is collected? >> short answer is, not very much. dez has just been coming in over the past hour or two. we have now been told by the pentagon that this was an object

that was tracked earlier, then, the u.s. more or less lost track of it ended then it reappeared today over lake huron in michigan and they shot it down. there is a senior official in the biden administration that was saying, describing this as an octagonal object with no apparent payload and that is about as much as we have on that particular one. there have been two others now over the previous days, not counting the one that the u.s. says is a chinese spy balloon. we also do not know much about those two others. the u.s. has been very cautious about describing them in any way, certainly not blaming china at this point. >> john, what do we know about the alleged object flying over

china as well? >> we know they identified the object flying in the city of qingdao where there is a large naval base end where chinese aircraft carriers are made as well as nuclear and ballistic submarines. obviously it's a very sensitive side. i think this underlines the situation, the level of tension now between the two countries. that any object in the sky that they cannot identify the objects are shooting at first and asking questions second. >> john, where do we go from here when it comes to geopolitical tensions between these two powers? >> well, we don't seem to be anywhere near de-escalation at the moment. obviously, over the past week we had three objects shot down over north america. another one potentially shot down off the coast of china. so, looking forward, it's hard to see where the offramp is at this point. >> let's turn to the boj.

this economy is the surprise pick to become the next bank of japan governor trying to manage the policy path while maintaining market stability. our global economics and policy editor kathleen hayes joins us now with the latest. kathleen, this was quite the surprise. do we know at this point what we can expect from ueda? >> i don't think we can exactly. we know the challenges he faces when policy normalization has to start at some point at the same time when many economists and policymakers might agree, not just yet and is certainly not quickly, while, the markets want to push against that, at least to the last couple months for governor corona. this talk about who he is. kazuo ueda. a policy board member 1998-2005. he helped introduce quantitative easing, the bond purchase

program for the first time. he helped a vote in negative rates. these are things that carried over into abenomics and kurodanomics. he said that "current policy is appropriate and monetary easing needs to be continued at this point." and a policy review should be done at some point in the future. we do not know if he is a hawk or aid of. he will be the first academic to head the boj, usually they go back and forth between someone from the bank of japan and the ministry of finance. the markets expect the ycc to be scrapped sooner or later. yield curve control is not working is the view of many investors. the lp -- the ldp chief in the last few hours said the government supports monetary

easing now. that is a signal that the government is probably still leaning in that direction. one big reason for this is japan has a very large government debt. they are also introducing defense spending that will cost a lot of money. if you have a big deficit that is getting bigger, do you want your interest rates, the financing costs to go up as you are trying to do that? that's a big consideration hanging over all this. i want to mention the two deputy governors. the woman was considered almost a shoe in to be one of the deputy governors did not get it by the financial -- former commissioner of the financial services agency, the ministry of finance, fills that slot for the bank of japan, for these choices. uchida, the bank of japan executive director played a central role shaping monetary policy, kuroda policy. he might help ueda maneuver what

is next with the monetary policy. there is a lot going on at once. definitely a surprise. doesn't it feel like we are already getting used to it trying to figure out what will happen next? >> global economics and policy editor kathleen hayes. let's get more on the markets side about the boj news. garfield reynolds is here. we had the straight up reaction in the yen. was that knee-jerk? what sort of premise are markets operating under at the moment? what the immediate premise is if it is not somebody from within the boj, that means they are more hawkish. the doj has been -- has boxed itself in a situation where it has to stay ultra dovish, even when it was concerned about the side effects of what was going on, so it weeks policy. in order to improve the function

of the bond market. everybody ran with that. oh, they will normalize policy and the function of the bond market became even worse. so somebody that's not in the bank of japan is seen as having the potential to take some real steps towards normalizing policy. now, ueda's statements since make it clear he is now out -- not an out and out hawk and may be more flexible from somebody inside the existing bank of japan hierarchy could be. he may be able to either stick with the current policies if he deems those appropriate or mauve -- move towards normalization and have some credibility he is doing this as a matter of what is the best policy, not to protect kuroda's legacy. >> for the federal reserve how much flexibility could we expect this week's cpi numbers to provide? >> that depends on what comes

down the pike. although, one of the things that the fed has been very, very clear about what they don't want to be is they don't want to be too flexible towards the idea of easing off on restrictive policy too soon. they want to draw from the lessons of the 1980's. they want to be completely certain that they have got inflation moving down towards a target, or even get it into the target area before they stop hiking rates, let alone, before they go to lower them. i mean, that is something the markets have had a great deal of tension with the fed about. because, markets are sort of, well, when will you stop? when will you stop cutting? when will you deliver the rate cuts we love so much? that will remain attention and even if we get a soft inflation number. if we get a hot one, that could

cause a lot more volatility for a market. >> we saw what happened in september of last year when the s&p 500 fell more than 4% on disappointing price data. garfield reynolds, good to have you as always. bloomberg's chief rates corresponded for asia and live contributor. vonnie quinn has the first word headlines. >> the party of the german chancellor olaf scholz failed to win in berlin for the first time since 1999 treats support first show show democrats fell from 21% to 19% behind the conservative christian democrats, 28%. the result is a blow to olaf scholz's party has been trailing in national polls since mid-2022. adani's conglomerate have to it's revenue target and scaled-down capital expenditure. the growth target is 15%-20% down from 40% focused on repaying debt, as it scrambles

to undo damage from the hindenburg short set of reports. a record number of new chinese loans in january but consumer borrowing remain subdued. higher than both economist estimates and the year on your figure. loan growth stronger this year after the pbs he urged lenders to frontload credit extension as parts of efforts to turn the economy around. i am vonnie quinn. this is bloomberg. >> ahead, more on the leadership change at the bank of japan. no mara --nomura's head of ethics -- fx strategy will be here. >> this is bloomberg.

