♪ shery: you're watching daybreak asia coming live from new york, sydney and hong kong. annabelle:.

counting down to asia's major market opens. paul: top stories, amazon jolts investors as amazon reviews -- reveals shares are down. asian trade is digesting corporate earnings and data showing the worst of both worlds with higher inflation and slowing growth. july that bank of japan headquarters for ueda's first policy decision as governor. let's get you some breaking news on the bloomberg, south korean industrial output for march falling less than expected. it was off 7.6% but the expectation was for 10.2 percent decline. better reasoning -- reading than anticipated. we had a revised number for february, a contraction according to statistics bureau

estimates for industrial production ranging from 40% contraction to a 2%. seven point 2%, beating consensus. the south korean yuan trading against the greenback at 1338. so weakness continuing to be the story. shery: especially as we are seeing dollar strength. take a look at futures at the moment. we are seeing downside pressure in the session after the s&p 500, it's best day since early january. we're talking about a jump of 2% as we got more positive tech earnings. meta-jumping 10% offsetting negative data that we got. growth slowing. inflation coming in better than expected. treasury yields are rallying. the two year yield above 4%, really expectations that the fed

will need to move when it comes to may rate hikes. not a lot happening in oil because traders are digesting mixed economic signals. not a lot happening in the asian session but a lot happening in after hours trading of amazon because we saw downside pressure continuing more than to have percent. this is a stock that was gaining ground because amazon beat expectations across the board. during the earnings call we heard that the cloud business slowed in a row from the first quarter bell so people have become more skeptical about the stock at the moment. annabelle: under pressure, fluctuating in after hours but in asia, the focus is on big tech earnings. those numbers will help us and the weak hybrid of -- high.

the numbers are telling us that big tech names held up better than what wall street hedman -- wall street had been expecting. tightening is coming through from the fed. the other big focus is the bank of japan's policy meeting. we had the end of that today decision coming out later. it is ued'as first as governor --ueda's first as governor. we have tokyo inflation after he saw the national level continuing to come in pretty hot. the expectation for when that is going to change any catalyst for the boj not quite yet. we are seeing traders pricing in the exit of negative rates by as soon july. shery: for more on the boj let's go to global politics and economic editor kathleen hays at the boj in tokyo.

the data dependency with those numbers expected today, not worse than expected from ueda in his first month's meeting. kathleen: glad you mentioned data dependence because you're thinking he is known for watching the data. he wants to see the numbers. in 2002 when he dissented against a rate hike by the bank of japan which they had to reverse, he said he wanted to see numbers. he was going to move slowly. he's watching numbers closely and in the big picture, what kind of pressure is there on the bank of japan to make any kind of change? most people would say nine. bond yields not pushing too fast or hard against the upper range of the band. the yen settled into a comfy range for a lot of households. and for businesses as well, so the idea is no change. it is about communication. and maybe a change in the

inflation outlook. the governor in january, the last time they adjusted the outlook they had inflation at 1.6% by the end of the year. we talked to a doctor who was a board member from 2012 to 2017 and a critic of the boj for a long time. he thinks the wise cc, the yield curve control is no longer necessary. in fact he thinks that it will start adjusting. not toward the second half of the year, maybe october, july is too early. in terms of any other change, he says they will have this long-term review, it signals that he has 25 years, that's going on for a while. by the second half of 2024 he says that's when we might see what the boj considers a true change in easing. when you move the negative rates to zero initially, that is down

the road. today we want to hear what he says about the economy, inflation and questions about why cc and when he think that might be adjusted in a few hours from now. stay with us in tokyo. paul: bloomberg's global economics and policy editor kathleen hays in tokyo. stick around for our coverage of the boj. we will be speaking with former officials at the central bank as we count down to governor ueda's policy decision. amazon reported strong first-quarter results with its outlook range topping estimates. shares have gone south as executives revealed on the conference call that the growth of the cloud unit is running lower than the first quarter's pace. let's bring in bloomberg's spencer. spencer, amazon was up 12% after hours at one stage. the conference call wrapped up 30 minutes ago. what did they say? spencer: they dropped a bombshell that they kept from us earlier about seo holes.

it was cloud computing business. web services are slowing so much in april. they had a pretty good print otherwise for the first quarter. sales were up across the board and they met tech's -- expectations. its advertising business and e-commerce business. so it looked like a really good print, but then they mentioned a slowdown in cloud computing and aftermarket shares cratered. shery: they are being more successful in reining in costs. what do we know when it comes to the cost cuts? spencer: they eliminated positions. the most recent round, 9000 cost them about half a billion in severance costs. so with those things, they are turning a profit, improving from a year earlier. so they're kinda send a message

that we are getting under control, realigning for a cooler environment after the pandemic but investors really cute in on the slowdown in cloud computing sales and that seems to be what is worrying them. shery: spencer with the latest on amazon. new data in the u.s. is showing that the economy is dealing with accelerating inflation and a slowdown in growth even before the brunt of a credit crunch stemming from bank failures. let's bring in vonnie quinn. as someone was saying, it's the worst of both worlds. vonnie: it could be. we got initial indications that what you just said might be the case. pce deflator data showed 4.9% increase in prices in the first quarter. q1 gdp data showed a slowdown of more than was anticipated. gdp in the first quarter when economist were looking for 1.9% rate. we should look deeper because

underneath the surface it may not be as weak as that in terms of gdp data. for example, some components -- it is good that they slowed down. we had two and a quarter percent lopped off the gdp data just by inventories alone but it's a good thing inventories were drawn down because companies might have to invest again. it depends on whether the consumer spends and we will get more data friday in the economic data coming out on friday for results spending and consumption. so far, it looks like consumers did keep spending in quarter one even though the rate of spending might have slowed down toward the end of the quarter. paul: consumer sentiment appears to be holding up. as does the jobs market. vonnie: consumer data from the university of michigan on fridays data doll we can't forget that. the fed will watch that and the employment cost which will give us more ratings into the labor

