>> welcome to "bloomberg daybreak asia," we are cutting down to the major -- major

market open. >> u.s. equities climb on the hopes of a big -- right through. -- breakthrough, negotiators can reach a deal. >> we are covered we will get an agreement with the budget to move forward. >> biden has two japan as a standoff in washington continues, his -- g7 allies open to confront beijing. tencent earnings missing estimates even as opposed faster revenue growth than most than a year. >> we are hearing that the prime minister might be having a big announcement when it comes to chip funding. micronic specter to land $1.5 billion in financial incentives from the japanese government to help it make next-generation memory chips inside the country. this is just the latest step in

japan's efforts to bolster domestic semiconductor production. it will be used to -- in his facility from hiroshima to make dram chips according to people speaking to bloomberg in this announcement could come on thursday when prime minister kishida meets with a delegation of executives that includes the micron studio -- ceo. >> one to watch when it comes to the side of trading on the chip-related names. as we get into the thursday session we are seeing, the optimism that permeated through the u.s. session on the account of progressing debt ceiling talks passed through to asia as well headed for at least modest gains after we saw the u.s. stock rally debt ceiling talks are continuing. giving a bit of space for investors to focus on the health of the banking system returning

to the four. there up by 0.1%, we have joel's numbers in focus the growth expected to grow -- slow on the labor market, watching kiwi assets as well, potentially looking at beneficiaries. or those and see a detriment when it comes to today's budget as well, he will be delivering his annual budget in wellington and has been called a no-frills budget trying to keep spending reigned in despite the ongoing price pressures and the looming recession. it is pretty tepid at this point watching china assets, in particular potential weakness for the want. >> --yuan. >> after the risk on rally we had on the regular session we have a low but more optimism about the debt ceiling impasse. banks rally with western alliance, with growth in deposits. 10 year yields gaining ground,

across the curve, the dollar of the highest level since march, oil even managed to gain ground. a little bit of pressure in the asian session this of course as we had u.s. stockpiles seeing the biggest increase since january of last week. haidi: president joe biden expressed confidence negotiators we reach a deal on the detriment and avoid default. kevin mccarthy criticized the plan to travel to the g7 summit. we have seen the decision to shorten the trip, the canceled the australia portion the domestic political plans always trump international. there is criticism that he is going at all. what is it look like when it comes to the prospect of a deal? >> we are hearing different things from different participants. the two sides decided after a meeting yesterday at the white

house that they are going to give the negotiations over to 5 washington insiders who are known for getting deals done. these are several staffers, key staffers on president biden's staff and a representative from louisiana, publican close to kevin -- republican close to kevin mccarthy. all people that have negotiated big washington deals before. that is giving people comfort. these are the folks you want to make is because of deals. at the same time president biden before he got on air force one to go to japan for the g7, expressed confidence they could get this done. and we heard from kevin mccarthy shortly thereafter. the house speaker saying, first of all criticizing the president for going. saying joe biden, stop traveling, then said he too thought a deal could get done. the president said he we come back after the g7 ends.

he will fly back on sunday. one would think they may be able to announce something that. getting it done and getting it through both chambers of congress in a short period of time will be a challenging task. >> exactly. what does a timeline look like right now? we were expecting president biden to return on sunday. >> yeah, again janet yellen has said, if -- the u.s. will run out of money to meet its debt obligations as soon june 1. there may be some wiggle room there, but people close to treasury and yellen herself said this is a real date, take this seriously. that is about two weeks from now. the president came back early next week a deal was announced that would only have a we can change to get through congress. that can happen things can get speeded up, they have to have a deal they think they can get

enough votes for in both chambers. on the democratic size -- side there are a number of people that said they will not rip port -- support the restrictions and requirements that those seeking federal aid would have to have stronger or more enhanced work requirements. we have heard from a number of people on that. we have heard from a number of people, particularly house republicans saying they will not do anything. they will not pass a deal that looks like a clean debt ceiling. it has to have serious budget savings. serious cuts to it. they will have to construct something that will get them enough votes in both chambers. obviously the senate is controlled by democrats, but only by a small margin. the same thing in the house only a small margin that republicans control things there. haidi: bloomberg political news director joining us from washington with the latest on debt negotiations. president biden's trip to asia

is intended to assure allies of the u.s. remains a reliable partner in the face of china's assertiveness. as we have learned that trip is cut short and he has had to cancel several trips as well. let's get more from bloomberg's chief asia correspondent stephen engle, much as this undermining the message the by demonstration wanted to send to asia? >> it deftly has the potential of undermining those efforts at a time when china is waiving its own charm offensive if you want to call -- if you want to call it that in the asia-pacific. wanting to woo the local south, brazil, india, indonesia, middle ground countries that are not picking sides on what has become a bifurcations of hearts and minds between u.s. interests and chinese interests. here at the g7 obviously there is some unity aussie -- on the