>> counting down to the start of trading in soul. stories out of korea. trade dating for the first 10 days of february. on monday we expect a record trade deficit in january. we are watching gs holdings, hyundai department stores releasing fourth -- fourth quarter earnings.

we are watching the entertainment arena as well. the messy battle between hybe and kakao unfolds. >> the activist investor backing hybe's bid for a bigger stake in entertainment ysaline capital management and we are joined by its ceo lee changhwan. tell us more about your position here. you said hybe's offer price for sm entertainment is too low. give us your rationale. >> thank you for having me. the latest disclosed position in sm entertainment is about 1%. we did not disclose any further information. our ask to hybe is given that the board announced the new plan sm 3.0 that goes from a single producer into a five plus

producing system to increase the volume of the new songs and lunches of new idle groups -- launches of new idol groups, we hope the revenue can double or triple or more in the next three or five years. given that i think that the 120,000 korean want ---won offer price is too low. it needs to be meaningfully upgraded. we will come out with a presentation in the next couple days. >> what do you plany to do with online stake in sm if hybe goes along and offers a higher price? >> the two things we ask for hybe is one to increase the share price and they are offering to buy 25% of the state from the public. there will be 60% remaining

public block there. that could be a problem for shareholders because there will be a significant conflict of interest between hybe and sm entertainment if they do not buy 100%. we will push them to buy the remaining 60% as well at the same price. if they do not give on that point i think we will discontinue our campaign and our work to demand the complete buy out. if they actually do that, and they take the company private, yes, we will be able to sell. but, right now, the hybe plan is just a by 40%. i do not think right now their plan is to buy the entire state. 9 what -- >> what do you think kakao should do, come back with a higher offer? >> i don't know, but it will be pretty weird. korea is different from other parts of the world. if you own a 30%, 40%, and

control board you control basically everything. if kakao ends up disowning 90%, that will be pretty weird. from kakao's perspective it will just be giving money to hybe, $200 million. i think it will be pretty weird. we will see. if that will actually -- if that actually happens, kakao will have to do something to defend their strategy position. but i am watching. hopefully, there is some product development. but, it is hard to tell at this moment. >> as an upcoming board member i am curious as to whether you see the potential for internal strife. as part of this, we know that a lot of these artists and producers, in kapok, k-pop have an intense loyalty to fans. do you think this will create problems down the track?

>> no. right now, the new board, the ceo, the founder is now out of the company. he retired from the company like 10 years ago. he has been the producer as the contractor with the company for maybe the last 10 years. but, yeah. he has been running around. he has been the producer. but the day-to-day work has been done by the management. ed, the people there. so, -- and, the people there. so, sm management end of the board are basically now all one together. even the artists, by understanding is they are all supporting the new plan of sm 3.0 even after the retirement of lee. so there should be no issue. i think that what will be an issue is that if hybe ends up acquiring 40% of sm and trying to control the board, that could create some problems because the

employees and management of sm have very high pride. becoming one of the labels of hybe. think about the prospect of the artists. that's also a big change. i am a little bit concerned that if that actually happens it might undermine some of the morale of the employees and artists and there would be some strategy changes in the direction of the company. >> yes. because, there is an understanding that his influence at the company has been big despite the fact he retired years ago. do you see him responsible for perhaps some of the corporate governance problems we have seen and sm? >> yeah. the key issue of the corporate governance was really driven by sm lee, though he officially retired from his position as board member in 2020 -- 2010.

he had always influence over the company, a contract with the company receiving 6% of revenue or 30% of operating profit every year. there were other tunnels into the company where he had steaks in affiliates and subsidiaries of sm entertainment, doing business with sm entertainment. many of these issues were done with transactions and contracts between sm management, appointed by lee himself. that was one reason we came out to run this campaign. ultimately, the board decided to announce independence from the founder and decided to work with the entirety of shareholders, the company, and the people. >> assim -- sm management agreed to new proposals including the board seat. i am wondering what your end goal is here. what is the end goal with sm? >> for me, my key point is to

maximize the company value and shareholder value. we think that rather than spending a long time with the management it is best to support the management direction and the strategy of sm 3.0. there will be multiple announcements by management. we think that by supporting that plan, the company can grow, more than triple, in the next several years. and, become a very substantial entertainment company globally. we think that would maximize shareholder value long-term and once we achieve that, i think we will exit. i mentioned that i was going to join the board personally at the end of this year. we will see what happens after the announcement by hybe. but my plan is to support as a board member the management plan for the growth, the new plan. >> tell us a little bit about

the history of korean shareholder activism through the lens of this hybe/kakao battle over sm. how much progress has been made on this front? >> yeah, so, the history of korean activism in general, right. yeah. so, it will be a pretty big frustration, friendly. so, korea, the legal system, the legal protection for minority shareholder rights is really limited. korean people as a group decided to really give the control, the power, a lot of power, two small families. to make big decisions without discussing other shareholders. so, that allowed the past decisions of capex investment for the past several decades. but because of the legal framework of korea, shareholder activity has not been very successful.

the families and donors -- and owners, we call them owners if they control the board, they did not have to this into what other shareholders had to say. that is one reason why kospi has been so undervalued. 50% of taiwan maybe one third or 25% of the u.s. in terms of pdr. then there is some significant change in the landscape, especially the political landscape. the covid outbreak. the korean version of the movement happened in 2020. the number of retail investors tripled. it was originally 6 billion -- 6 million people investing in the curb in -- korean stock market in 2019 and 2021 it grew to 40 million people. it impacted the media and political landscape and people

started to invest in u.s. stocks. overall people now have better understanding of shareholder activism. compared to the cases of elliott, for example in 2015 or 2017 when they ran campaigns against samsung and hyundai, all of the korean media demonized them as greedy for investors and -- attacking a korean company. now people better understand what this actually means because they have better experience investing in the u.s. market. there were some legal changes in the last two years. there will be upcoming changes as well and of the government is trying hard improving the legal framework for an already shareholder rights. they are making changes for the korean kps[i to be included --kopsi to be included in the developed market index. the sm board decided to announce

independence from its founder that owns roughly a 20% stake. >> lee changhwan great to talk with you, align partner's capital management ceo. catch up with that interview and past conversations on tv go. dive into securities or topics we talk about. send us instant messages during our shows. there is plenty more to come on daybreak: asia. this is bloomberg.

