shery: you are watching daybreak: asia. annabelle: we're are counting down to the market opens in tokyo and seoul. haidi: u.s. bank stocks tumble the most since 2020. fears about balance sheets across the sector. investors are on edge ahead of key payrolls data. the countdown to corrode us final act as the boj governor. breaking news when it comes to the current account in south korea.

we continue to monitor the impact of the china reopening. we have had several months of reopening weakness when it comes to the trade number. the reopening trade hasn't yet started to come through. shery: we do have breaking news. we're getting the central bank rate decision a hold of the benchmark rate in peru at 7.75%. they had already raised the rate for 18 consecutive rate hikes and had unexpectedly halted those hikes last month. annual inflation unexpectedly slowing last month showing perhaps are seeing some peak and inflation pressures in peru. not surprising given that we have seen the damage and the economy from the ongoing protests with political turmoil and that has really affected the

peru mining, and tourism. it could be the first major economy in latin america to ease monetary policy. whole different picture in the u.s. and more hawkish rhetoric coming from the fed. that's not going to help and it comes to market sentiment. u.s. futures are opening to the downside. u.s. stocks finished near session lows. bank stocks took a hit. from rising rates and that hurting the assets of some of the banks. what are you seeing in the asian set up? annabelle: it really is the focus on the financial sector at the start of trading today. given the issues in svb.

silvergate could portend broader struggles. the asx 200 leading the losses. in yields, continued retreat. a lot of focus in the currency space coming onto the japanese yen. yesterday it sought strongest move in a month. shery: a big day in japan as you said. it is boj day and perhaps the final day -- the final meeting under governor kuroda. we are seeing the financials take a hit and australia. peter thiel's founders fund and

others advising their portfolios and others to pull money from silicon valley bank. for more joining us is kathleen hays. also max reyes and garfield reynolds. the surge in rates that we have seen with the hawkish fed is now taking its toll and the banking sector. with the latest with svb? >> the latest as you said is that essentially venture capitalists are advising their firms, their clients companies they work with to pull deposits out of silicon valley bank as it becomes uncertain as to where the bank is headed. whether or not they will be able to weather the storm. part of the uncertainty and concern is arising from the fact that just yesterday we saw a bank that catered to crypto specifically make this decision

to liquidate to wind down operations which really hurt sentiment across the market. there's also illustrated the damage the banks are suffering on the asset side of the balance sheet due to the interest-rate environment. >> it's interesting seeing the outsized reaction. the big banks falling in sympathy to what is happening at svb. is this a crisis that is contained to this one bank much smaller than the big lenders and is it just due to their niche business which has the big exposure to tech and vcs were funding is drying up? >> i want to be careful on how answer the question because yesterday looking at silvergate, the general consensus was that it was isolated. then on the same day you have silicon valley bank saying it needs to do this capital restructuring so the way to look at it is every bank no matter the size, scale, what they are

doing has been dealing with this interest-rate environment that has inflicted losses on their securities portfolio which banks have been able to turn to as a source of liquidity. that means if you are a bank focused in narrow banking whether it's the case of crypto in silvergate or venture-capital and tech and private equity related funding as is the case with silicon valley bank, you have to be very cautious and cognizant of the risk you are bringing onto the balance sheet and how you're managing it. again, that is something across the banking sector. the business mixes of these banks you could say deposit mixes are contributing to these stresses. shery: a whole different picture for japanese financials that have been favored recently because of expectations that perhaps the bank of japan will have to move and scrap its yield

curve control. that's not the expectation for today. >> a couple of outliers expected or say it could happen. with governor kuroda famous for his shaking policy surprises, you can never rule anything out. his last hurrah is going to be no policy move because he and his colleagues at the boj still think they're going to stick to their guns. the economy still need stimulus to keep prices rising to help boost demand and keep inflation above 2%. now it's well above 2% on the key measures the headline number. take out fresh fruit -- fresh food prices. another factor to look at is the news we just got yesterday gdp the final number for the fourth quarter completely stalling out. it is down from 0.6. it was supposed to go up to 0.8

and the main reason week consumption as well as week business investment. that speaks to the kind of concern governor kuroda has. as for yield curve control, i love this chart. a beautiful picture of the governor and his team what they did in 2016 it didn't exist tying your 10 year bond to zero. stancil changes in the ceiling -- substantial changes in the ceiling. that is probably his final surprise, because now he is expected to acknowledge that there is some dysfunction in the bond market and he is expected to leave the next moves to his successor. >> when it comes to the yen, what is the biggest driver here?

will chair powell have a bigger impact than governor kuroda or his successor? >> i think it's very likely jay powell will have a greater impact because setting myself get full again but i don't expect a big move a big surprise today. why would he do that when his successor is busy clearing parliament in order to take over and his successor has indicated he wants to take things gradually, he wants to work out exactly where things are going. that lowers the chances that governor kuroda will do something surprising. the more likely impact is going to be the jobs data which is indirectly jay powell. we saw some of the moves in treasuries overnight driven by signs of surprising labor market weakness. it was very big move down

especially to year yield. you can see treasuries are on edge about where the fed is going to go. 25 or 50. jobs matter a lot. the totality of data that jay powell was talking about. strong jobs number will put 50 basis points on the middle of the table for the meeting later on this month and that would drive down the yen. on the other hand, if you get a more mixed or weaker result that would help to drive up the yen because we would turn to the trade we had a few weeks ago where the general expectation is that the boj will move gradually toward tweaking than removing yield curve control and the fed is slowing down and will soon stop it's rate hikes. anything that takes its -- takes us back toward that narrative is going to be yen positive. anything that takes us away from it on the u.s. side will be a negative for the yen. >> are we already starting to

see signs of a bit of weakness in the labor market looking at these jobless claims? >> jobless claims are still so low. yes they did have a decent jump but they are still so low. you have to see that number continue to climb. the jobless claims don't come out every week. the payroll survey is done once a month in the middle of the month. so this number on jobless claims isn't going to tell us anything about the february jobs are going to do. this is what the fed will be looking at to make the move. jobless claims are not the main driver. jay powell is watching the totality of the data. our story today saying this could be a solid report. that is all they need to go ahead and go from 25 to 50 on the next rate hike.

i love this chart. the number of times 10 months in a row that the estimate on the payrolls has been far too low. last month it was a very large increase. something that needs to be talked about is this financial instability for one or two institutions in silicon valley, is that the kind of the fed will have to look at at the next meeting when it decides if it's the right thing to do to go from 25 to 50. >> to a point i made earlier about japanese financials, look at this chart on the blue bird that shows the 30% gain in japanese bank stocks on the topics since the y cc was tweaked in september. what are you watching in today's decision? >> anything that might lay down the potential guidelines for what would come next.