market. you pointed into jobless claims. we saw them coming down. they were market is strong, fewer claims by 16,000. still of the 230,000 mark which is where we have been out over the last several months. looks like the federal reserve has the full steam go ahead to hike again. all of the data today, what might the most concerning is that the market is holding up as inflation is persisting. paul: bloomberg's vonnie quinn. let's get over to su keenan for a check of the first word headlines. su: we start with u.s. banks which increased emergency borrowing from the fed for the second week. this underscores stress in the financial system. over 150 $5 billion of loans were outstanding from tubac stop lending facilities. the week through april 20 sixth compared with 144 billion the prior week. surging volatility could play

into next week's fed decision. meanwhile, trade and diplomacy are on the agenda is an australian delegation visits china for the first time since the pandemic. more than one dozen companies including fortescue are involved. australia's tried -- trade minister is visiting soon. as the strongest sign inflations are improving since tensions flared under the previous government. south korean president yoon says his company wants to work with japan and the u.s. to counter threats posed by north korea. during a visit to the u.s., he wanted a commitment from the biden administration to strengthen its deterrence against pyeongchang and told congress that they will respond against provocation firmly. >> and i agreed to strengthen the u.s. deterrence. along with cross korea u.s.

coordination we need to speed up korea, the u.s., japan trilateral security cooperation to counter increasing north korean nuclear threat. su global news, 24 hours a day. on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm su keenan, this is bloomberg. shery: still ahead, why the yen looks set to regain its status as a haven currency after dollar dominance. up next, analysis that says recent turmoil in the banking sector makes an economic recession more likely. this is bloomberg. ♪

>> credit suisse a specific case. silicon valley bank was a specific case in terms of circumstances but it highlighted an issue with regional banks in the u.s.. and that we will see continue to play out in a small number of

names and we have seen first republic over the last couple of days. i expect we will see over a small number of names, it's not going to be systemic in any way, but there will be repercussions. paul: that is the seat of discussing -- a ceo discussing turmoil. joining us as anthony doyle, head of investment strategy at fire trail investment. anthony, the ceo that mention first republic, we had shares rising today. interestingly, only 4% of shares are available for shorting, so do you think the turmoil is over yet and what does it mean in terms of the fed and implications for tightening? >> it is unlikely that we have seen the end of the concerns around the smaller regional u.s. financial institutions and u.s.

banks. i believe in the turmoil that we saw in march, we need to accelerate the likelihood of a recession this year. there still remain many questions in terms of the depth of the recession, the length of the recession. but the bond market in terms of the yield curve is as inverted as it has been in decades. so that is on the horizon and in terms of the implications of monetary policy, the data was out overnight. it is likely to continue to hike interest rates potentially one more time. but arguably, what we are likely to see is tightening of financial conditions. risk managers will become more cautious and banks will have to increase interest rates in particular as well. paul: another 25 basis point hike widely expected next week.

let's take a look at this chart on the bloomberg. i will explain what it shows. markets are pricing in 170 basis points off cuts for 12 months from june. i realistic expectation and what does that say about the state of the economy if we see that much easing before june next year? anthony: what it suggests is that the economic downturn is likely to be of a deep nature and to see the fed pivot to that extent. in terms of its mandate, employment will increase by a number of percentage points. inflation will quickly return to the pce targets. the bond market has been suggesting that it continues to want to make interest-rate cuts with a six to 12 month horizon. and it has done that for the last six months or so.

and that keeps getting pushed out. concerns around the banking system that the terminal rates is likely to be lower then if concerns were not there. it would depend upon the progress of the reduction in inflation from what we are experiencing at the moment. shery: we are seeing positive reaction to the earnings season so far, but given concerns about the economy, how are you hedging this? anthony: we like to be highly selective in terms of those sure to global equities. a high conviction portfolio of companies. we think that economic conditions and financial conditions that we are likely to experience in the coming years will be different than what we've experienced over the last decade. it has been painful for investors to learn that central banks do not exist to backstop so you have to be selective.

looking at companies that can not only thrive in the environment which is more difficult, but a higher cost of capital requirement. we are looking at companies that are high-quality, have secular -- cyclical growth programs but do not rely on economic growth to drive earnings higher. shery: what are your top stock picks? anthony: a couple of recent additions to the portfolio following the section we saw in march include visa and alphabet for example. so obviously, highly familiar with many of your listeners i'm sure but on a valuation basis, the opportunity there for us is compelling. strong earnings results from visa on wednesday. 3% beat in terms of expectations on revenue. and alphabet we do not believe

it was heavily impacted by the release of chat gpt and the integration from microsoft that we do not believe in that sense as well. a couple of names in the mega cap growth star space, which has driven market performance, particularly over the first quarter an april of 2023. shery: i was going to say you're not worried about valuations being stretched? in terms of i'e looking to enter into positions at some of these banks, we invest with a five-year time horizon and that is where some investors may be undone in that they are looking at a three to six month investment time horizon. these are big names, high quality. they can continue to operate with high levels of success and growth in a more difficult economic environment.

amazon, we do not have exposure. paul: before we let you go, i want to get your thoughts on today's boj meeting, the first with the new kovner -- governor. yield curve control, we are certain it will not be changed today but for how long do you see the policy surviving? anthony: you're quite right, it would be ambitious to be expecting a change today. bank of japan likes to keep us on our toes. we are not an we do think that e control will potentially go the way of the dodo and become extinly by the end of the year but there has been economi.

