shery: we're watching daybreak: asia coming to you live. annabelle: we are counting on to the open's and tokyo and seoul. haidi: the top stories this hour, jay powell softens his tone during congressional testimony saying the size of this month's rate hike will depend on upcoming jobs and inflation reports. chair powell: we have not made any decision about the march meeting and we will not do that until we see that additional data. the larger point is that we are not on a preset path and we will be guided i the upcoming data. haidi: asian stocks are set to rise after the comments. more hot u.s. jobs data reinforcing that the fed will stay hawkish. further pressure and china's tech and patience as the netherlands prepares new restrictions on ship making gear. shery: take a look at how u.s. futures are trading. not a lot of movement.

we have a lot of volatility in the new york session already. the s&p 500 slightly in the green. real estate and tech leading those gains. despite slightly more dovish commentary coming from jay powell, we still have job numbers coming in hot. we saw job numbers dropping, but still significantly high level. that didn't really help with the repricing we have seen in fed rate hikes in the market. the 2's and 10's still inverted. in asia, we continue to see the pressure on oil. more declines despite the fact that we saw u.s. stockpiles declining for the fourth time this year. annabelle: still a lot of focus on the fed. jay powell did walk back some of his more hawkish commentary on the day prior. in terms of reaction we are

seeing an aussie stocks, we are still trading lower. we did see the wall street session rising a little bit into the end of the day's trading but still when you look at trading volumes, they were off their 20 day moving averages across the board. that tells us the level of uncertainty that is coming through in the market. in terms of the aussie dollar, that is trading flat but we do have chinese inflation data adding to the risks on the horizon. looking at what we are seeing across the rest of the region, there is still banks coming out to recalibrate where they think the fed funds rate will end up. that is putting a lot of pressure on asset including currencies. we are seeing the japanese yen rising above the 200 day moving average for the first time since december. a lot of focus on that rate differential between the boj and the fed.

shery: let's assess what was said because a somewhat different tone from jay powell was perceived by the markets. this was the second day of testimony to congress thank we will wait to fresh data -- for fresh data before deciding. i would say the markets perceived at that weight. are we seeing a shift or not? >> they downshifted at the last minute, of shifting this time would be a powerful signal. that's all we have been watching closely and why jay powell's first day of testimony struck such a strong cord. it was not just an offhanded remark, it was this firm statement that moving too faster hikes not just higher hikes, could be possible. when he entered a question being

pushed hard about are you doing enough for inflation so much you're going to tank the economy, this is what he said about the possibility of this shift in policy. chair powell: we are not on a preset path. we are not going to make any decision until we see that data. we will be guided by the incoming data. we're going to be looking at the totality of the data, the data we have seen so far this year suggests that the ultimate level of rates will need to be higher. the cost of failure to store price stability would be extremely high. bad thing for the country. >> remember the fed open market committee has 19 people. it is true that a handful don't vote, but the vast majority do and it's not just jay powell's decision. it is the decision of his colleagues on the board of governors, the fed reserve bank presidents. one of them speaking today.

saying yes there is more to do, but he has been one of the ones in favor of slowing down the rate hikes. i think we have to put that altogether than watch the numbers. you heard the word data over and over again. the jobs report friday big record for the past 10 months of small to very large overshoot on that jobs number. you can see it right here. the last one came in at 517,000. now we are looking for 217,000 but everyone is going to be braced for the kind of overshoot that tells people we do have to speed things up or convince them or reassure them that things are cooling off. this is what we're watching closely and the cpi report next week. haidi: it's a pretty momentous decision for the boj.

he is the king of policy surprises. >> it's a little bit nostalgic that we all wish she would just do it again. a lot of economists say and investors have watch this closely that it's just not likely. one of the biggest reason is he has a successor coming on board and would you want to do something that would limit or affect the next boj governor, his chances of doing things the way he wants to do them. another thing going on is kuroda and the boj have said over and over again yes inflation is way above 2% but we aren't sure it's went to stay there and a lot of us are betting that it won't that it's going to come back down to 1.9%. next year it could be 1.6%. japan gdp, we are getting a revision that it has been weaker.

i think they figured -- what's going to determine this is the wage increases. one thing to think about in terms of possible policy surprises maybe even a little one yield curve control. the japanese government bond market many people say is a bit dysfunctional. the new governor is going to have to buy a lot of bonds to keep it word is. even if it's not an actual tweak, i will be listening closely tomorrow to find out if governor kuroda opens the door wider to something like that. haidi: the netherlands is preparing fresh restrictions on chipmaking machines amid pressure from the u.s. to clampdown on china's access to cutting-edge tech. stephen engle joins us with more. stephen: we know this is why the top leadership at the national people's congress in beijing are talking about a nation strategy

to counter these moves which they claim is led by the united states to get others like the netherlands and japan, to countries that have companies that make some of the most advanced chipmaking equipment that the biden administration is pushing to restrict sale to china. they fear of course that it will be led into the hands of the chinese military perhaps as well as the competitive angle of geopolitics and the global economy. what the netherlands is saying is they proposed a new law that would ban or rein and exports of so-called immersion lithography products. adding to restrictions are already in place for the most advanced chipmaking equipment such as ultraviolet thought griffey and asml is the largest by market valuation and the world's only maker of certain lithography systems which are needed to patterns of

transistors onto silicon wafers. this would be another blow to china's ambitions to raise its game in advanced chipmaking and ai and other related industries. a separate statement coming from asml said the measures will not have a material effect on her initial outlook for 2023. but we need to apply for export licenses for shipment of the most advanced systems. the companies we are talking about mostly our asml from the netherlands, tokyo electron from japan. in the u.s., applied materials, lam research and kele. cpi inflation has been under 3% for 33 consecutive months for the whole year of 2022, cpi averaged 2% which he said was ideal. they have set a target for 3%

for this year as china reopens and there will be inflationary pressures most likely barring any unforeseen shock to the economy like we have seen over the last three years. 3% still is the comfort zone for the company's leadership and the projection for february is on .9%. we had 2.1% cpi inflation in january because of the lunar new year holiday. more people traveled, but foods and gifts and the like. high-frequency data suggest that in february after the lunar new year holiday, already food prices have come way down. 1.9% perfectly in the comfort zone of chinese leadership as they are holding the national people's congress. factory gate deflation likely deflated again. shery: breaking news, we are hearing that jp morgan is suing jes staley for liabilities for any damages incurred related to

jeffrey epstein's sex trafficking. this is the private banking chief that used to work at j.p. morgan. we have now seen those damages stemming from lawsuits accusing the bank of facilitating the sex trafficking from jeffrey epstein and the bank filed this third-party complaint against the former executive in manhattan federal court arguing he should be held liable if allegations about his relationship with epstein are shown to be true. jp morgan is aiming to recoup his pay from 2006-2013. chair powell: u.s. intelligence chiefs told the senate committee that russia is like which downgrade its ambitions in ukraine for now to hold territory seized after the start of the invasion. it was part of a broader outline of threats that the u.s. cases.