>> this is daybreak asia. china is set to take down an unidentified object. according to the chinese news outlet authorities are preparing to secure the object close to a

port city home to a major naval facility near qingdao home to ballistics and nuclear submarines and china's first aircraft carrier. the u.s. shot down a third unidentified object sunday over lake huron in michigan the latest in a series of aerial incursions over north america since a chinese balloon was shot down earlier this month. two other objects were shot down over alaska and canada friday and saturday. the white house says it's too early to characterize those objects. the two earthquakes in turkey will cost the economy $84 billion, 10% of gdp according td business confederation. it's based the calculation bomba 1999 quakes near istanbul that killed 18,000 people. this quake was deadlier with almost 35,000 confirmed dead and many still missing. india is discussing with other g20 members way to develop a regulatory framework for

cryptocurrencies. the finance minister told a media conference one country alone cannot do anything in terms of regulating technology driven assets. while india does not ban trading in crypto it introduced a harsh tax rate last year. global news powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn and this is bloomberg. >> adani's conglomerate making big changes to restore investor confidence following claims from hindenburg research. annabelle has been tracking the latest on the story. have we seen some fruits of their efforts to try to restore market confidence? what else are they doing now? >> making very big changes, heidi, to their capex plans and growth plans on a revenue basis. that is what we are hearing from sources. projections are revenue growth of 15%-20% over the next fiscal year at least. compare that with where we were

earlier, looking at projections around 40%. capital expenditure is looking to be revised down as well. the priority is really know about conserving cash, repaying debt, but teething -- retrieving shares. even though adani group denied the allegations in the hindenburg reported did not stop the mark itself. it was back into play friday. themsci also looking at shares in free float. so, on a market cap bases still north of $100 billion. but holding back on investments for even just three months could save the conglomerate as much as $3 billion, cash that can be used to pay down its own dead. the plans are still being reviewed. they could be finalized in the next three weeks. >> we still have not heard much from india's government on the matter. >> that's right.

it's been interesting. modi, the prime minister gave two addresses in parliament and in neither did he address adani. the finance minister as well has been pretty quiet on the matter. it came up again over the weekend. the finance minister basically once again deferred to regulators here and say are well-versed on the matter. she did not want to comment on the government's possible response to indian courts as well on the adani issue because the supreme court asked the market regulator to prepare a brief report detailing the existing regulatory framework and put in place some mechanism. -- mechanism to stop this sto ck market affecting small investors as well. as you said, so far, the government is quite quiet on the issue and continuing to do back to regulators instead. >> and about roller's there

joining us with the latest on adani. >> coming up, the head of n omura fx strategy joins us to talk about kazuo ueda's likely nomination as the bank of japan governor.

>> it's time for japan ahead. of course, the big story this week. the economics professor and former bank of japan board memberkazuo ueda poised to lead at japan's central bank. kathleen hayes has more on what is at stake. >> no matter who is finally selected by prime minister fumio kishida, the big question for the next bank of japan chief will be maintaining extraordinary monetary stimulus are taking the first steps towards policy normalization. once seen as a top contender for two of the deputy governor slots says examining kuroda's impact on the markets is on the table. >> the bank wants to gradually move towards normalization in a way that does not cause major turmoil to the bond markets while watching the economic and financial situation carefully.

but the next governor of the bank of japan is taking over at a time when deflation has turned into inflation. when the bank of japan now owns more than 50% of japan's government bond market and is struggling to keep it functioning smoothly. what will it take to get the job of transition done? >> inflation is up and we think wage growth will be up. our view is yield curve control will be dismantled at second quarter and japanese yields should be higher. >> others say the next governor may widen the bands for 10 year japanese government bond yields but for the foreseeable future the yield curve control model is here to stay. >> yield cap control will be around 1.75%-2% rather than the .5% we have right now. but the operatingofhe yield cap control being in place, the bank of japan committing in its budget to a very strong warchest to buy government bonds, i think that

operating model will not change. >> will the new governor make the kind of changes investors are pushing for as the prime minister pushes for a review of the bank of japan's decade-long commitment to 2% inflation? it is an issue that will be at the top of their list. kathleen hayes, bloomberg, tokyo. >> the prospect of the bank of japan moving tomorrow -- to normalize policy is key for the trillions of dollars of investments managed by japanese insurers. it lets bring in chief market editor david ingalls. what is it mean for markets? >> it has been a topic of conversation for about -- the most part, the last 12 months. when you look at the amount of assets, not just that life insurance in japan are sitting on, the gpif, the pension fund, other big funds, these are enormous stacks of cash. take the example of life insurance. shout out to our colleagues at bloomberg intelligence for putting this research piece

together. this is 3 trillion, but 40% in jgbs. they have decreased the amount of exposure to foreign bonds these last 11 straight months. this brings us to a key point. the prospect of normalizing policy in japan, in simple english, that means may be higher rates, may stronger currency. it actually does add to the allure of bringing most of the money back again on shore. especially, when you consider things like hedging costs, for example. i think we have a graphic that will give you a sense of how much it costs right now if you are a yen investor to hedge the yen exposure in various currencies. take these numbers. we have taken these numbers and you use this as -- well, you take the difference between, say, the nominal 10 year treasury are the 10 year guilt or the 10 year bonds. you take these various measures

of costs, the hedging cost essentially, and you take the net amount, just simplifying this down, you essentially get jgbs. if you are in japan and a yen investor you get jgbs offering you a lot more yields than would be the case if you had put it outside and were having to pay a lot of these costs. we have a chart that shows this. that is academic in a lot of ways. the point being is, the prospect of higher rates in japan moving forward, even if hedging costs come down, that is still a very big difference. it is sort of the incentive, as we speak. to look at japanese bonds, especially if you are a japanese insurer. that is probably the best proposition now relative to everything else, in the fixed income and government bond space. >> david ingles with that analysis. let's gets more with our next

guest, the managing director and head of fx strategy for japan at nomura. this chart shows the initial reaction when it comes to ethics traders. the news of the nomination took everyone by surprise. there is an element of potentially the traders being -- misinterpreting this potential nomination. do you think it is a straightforward hawkish tilt for policy, and therefore, beneficial for the yen? or is it they're just not enough we know so far about us not many. >> yeah, so, we were surprised by the news about the nomination of ueda to be the next bank of japan governor. his stance at the moment is not very clear or well understood by investors and based on previous

comments i think he is relatively neutral relative to our hawkish candidates. -- more hawkish candidates. in 1998, he was a board member that actually voted against policy. so, he may be somewhat more dovish than the market currently expects. but, it is an important point for bha policy at the moment, clearly a fundamental story is suggesting the bank is more likely to consider normalization for its monetary policy after this nomination. even with a more neutral person, it's clear he is more likely to be more hawkish than the current very dovish governor kuroda. the bank of japan policy stance