it might not even be something, it might be comments from governor kuroda in the press that might indicate how the staff are thinking because yes we are going to get a new boj governor and some deputy governors but the bulk of the staff will still be there and the same presentations. any guidance on when you might see and how you might see an end to this iron hand holding down yields and therefore holding down what banks can do, that would be a big issue. also that there is anything that might indicate one where the other what kind of safeguards they're going to put in place because there's plenty of concern that a sudden and to yield curve control or to negative rates or both could be enormously disruptive.

japanese investors have very long memories and 20 years ago, we had the so-called v.a. are shock that sent 10 year yields from .3% to 1.5%. that's going to be in the back of a lot of minds, that's the sort of thing they could undo that optimism if there any signs that the boj would be willing to risk anything along those lines. >> that's our top stories today. let's get you to vonnie quinn. vonnie: joe biden has unveiled a $6.9 trillion budget proposal setting the stage for high-stakes negotiations with congressional republicans over the debt ceiling and government funding. it includes extending the solvency of medicare, lowering prescription drug costs and cutting the deficit by $3 trillion over the next decade.

it is certain to be rejected by the republican-controlled house. the u.s. is stepping up its chips collaboration with india as it seeks a bigger control of the supply chain. gina raimondo has traveled to india. they will discuss ways to avoid over subsidization. india has offered $10 billion in incentives. the only goldman sachs banker tried and convicted in the 1mdb scandal has been sentenced to 10 years in. he was convicted last april of conspiring to violate u.s. antibribery laws and laundering money. global news powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg.

haidi: let's look at the australian traders at the moment. we are expecting asian financials to trade lower as we are seeing across your screen following on the back of the u.s. peers. svb taking steps to shore up its capital position. vcs are telling people to pull stuff out of svb. we are talking about a bank that has an outsized exposure when it comes to vc and tech. a should point out that they are very highly rated banks, these aussie lenders. we could see some fundraising on the back of that but we are seeing them as pretty systemically strong compared to perhaps around the rest of the region. shery: definitely a sector to watch given the rates

environment globally. still ahead, the details on president biden's ticks $.9 trillion buzz -- budget proposal. up next are exclusive interview with aia cfo about the company's earnings and growth prospects amid china's reopening. this is bloomberg. ♪

go. go lights. go big city lights. go spotlights. go staum lights. emerson software helps clean energy become reliable electricity. go “good night." go boldly. emerson.

>> aia reported an 8% drop in business value by 2022. analysts are looking at better business in hong kong after they drop the stringent covid controls. great to have you with us. we were just talking about the reopening and how it has

impacted business in hong kong. clearly that was the biggest drag across the business in terms of new business. have you seen that sales momentum start to pick up yet? >> we are really pleased with the business in 2022. we saw a resilient performance with momentum growing strongly in the second half. our volume of new business grew by 6% in the second half and we have seen encouraging signs in the first two months of 2023. most importantly here in hong kong with the reopening of the border. we are optimistic about the future and we see multiple growth engines across the region looking really strong for the 2023 year. haidi: when you take a look at the hong kong unit sales to maine then, do you think it will regain the pre-pandemic levels that we saw and how quickly can i get back there? guest: we are fully prepared as the market gears up for the mainland china visitors coming

back. you the visitor numbers already increased dramatically from january to february. we have been able to be resilient through the covid years. we grew the volume of new business to mainland chinese visitors three times last year from a small base, but we have a branch in the cow that grew very strongly. we kept our infrastructure intact in hong kong. we are extremely well-placed for the mainland chinese visitors and the border reopening. shery: do you have enough financial planning advisors? where are we when it comes to new hiring and your salesforce? guest: recruitment has been good through the year and here in hong kong, we have about 7000 agents focused on the mainland chinese visitors. we been able to keep about three quarters of the ones from before covid came.

in the agency force and keeping them active through the domestic segment and now as the market gears up we will see those agents be more active as well. shery: we have seen a huge repricing fed rate hike expectations. how is that affecting your business in terms of sales but also investments? guest: our business is a long-term business. we operate through cycles. what are products do is they provide customers with security for the long-term. they don't have to worry about whether the markets go up or down next week or next month. they can put their money with us, invest in our long-term savings products month on month and those sums billed substantially over the years and provide returns to customers. haidi: can you look at the levels that you expect in terms

of business growth in men then china and hong kong? how quickly do you expect the momentum to build now at the reopening is happening? is there volatility in terms of how bumpy that recovery is? guest: we have seen activity come back strongly since september in mainland china. what we have seen is a strong momentum continuing the mainland visitor segment in hong kong. we are a diversified business. we have a strong sem presence -- we have a strong asian presence. it's not all about china. it's about aia as a whole and our diversified portfolio. shery: i was going to ask about your business in thailand, singapore, malaysia. is that where you are seeing the most growth right now?

guest: we've seen great growth in asean. singapore 7%. malaysia 26%. as everywhere else, we have great protection products and long-term savings products. overall, our margins and our volumes remain very strong. shery: what about the impact from the fluctuations in the currency and where your businesses are? guest: again the diversity comes into play and don't forget our largest business is in hong kong which is pegged to the u.s. dollar. the fluctuations impact us your on your, but with the diversity it has dampened. again, good performance. haidi: good to have you back. we have plenty more to come on

daybreak asia. this is bloomberg. ♪

>> take a look at how markets are trading at the moment. financials are leading the declines on the asx 200. they have been hardly hit here in the u.s.. the kbw inc. index plunging on concerns about rising rates and their impact on those banking stocks. kiwi stocks also declining for a third consecutive session and are very much watching nikkei futures. f(jennifer) the reason why golo customers have such long term success is because we focus on real foods in the right balance so you get the results you want. when i tell people how easy it was for me to lose weight on golo, they don't believe me. they don't believe i can eat real food and lose this much weight. the release supplement makes losing weight easy.

release sets you up for successful weight loss because it supports your blood sugar levels between meals so you aren't hungry or fatigued. after i started taking release, the weight just started falling off. since starting golo and taking release, i've gone from a size 12 to a 4. before golo, i was hungry all the time and constantly thinking about food. after taking release, that stopped. with release, i didn't feel that hunger that comes with dieting. which made the golo plan really easy to stick to. since starting golo and release, i have dropped seven pant sizes and i've kept it off. golo is real, our customers are real, and our success stories are real. why not give it a try?