the director of national intelligence said china would deepen -- despite condemnation of the ukraine war. bloomberg has been told australia's new fleet of nuclear powered submarines would be based on a modified british design. this comes as the three countries present head with a security partnership meant to counter china. it will take years to deliver. senior executives at adani group are said to have told investors that the founder and his family have prepaid all borrowings but by company shares. it was part of a worldwide roadshow aimed at reassuring international investors. ray mcguire is joining lazard as president.

he was formerly chairman of a key dealmaking unit making him one of wall street's most senior black executives. global news powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. haidi: still ahead ceo joins us to discuss a deal and some of the other investment opportunities he sees in asia. was apple's into be reshuffling management of its international businesses with a bigger focus on india. we have the details coming up. this is bloomberg.

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♪ >> we are not on a preset path we have not made any decision about the march meeting we will not do that until we see the additional data. we will be guided by the upcoming data. we're going to be looking at the totality of the data the data we have seen so far this year suggest that the ultimate level of rates will need to be higher. the cost of failure to restore price stability will be extremely high. it would be a bad thing for the country. haidi: jay powell speaking

before the house financial services committee. looking to soften a little bit in terms of his positioning when it comes to this being data-dependent and they are not on a preset path. join him is ahead of fx research. let's recap in terms of how the markets are repricing at the moment when it comes to fed expectations, boe and ecb expectations. at the moment, we are looking at for the fed about two thirds chance or 67% possibility the fed hikes by 50 basis points. boe is sitting at virtually zero for 50 basis points and almost 100% probability that the ecb will go 50 as well. do you think that investors at this point have adequately internalized the assumption and is that being reflected in the fx space? guest: it's interesting that the

fed boe and ecb, they have all repriced their terminal rate significantly higher. it then yields have shut up for all of these currencies but having seen that equivalent effect into the euro, the sterling? no. the economy is focusing on the u.s. data, the u.s. dollar and it's a one-sided sort of -- last year the size of the dollar inventory picking up again. one thing to say, the dollar has rallied over the last four or five weeks but the rally has been somewhat cap and that is really again because the repricing has been across major banks not just the fed itself. >> where you see the biggest fallout in terms of dollar payers? is there further to go?

>> with the aussie dollar, there's a little bit of vergence the markets now expecting, a little bit of dovish commentary from one governor this week and a terminal rate expectations have declined slightly for australia which is now effected in the aussie dollar. i think next week we are getting our employment data. that is very important and that will sort of pave the way for future room for the rba. we have seen two consecutive months of growth. it could be seasonal effects because demand is holding up strong. we also have a lot of migration coming into australia. we think that employment growth should be significant stronger than effected over the last two months. >> we have seen inflation number starting to ease across asia over the past week.

we're talking about thailand, the philippines reporting slower than expected price gains not to mention the be ok pausing rates. if we're trying to figure out the peak for asia rates, what about when you're praising fed rates higher? >> that something we have to start thinking about and factoring in. i think em economies will be largely affected if the fed goes 6% or 6.5%. this cycle is very different to previous cycles. in this cycle, the effect of the em economies they started raising well ahead of the fed and the rest. it's preserving a little bit of the depreciation they would have seen that they had waited a little bit longer.

further to that, similarly many of these currencies based on previous experience have loaded on a lot of fx -- that will keep them a little bit shielded even now if we do see repricing higher. >> before we let you go, we have to ask about the boj. continue to see the bets that perhaps we could see a surprise coming from the boj governor. we have seen the dysfunction in the markets. what will you be watching? >> i think he is known for surprises as he did in december and previously as well. realistically speaking, i don't think he's going to shift the needle this week. on policy, he has already set the stage for the new governor to come in by shifting a little

bit in december. we do think there will be an adjustment in the second half of the year but we think the new governor needs to come in and agree on the new policy framework which i think there might be some revisions to have a look at inflation going forward. before making any changes. i think overall these changes are pretty much do because in japan it's picking up particularly in the wages side of things. earnings rose from 1% to 4% which is significant. shery: always great to have you with us. plenty more to come on daybreak asia, this is bloomberg.

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>> apple is said to be reshuffling management to its international businesses to put

a bigger focus on india. are they helping to in some ways replicate the success they have had in the chinese market and put in place the lessons learned there? >> that's exactly right. china went from being a small portion of apple's overall -- overall revenue to this hypermarket which brings in over $75 billion annually for the company. that is nearly one fourth of its annual revenue. if apple wants to see long-term growth, they need to grow and invest in new regions. the kiwanis india. smartphone penetration, 5g penetration, apple product sales are low there. sounds like a bad thing, it's actually a good thing. that means they have a lot more to grow there and sell into a whole new nation with over one billion people. that is something they are really focused on. they are now making india a dedicated sales region separating it from europe,

africa, the middle east and mediterranean making it its own thing to give it more prominence inside the company. it is indicative how important this market is going to be to the future of apple. >> how much of this is about a sales strategy as opposed to a comprehensive strategy with tech r&d not to mention suppliers take -- playing a part in india? >> this news we are talking about today, this is very much in terms of sales introducing new products and launching new initiatives. like you mentioned, this is really two-pronged because there's an entire supply chain operation that is being built up from the ground up in india to support apple long-term. to duplicate a lot of the efforts being done in china. they're putting together new iphone lines in india as well for production. india is key to new apple offices. in recent years, they have had an expansion in terms of

nonproduction operations. there is a facility there dedicated to research and development for apple maps. if they want to improve apple maps, they need a research and development facility to put in new data, correct data, take customer complaints and concerns and positives. they do a lot of that in india as well. >> really great story as always. we will be watching the suppliers for apple in the asian session. still ahead, silver get capital plunges on news that it plans to liquidate. around for occasions for the crypto industry next. -- the ramifications for the crypto industry next. crypto- [announcer] imagine th having fuller, thicker, more voluminous hair instantly. all it takes is just one session at hairclub. introducing xtrands. xtrands adds hundreds or even thousands of hair strands to your existing hair at the root.