board in by russia, they have condemned that at the finance and central banker meeting in the gutter last week -- nigata last week. they criticize the illegal war there is unity there, there are other issues, one is what u.s. officials called the economic coercion by china to essentially limit trade if there is more geopolitical issues at the fore. that is something the by demonstration is to get others on board. not just g7, there: this g7 +. inviting leaders from other countries including brazil, australia, the quad has been canceled back -- down and australia. indonesia was represented at the finance ministers meeting. other countries that need persuasion, if you will including india. that likes it strategic

ambiguity. on the one hand, and is a participant in the quad, but buys a lot of its military hardware from russia. there is a lot of akron -- back room bargaining and charm offensive the need to be done. with biden only coming to japan,'s tipping avenue giddy -- there, the foreign minister also went to port moresby last year. there are security issues potentially security pact at state for the nine states to offer something as well to counter china's rising influence in the pacific after the strategic partnership of the solomon islands china struck. a lot at stake for the united states, with joe biden truncating his visit to the asia-pacific it leaves a door open if you well for the likes of china. that is also hosing -- posting

its own summit with central asian countries. we have the bricks meeting in august and vladimir putin hosting and african summit in july. there is lots of moving parts here. we are standing in front of the atomic dome. the united states surely will use as a poignant reminder of the horrors, if you will of nuclear war. we'll probably punctuate that as far as vladimir putin's alleged threats if you will of leaving, of having the potential of nuclear weapons in ukraine. haidi: we know that the diversification of the chip supply has been a key issue as well. we are hearing micron might benefit in terms of these incentives from the japanese government to make nexgen chips in japan? guest: i think this is where the most significant and interesting parts of the g7 right now. clearly behind the scenes there

is an effort by the unites states and other g7 members to diversify supply chains. to make supply chains and high advanced semiconductors a priority. do you risking if you will the risk associated with having so many of these high end chips made in taiwan. i .2 warren buffett disinvesting the entire -- i point to warren buffett d investing his entire stake in taiwan. what we are seeing is a big push for japan to take up that slack. it is an ally, of course with the united states. it is on board with supply chain resiliency within the g7, this story is important that micron technology. we are hearing from sources, that the prime minister meets with the micron head, the tsmc and other chipmakers herein

hiroshima at the sideline of the g7 to offer incentives up to $1.5 billion for micron to bring asml, extreme ultraviolet lithography technology that is unique to asml to japan for the first time to a plant micron has here in hiroshima. that is on top, down in southern japan, tsmc is in the midst of the link its own high-end chip factory right now. that moved toderis -- to derisk the taiwan element to japan is really running strong. shery: bloomberg chief asia correspondent david ingle, we hear about this deal jointly between ntt andjera, japan's top power producer, the largest,

power generation companies having decided to jointly acquire green power investment, gpi. the investment amount being reported is ¥300 billion. that would make it the largest m&a of domestic renewable energy companies. reporting from the nikkei at the moment we will continue to bring more details, we have seen increasingly just needs -- japanese firms facing shareholder pressure and it comes to climate change and strengthen energy supplies and make of russia's invasion of ukraine. tencent posted the fastest pace of revenue growth in more than a year. first quarter results, bringing in annabel from hong kong, it was still a mess when it comes to -- miss when it comes to the earnings. >> some of the key number that came out revenue expanding by

11% in the first quarter. just over $21 billion that was exceedingly forecast. net income at $3.7 billion that was short of. projections talking about woodrow that we had healthy gains and domestic gaming side. honor of kings, one of its most popular titles saw new highs of gross receipts and there was weakness coming through in the ad sales business. it was reportedly uneven, something tencent itself acknowledged in the earnings call. verticals like fast-moving concern -- e-commerce seeing a quicker rebound. we chatt taking more than half of the revenue for the company. >> what do we see in terms of reactions for resident -- analysts? >> a number of different reactions when the key things is the focus on the domestic gaming revenue. it had double-digit sales

growth, the question is is it sustainable? a sign of pent-up demand coming through or something that is more sustainable? tencent like baidu, alibaba come these are closely tracked signals of the chinese consumer. speaking of alibaba we have it's earnings out to later today the big focus coming through from that company is more about what it's buddha plans, how far progress they are, it really could lead alibaba to -- into this fiscal year for different units given that they are looking to raise funds over the next few months. we could see a car structure, that could lead to better earnings gains for the listed holding company. shery: annabelle there with the big china tech giant. let's get the su keenan with the first word headlines. >> chinese president xi jinping

who will deepen beijing's influence in central asia at a major summit starting thursday. it will assemble leaders of kazakhstan, could you can stand, turkmenistan, and uzbekistan in the chinese city of xian. train ties, security concerns, and russia's war will dominate talks, this unfolds as the g7 leaders in japan this week. to india, where the prime minister is pushing through with his australian visit next week. despite the last-minute cancellation of the summit. is expected to hold bilateral talks with his australian counterpart anthony albanese and have meetings with the business community. his visit is seem to -- seen to eight australia's bid among growing tensions among australia and china. >> police have surrounded his house to potentially arrest him again.

he has given a 24 deadline, given a 24 hour deadline to hand over supporters at his residence were accused of attacking military facilities. his arrest last week sparked clashes between his backers and the security forces. supreme court ordered his release and the high court granted bail. 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 su keenan. this is bloomberg. >> we have him joining us with a view on china tech earning we will get a look at tencent numbers as well as x dictations it comes to alibaba's upcoming results. how much market should really be concerned about they u.s. default. this is bloomberg. ♪ fabulous surroundings... but everyone's looking at their phones for financial insights from merrill.

is he hailing a ride to the concert hall? no. he's making sure his portfolio and retirement plans work in harmony. they want to adopt a child and build a new home. so they're talking numbers with their merrill adviser. she's not researching her next role. she's learning how to handle market ups and downs without the drama. personalized advice so impressive your money never stops working for you with merrill. a bank of america company.