but also in terms of wages running lower and eventually headline inflation as well. yield curve control as a policy, we will add to potentially by the end of the year. shery: anthony doyle, head of investment strategy at fire trail investment. get a roundup of the stories you need to know to get going in today's edition of daybreak. terminal subscribers go to dayb . available on the bloomberg app. customize your settings so you only get news on the industries and assets that you care about. this is bloomberg. ♪

paul: let's get a quick check of the latest business flash headlines. intel shares jumped after the chipmaker promised a recovery in

the second half leading forecasters to look past a disappointing current quarter. the company predicts a return to cash flow in the second half and says margins should widen. intel painted a more optimistic view of the pc industry. snap plunged following its first-ever decline in quarterly revenue after making major changes to its advertising tools. sales fell 7% and are under 989 million dollars. that ms. to the average estimate of $1 billion. economic pressure and product changes will weigh on the current quarter. shares of jeffries surged after japan's --agreed to triple its stake. the japanese firm plans to increase investment to as much as 15% from the four and a half percent of outstanding shares purchased in 2021. jeffries president brian friedman says the president will help them compete against large banks.

shery: right, we are headed toward the bank of japan policy decision. the first one under ueda as we see the japanese yen holding 133 point 89 against the u.s. dollar. we will be watching if it regains the status of preeminent safe haven currency. as we have more speculation on the boj moving sometime this year. plenty more to come, this is bloomberg. ♪

shery: breaking news, we are getting japan's job numbers coming in with the job to applicant ratio at 132, slightly

below what estimates had expected. at 134, it is easing from the previous month in february. what we are watching closely is tokyo cpi given that this is an indication of nationwide prices. the headline number is three not percent acceleration for april which is above what markets had expected. it is an acceleration from the previous month. the important one is core cpi excluding food with growth of three to have percent. we were looking at these numbers as we head toward the boj policy decision. core would exclude energy and is an acceleration of 3.8% above economists estimates. in an acceleration from the previous month but the boj is still expecting to see more details in terms of sustainability of price increases before it moves, so no

fireworks expected from the boj. the jobless rate is coming in at 2.8% so a little bit more slack in the labor market in japan. paul: barclays says the yen is set to regain its status as a preeminent currency haven. as the boj normalizes policy ended the inflation stock starts to wane. let's bring in fx and rates strategist david. if the boj does leave policy unchanged, what should the dollar yen jgb traders be watching out for today? david: yeah, that's a good question because governor ueda has indicated that there will be a change but then markets go that's fine, what about down the line? a lot of yen traders will be looking forward to opening the door basically for the curve control meeting in june or july.

the outlook report for today, the way that the boj thinks and the wording and the statement, markets will take that quickly and run with it. but if they literally push back against that, saying we are not seeing anything in the need to change policy, that could be changed to september. it's very disappointing indeed and they're pushing higher to the 135 or above that. the fed is hawkish week. while ueda may say we are not changing policy today the markets are more interested in down the line and how far down the line you want to kick the can before there will be a change of policy. shery: so what do we have to watch out for in order to determine how dollar-yen is going to trade for the rest of the year? david: certainly in the near

term, there's a couple of things to watch out for. the outlook reports and do they open the door? if they do we will see the yen rally. if they do not open the door than it is over to the fed side of the equation. given the u.s. pca data, yesterday was sticky, above expectations. you have to think the fed next week will go one quarter, they will pause, but i would not be surprised if they push back and get rate cut expectations because the markets are looking to cut rates by 50 basis points this year so they will push back. if the fed pauses, do they leave a quarter-point rate hike on the table is needed down the line? a pause does not mean we are done for forever. if that's what they indicate you think that's dollar bullish and with the yen, if the boj says they're going to kick the can, then the famous dollar strength

and you see dollar-yen pushing 135 and essentially the implied volatility just for today, one day of volatility, space we saying there's an 80% chance of it changing 136 point 13 to 131.13. two points see their way from trade now. if the markets are really prepared for ueda is going to say nothing but nothing actually means something moving forward. paul: nothing does mean something. thank you rates strategist david . stick around for our coverage of the boj. we will be speaking with former officials at the central bank as we count down to governor ueda's first policy decision and it has been interesting keeping an eye on the chinese yuan which has overtaken the dollar as the most used cross-border currency. bloomberg intelligence zeros in

on this. cross-border payments and receipts rising to a record high of 48% at the end of the month from pretty much zero in 2010. the dollar share declining to 47% from 83% over the same time. so the yuan overtaking the u.s. dollar in terms of cross-border deals. shery: by china, so china is the most used cross-border currency and that is not surprising given that they want to internationalize and we are seeing indications that that may happen with the likes of argentina jumping on the bandwagon when it comes to using the yuan in order to trade with china. and this of course because argentina has its own issues, dollar shortages, inflation topping 100%. they are turning to the yuan for trade settlements because of dollar shortage in that country. but we have seen a broader trend. we have spoken on this show about how china and roseville

have deepened --brazil have deepened cooperation so we will sound the world when it comes to using it in the trade transactions with china which is as you say catching up now to using the dollar. let's turn now to annabelle for a check of how we are setting up in the markets. annabelle: the big focus today in asia is what came through in the wall street session and big tech earnings. amazon under pressure in after hours lacking that it's cloud services unit could be seeing slowing growth. numbers were expected than expected. corporate america is withstanding tightening and pressure from rising prices. we are looking for games across the region even though u.s. futures are coming under pressure in after hours. sydney hoping to open higher, 9/10 of a percent to the upside. that is coming online. when you look at japan, the

focus with the boj what will ueda be doing, you just broke the numbers there with the core cpi, core core cpi from tokyo, headline numbers quickening. that tells us that the boj is likely. let's look at the expectation given that we see expectations growing in markets for policy normalization. the bigger change that could come first would be any sort of signals or changes for dynex, paul. paul: let's get over to su keenan for a check of the first word headlines. su: start with bain & co. that says chinese authorities question employees and shanghai. the financial times two weeks ago took away computers and phones but made no arrests. they are cooperating as appropriate. it's the latest move and what the u.s. has described as an

emerging pattern starting with foreign companies in china. the philippine central bank is considering blowing its inflation forecast for this year i should say from six to five point 7%. governor philippe base says he expects cpi to be much lower in march. he sees inflation falling below 4% as soon september or october. easing pressures would give bsp room to consider cutting reserve requirements as early as june. recent data shows u.s. economic growth slowing and inflation celebrating before the brunt of the credit crunch. stemming from bank failures. gdp rose 1.1% in the first quarter, less than the median forecast of 1.9%. the fed's preferred gauge picked up a 4.9% highlighting the talents of taming inflation.