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>> the fed has moved

aggressively to bring inflation down by raising interest rates and reducing our balance sheet. we have seen progress but at 5.5 percent, inflation remains well above the 2% target and as a result, we still have work to do. >> the richmond fed president there. more traders are hiding out in credit markets. let's bring in garfield reynolds. what is on your mind today? maybe jay powell trying to soften the blow a bit. >> not much, he wants to be, it would have been hard for him to have out hawked himself from the previous day and there's no actual data so just the repetition. we still had treasury market where the 10 year and labor space is just about frozen at 4% .

we had a week auction which is unusual. but the previous ones were so strong. the ultimate impact was short and rates pushed higher three-month t-bills are 5%. the yield curve aged a bit lower toward 110 basis points of inversion. the bond market is still screaming recession. jay powell is still in a measured tone saying we need to go higher because inflation is way too elevated and the bigger risk in the medium to long-term is if we let inflation stay out of control then we end up having to raise rates more and do more damage. airing on the side of recession. >> does this heighten the risk going into the boj policy decision as well that you have more hawkishness coming from the fed when we have seen japan's bond market dysfunction and the

attacks on the boj policy really continue? >> it raises the stakes a little bit especially for the yen. if there's anything the traders see as being a decisive shift in the timetable for moving to normalize policy in japan where policy has been very much not normal for pretty much all of his 10 years in office. there was some speculation as we got closer to having a successor nominated then appointed that the boj would rapidly move with the end of the kuroda era board and end of yield curve control and possibly negative rates, that has been hosed down by the

successor in his appearances. the strong expectation is that not much is going to happen. the difficulty is that kuroda's career has been replete with surprises. will there be one last surprise and the yen in particular which is on strand a lot already would be the main focal point for the expression of market reaction to something the people aren't expecting. shery: it will be so exciting tomorrow. what time does the statement come out. garfield reynolds there watching the boj and fed as well. we are less than 30 minutes away from the opens of markets in japan. what are you seeing? annabelle: since you were just having that conversation on what we are expecting for the boj, just a note that some strategist saying the yen could reach the 145 level.

it has been a boost to the japanese stocks and nikkei futures are looking to outpace the broader gains we are seeing for asian benchmarks in the session. we looking fairly range bound. that is probably the keynote today. caution prevailing overall. it not only are we awaiting the key data that the fed is going to be washing -- watching clearly, there's also chinese inflation due later this morning. see aussie and u.s. futures looking flat and new zealand already online down. now to the crypto space. given the hawkish comments from the fed have helped drive bitcoin down closer to the 2100 level. it is sitting around three week low and generally what is hitting sentiment is what we are hearing from silvergate planning to eventually liquidate its banking operations.

shery: let's delve into that story, silvergate capital planning to wind down operations. we had seen these massive shorts against the stop. is this it for the company? guest: it's looking like it probably is it for the company. it has been one heck of a three or four months. this is the bank that hitched its wagon to crypto and it was also a bank that held deposits for ftx, the crypto exchange that collapsed. ever since that moment, it has triggered and unleashed a flurry of depositors leaving the bank. it posted a $1 billion loss. it had to close the kind of key part of the bank network, payments network for crypto players. it is under investigation by the department of justice and capping it all off today, we heard that it is liquidating and winding down.

haidi: what do we see as the broader risk from here? guest: the actual contagion for silvergate to the broader financial system might be relatively minimal. what this does is hasten efforts by regulators to ensure that those kind of risks don't ever seep into the u.s., the broader u.s. banking system. this will ignite the urgency of their efforts to make sure that banks are very well sealed off from any of that. silvergate it did have a federal home loan bank advance which it repaid in full. that is an indication of how these things can be connected to the broader financial system but aside from that, a lot of its customers and clients have started shutting off doing business from the company. so really it is now a bit of

shell and we are waiting to see exactly how the regulators will take it forward from here and what their involvement would be. at the moment, there's not a lot to the bank since it has been run down and liquidated. haidi: let's get the vonnie quinn. vonnie: preparing restrictions on the export of some chipmaking machines to china amid pressure from the u.s.. that would block beijing's access to chipmaking gear by asml. asml says the measures will not have affect on it this year. the director of national intelligence told a senate hearing two plausible explanations remain for covid. laboratory leak or natural

exposure to an animal. malaysia's former prime minister says he has been asked to appear at the anti-graft commission. the incumbent prime minister alleged that billions and covid relief was allocated without procedure. jp morgan is suing jes staley for allegations -- for damages. jp morgan argues and he should be held liable if allegations about his relationship with jeffrey epstein are shown to be true. a new global study finds a sharp rise in marine plastic pollution since 2005. according to a journal, there

are 2 million tons of tiny plastic particles floating on the ocean surface. author say this is driven by dramatic increase in plastic production and a lack of laws. global news powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. shery: coming up, jaguar global growth ceo tells us why there helping a korean glass company go public in the u.s. through spac deal. this is bloomberg. ♪