♪ (upbeat music) ♪ ( ♪♪ ) ( ♪♪ ) ( ♪♪ ) -awww. -awww. -awww. -nope. ( ♪♪ ) constant contact delivers the marketing tools your small business needs to keep up, excel, and grow. constant contact. helping the small stand tall.

>> there is a saying, bears make money, bulls make money. you can never time exactly when to get in and out of the market. that is the worst investment strategy could ever have. >> president and ceo, jennifer johnson, joining us now chief research strategist and per folio manager -- portfolio manager. we have to tackle the debt ceiling issue. there is cautious optimism we are getting close to the deal. we have been to the edge like this before. have you approached investing a different way this time around the previous time when we reach this point? >> not at all this is a problem that the markets do not move until they see real confirmation. what surprised me the most was today. to be honest i do not think the markets are move much at all. it moved the tent today because

they start to see some optimism. i think when the challenges for us, this is such a rare and high impact event with a low probability. that means, most market participants will sit and wait. haidi: what is the catalyst for you, in terms of the sitting and waiting, where you see a good entry point? guest: i think the problem right now is you are seeing there is optimism. that means people are started to think this will resolve. i think you will have to watch closely, actually in general we will not see any moves until we have more resolution. as we can to the next week or so they are trying to signal to us things look positive. i would say the real challenge here is most of us in the financial markets are not very good at predicting logical outcomes. we are much better. at thinking of markets was they start moving i think markets will move if there is an extreme event.

it will be very hard for anyone position themselves correctly. i will have to agree with them on that one. shery: if we are expecting greater macro volatility do you buy safe havens at this point? we saw a big rally in goal, the japanese yen, anything away from the dollar. guest: that is what we have seen. the interesting thing we are seeing cross asset, equities rallying recently. bonds still net short signal was from a technical perspective. we see a mix across currencies you highlighted that. em currencies being a short versus the dollar more recently as the yen and the yuan. in the commodity sector they have been trading more like recessionary trade. we are seeing copper, many different metals, down somewhat. i think the safe haven trade has been the outlier that in those particular true more recently. as the event can cause you might

pay attention to those. people getting into safe haven trades as they worry this may not resolve. haidi: some have liked chinese assets because of how isolated they are. they are not as correlated, i should say with global assets. is that something you are seeing is potentially summer people can take refuge? -- somewhere where people can take refuge? we have seen signals and china versus the u.s., that might be a mean reversion signal. we have seen some of the key inputs such as metals taking somewhat of a hit. that may also be that china is being impacted by spillover effects from tighter economies and having less capital flows. who knows if that is overcome if that is over this could also be a buying opportunity as well. you can kind of take that either way depending on how that evidence comes out. >> catherine, good to have you with us, chief research

strategist and portfolio manager at alpha simplex. we have heard this theme at hong kong were investors are liking chinese stocks. we will speak with oasis management founder seth who likes the education sector in china. we will be speaking to management managing director jay. this is bloomberg. ♪

did you know you can get someone to shop for you? with stitch fix, it couldn't be easier. i share my style, size and budget. and they shop just for me. my shopper sends me stuff i feel good in. i keep what works, and send back the rest. stitch fix.

>> a quick check of the latest business flash headlines this hour. sony group plans to buy back around 2% of its shares around the next 12 months. tokyo-based firm will spend as much is $1.5 billion. sony have learned of headwinds away -- ahead. share buybacks and japan remain at record levels as the country's stock exchange is

pushing for companies to let their market value. target with a higher look -- outlook, after posting higher than expected earnings. it will be more than a dollar 77 pershing -- 1.77 per share. that is continue to be a problem and expected to erode profit by a further $5 million this year. more to come on "bloomberg daybreak asia," this is number. -- this is bloomberg. ♪ we moved out of the city so our little sophie could appreciate nature. but then he got us t-mobile home internet. i was just trying to improve our signal, so some of the trees had to go. i might've taken it a step too far. (chainsaw revs) (tree crashes) (chainsaw continues) (daughter screams) let's pretend for a second that you didn't let down your entire family. what would that reality look like? well i guess i would've gotten us xfinity... and we'd have a better view.

do you need mulch? what, we have a ton of mulch.

shery: franklin templeton ceo johnson believes u.s.