the pentagon meanwhile under new pressure to explain why it failed to catch the men accused of leaking classified information. the government filing alleges that his access exceeds what has been publicly disclosed. he had been suspended from high school for comments made about guns and racial threats. global news, 24 hours a day. on air and on bloomberg quicktake, powered by more than 2700 journalists and analysts in over 120 countries. i'm su keenan. this is bloomberg. shery: south korean president says his country wants to work close with japan and the u.s. to counter threats posed by north korea. here he is speaking to congress in washington. president yoon: president biden and i agreed to strengthen u.s. deterrence. along with close korea u.s. coordination, we need to speed

up korean, u.s., japan trilateral cooperation to counter increasing north korean nuclear threat. shery: let's go to bloomberg's sangmi cha. did yoon get the deliverables he needed to take to his country as his popularity has fallen? sangmi: it was first of all the speech was a good 40 minute speech from yoon and he was received quite well, in the congress. anti-china sentiment is running high in the congress and south korea is a key ally against china's power. so he did get these deliverables we were talking about before the trip, the centerpiece of the trip would be be agreement that

he got from president biden, where he was able to get more of that active role for south korea in handling nuclear arsenal against north korea's attacks. but of course, he was going over business fears as well, meeting with conglomerate heads and hosting roundtables with top business leaders. he is seeking to shore up south korea's economy which is close to a recession at the start of the year. and he is looking to boost approval rating that he struggling with in south korea. in his speech he did not go over contentions such as whether he will be supplying lethal weapons to ukraine. we will have to keep our eyes out for that. paul: and president biden of course says -- sent a strong

message as well regarding the potential of what might happen under a north korean nuclear attack. what was the rhetoric? sangmi: it was pretty strong rhetoric from president biden where he said that any nuclear attack from north korea against the u.s. and its allies including south korea and japan with the end of kim jong-un's regime. this was a strong wording from him in line with the washington declaration that the two leaders signed where it allowed south korea to have more of that strategic plan stance in a nuclear arsenal. he is not going to pursue an independent nuclear arsenal. paul: all right, bloomberg's reporter there. still to come, debate over

reproductive rights heating up in japan. the nation's first abortion pill is close to approval. we will discuss that with the founder of the japanese women's rights advocacy group. this is bloomberg. ♪

shery: japan looks set to approve the nation's first

abortion pill giving women a nonsurgical way to end an unwanted pregnancy but it's only happening decades after similar medication became available in places such as france in the u.s.. joining us is women's rights advocate and founder of the project and cochair of women seven japan. thank you for joining us. for everyone who does not know japan's reproductive health measures and access for women, give us some backdrop to what you're seeing in the country right now. >> ok, thank you so much. abortion pill's have not been available in japan until now and only surgical abortion has been available in japan. it has been always like this. costing $2000 and no insurance covers it so everywoman has to pay for it from their pocket. there is safe abortion called aspiration but it is not for use

in all gynecologist. some gynecologist still use something categorized as an unsafe abortion by the who. so they have demanded for availability of abortion pill's for a long time. and it was temporary. the government collected public comments from the people and more than 120 thousand public comments were collected, which is usually a hundred times the normal public comment. many feminists are welcoming this decision. shery: is this enough, the approval of this abortion pill? what else do you need to see in the country for broader access to all women in japan? kazuko: it is not enough at all because first of all, in japan, like those like abortion itself

is criminalized but at the same time there is another law called maternal protection law which allows women to have abortions in certain cases like when they have physical problems or difficulties. but this law will require women to have consent from the spouse and the minister of health says that you need consent from the spouse when you get the abortion pill. there are women who cannot get consent from their spouse and the gynecologists are afraid of being sued, so they asked consent from the partner or the parents. it is not needed if they are single, but it is going on. so if the abortion pill is allowed, this will happen. and also, like the regulation will be not scientific based,

because nowadays, they support on my medication and taking a pill at home but in japan it will be like women have to stay in the hospital for one night or until everything gets done. it can take 12 hours, so women have to stay. the biggest problem is it is expensive because it can take a thousand dollars and it is unacceptable that abortion pill's and surgical abortions cost the same price. paul: japan is also struggling with a low birth rate that is well known. did that play any role in the debate over making this accessible? kazuko: definitely and every time i go to the politicians everyone says that actually we have a small number of children. but it's not about that. the number of children we actually have is way lower than the women expect or what women

want to have in their lifetime. definitely something that we have to tackle socially. it cannot be the reason but it is definitely especially conservative politicians who are against that. paul: you talked about barriers that are in place in terms of spousal consent being required. the incredible cost as well. more broadly, how do women reproductive rights compared to other developed countries? kazuko: unfortunately, there is definitely a lack of sex education. for example abortion and contraception are not supposed to be taught in junior high school in also contraception and abortion like all of the costs related to reproductive health are not included in the national health insurance, so therefore a lot of contraception, we have to