>> thousand seven the excesses

were funded with leverage. i believe that while we will have some amount of distress, i don't think the distress cycle will be anything like what we saw in 2008 and most of the pain is actually gone to be borne by equity. >> that was part of our exclusive interview. the financials are far outstripping the losses from the border benchmark today. given the lead and we had from the wall street session where vendors there under pressure. kick started by the moves we saw and svb. it's a small lender based in california. it has a large exposure to the vc industry slumping 60% and extending the losses after hours. a reminder to the broader financial sector sold off in turn that holding bank stocks

traditionally are seen as a safe harbor when you have the fed rising rates. it's not always a done deal. in terms of the session today with japanese futures likewise pointing to a lower start, that tp x banks, looking to extend their outperformance. that takes us to this terminal chart. analysts have been broadly rising their expectations for earnings outlook. also the moves that we have seen in this have been really driven by boj policy settings. the circle in orange is when governor kuroda took over. the green here is when he introduced negative rates.

coming to covid when all banks drop their rates than this time here in november or december when they changed the yield curve control policy settings. shery: we continue to see expectations that they will do more so you see those stocks rallying in the chart. resident biden has unveiled a $6.9 trillion budget proposal setting the stage for high-stakes negotiations with congressional republicans over the debt ceiling and government funding. >> let's have a conversation about how to grow the economy lower cost and use the deficit. i just laid out the full of my budget. republican should do the same thing. then we should sit down and see will reduce a. -- see where we disagree. shery: these presidential budgets tend to be wishlist. what can we gauge from what was presented within this budget and what is feasible? >> there's an unrealistic

session -- section and are realistic section. the most unrealistic part in the short-term is his tax proposals. there's a measure to increase the tax rate that contributes to medicare for those earning more than for her thousand dollars. there's the billionaires met own tax, an increase in the corporate tax rate. congress is not about to pass a major tax bill. on the other half of the budget, this also is how they kickstart negotiations to fund the government. that section also will get some pushback. he called for about twice as big an increase for non-defense domestic agencies compared to the military. republicans don't really like that. some moderate democrats might not either, but that is something they will have to act on by the end of september to fund the government. you have two sections and part of it is a purely political document that will play into the debt limit debate. the other half is the beginning

of government funding talks and it may not be entirely realistic, but it is not absolutely pie-in-the-sky. >> we have heard from jay powell talking about the deficit. is it sustainable and does this proposal do much to address it? >> no one on capitol hill, no one in washington really argues that the trajectory of the deficit is sustainable. this proposal is getting a lot of pushback from republicans especially because it is dependent on tax increase to try to change that trajectory. it is significant that they came up with about $2.9 trillion in deficit reduction over the next 10 years. everything important number is it would take us from a deficit that is about 6.8% gdp down to 4.6% by 2029. 4.6% is still a high number. there's nobody who is totally satisfied with those numbers.

but here are some ideas to try to change the trajectory somewhat. >> let's get you back to new york with vonnie quinn. vonnie: the fed is assembling a new crypto focus team to ensure it's on top of developments. the vice chair for supervision says the group what help bolster the fed oversight abilities as the central bank works on additional crypto guidance. regulators have taken an increasingly aggressive posture on crypto. lawmakers have accused norfolk southern of lacking transparency after the chemical spill in ohio . the ceo faced a tough grilling in the senate just hours after another one of its trains derailed in alabama. he offered a personal apology and faced heated round of questions ranging from safety to the railroads policy on staffing and sick leave >>. i want to begin today by

expressing how deeply sorry i am for the impact this derailment has had on the residence of east palestine and the surrounding communities. i'm determined to make this right. vonnie: a new york judge has ordered jp morgan to turn over more decrements -- documents from jamie dimon. australia's prime minister holds talks with his indian counterpart on friday on a trip that he says reflects india's place at the heart of the indo pacific. he is described india as a top-tier defense partner.

global news powered by more than 2700 journalists and analysts in over 120 countries. haidi: stephen engle joins us now from hong kong. xi jinping has already received his mandate at the party congress last year, but what are we expecting? stephen: this is going to be unanimous vote. xi jinping is expected to be voted in again as the head of the central military commission to lead the military. it's a foregone conclusion. i will be picking my job from the floor if anything otherwise happens other than him getting a near unanimous vote at the national people's congress. you can see the timeline here is we are getting toward the waning days of the national people's

congress that wraps up this weekend. you're going to get the new premier on monday speaking. the other questions are who is going to become the head of the national people's congress. and who is going to become vice president. there are three people who will be in the focus today friday in beijing. we have three shots of them and they're the ones i'm going to highlight. the npc will get a new head. the third ranking member of the standing committee is likely to be the new np chairman -- nbc chairman. han is the only retiring standing committee member to retain a seat in the npc despite being removed from the broader committee. that is a big clue that he is lined up to be the next president -- vice president but

not positioned as a successor to xi jinping. that is an important point because we thought maybe the vice president whoever he picks would be groomed as his successor but they have taken him off the central committee. they have taken him off the standing committee and they are going to position him as vice president much like he did in 2018 with the one who stepped down from the standing committee and party positions but became vice president. he was never a threat to be a replacement of xi jinping. this gives us the clue that xi jinping is not ready to name any successor. he is essentially leader in perpetuity since he will get the next five years as president then perhaps again and again without a name successor. that's where we stand right now as friday wraps up the npc and we get the final points -- appointments over the weekend. haidi: stephen engle with the

latest on china as we continue to watch that. also the fallout when it comes to asian financials and banking stocks. we only have the australian lenders trading. including the commonwealth bank of australia. you are the broader extension of losses. we are about 40 minutes into the cash trading session. this after the silicon valley based lender svb taking steps to shore up its capital positions. we are hearing with had the likes of vc funds urging customers and clients to potentially remove funding from svb. that fell as well as broader u.s. stocks. can at cba for example, the biggest decline since mid february and trading at the lowest since october of last year. coming up next, human rights watch landmark hearings in india

over same-sex marriage. this is bloomberg. ♪

india courts will hear arguments on whether to legalize same-sex marriage. joining us to discuss this is

the director of the lgbt rights program at human rights watch. give us a sense of where india is at right now. we know that the ruling party is not really in favor of widening the hindu marriage act. we know that religious groups also oppose it. >> india took an enormous step forward five years ago when it decriminalized same-sex relations. that was a colonial era law that had been in effect for over a hundred years. it was important because it was the template for british colonial lost throughout the empire and we see the legacy of this today. the repeal of that loan was deeply significant -- of that law was deeply significant and it has been used in a number of cases challenging similar laws in other parts of the world

including africa and the caribbean. this particular court case will resonate in a similar way if it is successful. what is at stake is the special marriage act which regulates secular marriage. the secular marriage act would regulate marriages between religion. >> what is the likelihood of success at the supreme court? >> that remains to be seen and for the court to decide. the previous ruling was very strong in terms of equality nondiscrimination and privacy. those same principles will apply in this particular case.