politicians will reach a deal and is important for investors to stay in the market. >> i think it is a black eye on the u.s. if we cannot -- we have such a dysfunctional political environment we cannot come to some kind of compromise. i am an optimist. i believe cooler heads will prevail. they will probably come to the brink, we will come to an agreement. >> how much are you concerned about going through the summer versus what we could see the next six to 12 months by way of a recession? what is a bigger risk? guest: i think, separating those two things. i think there will be volatility in the markets particularly with this looming. with the debt ceiling looming ahead. again we can get through that. you need to remember the u.s. government is solvent. even if you, let's say we did

not come to an agreement, and it bolted. i do not think -- it defaulted. i do not think that will happen. if you have the debt you do not celebrate deep discount. we are not -- the paper is worth something. a recession in our view it is a roma -- it is a mild recession. we see the consumer pretty strong. i think you are certain to see inflation getting more controlled. it is stickier at this phase. i do not think into a deep recession. >> there are two kinds of thoughts when you think about the markets. one is the distressed point of view, there are more shoes to drop. just this morning we publish a story about steve cohen who is saying, if you focus on the next 10% drop you are not facing the idea of a big wave ahead of you fueled by ai and other technologies. what point of view do you take? do you have to be cautious for

that six months or do you diving at some point? >> there is a saying, bears make money, bulls make money, pigs get slaughtered. you will never time exactly when to get into now the market. that is the worst investment strategy could have. especially with the equity market going down 20% last year he took a book of the pain than. --then. the worst thing is to miss the upside. in 20 years, if you miss the 10 best trading days you miss something like 47% of the equity returns. it is staggering what those are. it is a point to be diversified and stay invested. shery: jennifer johnson, franklin -- ceos be conditional he bostick in -- chanel the bosque -- speaking to bloomberg in new york.

>> you can see we are setting up for quite a positive trading across the day, given it is down to the optimism of the u.s. debt talks. both sides suggesting there has been a degree of progress and a deal could be reaching sides. we have futures for australia point to the upside, new zealand on line, nikkei futures the contracts in singapore coming up underway with a pop of 1.5% predicted for the open. that is quite interesting given that we are seeing the nikkei reaching near a three decade high. we are keeping and i on this market with a number of technical indicators suggesting we could be nearing -- conditions. looking at some of the trading tools used we are above the upper band that is a signal that they are overbought, due to a fallback. looking at the relative strength index a reading at 77. above 70 is overboard,

stochastics we look for 70 to 80, again we are in overbought territory. heidi, a lot of indicators that we could be due to some correction. at the same time, when you look at the options market we see a lot of bullish activity. a lot of signals investors are divesting from the u.s. market and entering from this one, given the level of interest we have seen from the foreign investor base. even though we have the technical suggesting there could be some kind of pullback. a lot of optimism, something we could see a jump of 10% for the benchmark. shery: so much optimism for japanese liquidities at the moment. the bell in hong kong we are looking at this story, the credit default swaps market saying the crackdown of credit spaces, at1 notes, will not trigger and issuance payout.

we know that going into this there are already deep divisions depending on which side you're on. does this come as a surprise there are some parties that expected to rule in favor of a payout. >> faster than expected for some people as well, some expecting this to drag out. you are right there were two camps the ruling here is in fact the junior debt, the at1 bonds were more junior than the other ones link to the bond swaps. you have the two camps the hedge funds that had been buying a lot of the cds contracts, 463 capital, diamond capital. you have the banks on their side to say no, these are not going to payout. you had this real tension between, the side of the street that is defending this case and those buying the bonds. as you said we had a catechistic

-- cataclysmic event with the at1 bonds there were not expecting. they expected to pay a big-time given how much they had rallied in the turmoil we saw with credit suisse. this decision came sooner than some are expecting clearly favoring one side quite significantly over another. >> these were pretty popular over the 2008 financial crisis. what is a mean that such a ruling was made in the whole sector itself of at1 bonds? guest: of course the develop mental this area of the bond market has been many years in the making. as you said of the pack of the financial crisis that happened many years ago now. it is a very established liquid market, as any deep liquid market shows both sides of the trade. the indications here are, this is one lesson, this is one example, of how a lot of people betting on these going to

payout. of course it looks like it is not good happen now. that will have implications for how people decide the relative risk management on these kinds of traits going forward. i think that is when the big takeaways from this decision here. shery: adam, is get to su keenan with the first word headlines. >> president biden who has expressed confidence that negotiators will reach an agreement to avoid default. even as republican lawmakers criticize his decision to travel japan for the g7 summit. biden and congressional leaders have agreed to a narrow round of staff of the talks with the hope of reaching a deal. he has shortened his asia trip to continue negotiations in washington next week. 'foxconns founder has appeared to will out an independent bid to become taiwan's president.