pay $30 every month and it's really hard for young people. and also the access to a variety of modern contraception is limited. we have had only access to contraceptive pills and iud's, but not implants, injections, the patch, those essential medicines. they are not available at all, so it is quite hard for women to protect from unintended pregnancy. but it is really hard to get an abortion. so almost every month, we hear the news saying the baby has suffered in the bathroom and then the baby has already died and women are arrested. it is really sad. i hope that it will be available for everyone as a human right. shery: thank you so much for bringing to light some of the realities in japan when it comes

to reproductive rights. founder of that project and cochair of women's seven japan. we have breaking news out of japan, we are getting industrial production numbers for the month of march rising .8% month on month, which is a bigger gain than what economist had expected at .4% rise. we are seeing the year on your number being a smaller contraction than expected. the preliminary march number contraction of 0.7% although it is five months. that this has been in the red. when it comes to retail sales year on year, growth of 7.2% surprising on the upside as well. this is an acceleration from the previous month, the month on month number also surprising to the upside, .6% which shows you that resilient despite of course inflation in japan. this is bloomberg. ♪

paul: we will be watching when trading kicks off in tokyo. this is after the plan to stable -- triple stake in jeffries. it jumped the most in three months. let's bring in our breaking news editor, gareth allen. the markets are welcoming this development. can you tell us about the synergies here? >> that's absolutely right. in 2021 when the government purchased four and a half percent of jeffries, it was

welcomed as a pretty good partnership between a very big japanese bank with deep pockets and a niche investment banking firm that can get into the u.s. market. now obviously, it is going well and they're going to increase her tactic, up to 15% now so there'll be a chance to expand on their partnership. and build on what they have created. shery: our breaking news editor gareth allen there with the latest. of course, we are four minutes away from the open in japan, south korea and australia. this as we head toward the boj policy decision, the first one under new governor ueda as the

japanese yen holds 133 level. of course, we have seen the yen trading sideways as 90% of economies do not expect anything when it comes to fireworks at the boj. still, there are concerns after a decade of the governors shock and all policy that we might see some changes moving forward. and we have seen speculation really giving rise to the yen against the u.s. dollar and of course we will be looking forward to perhaps some changes down the line. this is bloomberg. ♪ ♪ ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪

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>> we are counting down to asia's major market opens and it

is all about the bank of japan and what the new governor do or not and what will he hit. we have seen some dovish monetary coming from a series of parliamentary hearings and more than 90% of economists not expecting a change in interest rates or purchase settings but it is japan, so people are watching it closely. paul: and the earnings season rolled along. we heard from amazon earlier and we could have a lot of china's financial stocks reporting later today but it is all about the boj. annabelle: we have the opening of japan, korea, and australia and really no major changes expected in the decision later today but that is not stopping debate over what will be seen as the first step in forward guidance and what most economists are looking for. the yen ahead of it has some

strength coming ahead but that is down to tokyo inflation numbers that hit a decade high and core cpi looking higher than forecast. that tells us boj normalization is not a matter of if, but when. we are watching stocks coming online to the upside and watching the two yields given we saw it fall in the prior session with stronger inflation numbers coming out of the u.s. and that tells us the fed might have to keep rates higher for longer. what we are watching today is the reaction that came through very much focused on what the numbers were overnight and amazon under pressure but still large cap names reporting and corporate america with standing

rising rates and prices. we are watching tech stocks outpacing but also watching the korean won unchanged this morning but industrial output falling less than expected in south korea in march down 7.6% on the year in the estimate for 10.2%. australia, geopolitics they are a watch because we saw a delegation of large australian companies had to china this week in the biggest diet we have seen in the frosty relations between the country's warming again and that is something we are watching. brent crude is spiking back to navigate the economic signals coming through but really the focus in the session in asia today really comes down to the boj. shery: kathleen hays has our

next guest. kathleen: i am here with the nikko asset management. inflation maybe not looking as strong but he has a view that steps outside the consensus. a beautiful day to be here and more than ever assign that people are excited about what will happen because we have heard signals he is not ready to do anything yet but we are wondering if he will give us something. what will happen today? >> no big surprises today. i do not think they will get a surprise for a while.

but there will be some data coming out and forward guidance of some kind. kathleen: in terms of what might be signaled on inflation, it was expected to come down by the end of the year and stay below 2%. any chance that gets revised higher? >> i think there is some chance but not by much. the western side of core is only a little above 2% here and there are several reasons to expect it will roll over by the end of the year below 2% by the end of the year. so no big hurry for boj to move. paul: what is your outlook for

the yen in context to the boj? that status as the haven currency could be cemented. where do you see it going? >> a bit stronger by the end of the year. 127. later in the year we expect some move but if that does not happen the yen might not reach 127 to the u.s. dollar. shery: later in the year you expect some why cc moves? but not for a few quarters. is that because of inflation data being stronger? >> it is part of our global macro view that expects a recession in the states and reflects the expectation of

financial accidents in the states to impact the situation but if they do not happen, why cc could be earlier than my personal opinion. shery: in this environment when we do not know where the boj is headed, what do you buy in the japanese market? >> you look for earnings growth. things are going very well with japanete profit earnings season so far. looking for companies that are beneficiaries in china. standard stock market amount -- analysis is what you should do at this point. kathleen: your view is there is no change this year or much of the next but there is a big view that there is a lot of money

invested in bonds overseas. money has already started to come home to japan. and that that is another reason why your call is significant because if there are not changes and bond yields don't move much, is the argument moot? >> it is important what happens with the bank because you are right, consequences could be major globally especially with japanese investors bringing money back from overseas and putting it into japan. that would drain liquidity from the global system and push up bond yields globally. another thing to remember about the boj on the new governor, is he really going to ruin his credibility on his first meeting by surprising the market? i don't think so. so i think there are many