instead of opposing this change in the law, the indian government should be behind it in terms of the constitutional provisions in india guarantee equality and nondiscrimination for all. haidi: here in sydney, we just celebrated a couple of wonderful weeks of world pride. so much focus was on top of the celebration and commemoration. so much focus on the progress that still needs to be made particularly in certain parts of asia. do you think the spotlight on sydney and all of the events here and the discourse potentially helps these arguments being made in parts of the world like india where as you say equality is not a guaranteed right? >> i think that these kinds of public events are always important and there was a big human rights conference associated with the events in

sydney. we have seen progress specifically around relationship recognition in the region. taiwan was first in the region in terms of extending marriage to same-sex couples in 2019 following a court ruling there. we have seen other positive developments for example vietnam removed the prohibition on celebrating same-sex relationships even though they don't have any legal standing, it was at a certain point illegal to celebrate a same-sex relationship. we have also seen in japan at the local level some areas do have some form of relationship recognition. and as far back as 2007, a government appointed commission did recommend to the government

same-sex marriage although there has been no progress on that to date. in thailand, we see that lawmakers are taking seriously to bills that are currently before parliament that would extend some form of relationship recognition including potentially marriage. haidi: in a lot of jurisdictions, we see the activism within the corporate sector supersede what we see developments for the public sector. is that the case in india? are we seeing the influence of corporate's in the country and is that making a meaningful impact on how much this can be pushed forward? >> corporations particularly transnational corporations are paying increased attention to human rights issues including the rights of lgbt people. on one hand it's about taking their own employees and there is a limit to which companies can protect their employees if there are laws that criminalize

same-sex conduct or it becomes difficult for companies to attract their top people if there are this room the true provisions within the law in a particular country. companies have become more proactive in terms of engaging with governments around discriminatory legislation which is bad for business. >> we appreciate your time with us today. you can watch us live, catch up on past interviews on our interactive function tv . you can join in on the conversation as well, send us instant messages during our shows. this is for bloomberg's subscribers only. this is bloomberg. ♪

shery: breaking news out of japan. surprising to the downside for the month of february. still easing the previous month when it came in at 9.5% growth. producer prices in the month-to-month basis is also a contraction of .4%. this is contracting more than economists had expected. the inflationary picture in japan is still strong.

the year on year gain for factory prices 8.2% but easing from the previous month and also surprising to the downside on the day. woman get the big boj decision, the the last under governor kuroda. investors are keeping a keen watch despite not much of an expectation of an outside surprised. the equity benchmark for japan trading just below its highest level since 1990. investors are watching that final policy meeting from governor kuroda as he could potentially still shocking all. -- shock and awe. how is he positioning going into this last meeting because we keep saying logically it would be very unusual for governor kuroda do something unexpected but he does have a form. guest: indeed.

if you asked market players most people say they're not expecting any -- surprises but given their experience in december, most are very nervous. probably if there is no policy change, the chance for topix to gain further, it could hit its highest level since 1990 because it is just .5% below september two years ago. shery: there has been a lot of optimism when it comes to japanese stocks especially about corporate governance improving in japan. also not to mention the japanese yen has been pretty weak. is that what's behind the resilience right now? guest: the yen weakness is part

of the reason. another big reason is the very strong performance of volume shares in japan since the end of january. that has been triggered by the tokyo stock exchange plan to ask companies with low price ratios to come up with a business improvement plan. that seems to have caused a massive shock among japanese company executives and a few companies have reacted with massive share buyback plans. a printing company is a very good example of this. it announced a massive ¥300 billion share buyback yesterday. its share prices are expected to jump opening today and probably it is going to hit today. many investors are expecting other companies to follow that

example. that trend could continue for a while. haidi: our senior asia stock reporter. let's take a look at some of the stocks we will be watching in a few minutes. we continue to watch the financials and banks. they are likely to follow u.s. peers and australian piers that are already trading lower. the fallout spreading from silicon banks move to shore up its balance sheet. the ceo of svb -- crypto shares are in the spotlight. shery: take a look at how asian stocks are trading at the moment. we are seeing the asx 200 following more than 1.5 percent.

this as bank stocks take the biggest hit at the moment. kiwi stocks losing ground for a third consecutive session. u.s. futures are also under pressure down .2%. the s&p 500 finished near session lows given the hit on the bank shares. nikkei futures are pointing higher. the market opens in seoul and tokyo are next. this is bloomberg. ♪

i screwed up. mhm. i got us t-mobile home internet. now cell phone users have priority over us. and your marriage survived that? you can almost feel the drag when people walk by with their phones. oh i can't hear you... you're froze-- ladies, please! you put it on airplane mode when you pass our house. i was trying to work. we're workin' it too. yeah! work it girl! woo! i want to hear you say it out loud. well, i could switch us to xfinity. those smiles. that's why i do what i do. that and the paycheck.

>> this is daybreak asia we are counting down to asia's major market opens as we see the fallout from the loss outs on -- losses on wall street. the concerns about what rising rates will mean for some of the banks. >> of course in addition to that we have risk factors coming out of the governor's last policy meeting at the bank of japan. markets are still bracing for potentially an unexpected decision. let's get you straight to the balfour look at the market open. >> we are a few moments away from the opening of japan and korea and the start of trading for cash treasuries, as you say we are focused on the financial sector across the board in asia. interestingly as well it risks overshadowing what will be his

last decision in the helma position. second -- helma position. stepping down after a decade, he does lead with japanese stocks -- leave with japanese stocks at a three decade high. part of that is a broader outperformance with the japanese bank index rising significantly. we see banks coming online lower, tracking what we see on wall street. take a look at that we we see in australia. we have the financials likewise leading losses this year, sherry, it does come down to what we see in terms of the financial sector today. it signals to us that searching interest rates are not always a blessing. sheri: we have breaking news at the moment, we are getting more funds now advising companies to pull funds from svb. they are advising companies to pull bonds -- funds from svb.