would be somewhat neutral going forward and monetization is necessary. i think it will still be positive for the japanese yen in the medium term. >> he does not necessarily take us closer to normalization or potentially another look at yield cap control. what are the biggest risks if this happens faster than expected? >> what is interesting with the comment to a japanese newspaper is he understands the exit policy, the exit strategy. as we experienced in australia, yield cap control policy is difficult because guidance can accelerate investors sitting in the market. therefore i expect governor ueda to be relatively quiet apart a mental hearings, the 20 -- at

parliament to hearings, the 24th of february because he does not want a spike at the moment. but even if he sounds dovishh at that parliamentary hearing, i think there is a big surprise for the bank of japan because exiting yield cap control must be a kind of surprised to avoid any kind of speculation beforehand. in this regard, i think there is a high base on that yield cap control tweak. i think the yield cap will be higher going forward. >> how are you factoring in the global macroeconomic picture? this week we expect u.s. cpi numbers. depending on those, we could see the greenback also moving very strongly. >> that is bright. recently, we have some recovery

in australia thanks to a very strong payroll and somewhat hawkish comments from the fed compared to data. i think there is more room. another gap between the market and the fed is the market is now pricing nearly a 5.2% terminal rate. that is as of december. the gap is now much smaller. therefore, we have very strong u.s. data. i think it will be difficult for u.s. data -- the u.s. dollar to keep appreciating against the japanese yen. weakness 125 by year end is quite likely. and the bank of japan will price the market in april or june and

i think 125 can happen even sooner. >> we know how much of the bank of japan's actions in the past decade have distorted the market. what are you watching for when it comes to the winding -- unwinding of all these actions? website think the market can be volatile. but, the point is the new governor at the january meeting, up to 10 years. so far, operation is five for the year but can encourage japanese banks and financial institutions to purchase for up to five years. i think that if yield cap control is disrupted it is likely to have an impact for 20 years.

but up to five years i think the bank of japan can control the pressure on the yield curve. we should expect further guidance to also be changed. after the yield curve control is scrubbed to market control expectations over the next two to -- two to three years. i think yields are still relatively stable, more important for the japanese economy or financial market as a whole. >> great to have uss -- you with us yujiro goto head of fx strategy at nomura. more ahead on daybreak: asia. this is bloomberg.

>> chemicals giant lg chem is prioritizing securing critical minerals for ev batteries while securing climate goals. in an exclusive conversation with bloomberg the ceo discussed continuing supply chain issues. >> i think we are going through the bottom of the downside curve as we speak. so, i think the first quarter be the bottom.

of the petrochemical cycle. which is good news. in fact, we can only think about going up from here. whether or not the up cycle starts with some kind of sharp increase like a v curve, which i do not think will happen. i treat it more like a slow recovery because there are some other elements, geopolitical, geo-economic issues surrounding those. >> you agree with some in the south korean government that claimed the ira is a betrayal by the united states to the partners they have here in south korea, whether it is hyundai or other automakers that have been building plans? >> -- plants? >> when it comes to the ira there is a government tried to convey their message. different countries are trying to convey their message. i think it's a process of collecting all those voices. friendly, it is picking, -- frankly, it is picking from what

i understand and probably trying to nail down some of the details that have to be nailed down and narrowed down, frankly speaking. and i am sure even the u.s. government does not have all the answers to satisfy everybody in the supply chain. >> how do you mitigate against fluctuations in raw material prices in particular in things like nickel? >> we are repairing ourselves for, first of all, the secure supply of raw material, which is more important than the price. what if you don't have material to produce? then the price become secondary. so our first and foremost priority is to secure raw material for the future. so we are doing a lot of projects. with suppliers and players to make sure that we have a stable source of supply. number one. number two, pricing to the extent that we can probably move up the value chain just a little bit. i do not think we will ever be a mining company.

however, if there is a mining project, of lithium, for example, that makes sense, maybe, we can invest a minority share. >> how are you addressing the climate crisis? i know hydrogen is a big push. there is a new plant where you are planning for green hydrogen. dare i say, the reputation of the petrochemical industry is that it is a dirty process. >> we have a daunting goal of reducing 20 million metric tons by 2050. so i think we are fully committed to deliver net zero by 2050. we are doing it in three ways. first, direct reduction. this is mainly processing technology using more hydrogen and really investing in technologies like ccu, carbon

capture utilization. we are investing a lot in those areas and we are doing all kinds of methods to make sure there is a secure amount of renewable energy in korea and overseas plans as well. the last one is compensatory tactics like a cookstove project in africa to make sure that we also contribute to co2 emission reduction in other countries while we are getting the credit. >> that was the lg chem correspondent speaking with our chief norse asian correspondent in seoul. dbs group reports a surge in fourth-quarter profits and tail when increased net income 69% on the year to 1.6 billion u.s. dollars. the bank announced a special

dividend of 15 singapore cents per share. floor delays reporting a loss of a provision of u.k. government action. the provision relates to remediation work on residential buildings. the company expects core operating earnings to improve in the second half despite risks including inflation and interest rates. the financial times is reporting goldman sachs ceo david solomon jody -- said he should have active sooner to cut jobs. he told about 400 of the bank partners in a private meetings that the layoffs would have been less drastic had he reacted when signs of a slowdown emerged. goldman is slashing 6.5% of its headcount in one of its largest rounds of job reductions ever. >> these are some stocks we are watching when trade opens in japan and south korea. softbank laid off about 95 employees last week to cope with a challenging business outlook.

market time bank published a pre-deal report for prospective investors ahead of an april listing in tokyo and tokyo think expects to spend about $76 million to raise production of materials to use in ev batteries in the u.s. and china. fourth quarter profit beat expectations raising the stock to a buy. also hybe, sm entertainment, and kakao, their corporate battle continues to unfold. in the next hour we discussed em asia risks being understated. this is bloomberg.

shery: this is daybreak: asia. we are counting down to asia's major market opens and potential

reaction to the surprise pick to head the bank of japan. and we could see a lot of volatility already from the u.s. cpi numbers coming out tuesday. the expectation is for the headline to ease but core cpi remain sticky. haidi: this on top of heightened political jitters. we have four of these incursions into north america airspace. the pentagon expected to brief with further details of the latest incident this hour but we continue to watch for the implications on the relationship between beijing and washington. shery: and what that means for supply chain disruptions -- what could this mean for the global economy and we could be getting an indication from singapore. we are getting gdp numbers from 2022, extension of 3.6% which is below the estimate of 3.8%.