reasons why we can be calm about the situation for a while longer. kathleen: the 90% of all important 10 year jgb's, is it an issue or problem and how to use square it with what the government might be thinking about whether it is a good time or not to start reducing stimulus and allow bond yields to go up a little bit? >> the government should be worried about having bond yields rise. it would not immediately impact their deficit projection but it would an intermediate. the market wants to see a functioning bond market. they want to see trading high again. they want to see a free market. unfortunately it is a side effect that they seem to think is worth having as a negative

item in order to have the stimulus from the policy. kathleen: in other words there is a lot riding on how this plays out. thank you so much for sharing your view to keep everyone thinking because we do not know what will happen with the new governor today or down the road. we are counting down to the governor's first decision and we have a lot more guests coming up to get us ready for what will happen and what it will mean for the market. back to you. paul: kathleen hays in tokyo outside the boj and she will have a busy day. more coverage to come. we will speak with formal or just former officials. let's get back to markets. annabelle: earnings watch under 10 minutes until the session start of trading in tokyo and focusing on frigid so -- fujitsu

they pocket -- purchased a big share buyback scheme and the rival also announced the same but it's the first buyback in eight years but it is joining a chorus of companies stepping up efforts to woo investors but interesting both stocks are in the red but a and a is higher at the open that is the airline in japan the hosting their first annual profit since 2020 another signal of the rebound from covid and upgrading the forecast with march global output jumping on the year. let's change on now because it is also the start of trading in korea and a mixed outlook for major gas companies at the start of trade. one biggest sector in focus throughout the week because a lot of them falling by daily

limits from monday and a lot of speculation in local media about what is driving. some speculate margin calls related to contracts could be behind the massive sale order. [indiscernible] the difference is because it -- between the open and closed the trading prices this sort of contract is not allowed for trading in the u.s.. >> u.s. banks increased emergency borrowing from the fed for the second week in the row, on -- underscoring distress in the system. volatility in the banking sector could play into next week's fed decision.

trade and diplomacy are on the agenda as an australian delegation visits china for the first time since the pandemic. more than a dozen companies are involved and australia's trade minister will visit soon. the strongest sign yet relations are improving since tensions flared at the previous government. biden administration is sanctioning russian and iranian intelligence services and individuals for their roles in detaining americans. brittney griner came home from russia last year after facing drug smuggling charges but wall street journal reporter remains in russia, accused of site -- spying. one company says chinese authorities have questions their employees in shanghai.

they took away computers and phones and did not make arrests. dana says it is cooperating as appropriate. the latest move in what the u.s. has called -- global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. paul: former boj board member tells us what economic challenges the new governor will face and growing market expectations. next, amazon executives reveal growth in the cloud unit is slowing. it next. this is bloomberg. -- details next. this is bloomberg. ♪

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paul: we saw a decent pop after amazon earning reports came out and then amazon had some remarks to make about growth in the cloud division. the outlook range topped estimates but other key areas in the conference call suffered. let's get context from spencer.

what is the outlook for aws? >> basically they released their earnings results for the first quarter and everything looked pretty good. most of the business lines doing better than expected. but on the conference call they mentioned aws sales were slowing down a bit and on top of that they have narrowing margins from the web services, the cloud computing business and investors honed in on that because that is where most of amazon's profit comes from. shery: there is concerned consumers might pull back on spending. have we seen that on amazon? our people shopping? >> they mentioned on the call people are trading down and buying cheaper items and looking for bargains but amazon still is

seeing value from the advertising business so if people are pulling back, a lot of them still go to amazon because they think they will find good prices so then merchants reward that with more advertising spending. it is still a good place to advertise. paul: new data shows the u.s. economy is in the worst of both worlds with high inflation and slowing growth but one of wall street's fear gauge is is sensing investor anxiety diminishing. garfield reynolds, high inflation, slow growth. there is a word for that. >> yes. stagflation. it has been on people's minds lately, even before we got the data out of the u.s. because there have been plenty of signs that inflation was remaining sticky, even as growth came down.

the bond markets in particular has tried to convey an air of calm that inflation is a lagging indicator but we are not far away from the transitory moment which proves to be very far from the case so there is lots of concern about the inflation and in particular there has been an expectation the economy would roll over in the u.s. and elsewhere and that would be accompanied by inflation coming down. if the first part happens in the second does not, it creates a lot of problems for investors and in the real economy. shery: are we seeing the fear in different gauges? what about the one david vick gave that just launched. after a few days of trading are we getting more insight into

what it is telling us about market sentiment? >> the fix, there has been lots of concerned that it is not as good a fear gauge as it could be in the current set up and that is part of why we have the one day fix that i am not sure it escapes from the difficulties that beset the longer-term one but it does seem to show, anyone could have told you that, it shows that investors are less directly concerned around major events such as cpi releases and said decisions -- fed decisions because the fed is currently looking at hiking by 25 basis points or not so that is a world away from last year where it was due we hiked by 75 or even one

full percentage point. so the immediate furor has definitely dialed's down that is showing up in this gauge. i am also tempted -- yesterday someone mentions the idea that bond markets are better at picking recessions than stocks. stocks wait until they are close to a recession before they start getting worried. so there might be some of that going on as well. equities are busy. getting quieter because the fed is seen as being less harsh but they are looking past the concerns that the reasons why the fed might be getting less harsh is because the economy is heading into trouble. paul: garfield reynolds. plenty more to come on daybreak asia. stay with us. this is bloomberg. ♪

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shery: evergrande has extended a deadline for investors to vote on the restructuring plan after failing to win enough support for the massive overhaul. holders of 77% of their offshore bonds back to the plan but only 30% of classic see holders endorsed it. kevin joins us from hong kong and what is next? >> the deadline will now last another three weeks for creditors to see there was support for the proposals. on the whole the results weren't bad.