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shery: our next guest runs a blank check company. it's get more on that deal and other opportunities on the horizon with the chairman and ceo of jaguar global growth. he is with us in the new york studio. good to see you. tell us a little bit more about this deal and why this company. guest: thank you. as we previously discussed, we are an investor with leading entrepreneurs in the most compelling geographies and sectors. we established jaguar global a

year ago focusing on the intersection of property and technology. we are thrilled to announce last week business combination with glam founded and led by a person who fits our model leading entrepreneurs, a cutting edge company that is both revolutionary and transformational. glam has over the last 10 years completed over 400 installations , multiple continents asia, middle east, europe, the americas, and is essentially transforming vertical structures into i.t. media devices. the first of its kind. it is absolutely fascinating and transformative. shery: how do you find these opportunities in the investment landscape across asia? you are also the only want to do this sort of real estate spac deal in south korea. guest: asia for us is a top

priority. we first starting investing in china about 20 years ago. we have been multiple investments in multiple sectors. across the region. acquired overage -- logistics company three years ago. it's a top 10 company in china. starting a cold storage platform as well again logistics related. glam is different because it is a technology business. we really set our sights to push the envelope with glam. this company happens to be based in seoul with bases in london and let. -- los angeles. haidi: is this an idiosyncratic story? guest: it's more of a standalone for short. woman met the founder, we knew that he was something special

and that his team which has been together for over 10 years had established not only a global footprint with boundless promise, but also profitable. if the last two years have been a wake-up call for a blank check company, it is technology companies that have not yet crossed the rubicon to profitability run into trouble. we narrowed our sights to focus only on ebitda positive businesses. haidi: hugely challenging for investors with the china exposure. you touched on brilliant but has that changed, what is meaningfully changed from last december until now? guest: this is a business, we are big believers in logistics as a sector because of its simplicity and sustainability, scalability.

china without we acquired growth platform. it has become a contrary and play -- contrary and play. the barriers to entry are such an that in terms of land acquisitions as we talked about before primary and secondary land acquisitions, it is all favor -- off favor which presents an opportunity for us. we have a singapore-based institutional partner which is supporting our growth in brilliant. >> you talked about warehousing logistics. is that mean potentially a deeper dive into property? guest: it is property, we have both an operating platform and a property venture as well.

shery: tell us a little but about that business. guest: we have a team on the ground and shanghai. vertically integrated about 40 strong. this is an institutional quality mainland chinese based company. we are in the middle of nearly 2 million square meters of space under development. with a top logistics three pl -type tenants. along the lines of global logistic properties. shery: good to have you with us especially in the new york studio. plenty more to come, this is bloomberg. ♪

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>> negative interest rates policy doesn't mean we are at a limit of our easing policy. this adds another option from the interest-rate side to the current quantitative and qualitative easing policy. we aim to let the yields drop in the most desirable way to stimulate the economy and used wages to meet the inflation target. since our inflation rate is still far below target, whatever

ecb for the federal reserve does in the coming months, we have to address the situation by our monetary policy. this is just to ensure that yield curve control functions steadily and does not mean the beginning of a rate hike tightening monetary policy or reviewing why sisi. shery: over the last 10 years as boj governor. we are watching his last meeting. investors given the history with governor kuroda cannot forget the fact that we have been surprised so many times. with the market distortions we are seeing especially in the bond markets, i think we are still wary of what he might bring us in his last policy meeting. >> is it wariness or hopefulness? those of us who have covered so many boj decisions between you

and me, there is always a sense of a little bit of excitement of what we could get. i will never forget the halloween surprised it's one of my favorites. shery: and always having to gauge what time the statement comes out, because the latest it is perhaps we will see a surprised. reckon news now, the fourth quarter gdp numbers. .1% on an annualized basis coming in below expectations by economists. we're talking about the final numbers, so this would have been revised down to .1% growth for the fourth quarter. this is the annualized number. we were expecting the revision to be downward because we saw the drop in business investments so it's not necessarily that surprising but the japanese economy barely growing in the fourth quarter. quarter on quarter growth of 1.2%. we are also sing the gdp deflator year on year, that's actually not dropped as of yet.

we're looking at business spending contraction of .5% quarter on quarter. inventory trends of .5 percentage points from quarter on quarter gdp numbers. private consumption also rising less than expected. haidi: as we mentioned going into the last boj policy meeting for kuroda, he is do step down in april after the longest stint running the central bank in the 140 year history. let's look at how he spearheaded one of the most ambitious monetary policy stimulus programs in modern times. >> he took over as group -- governor in the bank of japan archer 2013. two months, the boj signed a landmark a court to reach 2% inflation in the shortest time possible. after being sworn in, he committed to a two-year deadline to reach that target and introduced his bold strategy

called quantitative and qualitative easing. the first step in what soon became known as his monetary bazooka. one year later, he fired another shot. the infamous halloween surprised shocking markets as the boj nearly doubled its yearly bond product -- purchase target from 50 to ¥80 trillion. january 2016, the boj narrowly voted to cut its key rate to -.1%. the public backlash was immediate and fierce. eight months later, the boj adopted its most innovative step of all, yield curve control tying the 10 year japanese government bond yield to zero and coming the first central bank in the world to take this radical monetary step to spur inflation. by the end he was reappointed, they did not reach the 2% target. he then fine tuned by allowing it to move around double the rate of 10 basis points on the

either side of zero. the boj became the biggest single holder of japanese stocks. by september 2022, a weakening in the yen help boost the key inflation metric reaching 4% by the end of the year. three months later, he rocked markets once again with a surprising decision to widen the 10 year yield band doubling it to .5%. by 2023, investors are betting some of his ultra-loose policies will be dismantled before long. how history will join him is still uncertain. shery: in our next hour, we will speak to a former advisor to the japanese government about the policy path for the boj. here's a quick check of the latest headlines. adobe has opened a new office tower in san jose, california. bucking the trend among

technology companies for cutting workers and paring back real estate footprints. the new space adds capacity for staff. the chief people officer told us exclusively that adobe will not have any companywide layoffs this year. >> we are coming from a position of strength. we have posted great earnings, we are growing profitably and so how we are managing is to be prudent about our investments. prudent about hiring. we are committed to not having companywide layoffs. shery: a different story. looking to move most of its hong kong staff out of the central business district to cut costs. sources tell us the lender might move all of its staff to offices on the east side of hong kong island. it says they are reassessing your operations post-pandemic. haidi: let's take a look at the stocks we are watching.

we have the final kuroda boj decision underway. we will be watching sony to block the activision blizzard deal. also watching some of the japanese airlines. boeing is set to be near closing a deal. shares of asian construction makers may be moving with caterpillar seeing demand on construction equipment. we have market opens in seoul and tokyo next. this is bloomberg. ♪