their fourth quarter gdp has been revised downward for growth of .1% quarter on quarter. the estimate was for .3%, so a little disappointing, but showing the resilience of growth for 2022. we are talking about the expansion of 3.6% and this as we continue to look ahead to more slowing down of the global economy. manufacturing is shrinking and perhaps that could signal this trait-reliant economy and could see some pressures had. let's turn to belle on how we are setting up for the session. annabelle: what is driving it is the pricing we are seeing, the market seeing the peak in the terminal rate at 5.2%. compare that to a few weeks ago,

little less than 5%. in japan, a lot of the focus this morning on what's happening with the central bank there given we do have a nomination for who will succeed governor kuroda expected to come tomorrow. we had been pricing around and mmo we led boj but the initial interpretation was it would be a more hawkish tilt. some traders purchase -- some traders saying that is perhaps a little overdone. still a lot of expectations in the bond markets as well because traders will be pricing for a shift away from its easing policy and we had seen bond futures ticking lower for a sixth straight day. in terms of stocks, coming online in the red and we will be watching bank stocks in particular because we have seen that sub index moving higher, around 7.5% over the course of this year.

we do have some headlines -- you mentioned fears around the outlook for global growth. south korea is an extremely important bellwether and we are continuing to see exports there on the first 10 days of february. they gained nearly 12% year on year, so perhaps a more positive indicator coming through in terms of that front. imports still weaker year on year but in terms of the market reaction, we are looking weaker at the start of the week in korea. also keeping an eye on the korean won because it's coming off its biggest weekly drop in more than a decade. sk security says the trigger was the jobs report last week. that start the repricing on where the fed ends up. the inflation print to will be the litmus test for traders whether the fed is managing to tame inflation. those macro concerns also

showing up in australia. we have a six 200 lower. brent crude reflecting fears around global slowdown, but we also have the rba under a little pressure. we have governor fronting two panels and we understand from the country's finance minister chambers that a review into the rba is ongoing in terms of its communication strategies. haidi: we do have some more breaking news when it comes to the alleged china spy balloon. this coming from the u.k. -- they are set to launch a security review over these chinese balloons that were shot down over the u.s. and have captivated so much of the world. we've seen further developments of other unidentified objects but we are hearing from the defense secretary of the u.k. to work with allies to analyze intelligence, warning these balloons may have already

crossed over to the u.s. ben wallace has said these balloons probably spied on the u.k. china maintaining these balloons are civilian and for climate use. shery: let's go back to the breaking news on singapore's economy, growing by 2.1% year on year in the fourth quarter, slower than last orders expansion and below analyst estimates. let's bring in our markets coanchor and chief correspondent for southeast asia. what do these numbers tell us about the resilience about the singaporean economy right now? >> it slows a showdown. these data are backward looking and it's important because singapore is seen as a barometer of the global economy. there is an open economy, so the data of what is to come for the rest of the world. a miss for both year on year as well as quarter on quarter.

2022 growth coming in at three point 2%. the estimate was 3.8 and for the quarter, 3.1 versus 3.4. both a miss for singapore. if you look at the breakdown, you see how manufacturing slowed down. 2.6% versus an expansion. growth in wholesale trade sector slowed to 2.4% from 1.4%. the retail trade sector down, it grew by 5.1%. the growth was more than 8%. across the sector, we are seeing a slowdown. not surprising. exports account for 1.5% of gdp so it is very much key to singapore. you have heard from the likes of samsung electronics a slowdown going forward. it is a key sector for singapore, so it is not looking pretty. inflation high, rates, high, and

that is impacting singapore's to mastic demand. on all counts, we see a slowdown going forward. shery: catch her exclusive conversation with the singapore economic evolvement board chair on google markets asia. this as we get reaction from the monetary authority of singapore, the defective central bank after that economic data. an official there, the deputy managing director speaking at a briefing saying the monetary policy stance remains appropriate, that policy tightening is slowing inflation momentum singapore is seeing right now. they left the singapore dollar trading near the middle of the currency band -- currency band. that is to be held in their april meeting according to bloomberg economics. our next guest says em razor

risks are significantly underpriced. joining us now is the head of economics and strategy at mizuho bank. rate to have you with us. tell us about the rationale behind the point you think the risks are underpriced because we have significant optimism coming from china's reopening. >> i'm going to turn that on its head and say that is precisely why the opportunities are overdone. clearly with the reopening's here having to defer somewhat to rising geopolitical risk, that spillover on trade might have an impact for reasons of real trade as well as in terms of capital flows that may or may not get somewhat nervous about the state of affairs against the bank of

high u.s. interest rates and perhaps compromised trade flows coming into the region. these conditions set up higher risks in the region. if you look at the spreads between sovereign bonds versus u.s. treasuries, they are exceptionally low levels, suggesting risk premium here is very suppressed. that could partly be due to the part real returns in asia were really accentuated by very high u.s. inflation. u.s. inflation decelerates and if u.s. remains sticky, that is also eroding quickly. shery: we are already seeing that reflected in the data, whether it's south korea, we see the daily average exports falling 13.5% year on year and the trade deficit at almost $5 billion which come up for an economy that depends heavily on exports is not great, including

singapore where that gdp numbers have been revised downward. who are the most vulnerable when you talk about this rising em asia risk? vishnu: by and large, as you pointed out, the trade-driven economies would perhaps be feeling the brunt of this in terms of net exports. usually it is a strong inflow and any headlines could have a dampening effect. if we were to look at this as a larger risk and comforting geopolitics as well against the backdrop of high u.s. interest rates, the financial risks are being driven in areas between deficits and high inflation. asset classes may be somewhat more honorable under those

situations. the relative offer comes from there could be a sticky recovery such as the korean won or peso. if you do get gathering further, then it may not fully offset what could be a greater dent on demand. for now, the risk to the region, whether other sectors hold up is the question. haidi: i have to get your reaction to the surprise nomination for the bank of japan. does this change the calculus for you? you have pointed out that boj is in a tough place. vishnu: that is a really good question. it is a risky position to just sit on my hands and say it does not change the calculus. i think it remains very nimble

but as markets are exhibiting to some extent the real low hanging fruit here is to move interest rates out of negative territory back to zero and that is why bank stocks are getting some relief because negative rates have not been good for banks. whereas yc see in the broader policy, there may be tweaks to eliminate pressure but i don't think there will be a major overhaul to turn the policy hawkish at this juncture given this is where we are seeing rising risks to demand. what the bank of japan has going for it is the pressures on the yen are farmer more diminished now than they were last year, so it does give them a bit more policy space to watch and assess the situation rather than being fostered near it. haidi: what is your gauge as to where the dollar goes question mark obviously with the

inflation numbers we get this week, but the pump located road ahead for the fed, does that give us a clear idea of where the greenback goes? vishnu: i love the tough questions, haidi. 1 -- [laughter] i'm going to refrain that question. i'm going to tell you how it is going to go. it is not going to go silently. this time around, peak dollar is not in the dollar rolling over and playing dead. it is far from that. we continue to think fragmentation risks for the ecb remain significant even if it is not acute and clearly, if you are looking at it from any mh perspective, just betting on long em it's -- whether on the fed peak, it seems precarious and dangerous. shery: thank you. always great having on.