he also promised he would do his best to help hou with the election and outs the current democratic congressional candy -- candidate. micron is poised to land $1.5 billion in financial incentives from the japanese government. this to help it make next-generation memory chips in the country. sources tell bloomberg the company will make chips at its facility in hiroshima using advanced tech. the deal is the latest step in tokyo's effort to bolster domestic semiconductor production. two india, where they have asked them to close the investigation into hindenburg allegation to the adani group and do it by august 14. including corporate fraud and violations of insider trading

regulations. that they have the light. the sick -- that they have denied. the security and exchange board of india has a six month -- 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'm su keenan. this is bloomberg. haidi: coming up next alibaba earnings in -- and focus, tencent missing on profit. we are joined in the analysis of this week's china tech earnings. this is bloomberg. ♪ go. go brain. t that one. go this one. go. go optimizing data. go efficiency. go results. emerson's plantweb digital ecosystem is the brain for smarter, safer and more sustainable performance. go plant go. go boldly. emerson.

he snores like an angry rhino you've never heard an angry rhino safer and more sustainable performance. baby i hear one every night... every night. okay. i'll work on that. save 50% on the sleep number limited edition smart bed. plus, special financing. only at sleep number. was also the first time your profits left you speechless.

at the counter or on the go, save 20% with the lowest transaction fees and keep more of what you make. start saving today at godaddy.com shery: investors are closely watching chinese tech shares with alibaba's results later today. tencent posted the fastest pace of revenue growth in over a year, but missing profit estimates. let's invest with chief investment officer at crane. great to have you back, brendan. we know that the revenue growth will not be the exponential increase as we saw in the past years. given of course how not only tencent but also jd.com has performed and beaten expectations could we expect a more positive outcome?

guest: we are optimistic going into it. based on the performance of u.s. listed china adrs, alibaba's u.s. share class, baba closed at 4.5 premium to where 9988 the hong kong listing closed yesterday. investors have pretty strong expectations going into the earnings release tomorrow. driven by strong numbers from tencent today. baidu yesterday and jd last week. shery: this chart on the bloomberg showing analyst feel optimistic about the alibaba stock, 89% have eyes on the company, morgan's buys on the company -- have buys on the company. >> sentiment -- similar to

analysts we are bullish on the quality of the company. what is weighing on the security like many chinese this is securities, like the adrs in the u.s. are the geopolitical tensions. that has been the main issue. a year ago. there was a whole host of issues. zero covid, distressed real estate players, china's internet regulation the u.s. is holding foreign companies accountable. for the five headwinds have receded, the geopolitical issuance is keeping investors on the sideline. that is why alibaba's trying to unlock shareholder value through this spinoff of the companies. shery: the question is if in longer-term be compelling enough? there is a lot of vagueness around the geopolitical tensions between the u.s. and china, certainly the signals and policy moves from beijing have not been that concerning -- encouraging.

is it damaging when it comes to investor sentiment? guest: critically for u.s. investors as opposed to investors outside the u.s., it has been more of a headwind. just that volatility that comes with companies, u.s. listed china adrs, having to explain some of that headlines in terms of the u.s. and china political relationship. that is despite the two economies being highly intertwined with one another. at crane shares we are optimistic, we seen a few green shoes. john kerry last week mentioning he was invited to china. secretary of state lincoln talking up -- blinkin talking about rescheduling his chip --. trip. does president z visit -- xi

visit. president biden mentioning he wants to meet with xi in person. tentative green shoots of the two getting on an airplane and visiting one another. haidi: i want to get your views on ai and your preferred exposure to that. if you discount the ai related rallies you would see negative when it comes to the s&p 500. do you have a for -- preferred way to get in when it comes to the china part of that story? guest: it is a great observation in the case of baidu when they first announced earnings, the stock traded below that value. i think for us as focused on china and emerging markets we do see baidu as a leader with earning bought. tuesday's conference call, robin lee spoke at length of how they

are integrating this large linkage model into all aspects of his business including the surge business. they see it as a great opportunity. baidu is interesting to have been at this longer than others. as well as they spoke to their interaction with chinese regulators, obviously very important. they might have a little bit of a head start relative to their peers in terms of that government interaction. haidi: do you expect broader china tech to rally again? they have been up, am talking about the golden dragon china index. really very far from the peaks that we saw months back as this chart on the bloomberg shows. guest: certainly we had this great rally after the party congress and the removal of zero covid policy. we have had a bit of a pullback here, driven somewhat by the very strong dollar. the dollar has been a headwind just to chinese assets, but risk

assets globally. the key will be, it is the fed positioning? are they done hiking? there is a lot of expectations you could see the dollar rally come to a close or roll over. it would be a good tailwind for china as well as broader emerging asset equities. shery: chief investment officer at crane shares, always great to have you with us. cisco shares falling and extended trading after the network gear maker has declines. a difficult market environment contributing to portions among clients, they raise the full year sales forecast. take-two soaring and extended trading, the game maker known for the grand theft auto franchise says fiscal 2024 will

be tough but is projecting a rebound after that. that fueled speculation that grand theft auto six would be out in that window. be sure to tune into bloomberg radio to hear more from the day's big newsmakers and get in-depth analysis. you can see them broadcasting live from the studio in hong kong, you can listen to them by the app radio plus or bloombergradio.com. much more ahead. this is bloomberg. ♪