as we see the founders fund by peter thiel, advising their portfolio company to pull the money from the silicon valley bank. a huge plunge in the shares today, given they had to take measures shore up their capital position. as we talked about those rising rates, wreaking have bacon some parts of the market, right now that seems to be hurting the financial sector. canon telling companies to pull funds from svb on a needed basis. our next guest is overweight on financials, i will have to ask you, which financials and what parts of the global market are you overweight even that you -- here in the u.s. we start to see the fallout from not only rising rates. and concerns about the sector.

but also brought competition in the sector. guest: in our asian model for folio we have allocations both to the chinese banks -- portfolio come we have allocations both for the chinese banks and retail focused banks. indian private sector banks and the korean and singaporean banks. in the case of asia, they are increasing interest rates. we have seen this in korea and some of the other pockets of asia leads to net interest margin expansion. we think that story, while possibly the last leg is still alive. in other parts of the world, particularly in india the private sector banks are the biggest beneficiaries of market share expansion. and a very strong credit growth environment has emerged over the past year. running 16 to 17%, corporate's are under leveraged and months

of asia. barring if you pockets and greater china. it is a combination of all these considerations that lead us to be overweight financials. we think despite what is happening and the concern on the interest rates is likely to stay with us for a while. this will likely stand is in good stead. sheri: do you think what is happening in the u.s. could pose a systemic risk to the sector? >> i think the risk on the rates being much higher for longer, what -- the systemic risk it poses to emerging markets is through the currency. in means the u.s. dollar could appreciate more. we could even reach a dollar shortage environment that we had a few years ago. that obviously is not good for the emerging market.

particularly those markets within asia that are dependent on external capital inflows with her balance of payments. i think that is a risk that asian emerging market investors would have to be mindful. haidi: when you take a look at it perhaps from a different white of you, the fact that we see this as a soul from the outsized exposure it has to broader tech and vc's, funding in vc's drying up, is this a sign we are starting to see recessionary conditions across some major contributing sectors to the broader economy already? guest: inversion of the yield curve, much higher interest rates than the market currently anticipates today. very high inventories across certain sectors -- sectors and the tech hardware are pointers

to a likely demand contraction in markets. this is something emerging markets will have to contend with. much of the asian emerging markets are exporters. the final demand rests in market. even if we do have a technical session, that we have been talking about, starting from quarter three in united states it would certainly have an impact on the exposure of the markets, having said this of a of the earning at summits trajectory -- earnings estimate trajectories. they are possibly in the last leg of the earnings the kind -- decline. i would think that the first half of this year would be turbulent for asia and a relatively calm her second half -- calmer second half.

sheri: interestingly we see downside pressure in comes a rate sector like tech, but your pressure is -- >> that clearly dovetails with china's reopening, where we think that this consumer discretion or improver in that improvement in consumption sentiment has an impact in e-commerce, internet and other social media in china. we have seen that, the stocks actually skyrocketed since late october early november. many of these are understandably taking a breather. some of these even an hour valuation screens are showing as reasonably valued stocks now. the evaluations up possibly the midteens, one your fork, to your -- year forward and two year forward.

after the hiccups we saw in 2021 and 2022 are likely to stabilize with improving consumption sentiment. that has been the strongest background reason, the tailwind that we see for the stocks going forward. haidi: always great to have you with us, head of apac equity research. they are preparing for the risk of a rapid rebound in the yen next week, the boj policy meeting followed by some crucial data points from the u.s.. we are already seeing that support from the yen from traders who are not giving up yet on potentially a parting shot from the governor. as years and saying, the fed u.s. data, that goes with a much bigger influence. >> the baseline for investors when it comes to the bank of japan is, assuming no surprise, the path, the general consensus

is very strong, the path for the boj is gradually towards using or scrapping yield curve -- controls, towards normalizing policy. all seen as a young positive -- yen positive. no one -- a sudden shift back towards easing. that is taken for granted. that is what is put a little fire in the yen's belly overnight and into this morning. the way u.s. yields have come down so strongly. there is some, some concerns brewing that the fed might be on the verge of going to hard to fast it goes to 50 basis points. therefore what happens with a jobs numbers will really matter. if that comes in a stronger some people fair, the whisper number

is a stronger-than-expected jobs report you will see the two-year yields jump back up, maybe lose all the 20 basis points, regain all the 20 basis points they lost overnight. and make fresh highs, we made -- we had jeffrey tweeting yesterday how the two-year chart looked as though it was not anywhere near close to a top. there are some scary metrics, if you look at the long-term chart, we are close to going on the yields for the two years -- that we saw back in 2006. the next level up his back before the dot com bubble burst. there is a capacity for a lot more pain in the bond space. unless we get data that surprises on the downside. sheri: on the doj today, perhaps not eight-week on the --a tweak on the ycc.

could we see an -- i downgrade on fourth-quarter gdp numbers or a bit more when it comes to for guidance? guest: forward guidance is going to be difficult for the point of view. you're about to have a new man at the boj. even if you give it, does it sustain once he takes over? it is -- you are right in the assessment, the economic assessment will be key. in particular because we did just get week economic data. do they take that as supporting the boj's general stance that the current inflation at 4% is not sustainable? that they are a long way from meeting their target for it to be above 2% over the long-term? or do they say the economy weakened a bit, but if you look at other indicators of what is going on, what is going on with wages we are hopeful we are getting closer.

that is going to be a very key swing set of, not really data, but comments from the boj. also there is a potential that kuroda himself might offer broader assessment. this will be his last chance. if he ruminates on the idea of how close the boj is to achieving its objectives, that could be taken by traders in of just -- and investors as signaling but will take place under his successor. >> garfield reynolds, chief correspondent, looking ahead to the boj and also the jobs report here in the u.s.. let's get to the bell for some of the movers across the asian session. >> we are just over tens -- 10 minutes into the session, the focus on the financial sector. we saw the banks closing at the

lowest level since mid-2020 on wall street. the concern is that we have seen investors piling into the sector given it is one of the areas you can hide out during a rising rate environment. it cannot always be a blessing. surging rates in the money market send investors looking for better deals elsewhere. banks possibly getting saddled with losses on the bond holdings. investors were that the need to sell. that is spooking a lot of concern in the market today, we see financials on the biggest laggards for the broader index. kicked up by svb, a smaller bank in california, a key lender to the vc center -- sector, issued a fire sale to shore up liquidity earlier today. that has a lot of ramifications across the landscape. these are some of the biggest movers we see in the session, being led by cow bank. -- kakao bank.