thank you for rolling with the gold questions. let's get to vonnie quinn with the first word headlines. vonnie: the two earthquakes in turkey are expected to cost the economy $84 billion, about 10% of gdp. it-based calculations on 1999 quakes here is double that killed 18,000 people. this month quake has been far heavier with almost 35,000 confirmed dead and many still missing. the party of german chancellor olaf scholz has had its worst election ever, failing to win their for the first time since 1999. support for the social democrats fell well behind the conservative christian democrats at 28%. they results will be seen as a blow. chinese banks extended a record amount of new loans but consumer borrowing remained subdued.

financial institutions offered $719 billion of new loans last month, higher than economist estimates and year on year figures. the pboc urged lenders to frontload extensions as part of an effort to turn the economy around. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: let's get a look at some of the movers and we continue to watch the entertainment. annabelle: this is the biggest mover so far for japan and korea, leading, no real big update except we did have that interview with the activist shareholder earlier and he is pushing to buy a 100% stake in ak pop pioneer. of course kakao would be the major loser given they had been the second-biggest shareholder in the company had of this announcement.

this is the state of play in the korea but we are still focusing on what's happening with japan. more on that ahead. but in terms of what we are seeing for the japanese lenders, they are gaining. that's on the anticipation the next governor at the eo j would be forced to change settings and possibly also on rates. shery: still ahead, we will delve into that potential policy change coming from the bank of japan and intentionally the domination of kazuo ueda. and an update just had. this is bloomberg.

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haidi: take a look at how japanese government bonds are trading in the early part of the morning session. we were expecting to see more in the way of fireworks. we saw jg futures falling at the end of the week, the benchmark yield rising about one basis point, but still looking at that reaction when it comes to the surprise news of the nomination potentially going into the

confirmation of kazuo ueda with that first policy meeting and that herculean task, japan bonds looking for that kind of exit timeline as well. shery: whoever becomes nominated will face a rough ride facing the policy path while maintaining market stability. our economic policy editor, kathleen hays is here and the expectation is now that kazuo ueda will take the helm. kathleen: he has a tough road to hoe. when he was asked on friday, the news was raking, what do you think about monetary policy, he said it is appropriate at this point and monetary easing needs to be continued at this point. the question is what is he going to do down the road? is he a hawk or dove? let's look a little at who he is. he's a respected academic. he got his phd from m.i.t..

he is a university professor in tokyo teaching economics. he has not been in the spotlight lately. he was a member of the boj board from 1998 to 2005 and help introduce quantitative easing and negative interest rates. when they needed to get devilish, he was on board with that. he is someone i think who is viewed as a realist who knows he has to walk this very narrow path between maintaining that easing but still looking at market pressures and how it may have to be adjusted because the first thing, it looks like the bond market is starting to push up against the start of that yield curve ban with the 10 year jgb. in terms of what the government is thinking about all of this, they play an important role in japan. and fumio kishida is why he is said to be the next boj governor.

he is certainly going to be watched for his reaction to the yield curve control and how adeptly he can contain monetary easing and the government facing a big budget deficit. when that is only going to get bigger on the defense spending when that kicks in and you don't want your boundary at -- your bond yields to be rising a lot. shery: kathleen hays with the latest on what to expect from the boj as we continue to watch the latest elements around the downed objects across north america. we are hearing from the assistant secretary of defense briefing reporters, saying there was possible danger to civilian aviation, that objects had neared sensitive military sites. the reason objects don't pose genetic -- kinetic threat but the u.s. is scrutinizing airspace as we saw four objects being downed in the past eight

days. let's bring in rebecca choong wilkins. the u.s. has been very careful in not directly linking this with china, but what do we know at this point? rebecca: this is the fourth balloon or aerial object they have downed in eight days over the u.s. or canada and there have not been an enormous amount of details, it is smaller than the first chinese balloon that was discovered and downed, but there is no confirmation it's even a surveillance balloon. officials have said biden is acting out of an abundance of caution. the other two balloons that were found before this one, the u.s. senate majority leader, chuck schumer, did say were linked to surveillance but ultimately, we don't really know where they were from. there was some speculation they

may be from china. that would be one thing to watch very closely now. shery: we are also watching an object over the skies in china. what do we know about that? rebecca: china also now moving in and identifying one object. not a lot of details, but civilians were warned there could potentially be dangerous. it will be interesting to see whether or not this becomes a central narrative that china uses to push back against some of the claims the u.s. has made. it's important to rembert china maintains that first balloon that was bonded -- that was spotted was a civilian balloon it was blown of course. shery: we will continue to watch the latest developments. we have more to come. this is bloomberg. ♪

haidi: a quick check of the latest business flash headlines. ella gk moving to prioritize use of batteries. the company is working on establishing a self-sufficient global supply chain. it includes potential department -- potential partnerships with mining companies. >> we are preparing ourselves for first of all the secure supply of raw material which is more important than the price. if you don't have material to produce, the price becomes secondary. our first and foremost i ready is to secure enough raw material for the future. haidi: dbs group has reported a surge in fourth-quarter profit, beating expectations thanks to gains from lending. a tailwind also helped increase