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>> this is daybreak asia, counting down to the open, day two from jerome powell's testimony in congress. treasury yields continue to rally. >> sticking on the theme of central banks, the boj, governor kuroda looking to deliver his last policy decision as the head of the boj, could he come through with another surprise? quite a 10 year and wonderful ride -- tenure and wonderful ride. let's look at how markets are opening the session. >> -- fed decision, but today, watching japan, south korea, beginning of trading for cash treasury and watching where we

see the 10 year yield, still close to 4% and staying stubbornly high, the yield curve inversion at the deepest level since 1981. that is the state of play coming into the session today. the focus on day two of jerome powell's testimony, slightly walking back some hawkish comments, but reiterating any decision will be data-dependent, bringing uncertainty into the market. equities higher for the nikkei, but trading volumes is key to watch and well off the moving averages. the fed is highlighting the growing diversions between the fed and boj with governor kuroda said to chair his last policy decision friday. the yen holding above the 200-day moving average. bank of america saying that

the yen trade could be back on if the boj executes without turning hawkish. we also have currencies and focus at the open in korea. yesterday, the korean won slumping the most in a week, back to its weakest level since november. today, we continue to see it holding around 1300, the focus on jerome powell and his comments. we are watching the tech-heavy index, slightly lower than the kospi, but the nasdaq snapping the drop in futures looking flat. the asx 200, one hour into the session, i.t. stocks leading. flat level, but earlier higher. when stock we are watching --

one stock we are watching is a software accounting firm after confirming plans to reduce headcount this year to lower costs, so investors liking that. watching oil, wti weaker, declining inventories, but still the focus very much on the fed and the outlook for rates. >> yeah, this is about the repricing, a work in progress. let's bring in our next guest who remains cautious on global equities. karen, great to have you. let me throw out these probability calculations of who will move 50 basis points this month, implied percentage. the ecb is a done deal, 99.23 they go 50. the fed is just under 70%. the bot, virtually -- boe,

virtually no chance they do that much. does this tell you that the markets, traders, investment participants have finally priced in, processed, internalized with the fed and other central banks have been messaging? >> well, so, but that would tell us, as well as the fed being increasingly surprised by how sticky inflation is over the course of the rate hike cycle, almost one year now, markets are almost catching up, and in fact, the probabilities further out, the markets are expecting a pivot two rate cuts after reaching a terminal rate for the u.s. around 5.5%, looking for cuts by the end of the year, and if you look at the history of aggressive rate hike cycles, d time between hike -- the time between the hike in the first cut is nine months, not weeks,

so in the short term, the short-term data on inflation, pushing central banks and markets higher on rates, and we think inflation is likely to or is proving stickier than anyone expected. >> except in china, or at least for now. if you look at it as being kind of a cyclical force at the moment, does it make a compelling investment opportunity? >> yeah, except in china. yeah, china at the end of last year, halloween on, the reopening trade, you could have almost bought anything, but i think things get tougher for now. if you look at the messaging coming out of the meetings this weekend next week -- week and next week, never forget the

china's government is concerned more about control than growth, and if we get growth, there might be a market unfriendly resolution to what's going on with real estate and china so i have been countercyclical on the inflation side, but china is a difficult market and has become increasingly difficult after the rally from the end of october. >> does that mean the broader emerging markets are also challenging at this moment? >> yeah, we think so. um, so, rates higher, dollar stronger, not weaker at least, is always a challenge to emerging markets. also idiosyncratic risks in the larger emerging markets we think makes it hard to for example suggest a broad buy em trade at the moment, yes. >> do you position in any

different way headed into the boj policy decision? >> yeah, japanese financials have done well after widening the band. you mentioned will governor kuroda surprise on his last meeting, we have learned that anything can happen with governor kuroda, but over time, we would probably expect that there will be an easing of the yield curve control policy or something like that which will likely result in yen strength certainly versus the dollar because there is nothing holding back yen weakness at the moment, so i over time as the market takes the view that with the data coming in, there is little upside to him doubling down on

yield curve control, for example, and if you look at your package on governor kuroda's history at the boj, against all of that, what has happened is as set markets and japan have been increasingly nationalized, and except for the impact at the beginning, have not done that well over that period of time was a let's see how but comes to an end and what he can do with his team to possibly reverse or change opinion. >> we have seen those market distortions heightened across japan. if you are look in this environment for quality balance sheets, revenue streams, and sustainable dividends, are there any factors that can provide all of this in in diverse regions around the world right now? >> yeah, so, week, so, yeah, so

it is tough. one of the things we have been focusing on is if you look at the period 12 to 18 months after rate hike start, dividend names and sustainable dividend names have tended to be the sweet spot for that style, especially amongst u.s. equities, so uh we think heading into where we are now, we want to focus on some of the dividend aristocrats or sustainable dividend names, we think that is an interesting theme from here. value tends to do well at this period in the rate hike cycle as well and it is always good to focus on quality, and we also there are specific i guess sectors and beams starting to look on a stock picking bases more interesting. if you look at the internet names and stuff these days. for example, one of the big

themes is because in bringing forward profitability, and stocks that really responded to that, or certainly on a style basis, quality and dividends is something we like at the moment and some more stock-specific or theme-specific stories. >> good to have you with us. thank you. let's get to vonnie quinn with first word headlines. >> thanks. u.s. intelligence told a senate committee that russia is likely to downgrade its ambitions in ukraine to hold territory seized up and started the invasion come apart of broader threats the u.s. faces. one person also said china would deepen its economic/defense support for russia despite international condemnation of the ukraine war. bloomberg has been told that australia's new fleet of nuclear powered submarines will be based on a british design with points and upgrades, coming as the

three countries push ahead with the security partnership meant the counter china and the plan is set to be announced next week and will take years to deliver them and in the meantime, the u.s. may base nuclear submarines in australia or sell some to the australian navy. adani lawyers have said they have paid back loans part of a roadshow ensuring international investors. $153 billion in market value was raised following the report from hindenburg research. ray maguire, decades as a top investment banker for joining lazard as president, former chairman at citigroup and vice chairman of the entire company, making him one of wall street's most senior executives. he left to run for mayor for new york city, a post won by eric

adams. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. >> let's look at the crypto movers so far. >> yeah, taking a look at these given the headlines that dropped around silver gate earlier, winding down and the quit dating its banking, bank rather, by that is significant is because this seen as a key conduit between the fiat world and crypto players so it will have ramifications for crypto exchange is. let's look at some of the biggest crypto-blanked stocks in asia. next at the start of the trading social. the msci index moving to the upper side -- upside. silver gate slumping in after hours trade. another sector were focusing on is shares of asian construction and mining equipment maker's. -- equipment makers. caterpillar saint strong demand

is assigned -- saying strong demand is assigned that the u.s. can avert a recession and that north america is one of its best markets for heavy machinery, excavators, according to its cfo. komatsu generating 40% of revenue from the americas and 20% for hitachi construction. >> a look at some of the movers so far, 10 minutes or so into the trading session in japan and korea. still ahead, the former japanese finance ministry official ways in on the policy path is governor kuroda leads his final meeting. next, pressure on china's tech ambitions as the netherlands prepares restrictions on chipmaking gear. this is bloomberg. ♪ delivconventional results. at allspring, we break away with purpose. harnessing data-driven insights