investors positioning for possibly some kind of surprise from kuroda later today. we see in the crypto space, svp been drawing parallels with silver gate, both of those have those key concentration risk, having a bearing on the crypto space as people grow concerned about access to liquidity. how they can transfer access -- assets on and off the exchange. haidi: still ahead we see jinping on the verge of a historic third term as president. we take a look at what the seating plan reveals about china's internal politics. by the farewell surprise it seems to be diminishing, corroded gets ready to deliver his final policy decision. this is bloomberg. ♪

lomita feed is 101 years old. when covid hit, we had some challenges. i heard about the payroll tax refund that allowed us to keep the people that have been here taking care of us. learn more at getrefunds.com.

thanks to avalara, we can calculate 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 >> this is "daybreak asia," i am vonnie quinn with first word headlines. sources told bloomberg that founder fund told companies to

pull money from svb. they said that svb ceo greg asked people to stay calm in concern about its financial consist -- position. they announced a share sale after is a gift and loss on the portfolio. -- at their a significant loss on the portfolio. the u.s. steps up -- commerce secretary traveled to india to sign a deal the chip industry incentive plans. discussing ways to avoid over subsidization. india offered $10 billion in incentives to win manufacturing, tracks -- contracts. >> one person accusing of supplying parts that around uses to supply drones come u.s. intelligence says some of the drones center russia uses them in ukraine. the same type of drone is shipped to hootie rebels in

yemen. this is the latest to disrupt the sales of military government. >> tried and convicted in the global 1 mdb scandal. roger was convicted last april, to launder money with future malaysian financier joe, over $5 billion globally for its role in the scam. global news -- global news, 24 hours a day, on air and on bloomberg origionals, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn, this is bloomberg. haidi: china is expected to hand xi jinping a third term as president, 3000 members of the legislative vote on the key -- on friday, david ingle joins us from hong kong. we know that this is procedural. he has the mandate. guest: that is right, this is election friday in beijing, xi jinping, the only big question

is if the vote will be unanimous in the national people's congress later today on friday. back in 2018 there were 2970 votes cast for his second term, he got every single one of them. the question is if you will also get that. in that same year in 2018, lived that year he got the constitutional changes to allow him to essentially rule in perpetuity. he will likely be voted in for president busting third consecutive term in there could be further terms down the road we do not know right now because he has not named his successor. the biggest question today is a do a number of other votes. i can bring up the three gentlemen in focus today. this is their day, the new premier designate will get his day tomorrow and on monday with a press conference. today's about xi jinping securing the third consecutive term as well as well has re-upping the central military commission had.

we will -- head. lee will be stepping aside after hitting the age apartment and the standing committee member will be taking over him. you will become the new head of the national people's congress. also there will be a vote for vice president, the former vice president hitting the retirement age, this is the most interesting on what should be a not eventful voting day in the national people's congress. we do not know who will be the vice president. you can bring up his name, you can bring up who is most likely to be picked because he is the only retiring standing committee member to maintain a seat on the national committee congress. he does not have a job necessarily the upper echelon of the party. because he is still saying -- of staying he is likely to get a new job. a similar process we got in 2018.

when they named the last -- it is the same as when they link -- named the last vice president. by naming someone who a step aside from the standing committee to vice president, is this enough from champaign, he has a new right-hand man as vice president but not a potential successor. that is very important, essentially there is no successor named. xi jinping will likely continue to rule as long as he wants to until he names a successor and decides not to stand for these positions again. that is where we stand right now as we wrap up the national people's congress this weekend. we get the first press conference on the new premier on monday. haidi: chief north asia correspondent stephen engle there, following the conference ongoing in china. plenty more to come on "daybreak asia," following the markets a

sea of red. this is bloomberg. ♪ 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. 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...

could help put them within reach. from your first big move to retiring poolside and the other goals along the way wealth plan can help get you there. j.p. morgan wealth management.

>> let's take a look at some of the asian banks trading with the downside pressure coming with a decline reselling u.s. lenders, it sparked we saw from the silicon valley base, sbb taking -- svb taking action shore up capital, we help you tells fund advising companies to exit svp, we see that brought down when it comes to trading in japan. of really ankara as well. -- australia and korea as well.

the industry grapples with a slowdown in dealmaking and capital markets, the lender has avoided major -- job cuts, they say how attrition has been key to managing headcounts. >> we have a phrase, let attrition be our friend with a 200,000 plus people you have a normal turnover rate, it is starting to go down to an all-time low. we are running about 12% across the whole base. the pandemic dropped to six, worked its way back up, notice back down to mid single -- now it is back down and then back up to mid single digits. we moved investment biggest other parts of the franchise to help us in the market, you can overcome the headcount peak in january. down a few thousand, it moved, you have to start -- stop hiring, that is what we did last

fall. i spend all my time asking questions about all of that, i have the talented teammates that drive the company. how chat gpt effects come we have erica, a virtual assistant, technology that we have been running for four or five years, customers use it millions of times a quarter. we are used to it, this is a new one that can change the game. >> do you think it will? at the moment you are not allowing it. >> we are not allowing at that more of a technical security question, and how it works, the use of artificial intelligence and predictive technology, we use not only on the consumer side. we use the same technology internally. it runs on our data, in an environment we understand, doesn't have the exultation problem. it is a great thing, it will be work out over time, there will

be licenses brought internal, working on the data. that is working through the security things. as issue of letting a budget is gone the public environment potentially pulling the data into the public and varmint without understanding -- environment without understanding. >> it will morph into some form some way. >> we already use it, our intelligence, stanford gave us a natural that'll natural -- natural linkage processor, you can think about it you can be driving down a road in a car 60 miles per hour and talk to our mobile app. it can go to 110 systems and find a specific transaction. tell you what it was. that is pretty amazing. it takes the these days, our households depend on the internet more and more. families grow, houses get smarter, and our demands on the internet increase. that's why we just boosted speeds for over 20 million xfinity customers, on us. so you get more of the speed you need

for day and night streaming. more speed you need when you're work from homeing. and more speed you need as your family keeps growing. check in on your current speed through the xfinity app - [announcer] imagine having fuller, thicker, or upgrade to the speed that's right for you today. 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. they're personalized to match your own natural hair color and texture, so they'll blend right in for a natural, effortless look. call in the next five minutes and when you buy 500 strands, you get 500 strands free. call right now. (upbeat music)