>> trade numbers out of japan right now exports rising 2.6% year on year for the month of april which is missing expectations of growth of 3%. it is also easing from the previous month. we know global demand has been weakening. we are seeing the downside there. we are now getting the trade deficit coming in at 432 billion yen. 432.4 billion yen, a smaller

deficit than was expected and a smaller deficit than the previous month. adjusted deficit still more than ¥1 trillion. imports on a contraction of 2.2%, giving you an indication for the month of april about domestic consumption. when it comes to exports of different regions to the u.s. rising more than 10% to china contracting almost 3% year on year. that is a breakdown of global demand haidi. haidi: we are watching new zealand, with the budgets delivered by the finance minister grant, being referred to as a no-frills budget. spending constrained by inflation and a slowing economy. to talk about this move is a bloomberg economist from new zealand. you were critical of the australian budget, you said it

should be more frills. >> new zealand has a slightly different challenge from the australian challenge. is not like we are neck and see that much extra spending new zealand budget. the economy is in a given spot. under heated, much more than we have enough triller, discuss policy more strained what we see here is the way to go. we have the major reached building and restructure taking place, following the cyclone after -- that will add to the economy, that sees the rba that might be concerned about the budget. no-frills, that could be what we see from the monetary fiscal policy perspective. >> what is the inflation environment that the rbnz this is seeing right now as it could

raise concerns for the central bank? >> we have seen the recent inflation data over a new zealand. the first quarter numbers undershooting what they were expecting. we have a tight labor market. that expectation of wage pressures moving ahead from where they are right now. already elevated by continuing to rise over the next six to nine months is the key underpinning of that very aggressive stance against inflation. very tight on terry -- monetary stance the rbnz has been articulating. there will be disruptions from the economy -- through the economy from the natural disasters. this could mean the disinflation is not as quick as the rbnz likes. we will see when they update the forecast at the end of this

month on may 24. >> wage pressures seem to soften us triller, does that seem to -- soften australia. >> we do need to see incredibly strong job numbers. as a board is reopened we see a massive surge in they were supply. the conserved -- consensus is 25,000 jobs this month, in a more normal period we expect to be a strong outcome. we need on our estimates, between 9000 jobs a month to keep pace with the -- 29000 jobs a month or keep pace with the rapid publishing growth. although jobs growth could remain relatively healthy we could be seeing the labor supply dynamic within the australian economy easing off. some of the soft wage pressures coming through. haidi: bloomberg economist for australia and new zealand ahead of the aussie jobs numbers.

we have the market open coming up next, two of the stories we are following for australia and new zealand. the budget handed out in a few hours time expected to be tight when it comes to any spending measures. we are watching out for the labor market data out of australia as well. we do have the market opens at sydney, seoul and tokyo next, we see an upside. from the u.s. market rally. some progress being seen when it comes to the debt ceiling negotiations. this is bloomberg. ♪

shery: we are counting down to asia's major market opens.

there was optimism over the debt negotiations, also regional banks, as president biden is on his way to japan. haidi: speaking of japan, watching for the chipmakers, we are hearing about a package of financial incentives for micron to produce next gen chips in japan. let's get you to the market open. annabelle: a few moments away from the open in japan, korea and australia. we are watching japanese stocks, we saw the nikkei closing -- we can see further extending the gains, we are at the highest for the gay -- the nikkei. investors saying this is an

golden opportunity, half the market is trading below its market value. we are seeing a few indicators that we are having overboard levels. what else will be driving optimism is the progress we are seeing in the u.s. debt talks. president biden has expressed confidence there will be no default, house speaker kevin mccarthy says reaching an agreement is doable this week. there is a big business takeaway ahead of the g7 summit getting underway in japan. micron is poised to land this deal from the japanese government, the prime minister is meeting with other heads of chipmakers. let's turn to what we are seeing in korea, tech is in focus.

we understand the industry ministry is looking at ways to bolster the competitiveness of its display sector. new measures are expected to be released later today. an effort to count on increasing competitiveness from china. we are continuing to watch the offshore -- past the seven level for the first time since december, a signal of the concerns that are building around china's economy. it is having an impact on the korean won. we are seeing strength coming into the currency. and australia, the asx 200 coming back online, employment data is going to be the highlight. bloomberg economics saying that jobs growth is likely to have slowed in april, unemployment probably grows. new zealand is to do out with its budget later today.