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>> we are not on a preset path. we have not made a decision about the march meeting and will not do that until we see the data. potentially important data coming out. we will be guided by the data. we will be looking at the totality of the data. the data so far this year suggests rates will need to be higher and the failure to restore price stability is high and would be bad for the country. >> jerome powell speaking before the house financial services committee, but perhaps a different tone from jerome powell saying waiting for data

before deciding to hike, kathleen hays has the latest on this. data. data. data. what is he trying to tell us? >> shift. shift. shift. right? that is what it is all about. yesterday, jerome powell opened the door to shifting back up to 50 at the meeting in two weeks. of course the jobs data came in stronger, cpi, and other indicators have not come down enough -- that is what he's looking out. so today when he spoke, you heard him say yes, they are looking at rates higher than expected and more hikes, but would you go faster and do that shift? he is saying that has not been determined yet. the committee has 19 people, a

chair, governors, and 12 central bank presidents, and most have a vote. one was speaking today and said yes, inflation is high and they have more work to do, but was in the camp recently in favor of let's take a look at it and take a look at the like effect of these rate hikes. it was interesting, funny i should say when jerome powell said we have potentially important data coming up, the jobs report on friday the first big one in line, so what is important about this is that jobs were weakening for a while, but the past 10 months in a row but they have been stronger, weaker, but always beating the forecasts, and that is what they are concerned about so watching the jobs report on friday closely, and the cpi report tuesday, but the consensus is definite more rate hikes. the only question is 25 or 50? that is what made tilt things,

the strength of the reports, but the signaling from jerome powell again at the press conference will tell us a lot. >> the boj governor begins his last policy meeting of his term today, and i think those of us who have been watching the boj for so long are kind of hoping for another surprise, just one last surprise from governor kuroda. >> right. exactly. his last hurrah. you go out with the bank. most say unlikely, but governor kuroda can pull that rabbit out of his monetary policy had. what is also going on is the boj led by governor kuroda, cpi, it will not stay at that level and by the end of the year , the forecast is 1.9%, below the 2% target. it is interesting that the gdp numbers just out that were supposed to be not strong, but going from from .6% to .8% on

the quarter actually came in at .1%, so if you have an economy weakening, slowing down, not picking up momentum, we consumption led that, so why would you want to be so short going higher? so the latest number seems to support no surprising moves tomorrow. now the bond market, kent he do something about yield curve control? the boj or they have to buy more bonds and the market get more dysfunctional? i'm waiting to see what he says about that because any indication in his view of what might change that, but he might say we can handle it and keep buying those bonds, but a big one for policy, big for the markets, but big for those who watch this man who has tried so hard for so long as he gets ready to step down. >> it has to be one of the

toughest jobs in central banking we have seen over the past few years. the end of an era. turning to china and the netherlands is preparing fresh restrictions on certain chipmaking machines amid pressure from the u.s. to clamp down on china's access to cutting-edge tech. our chief north asia correspondent joins us now. this is increasingly front and center not just china/u.s. relations, but allies being brought into the fray as well. >> it seems to be front and center at the mpc, recurring theme, thread throughout the press conferences since the n pc started sunday, and the leadership team will put this front and center on the priority list, creating technology independence. xi jinping was quoted by state media in his address to the advisory body, to the annual

session of parliament blockfi, essentially saying we must encourage the private and state sector, all sectors of the chinese business community to achieve technology independence and boost innovation, in light of what is happening but what they claim to be as a u.s.-led assault on china's rise through the biden administration tech export curbs of advanced semiconductors on the chip equipment making technology like those from asml and tokyo electron of japan. asml is the dutch company in the another lens, lawmakers bear -- netherlands, the lawmakers proposing to expand limitations to export the equipment to china. already they have banned essentially the high end ultraviolet lithography, extreme ultraviolet lithography, this

new proposal in the dutch government essentially looking at banning or reining in the exports of so-called immersion duv lithography, the kind of lithography equipment that essentially prints the sequence of on to come excuse me, i had a sore throat there, it basically limits the printing onto the chip wafers. this is a company that is one of the only companies in the world that makes this kind of equipment, so that again, would significantly limit china's ability and perhaps push back their ambitions to achieve that technology independence. >> steve, let's preview eco-data as well. i hope you feel better. don't go yet. we have those inflation numbers and need to go through that. >> very quickly, it is not an issue now. 1.9% is the consensus estimate

for cpi inflation in february because high-frequency data indicated those price pressures in january because of the lunar new year holiday food prices, travel demand were higher, but cpi in january was 2.1% and will come down to 1.9%. the full year was 2%. beijing leaders said that was ideal. this year will be 3%, the target because of the opening up story, inflation, but cpi is still benign. ppi will continue into deflation for a second month. >> thank you. we have plenty more to come. this is bloomberg. ♪

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sales tax automatically. avalarahhhhhh what if tax rates change? ahhhhhh filing sales tax returns? ahhhhhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh -item classification? -ahhhhhh does it connect with acc...? ahhhhhh ahhhhhh ahhhhhh >> silver date capital planning to one done operation and liquidate. annabelle has the details. what is left?