vonnie: this is daybreak asia i

am on a queen with a first word headlines. they are assembling a crypto focus team, michael barr says the group would help bolster the fed's oversight ability as it works on additional crypto book -- guidance. they have been giving additional attention to crypto assets after the collapse of fdx. -- ftx. >> the ceo alan shore-based the tough grilling -- faced a tough grilling at the senate after another derailment. he offered a personal apology and a state he did round of -- heated round of questioning. >> i want to begin today by expressing how deeply sorry i am for the impact this derailment has had on the residence of east palestine and the surrounding communities. i am determined to make this right. >> a new york judge has ordered

jp morgan to turn over more records from ceo jamie dimon to the u.s. virgin islands, this is a lawsuit accusing the bank of facilitating jeffrey epstein's sex trafficking. it is sued the former executive, whose relationship with epstein is the focus of the lawsuit. global news, 24 hours a day, on air and on bloomberg origionals, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn, this is bloomberg. haidi: let's get you to the bell quickly, for a look at the markets, but a friday we are setting up for. >> that is absolutely right, you can see that retreat we are seeing back into the havens. you can see for instance in the bond space we are coming back into the shorter end of the curve. two year treasury yield dropping, the treasury yield curve inversion starting to narrow. earlier we are at the 107 mark. likewise when you look at the

currencies base some of the ones holding up a little bit better are the more safe haven plays. the yen for instance and the euro that is on par with the ecb with the fed on that right against inflation -- fight against inflation. there is a move away from equities, there is an index down's extensive percent, when you look at that -- down 6/10 of a percent, when you look in more detail, is a second worst performer, even bringing down the bank index. investors piled into the space and head the boj meeting with the governor sharing his last policy decision, the moves coming from the wall street session and what we see or solve with -- saw with svb. >> more on the fallout for silicon valley's banks to shore up capital, hit with a slowdown in funding among its clients,

let's bring in richard, the financial strategist, good to have you with us. how concerned are you that this could turn into a systemic issue for the sector? >> i really do not believe that is likely. i think svb, silicon valley bank is a very specialized company that operates in, the more speculative area of the banking industry. an industry that is highly cyclical. you have to expect that the bank of this nature will go through periods of great success, the stock price of one point was over 775 dollars to period of great stress that we will go through the next several years. >> how exposer other banks to rising rates? we are worried in this case about accumulated loans and other investments and how the other assets value could be eroded because of the increased

interest rates. >> i think it is likely that banks are going to be exposed to much higher rates. in fact, the you just interviewed, he is a perfect example. basically, the banks have not passed along to depositors the increase in interest rates they have been. experiencing the net result is they have to catch up. as they catch up, they will increase their rates they are paying on deposits faster than interest rates are going to go up in the overall economy that will stress the margins of the bank. at a time when loan volume is likely to be weakened and loan losses will are likely to increase. however that is not a systemic problem. that is something that normally happens in an industry like this. i think ink stocks will be lackluster -- bank stocks will be lackluster investments the next two or three quarters. the industry will not get the devastation it is experienced in

2008. >> in fact i would assume after 2008 what you will see is a proven resilience of a lot of the larger banks. when you look at smaller banks, regional banks, niche facing banks like svb. are you concerned as shary mentioned they are more sensitive to deposit pricing. they do not have diversified business dreams, there is more volatility in that part of the banking sector? guest: member, small banks have a business model that does not work. when i got to the business there were 17,000 of them in the united states and there is roughly 4500 today. the reason is, they borrow short, lend long. a strategy that does not work, year-by-year you continually lose banks. svb is a different type of company.

it lends money to start up operations in silicon valley. it lends money to, if you will, venture capitalist, it lends money to the private equity firms. all those funds are directed to the consumer technology sector. the consumer technology sector, in my view, has had it. the consumer is in trouble in the united states. it will shock you to know, there are fewer people with jobs in the united states today than in october of 2019. despite all you hear about job creation, etc., etc. there are fewer people working. they have gotten a staggering amount of money from the government in 2020 and 2021. they have been spending that money streaming rapidly, they've been borrowing that money extremely rapidly therefore they are tapped out. by the end of this year, no less of a person than jp diamond has

indicated, the consumer has had everything go their way. as i said, by 2024 jamie dimon says that will be over. when you take that back to silicon valley comey take a look at the fact that these come -- and you take a look at the fact that these companies spend other their time and money on building consumer technology products they have had it, too. you see layoffs in large amounts coming out of every consumer tech company in the united states. certainly all the ones in silicon valley, silicon valley vanke, that is their customers. if their customers are hurt like that the bank will get hurt also. that is exactly what is happening right now. it is not a national bank issue. it is an issue for silicon valley and silicon valley bank. haidi: i think when it comes to broader financials, i'm quite

keen to get your view on this chart. we look at it internally quite a bit, people call it quite scary, it seems to me it hits up against accounting instruments that have been quite a verbal for a lot of banks -- favorable for a lot of banks if you have a liquidity crisis or liquidity needs. this looks at the significant extent of unrealized losses in bonds if they are held to maturity for u.s. lenders if they are held to the end of 2022. if there are liquidity needs there are the ability to sell a small portion of that without being considered and compliant with u.s. regulators. guest: clearly, if any industry sees the value of its assets going down meaningfully such as that chart is indicating, it will have a problem. the fact of the matter is, over the last 15 years since 2008,

the banking regulators have forced the banks to take on a lot more capital than they had in the prior period. they forced the banks to increase liquidity dramatically from what it was. to give you an extreme sample, jp morgan is sitting on hundreds of billions of dollars of pure cash. it has hundreds of billions of more of that -- of government backed securities, treasuries by the united states government. these banks are in a position to take a fairly sizable hit to the value of some of the assets because they are long-duration securities. again, when you look at the magnitude and the size of these institutions, you are not going to see anything near a panic or a problem with the banking industry. panics and problems in the banking industry do not come

from reevaluation of the value of securities. they come from loan losses, therefore what you need to focus on, is will the loan losses of the industry grow at a very rapid rate in 2023? the answer is yes they will. however they will not reach the point where they are threatening the stability of the industry or the stability of any major bank of the united states. we will not go through a good time, liquidity will dry up, interest rates will stay high for a long period. give our view is correct. we will be operating in what could be a recessionary environment by the end of 2023. that is not make you want to jump up and put your money into bank stocks. to take it to the next step and argue the banks will be harmed dramatically as a result of these events is not correct either.