we have our eye on oil. recapping, keeping an eye on the nikkei, turning at its highest since september 2021. haidi: our next guest is underweight when it comes to develop market equities. the head of lack rock investment institute. -- blackrock investment institute. does the outcome of the debt ceiling negotiations change anything? where are you seeing compelling avenues for returns? >> thank you for having me. we are on the way to develop market equities. as a result of what we think is a challenging environment, we don't think some of the damage that will come with the fastest

rate hike since the 1980's will be reflected completely in equities. in the near term, the debt ceiling is a focus of attention. there are going to be ups and downs, we expect more volatility. we expect that to get out of the way at some point over the next few weeks. the question is what happens in terms of the economic activity? we don't think damage is fully reflected yet. the near term concern or consciousness, longer-term we already see equities being attractive. haidi: how much attention are you paying to narrative? the political narrative we are seeing in terms of how the g7 will be addressing it in their meetings. it has caused concern for foreign investors. jean: one place where we are

positive in the near term, is on emerging-market equities. we think the restart that is happening in asia israel, it continues -- asia is real. the policies where they can come on the back of weaknesses that could happen is there. there is room to maneuver in emerging market economies, they are ahead of the hiking cycle, inflation spots is more advanced. that creates a favorable backdrop. china is one of the restart engines. we have seen weakness this week. that is concerning. but this is offset by the fact that they have more ability to respond. that is a better position to respond to weakness then you would see in another economy.

we see your outlook there, we are overweight on em equities as a result. the bigger picture story is about geopolitics. we have the g7 meeting, when i used to take part, it was about economics, markets, finance. now it is about geopolitics. and regional blocs aligning themselves, companies thinking about factoring in this chris kise into how they operate -- about factoring in this risk. shery: is that a top-down call in the index spaces with china as an anchor? jean: it is more of a top-down view. i would frame it as, this is a

story about being closer to the growth engine, is where the conviction will be strongest. anything that is more strongly related to the china restart will benefit more from this. that is how would -- we would look at this. the other lens would be around the central banks that have made the most progress in dealing with inflation. the em world is in a better place than the dm world. the closer you are to the restart engine, the more positive it would be. shery: how close are you watching the developments in the semi conductor side of things? we had breaking news that micron is expected to get $1.5 million in incentives from the japanese government.

it seems this would be a sector that could and if it. jean: there are two themes that i see at play in this example. the first one is the fact that we are seeing governments that are aggressive in pursuing industrial policy around the world. you see it in the chip story, you are seeing it in the climate transition space. it is pushing government to provide support to companies that we have not seen in many years. this is fiscal the policy -- fiscal policy being deployed. that is the first somatic. -- thematic. and the geopolitics. a realignment, we talk about

globalization being rewired, this is a key example with mike rounds -- with macron's announcement. shery: let's get to su keenan. >> start with xi jinping, who will seek to keep in beijing's influence in central asia and a major summit starting on thursday. it will assemble leaders of kazakhstan, does she just on, turkmenistan and uzbekistan. trade ties, regional security concerns and russia's war will dominate talks. the g7 leaders meet in japan this week. the indian prime minister is pushing through with his australian visit next week, despite the last-minute cancellation of the sydney summit. he hopes to hold bilateral talks

with his australian counterpart. his visit is seen to aid australians. this amid growing tensions between the u.s. and china. the former premier says the police have surrounded himself to potentially arrest him again. he was given a 24 hour deadline to hand over supporters at his residence who are accused of attacking military facilities. his arrest last week sparked clashes. the supreme court had ordered his release and the islamabad high court granted him bail. montana has become the first u.s. state to ban tiktok. tiktok and app stores operated by apple and google could face up to $10,000 in fines for violations. the law is short on technical details and is certain to face

legal challenges on constitutional questions. a cvs panel says the breakdown of credit suisse's notes will not trigger an insurance payout. the combined -- the committees took the view that the 81 notes were junior to the sport of bonds and swaps. the european banking authority has been holding talks on ways to boost investor interest in the market following credit suisse's follow-up. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg. >> we are seeing topic at the highest level since 1990, 5 sessions of gains. the nikkei at the highest level since september of 2021. your following stocks, including nintendo, rising more than 2%. zelda sold more than 10 million

copies, sony is also rising after announcing a share buyback. we are getting disappointing news from -- breaking news out of japan. the wholesale head says cost inefficiency and lack of scale, cutting profit targets for the year. it is all about chinese stocks. oasis management founder on why he thinks fears around investing in china are overblown. g7 leaders meet in japan hoping to send a strong signal to china. we are live from hiroshima next. this is bloomberg. ♪ listening more than talking, and a personalized plan ♪

to guide you through a changing world. ♪ go. ggo sensors and software. go find leaks. go fix-em. emerson technology detects compressed air leaks to save manufacturers, like colgate, over 20% in energy costs. go brush your teeth. go boldly. emerson.

haidi: looking at a reaction to nemura. annabelle: it is holding its investor day-to-day, they are cutting profit targets for the year ending march 2025. the ceo is releasing profit targets in a presentation. we are hearing from the wholesale business, that is looking challenge. are seeking a cost inefficiencies -- they are seeing cost inefficiency, lack of scale. they are seeking an improvement as soon as possible. the nikkei holding at its highest since september 2021, -- it is at overboard levels. we are watching nintendo, we

have the results of the game launch. the best ever for videogame for the company. zelda, selling 10 million copies in three days. nintendo will be benefiting for that, you see that reflect it. buybacks in focus with sony. we have seen a wave of share buybacks from companies in japan, leading to a lot of optimism around japan stocks generally. another sector focusing on, the biggest gainers for the nikkei so far, it is all about the chip stocks. we had breaking news from micron. showing the reaction, these are the chip stocks that could benefit from that. shery: let's delve into that story that broke earlier today. we have learned that micron could be getting $1.5 billion in incentives from the japanese