59% on year to one point seven 6 billion u.s. dollars. they announced a special evident of 50 singapore cents per share, citing a strong capital base. much more to come on daybreak asia. this is bloomberg. ♪

vonnie: this is daybreak asia. i'm vonnie quinn with the first word headlines. china is reportedly set to take down in unidentified object. according to a chinese news

outlet, authorities are preparing to secure the object seen close to the city which is home to a major naval base. the base hosts nuclear attack submarines as well as china's first aircraft carrier. bloomberg has learned the u.s. has shut down a third object over lake huron. it's the latest of a series of aerial incursions over north american airspace. sources say to other objects were shut -- shot down on a friday and saturday. the white house as it is too early to characterize those objects. new zealand is stepping up preparations rate powerful cyclone forced to drag across its north island over the next you days. airlines have canceled some flights through tuesday. northland has declared a seven-day state of emergency with unplanned power outages affecting thousands of people. india is said to be discussing with other g20 members ways to develop a regulatory framework

for cryptocurrencies. the finance minister told a media conference that one country alone cannot do anything in terms of regulating technology driven assets. while india does not ban trading crypto, it introduced a harsh rate last year. global news 24 hours a day on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i'm vonnie quinn. this is bloomberg. haidi: as adani tries to rebuild customers, it's planning to spend a lot less when it comes to new projects. for more, let's get bloomberg's asia business managing editor. we've seen them trying to restore investor confidence, what are they attempting to do? >> it seems they are trying to free up cash and rein in expectations they have had for this year. most notably on capex, down from about 40% free the hindenburg

report. a real reduction there. it seems as though what we are hearing is some of the more capital intensive units, say adani grain might be in frame for that reduction but it is in line with trying to firefight this and soothe what has been a huge market rout that has hit not only those firms valuations but his personal wealth. shery: and increased uncertainty over the broader indian economy and market as well. we have not heard that much from the market. emma: they are being quite tightlipped when it comes to prime minister modi. we have some comments from the finance minister over the weekend seeking to reassure, saying they are on their toes

and watching the situation and have looked into what hindenburg has alleged but nothing really more than that. there has not been a formal investigation that we know of, so it does appear as though they are trying to wait this out and hoping the fallout for the wider market and economy is not more severe. shery: bloomberg's asia global business manager joining us as we continue to get the latest developments around those objects downed across north america. right now, we are hearing from the air force general briefing reporters right now that the u.s. assessed the latest object posed no threat and the u.s. is collecting debris from the balloon. he is seeing very small objects but he would not necessarily categorize those unidentified objects as balloons. we have heard one of them that was downed over lake huron was

an eight sided object. we are talking about for objects being downed in the past eight days over north america as tensions between the u.s. and china grow. we will continue to get the latest developments. we have a few briefings happening at the same time from u.s. officials trying to piece all this together. but we were talking about adani and we have heard they have cut growth targets given the ongoing crisis. we have more on what to watch this week. >> as we head into week four of the adani crisis, here is what we will be watching closely. any continuing impact of the review from last week of adani group shares and continuing selling pressure across group companies. we will be watching to see if the adani group makes further commitment on repaying debt and any disclosures on where it is

able to raise the money to do so. and what india's banking and security markets regulators have to say about the potential systemic impact of the financial difficulties facing the adani group. haidi: we will have more coming up when it comes to adani and speak to the merits us financial services good governance minister after the hindenburg named the group is home to some adani -- to some adani share companies. we will be watching these coming out on tuesday. let's bring in our news editor. a specific focus when it comes to any of these companies but particularly, earnings to from the adani group friday ship. -- group flagship. >> investors are paying attention to the plan to raise funds after a record 200 billion

rupees shares sales due to stock and bond prices. although company -- companies, staff and policy makers are trying to l.a. concerns. any insights about the repayment of loan or any cuts in capital expenditure are something we will be watching during the announcement. shery: what are we watching in terms of market impact? >> investors are seeking more clarity from companies during the earnings seasons about exposures to adani because of the selloff and volatility. but just like the bank, they need to increase their reserves as a sign of exposure to the adani group. the charter is going to report earnings on thursday. they may offer some clue about exposures and position in india because india is the third-largest market by revenue

in the region. haidi: what are some of the other big themes we are watching when it comes to earnings? >> earnings season is shifting and china reopening is effecting it. investors are learning whether the story will come true. they are concerned about anticipating demand and the chinese iron market may not be materializing after the new year. lenovo is pacing sluggish demand and the local pc market after reopening. so for this quarter, we are looking for guidance and comments from the company about china reopening before the real data to gauge the momentum. we will need to raise it through the next quarter. shery: felix tam with the latest on what to expect from earnings from adani.

the marshall fund shares why they think kazuo ueda will be less of a politician and his predecessors but will be reliant on his deputies for analyses on the future of japan's monetary policy, next. this is bloomberg. ♪ we all have a purpose in life - a “why.” no matter your purpose, at pnc private bank we will work with you every step of the way to help you achieve it. so let us focus on the how.

just tell us - what's your why?

annabelle: this is daybreak asia. 40 minutes into the session for markets in japan and you can see we are a picture of risk aversion to start the trading day and that is as we come off the worst week so far for 2023 for stocks and bonds. kicking off what we are seeing in the bond space, we continue to have pricing around expectations of where the dead funds rate ends up committing at 5.2% for the peak. compare that to her we were at just 5%, we continue to see that being reflected and that is playing out around concerns of the global growth outlook in the months ahead. we have commodities declining and dollar strength coming back into the session. a lot of the moves coming into the stocks space focusing on what we are seeing in the nikkei. one of the areas that is gaining is japanese banks and that is amid expectations of who the next boj governor is going to

be. this terminal chart coming across because if you bring up the chart, they are testing that .5% upper limit set. that could be tweaked possibly but the expectation among investors is it's going to take quite some time. kazuo ueda is seen as someone who could be a little more hawkish. shery: we are talking about kazuo ueda, who could be the surprise pick when it comes to heading the boj. let's bring in kathleen hays for more on this along with a special guest. kathleen: winning assist tobias harris, the deputy director at german marshall fund of the united states. great to have you. i enjoyed reading your latest piece on friday after the news broke. you have had a couple of more days to think about it. why was he chosen and is he the right person for the job?

tobias: to the why question first. we see reporting to suggest kazuo ueda was not the first choice. he actually went to the deputy governor first who turned him down. then kazuo ueda emerged as the second choice as part of the leadership team for the boj. so that is a little puzzling. all signs were pointing to, mia is one of the most likely candidates and it looks like we have different explanations. my guess is kazuo ueda was a relatively safe pick. he's known, he has a reputation as a realist who could have a dovish record when he was on the policy board, so all in all, may be a safe pick for the prime minister.