>> not a lot. that is the big question facing the bank because yes, announcing it was going to be ending its payment network, now silver gate saying it will wind down banking. what is left? it has that banking charter, but without the network and other parts of its operations, it does not offer much. the bank has been through trials and tribulations. silver gate was holding the deposits of ftx, the crypto exchange, so it has seen its depositors leave on the backs of the likes, coinbase and others saying they have no connection to this bank, also posting a huge loss of $1 billion in the fourth quarter, under investigation from the doj. officials from the fbi see were on the ground at its headquarters in california

looking for ways to resolve the situation, so that's question becomes what is next. it could be a company trying to come in and salvage the remainder of its assets under the supervision of regulators of course, but now the broader question for the crypto spaces who will be the key banking partner? silver gate was the key conduit between the fiat world and the crypto sector, and we're seeing that weakness into crypto assets , including bitcoin around a three-week low. >> we will watch the broader market implications, right? the latest on the troubles it's over gate. coming up next, we discussed the

>> negative interest rates

policy does not mean we are at the limit of our easing policy. this adds another option from the easing right side to the quantitative and qualitative easing policy. we aim to let the yields drop in the most desirable way to stimulate the economy and meet the inflation target. >> since it is still below the target, whatever ecb or others do in the coming months, weeks, we have to address the situation by our monetary policy. >> this is to>> ensure yield curve control functions steadily and does not mean the be beginning of a great tightening policy or review. >> governor kuroda, the last 10 years as the boj governor let's bring in kathleen hays standing by with our next guest. >> yes, a special guest and a perfect time to have him with

us. professor ito, professor at columbia university, former economic advisor to the japanese government. welcome back. thank you for joining us today. i love seeing those clips of governor kuroda over the years good one in english with -- years. one with him in english at jackson hole. is there any chance governor kuroda -- i know people say no surprise -- but is there any chance he could say or do something about inflation, yield curve control, but that would not necessarily shift policy, but shift direction and as you have said, a step towards the first step? >> yes, the december move was a significant one, admitting that market function is not well

under pressure of the bond market, so he and his board suggested to widen the band. they want to see how that works, so i don't think that there is another change before he, his term ends. >> what do you think he will say about the wage negotiations? will he say they look good, because he said they have to be 3% or higher, because i could be a subtle/strong statement? >> right, so far, the numbers coming out are good. many companies are giving the full demand for full amount for the demand from the labor unions and automobile companies and retail companies and they all give what the unions want, so i think there will be a

significant increase in the nominal rate which will make up the decline of their rerate, which is have -- real rate, which is happening in the past 10 months. >> how big of a legacy is it that governor kuroda has taken japan out of inflation, whether or not it is sustainable is a big question, but at the same time, his policies have caused so much market dysfunction? >> market dysfunction is a more recent thing that he, so for a long time the yield curve control worked, until last autumn, so maybe it was a few months too late to widen the band, but most of the 10-year period he had, i think he did most of the things right, and yes, the deflation is over and

now we are coming very close to achieving the 2% inflation target, and you have to see the results of the wage negotiations, and whether that will soft land to 2% when the supply side dissipates towards the end of the year. >> so professor, would you characterize his tenure as a success or is that yet to be seen? >> it is a success. there are a few regrets, of course, but i think overall it has been a success. and um the covid was a bit unfortunate, but just before the covid, you know, the economy was doing real well, and all the indicators were showing that it has improved quite a bit. and after the covid, yes, we are on the recovery side, and with

this wage hike, when the oil price pressure dissipates towards the end of the year, maybe you know we get to percent and that would be a happy and to governor kuroda's 10 year -- tenure. >> if governor kuroda would acknowledge this at his last meeting and everyone is watching and he acknowledges how close they are, and it is 2% and it could stay there, would that be a small, subtle step to opening the door for him when he comes into build on that and not just be stuck with we have to maintain monetary easing, but something more hopeful and looking in that direction? >> so that would be a smooth transition from governor kuroda to his successor, and that depends on whether you know inflation will soft land to 2%

or go below 2%, and also if expectation moves up to 2%, and i think many companies are adjusting prices and also wages, and this is good indications that japanese economy is finally back to a normal again. >> so let's move to governor kuroda's successor and whether governor kuroda does that are not and he probably will, what do you expect his successor to come out with him let's look at the accord, the agreement to get to 2% inflation as fast as we could, will he acknowledge the weakness in the economy versus the strength of prices and what kind of signals will he send and what kind of signals does he need to send? >> i think that he will carefully watch the data. he loves data, so i think he will look at the data and see

how those surprises and other variables are moving, and then decide, but i think he will be more open-minded to taking a new direction, but you know, we have to see the data and his decisions. >> professor ito, good to have you here, professor at columbia university, and also kathleen hays. thank you for that conversation as we head to the boj policy decision. breaking news at the moment. president biden proposing a series of new tax increases on billionaires, investors, and corporations in his latest proposal for how congress should prioritize taxes and spending. this budget request to congress is slated to be released thursday, that this could call for 25% minimum tax on

billionaires according to people speaking to bloomberg. the plan would also double the capital gains tax investment to 39% from 20% and raise income levies on corporations and wealthy americans. of course this as president biden is seeking to rollback some tax breaks that businesses and rich people received from president trump, and now we are hearing that this could be put in the budget request to congress but will be released thursday -- that will be released on thursday. let's get the vonnie quinn with the headlines. >> thank you. jerome powell has softened his tone on policy rates, and besides that the next hike has not been decided and reiterated the fed may take rates higher than anticipated, but they will wait for data before deciding how much. >> we have not made any decision about the march meeting. we will not do that until we see

the additional data. larger point, we are not on a preset path and will be guided by the data and no decision has been made. if the totality of data would indicate faster tightening is warranted, we would increase the pace of rate hikes. >> amid pressure from the u.s., beijing is being blocked to gear made by asml and add to existing limits on technology needed for advanced chips. asml says that it would not have a financial impact. u.s. intelligence agencies say there is still no consensus on the origins of covid-19. the director of intelligence said two plausible expeditions remain, natural exposure to an infected animal or in lab that. christopher wray says his team favors the latter theory, even though it has low competence. malaysia's former prime minister

says he will appear at the anti-graft commission thursday. the commission froze his bank accounts as they looked into the misuse of pandemic funds. the incumbent prime minister has alleged that billions of covid relief was allocated without due procedure during his tenure. a new global study finds that rise in marine plastic pollution since 2005. according to the paper, there were 2 million tons of tiny plastic particles floating on the surface of the ocean. the authors say this is driven by an increase in plastic production and the lack of marine pollution laws. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg. >> senior executives at adani are said to have told investors that the billionaire and his family have prepaid all loans backed by shares. we now have more.