77% of class a holders, largely dollar bondholders from evergrande back the proposal but only 30% of class c that. a lot of it is loans and repurchase obligations. that is where the focus will be the next few weeks, trying to get holders of that debt to get back and support the deal. paul: the deadline pushed out to may 18 but there was another important date coming up in july, a hearing about potentially liquidating evergrande. how important is getting the debt restructuring plan through to avoid that? >> in the past the judge in the case has said getting the process rolling has been a key factor as to whether they will decide on the liquidation

proposal. we need more progress on debt restructuring. we have the initial proposal out and the company needs to build on the support to put worry about the potential liquidation aside. paul: let's get a check of the latest headlines. byd reported another stellar corner of earnings on the back of booming electric vehicle sales. they served 411% from last year. sales of their passenger electric vehicles almost doubled in the quarter. chinese oil companies reported weaker first-quarter warnings. -- earnings.

scenic saw its net shrink. brent crude down from last year. sources say sinochem is exploring ways to salvage -- to salvage their ipo plan. it is unclear whether chinese authorities will accept the proposals. snap plunged in late trade following their first ever to client after making changes to their advertising tools. sales fell 7%.

economic pressures and company product changes are expected to also way on the current quarter. next we ask a former boj board member where the central bank is headed under the new governor. as he gets set to deliver his first policy decision. that conversation then a moment. this is bloomberg. ♪ hi, i'm lauren, i lost 67 pounds in 12 months on golo. golo and the release has been phenomenal in my life. it's all natural. it's not something that gives you the jitters. it makes you go through your days with energy, and you're not tired anymore, and your anxiety, everything is gone. it's definitely worth trying. it is an amazing product.

shery: we are watching the lion

city as we expect the private home price numbers quarter on quarter from the urban redevelopment authority coming when singapore has moved to double property taxes for foreigners and home prices have defined a global slow down. the expectation is they will be growth of 3.2% in the first quarter. we will bring you the numbers when we get them. >> south korean president says his government wants to work closer with japan and the u.s. to counter threats from north korea. the biden administration has committed the strength into deterrent against pyongyang. >> president biden and i agree to [indiscernible]

with close coordination we need to speed up trilateral security cooperation to counter the increased north korean the threat. >> philip -- the governor of the philippines expects april cpi to be lower in march and that inflation will fall below 4% as soon as october and easing price pressures would give them room to consider cutting bank reserve requirements as early as june. a video on russian state television suggests jerome powell called a pair of

pranksters. he says no information was discussed and that the russian video appears to be altered. u.s. pentagon is under renewed pressure to explain why it did not catch the naval airmen who leaked classified information. he had been suspended from high school for comments that he made about guns and racial threats. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. paul: let's get annabelle in hong kong. annabelle: you can see we are

watching the broad upside in the session coming through from the wall street session overnight the best day for u.s. stocks since january with big numbers continuing to roll through and telling us corporate america is standing up pretty well so far but in terms of what we are watching when you put it in perspective the board index up 4/10 of 1% and we are coming off or straight days of losses for the index and that comes down to the weaker sentiment feeding through into the economy signs of deterioration we are continuing to monitor and that is showing up in the commodities base with metal under pressure and oil flat but on track for the six monthly loss and when we look at the bond space just moving slightly higher we saw treasuries falling overnight and that is with the stronger-than-expected inflation data coming through telling us the fed is going to need to keep rates on hold for longer.

the japanese yen in currency on focus. look at what the yen is doing in the session today, slightly stronger against the greenback with those tokyo inflation numbers showing further acceleration, and others signal the boj will begin to normalize policy settings at some point and we can see when we look at risk reversals, we see trades -- traders are saying the dollar will decline against the yen in the near term. shery: let's go back to boj where kathleen hays is with our next guest. kathleen: this is a great person to have on the show. [indiscernible] she was a member of the boj policy board and has been

concerned for a while about trends in policy and it is great to have you back on this gorgeous day. the inflation numbers on tokyo cayman hotter than expected and we are wondering what kind of inflation forecast that boj governor will have been his first meeting as he shows higher inflation. >> it comes from food and eating out. i see it spreading out to include services in various sectors so it gives pressure to the boj and then everyone starts to say they should normalize because this is high inflation. kathleen: you are concerned about demands.

that there is not enough demand driven. >> it is commodity-based. on the demand side the services consumption is speaking up but on a look -- picking up but on a lower level but looking at other consumption, food consumption is dropping and others are flat so this is a sign this is not demand driven inflation. kathleen: and therefore not the stable 2% target the boj is looking for. >> if you look at prices, food and oil commodity prices [indiscernible] eventually we will start to see a slow down and inflation. i think at the end of the year you will see inflation below 2%.

kathleen: but everyone is seeing the same numbers but many market participants are still eager and thinking if it does not happen at this meeting it could happen as soon as june. what do you make of the push? >> it looks like a concerted effort from the market and banking sector and i think it is partly because the interest rate margin is so slight edge -- sluggish [indiscernible] from financials perspective they are set to make a lot of money so they don't want enough --

they don't want another five years so this is a good time for boj to normalize but [indiscernible] want to make underlining [indiscernible] that has not been realized yet. kathleen: he is sure inflation is going to come down and yet there seems to be a door open to bond market functioning. a mixed message. >> yes. he keeps saying the 2% is the most important thing and he will maintain monetary easing until it's reached but also says to pay attention to [indiscernible] so if it means expanding or

shortening that is already a sign of normalization and will be contradictory to the statement he will make in monetary easing so we do not know exactly what he is talking about when he says he will take care of side effect. kathleen: this is a very important day for the governor. does he need to give us a clearer sense of what he is trying to say? does normalization start when you adjust yield curve control or not until you raise the negative rate which cannot happen for years? >> april 8 press conference he says he will not normalize monetary easing or make big changes just because side effects [indiscernible] he should try to explain what is happening to the underlying inflation. he should show the data and not