kathleen: what does that signal about what the government needs and wants? we know on one hand, they seem concerned about the bond market volatility but when the yen was weakening so much, that has been an issue. on the other hand, they don't want someone who gets to type too fast, right? tobias: clearly not. this is a mine field for the prime minister who is definitely vulnerable and in a week position. you have to look at the politics. this is a prime minister who depends heavily on the ldp's right wing which has become very dovish fiscally and does not want, wants to see more deficit spending and wants to see the bank of japan continue to buy significant amounts of government debt and does not want to see interest rates and debt services rise. so he's in a position where if he comes out in favor of a much more hawkish monetary policy and a more hawkish fiscal policy, he

will be under fire within his own party and that will make his life a lot more difficult. he did not want to pick someone who's going to signal too much hawkish this too quickly because you would end up with a confirmation fight. may be the prime minister would ultimately get who he wants but it would get very messy very quickly within his own party. kathleen: there seems to be a lot of analysis about how much he might be a caretaker and the extent to which the two deputy governors in place are being groomed almost to be in five years take his place. tobias: having not even formally got through this process, i'm not going to think about what things could look like in five years but clearly, this is a major departure from practice when it comes to appointing governors. this is the position alternating between the former career ministry of finance officials and bank of japan officials and here you have an academic economist who had been on the

policy board but has not run a large organization. he did not have a career in the bank of japan, so he is going to be in a position where he's dependent on his deputies to manage the organization that hopefully manage those institutions that have a big say. he has to make sure his relationship with the prime minister is strong and he has channels of communication with the right wing of the ldp and key decision-makers. there is a lot of work to do and a lot of political juggling and i just don't know if he is up to the job. i don't know if he has had a job that will test him like this will. haidi: you said kazuo ueda was a safe political choice but to expand how much rule eight -- how much of a role politics will need to play. governor kuroda was very close to the economics policy as well. what can we expect in the next few years under this governor

and the relationship with japanese politics? tobias: that's a major difference we have to look for. kuroda -- they did not have a long-standing relationship but abe trusted him. kuroda carried out the policies abe wanted to see and they forged an effective working relationship during the time they overlap. kuroda was an important partner. now you have a premise or whose position is vulnerable. his approval ratings are not great and has not set a clear direction for what he wants to do with policy. so you have a bit of a vacuum when it comes to the governors approach but you also have a governor at the bank of japan who is something of a political newcomer who is not necessarily coming in with a strong agenda. so i think there is a risk you have the potential for drift and a certain lack of political coordination between the

government and the boj. haidi: or a lack of political clout within the boj and government as well. he could find himself to be a man without a constituency. how vulnerable would that role be given what we know of the machinations to get to this point as arguably you need some strength at the helm. tobias: i don't want to rule out is chances of being an effective governor. he's got to very capable deputies who have been -- the financial services agency, a senior boj official, so he is going to have help but the danger is if he is perceived as making a misstep, you will see the leaks from the finance minister, the bank of japan or anonymous complaints or questioning whether this is the right policy. given the importance of clear munication from the bank of japan, there's going to be a lot

of work to make sure the banks messaging is not being undercut by these other actors. you have lots of institutions that have thoughts on what direction the bank of japan should go and that is going to be pair amount. kathleen: i have to get the banks in here because they are an important constituency and higher rates would help the banks. how strong of a voice or constituency will they be? tobias: clearly, they are going to be part of the discussion but we have seen a decade of -- i will not say lipservice but they've had acknowledgments of their issues and the side effects of the bank of japan's easing policies, but effectively they have taken a backseat to more macroeconomic concerns. we have heard from kazuo ueda in his past comments that he acknowledges the side effects and i'm sure he will be listening but i expect when it

comes to making decisions, he's going to have the macroeconomic outlook in mind ahead of the banking sector's interest. haidi: great to chat with you. more to come here on daybreak asia. this is bloomberg. ♪ quais vital to your mental, emotional, and physical health. and we know 80% of couples sleep too hot or too cold. introducing the new sleep number climate360 smart bed. the only smart bed in the world that actively cools, warms, and effortlessly responds to both of you. our smart sleepers get 28 minutes more restful sleep per night. proven quality sleep. only from sleep number.

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shery: chemical giant lg chem is prioritizing securing chemicals for ev batteries. in an exclusive interview, they discussed continuing supply chain issues. >> i think we are going through a down cycle as we speak. we think the first quarter will be the bottom of the petrochemical cycle, which is good news. we can only think about going up from here, whether or not the upside starts with some kind of sharp increase like ev curve, which i don't think will happen. more like a slow recovery because there are some other elements and geopolitical issues. >> do you agree with some of the south korean government who they get is a betrayal to the united states and partners they have in south korea, whether and they or

other automakers? >> when it comes to ira, there is a government trying to convey their message and different countries are trying to convey their message, so i think it is a process of collecting all those voices, from what i understand, trying to probably nail down some of the details to be narrowed down. i'm not sure if even the u.s. government has all the answers to satisfy everybody in the supply chain. >> how do you mitigate against the fluctuations in raw material prices, particularly nickel? >> we are preparing ourselves first of all for the secure supply of raw material which is more important than the price. the price becomes secondary, so our first and foremost priority is to secure enough raw material

for the future. we are doing a lot of projects with suppliers and players to make sure we get a stable source of supply, number one. number two, pricing to the extent we can probably move up the value chain just a little bit. i don't think we will ever be a mining company, however, if there is a project, a mining project that makes sense, maybe we can invest some share. >> how are you addressing the climate crisis? there's a new plant you were planning, but how are you specifically -- dare i say the reputation of the petrochemical sector, it is a dirty process. >> we have a goal of reducing 20 million metric tons, i think we are fully committed to deliver a

net zero goal by 2050 and we are doing it in three different ways. first is direct reduction. this is the mainly processing technology using more hydrogen and really investing in technology like carbon capture. we are investing a lot in those areas and we are doing all kinds of investment to secure energy in korea and our plant as well. the last one being the compensatory tactics. we are doing a cookstove project in africa to make sure we contribute to co2 emission reduction in other countries. haidi: let's take a look at some of the stocks where watching

ahead of the open in the next hour, watching these chinese banks -- we had a record amount of new loans extended in january, so watching the likes of bank of china as well as china merchants. metal miners might be on the move. still to come here on bloomberg, hsbc global research joins us to discuss china's economic outlook. we will be talking about ai-related stocks. plus land leases global ceo and their managing director is with us. this is bloomberg. ♪

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>> good monday morning, it is 9:00 a.m. in hongog