why is this assertion important for the group? >> one of the key allegations that the hindenburg group is the adani founder and family barber road -- barber road -- borrowed against the shares in both the company "leveraged to the hilt," so they are no doubt trying to address that rattling investors if they thought something was happening, and if true, we can take the adani group at face value, addressing a specific concern that could have, as hindenburg said, left the group very vulnerable to margin calls. that >> -- that roadshow is moving across the world now. is this having an impact for the company? >> yeah, it is an ambitious think they are doing.

last week, hong kong, singapore, the middle east, london overnight, then the u.s. next, the home of hindenburg and where they probably have the least visibility and knowledge of what the group is about to so it will be interesting to see if they get tougher questions when the roadshow gets to los angeles and onto new york. >> so, can we you know the shell companies registered in mauritius, is this in a broader way putting a spotlight on it? >> yeah, this is an interesting aspect of the hindenburg report where they lensed in on 30 shell companies connected to adani's brother and associates in the allegation is they were effectively used to juice the shares of the adani empire.

the adani group denies that, but is putting an uncomfortable spotlight back on mauritius, that does have a history appearing in some of the scandals, financial scandals, particularly when it comes to india and the historical links between the two places. malicious had been seeking to clean -- mauritius had been seeking to clean up its act and had been removed from a blacklist for money laundering, but the adani report and explosive impact that has had has put them back in the spotlight as a haven. >> the latest on adani. coming up next, the bridgewater co-cio says why traders should look to china to diversify away from the risk of a hawkish fed. this is bloomberg. ♪

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>> bridgewater associates says chinese assets can help investors looking to diversify portfolios as the fed keeps hiking rates. the current code-cio -- co-cio says what they need to look for. >> chinese assets still do provide significant diversification relative to almost any asset you can buy.

china is such a large entity that it goes according to their on policy, and you see that in the reopening out of step with the rest of the world, so you're getting real diversification, and pricing of equities is still attractive. they don't have to grow that much, relative to the u.s., very attractive, bonds are different, very attractive assets, so this is a diversification play investors should be looking at seriously and it is clear there are big opportunities but investors have to consider risk tolerance and what will happen geopolitically on the their tolerance is that, and we don't know what regulation will be and what it's like to have assets, more screening, more questions and it depends on investors and their ability to utilize diversification given the circumstances. >> the bridgewater associates

co-cio they are. china set to release its consumer factory inflation numbers for february and the next hour. let's get a preview of the market open in hong kong and the mainland with the person who leads our asian equities coverage, and we saw the immense pressure on asian equities in chinese tech given the fed comments that turned out to be pretty hawkish, a little bit softer today, but what are we expecting in terms of market reaction? >> good morning. it has been an interesting week, quite volatile and soft. i think that will be for today and the rest of the week. as you mentioned, the data from china coming out, and the market is expecting a softer number, particularly after the lunar new year holiday in january, so if there is a big jump in

inflation, people will be more cautious, otherwise were going to this national people's congress now, and that's what they are trying to digest, the remarks in the commentary. it has not been the greatest so far, down 3%, 4% this week, so the market has not loved it, but there is a lot going on. >> not least of which is earnings, right? what are we expecting? >> the big one will be catl. the sector has been a tough one with price cuts and a lot of companies trying to fight for market share. even one of the strongest ones backed by buffett has seen share

price declines, so it will be interesting to see what that looks like. those are the ones to watch. >> what are the other markets you are watching given the reaction to the fed's comments on the fact were heading towards a boj policy decision that some fear could hold surprises as well? >> yeah, it's so great, isn't it? boj friday, we will be glued to that and what happens. tanks -- bankshares will be top of mind in the market. with the fed yesterday, china tech was the hardest -- yesterday, china tech was the hardest hit. and beyond that, it curved any excitement for buying gold, copper.

these areas will continue to be under pressure as we move forward. >> our bloomberg leader for asian equity coverage. you can hear more from the newsmakers and get analysis from our studio in hong kong. you can listen on the mobile app, radio plus, or bloomberg.com. this is bloomberg. ♪ get help reaching your goals with j.p. morgan wealth plan, a new tool in the chase mobile® app. use it to set and track your goals, big and small... and see how changes you make today...

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>> a quick check of the headlines. adobe offered a new office tower in san jose, california, going against the trend of paring back real estate footprints. it adds capacity for staff. one executive said adobe will not have any company-wide layoffs this year. >> we are coming from a position of strength, posting great earnings, growing profitably, so

how we are managing is to be prudent about our investments, be prudent about hiring. we are committed not having company-wide layoffs. >> bnp paribas looking to move most hong kong staff out of offices in the central business district to cut costs and the lender may move from staff to offices on the east side of hong kong island. bnp paribas says they are reassessing operations post-pandemic. sony urge the u.k. antitrust watchdog to block microsoft's activision blizzard deal or force it to sell the blockbuster game call of duty and says the playstation maker says no other will prevent harm to the consumers in the cloud gaming or consol markets. microsoft is the deal cannot be completed without call of duty. shares in new zealand zero jumped in sydney after ed announced major job cuts. it plans to cut 800 roles, 17%

of its headcount. layoffs are expected to streamline its business and boost profitability and marks the first major shakeup under the new chief executive. >> these are some of these stocks we are watching ahead of the market opening in hong kong and china, asian semiconductor stocks and focus as the netherlands prepares for more restrictions on certain chipmaking machines to china. watch as tsmc, home hi, and others -- hong hai, and others. shares of asian construction and mining makers may move as caterpillar flag strong demand for construction equipment. >> taking a look at the markets trading as we get into the last bank of japan decision under

governor kuroda, still a little chance of an outside surprise, i guess, if he goes out entry keeping with his style. the nikkei 225 .6 -- .06% higher. this is markets look weaker, but if you gains after the choppy u.s. session, as we saw a softening of the messaging from jerome powell overnight, but seeing a lot of fluctuations when it comes to trading in australia, looking flat at the moment, the kospi negative. asian stocks have fallen, and more broadly, .2 for private -- .25% higher because the region. that is it for "bloomberg daybreak: asia". this is bloomberg. ♪ detects compressed air leaks to save manufacturers, like colgate, over 20% in energy costs. go brush your teeth. go boldly. emerson.