talk so much about side effect. kathleen: when will the bank of japan make the changes to the policy? >> next year inflation will come down below 2% so i think it takes a couple of years to see the underlying inflation yearly get stronger based on current information's. kathleen: thank you for joining us. always good to have you here on boj day as we have a new government -- governor. a landmark day with someone who has been behind that door and knows what it is like. paul: a busy day for kathleen hays in tokyo. we will get more insight on the

boj throughout the day and later on we will hear from a formal bank official and former assistant governor and you can also turn to the bloomberg for more. go to the bloomberg for expert analysis. this is bloomberg. ♪

shery: finally the singapore residential price numbers are out rising 3.3 percent quarter on quarter and this is a revision upwards because expectation was for a rise of 3.2% and the reason we are watching is because home prices in singapore have defined the global slow down and they have moved to double property tax for foreigners, signaling policy makers are growing more cognizant of surging margaret -- money outflows, especially from chinese and private home rentals rising quarter on corner. paul: many big banks are set to report this friday in china including the bank of communications. francis chan joins us now,

senior analyst in hong kong. what we expect to see today? >> one key area investors could focus on would be the margins economy. we have been seeing too big banks in the country been reporting a series year on year squeeze in the margins sending revenue [indiscernible] and i think this margin problem would be a litmus for chinese earnings bank.

shery: we know nonperforming loans in china have remained elevated. what are we going to see in terms of quality of some of the assets that chinese banks hold, especially as they resurface from the covid zero policy? >> i think your comment would be correct for only a few sectors. for those still in trouble, we do see rising long ratio for short but for some corporate sectors we have been seeing improving [indiscernible] and last year they were also increasing the buffer [inaudible] i don't think it will be a

problem for lenders. shery: francis chan with the latest on what to expect from chinese bank warnings today. -- earnings today. and numbers coming out of the insurance sector are looking good. stephen lam, what are we expecting? >> we had a lot of chinese insurers report and we think the impact his descent. we have seen a lot of net income growth. what happened this year is a lot of accounting changes. it is hard to decipher but under the new circumstances you have companies reporting a net income jump and some even get decent

increases in double digits. in other -- another metric we focus on for life insurance is the new business value. this is worth noting because it is comparable versus last year and the industry is expecting a decent increase this year and so far for the companies that have reported, they have all been increasing and for mainland like china live and see pic even with decent increase. paul: there have been changes to disclosure rules in hong kong. how will that change what we hear from the big insurers in the future? >> it is a very long drawn process to prepare for this for a number of years.

to distill it, basically what they are trying to do is make the company is more comparable to the other industries like banks and other manufacturing companies. if you remember for the life insurance specifically, a lot of the -- including the deposits and savings. they want to be more comparable even to their peers. and for the life insurers, they are really influenced by the changes in interest rates. both asset and liability side will be on a spot rate basis so making things more comparable. before they were in a different manner. on the liability side you had to count interest rates using a rolling average so there is some delay and a lot of these factors will be put down below the line,

in the other comprehensive income. shery: stephen land with the latest -- stephen lam with the latest. amazon reporting strong first-quarter results with the outlook range topping estimates and seeing net sales for the second quarter up to $133 billion but says cloud unit growth in april is running lower than the first quarter pace. amazon has worked to streamline businesses amid slowing sales growth in online shopping and web services. until shares jumped after they promised a recovery in the second half, leading investors to look past a disappointing forecast for profitability in the current quarter. the company predicts a return to free cash flow in the second half and says the margins should widen. they painted a more optimistic view of the broader pc industry. more to come on daybreak asia.

this is bloomberg. ♪

>> i think the boj has made several mistakes in the past and they cannot afford to make another. there move is to get behind the curve. >> people do not expect much

from the boj. >> they should not send the wrong message to that market. >> the boj getting the message after 30 years where maybe policy is about policy. >> right now there is less pressure for interest rates to rise at this is a good chance for the boj to take the first step on policy change. >> fourth quarter. kathleen: fourth quarter? we will see. >> japan is making a big's -- a big mistake and unfortunately the boj will not change. shery: some of our guests on what to expect from the boj first policy decision under the new governor and the expectation is for no fireworks, at least at this meeting. take a look at the chart because about 90% of economists do not

expect any change to the rates settings or asset purchases being carried out but some 11% forecast policy tweet and 2% predict a tightening step so you can see if you add up all of the percentages, most people do not expect much to happen today. perhaps the june meeting is most likely timing but the next step would be the adjustment on guidance on future policy that could be the most likely first policy step, according to vote -- more than 60% of surveyed economists but some people say we still have to watch where ycc goes given we have seen so many surprises in the 10 years but at the same time because you have global bond yields falling that perhaps if you do tweak the yield curve control setting there is some leeway for the boj. paul: definitely seems to be the

conversation around what will happen down the track as opposed to today but take a look at the chart on the screen. tokyo cpi that we got just a short time ago accelerating again, 3.5 percent for april, beating estimates and a pickup from the numbers in march. inflation in tokyo has now been above 2% and that has been the boj target for 11 months in a row and energy prices have been held down artificially by government policies so when you look at that you think surely it is time for the boj to do something and inflation is well beyond target, but no, it was made clear that underlying inflation has to get to 2% in a stable manner and that has not been achieved yet so we have to wait and see what meets the definition of stable. wages not rising yet either. we will get more insight on the

boj throughout the course of the day. we will hear later on from a former central bank official and former assistant governor. so we have the yen currently holding steady ahead of the meeting. that is it from daybreak asia. markets coverage continues as we look ahead to the start of trade in hong kong and shenzhen. stay tuned for market opens china. this is bloomberg. ♪ go spotlights. go stadium lights. emerson software helps clean energy become reliable electricity. go “good night." go boldly. emerson.

david: good friday from hong kong. it is 9:00 a.m. in the