the banks have more capital. they have more liquidity. they have a much better underwriting in their loan portfolio. did not overly exposed to something like residential real estate the way the word 2008. -- the way they were in 2008. they're not asked -- overly exposed to anything, they will hit loan losses it will not destabilize the banking industry. when you come out of this the place you want to be invested is bank stocks. they are the only guys that have money when the liquidity situation dries up. haidi: i do not know if to feel better or worse after that. it is a bit of a roller coaster you took us for that answer. richard, always the voice of reason and much appreciated on a day like today. coming up next invesco asset management in japan, just -- it says not to expect a surprise

swansong from corona, chairing his last -- kuroda, chairing his last policy meeting of his leadership. this is bloomberg. ♪ the first time your sales reached 100k was also the first time you hit this note... ( screams in joy) save 20% with the lowest transaction fees and keep more of what you make. with a partner that always puts you first. godaddy. tools and support for every small business first. ♪ at morgan stanley, we see the world with the wonder of new eyes, ♪ helping you discover untapped possibilities and relentlessly working with you to make them real.

♪ because grit and vision working in lockstep ♪ puts you on the path to your full potential. ♪

>> take a look at trading in fx today as we get turmoil hitting banking stocks and as we get into the bank of japan decision. the last from governor kuroda, you hear the dollar-yen just shy of 136, the biggest question potentially we do not get much of a move on the bank of japan. no big surprise from corona, perhaps a bigger influence will be -- surprise from corona, perhaps a bigger influence will be the payroll information for the fed. the rat -- risk for the rapid rebound in the yen next week as we get the crucial data points out of the u.s.. we see a little bit of weakness out of the aussie dollar, the classic risk as we have risk off

sentiment in particular when it comes to everything going on with svb and the concerns of systemic risk from the board of banking sector. to the bank of japan, most economists are not expecting our works from the governor's final policy decision, policy traders looking keenly at the next moves for the yen, joining us now is a global markets strategist at invesco asset mentioned in japan, with us outside the doj headquarters -- boj headquarters . great to have you with us, do you expect him to leave with a parting shot today? guest: i think given the track record of kuroda, who does not mind giving surprises to the market, we do not know for sure. i think he is very likely to leave the policy unchanged.

the fact of the matter is the incoming governor, waiter -- uada thinks the current policy is appropriate and 2% inflation is just away, at think you will leave the policy unchanged for today. >> when do you start to see more moves, once we see that ship being taken over by governor uada? guest: that is a good question. at the moment, like many other economists -- economies, japan export conditions are not so good because of the slowdown in the global demand. i think from the mind of the boj, they should be thinking that we need to really support the economy. in order for the companies to raise wages. for the spring and also next spring. that is the way to the 2%

inflation. my view is the boj should wait for a while, for this year, and then it is probably going to have a tightening policy after they confirm the economy condition is good. you have wage increases, and then that is the time they should raise interest rates. both on the short-term front and on the long-term front. haidi: when that time comes, how much are you expecting the 10 year jgb yield to jump? do you position now in the likes of financials? guest: you know, i think, if, when the boj -- the 10-year will jump quite substantially to 1%

or beyond 1%. 1.5%. premature abolishment of the y v is notc good for the economy -- the ycc is not good for the economy. i think they will raise rates little by little, maybe by 10 basis points each, they reach one percentage point, they have abolished the policy, then we should be able to minimize the impact of abolishing that policy. sheri: how do you position in the markets ahead of that? do you buy into japanese banks? do you expect the japanese yen to strengthen or do you so say the export oriented companies less? guest: what i think will happen, given the inflationary environment, we have seen a

resilience of domestic demand in japan. we see increasingly more visitors from abroad, inbound demand is growing in japan. we have a constructive view of the japanese equity market. even though the export conditions are unlikely to be -- or a while, it should perform probably more than the u.s. and european markets. shery: from invesco asset management in japan, good to have you with us standing instead -- standing in front of the boj ahead of the important policy decision. look at how we are trading, treasuries gaining ground and extending gains in the asian session. two year yield down to the 4.80

level, surpassing 5%, earlier in the week, the highest since 2007. the curve is easing a little bit. coming up jd.com reporting a sharp drop in revenue growth. expressing caution in the chinese recovery. 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... could help put them within reach. from your first big move to retiring poolside and the other goals along the way wealth plan can help get you there. j.p. morgan wealth management.

haidi: jd.com shares tumbled after a sharp drop in revenue growth and only a tepid view on the strength of the chinese consumer recovery. for more let's bring in bloomberg intelligents senior analyst catherine, what did you think of the results? guest: not much surprises from the results. they delivered on some of the growth. we knew it was a difficult quarter for everyone. october to december quarter. the company did deliver on the margins expansion. really what we are seeing in terms of the share price today is the guidance and the outlook ahead. the company, particularly as they will go after the more price conference -- conscious bargain shoppers in mainland china. haidi: what is ahead in terms of expectations as has do this --

how this economic reopening and regulatory changes that? guest: from a fundamental perspective you will see topline going very volatile. the different quarters came from different places. particularly if i highlight the shanghai lockdown last year, the april to june quarter, you see a nice uptick in accelerations of the topline. against what jd is highlighting from the subsidy is that you will have to stimulate the consumption. consumer sentiment, in mainland china, is just recovering and possibly still below what we know of pre-covid levels. that is the uncertainty, we will see through the rest of the year. from a regulatory perspective i

am less concerned about that. the eakin -- e-commerce play, it has settled in terms of new regulation and roles coming out. as long as they -- rules coming out. as long as they abide by the standards put in place they can safely move on and look at the fundamentals for these companies. >> bloomberg intelligence senior athleisure list -- senior analyst catherine. some of the stocks were looking at ahead of the open in hong kong, we see svb take steps to shore up its capital positions and a number of venture plans calling for funds to pull out of svb. we see the fallout when it comes to the financial and bank stock trading in koran, korea, -- bitcoin tumbling following the

silver date capital collapse. some of the names we should be watching for. shery: take a look at the bank indices trading across asia right now. we see the big downsides, in japan, the index down 2.4%, despite the fact that we are headed towards a boj policy decision. the last under governor kuroda. a lot of support for japanese banks after the ycc yield curve was tweaked in december, a 30% gain. you can see the downside with a news related to finance, financials, and the impact of rising rates. that is it for "daybreak asia," the china open is next. this is bloomberg. ♪

go. go scientist. go software. go cure. go production. go faster and safer. emerson automation software helps breakthrough medicines get to market at warp speed. go human go. go boldly. emerson.