government. part of the effort to strengthen the chip supply chain. what do we know, what will be done with this billions of dollars of investment? steve: it is a big development, as the g7 has been pushing supply chain resilience, that is code word for relying less on china for key critical supply chain issues. ships are at the forefront of geopolitical concern. it is no secret that warren buffett's berkshire hathaway just invested -- because of its location in taiwan. there is a diversification with japan reaping the benefits. the prime minister's from hiroshima, he will be meeting with the heads of micron, as well as other chip companies, trying to lure them to come

here. we are learning from sources there could be an announcement later today on that story where micron technologies of idaho will bring, for the first time, the most advanced chipmaking equipment from the dutch company to their facilities here in hiroshima to build out memory chips at the high end. that is on top of what we are seeing, which during the heyday of japan's attack boom, was not as silicone island. they are building a factory there, there could be another factory being built. this is not only the private opportunity for companies like

micron, but the government is getting involved, throwing $1.5 billion to micron to tilt its factories here in hiroshima. which is the prime minister's hometown. haidi: when it comes to what the g7 will be focusing on, the chip supply chain issue is one that features very front and center when it comes to an attempt to counter way the chinese influence. do we expect to see a united front? steve: on russia, there is a united front. we got that from the communiqué from the finance ministers and central bank meeting last week, where they all condemned the illegal war in ukraine by russia. there could be perhaps more

sanctions coming from the g7 announced, as well as humanitarian and economic aid for ukraine. the g7, while they have been united there, the g20, which is chaired by india this year, has been -- there is not as much consensus. they did not have a communiqué condemning russia's war in ukraine. it will be interesting to see on the other issues, with bryden -- with biden truncating his trip to asia, not going to the quad meeting in australia. is this a missed opportunity for the white house to build consensus in the other areas beyond where they do have consensus, that is the condemnation of russia's war in ukraine. jake sullivan has talked about the u.s. ambassador to japan has talked about it, the allegation

that china is using economic coercion to propel its own agenda by limiting trade because of political reasons. that is something the white house is working to get consensus on rid finding a common voice on limiting the comic coercion. -- economic coercion. haidi: china tech is in focus, alibaba fourth-quarter salt due out today. we saw tencent reporting revenue that beat estimates. let's bring in our guests. so much of the focus will be on the split up. what are you expecting? >> i think that alibaba is in a position to improve their

overall profitability. to narrow their losses, there has been cost-cutting measures put in place since last year. we will see the impact of that coming through. for the cloud unit, it will be interesting to see the impact and company guidance towards cloud profitability. shery: morgan stanley was say the restructuring could lead to more cash yang release, can we expect more buybacks? >> we will likely continue to seek buybacks. this is management guidance. we have to be mindful that, with restructuring, and them looking

at potential new share options, the magnitude may not be as huge as what we have seen over the last 12 months. i am expecting the share buybacks to continue. shery: tencent seems to have a mixed bag. what were the key takeaways? >> in general, the revenue -- market consensus. the most surprising part is online gaming. both domestic and overseas gaming revenue grew at a faster pace than expected, especially the titles that have recorded revenue for the last quarter. the key thing is the

cost-cutting measures have turned out that are than expected. the fintech business was encouraging. all of those have offset the week momentum in online advertising. haidi: will tencent earnings become an inflection point when it comes to tech stocks or hong kong stocks when it comes to better performance? we have seen downside for four months. >> tencent's results are encouraging. we have seen hong kong markets, total turnover has been weak.. the shares did not rise after earnings and hong kong, even though they rose in the u.s. overnight.

tencent earnings is encouraging for the market to revive sentiment, and ease peoples worries about sales growth momentum. shery: plenty more to come on daybreak, this is bloomberg. ♪

♪ (upbeat music) ♪ ( ♪♪ ) woah. ( ♪♪ ) ( ♪♪ ) ( ♪♪ ) ( ♪♪ ) constant contact delivers the marketing tools your small business needs to keep up, excel, and grow. constant contact. helping the small stand tall.

shery: take a look at the the nikkei, close to the 23 here high. -- 23 year high. above that, we could reach new heights, the topics at the -- the topix at highest level since

1990's. the outlook for japan's economy is strong, the domestic financial system is sound, and improving corporate earnings outlook and corporate governance gives the boost to the japanese market. watch the nikkei. our 23 year high. this is bloomberg. ♪

haidi: a check on markets, 30 minutes into the session for japan, australia and korea. japan is the focus so far. the nikkei 225 building into

gains, we are at a september 2021 high. we are a week away from it reaching its highest level in 23 years. it comes alongside a lot of optimism. we are seeing buybacks coming in from japanese companies. optimism around the health of the economy. foreign investors, the warren buffett playing into the moves we are seeing. the yen trading fairly flat. the focus is on the chipmakers. the topix index is the biggest gain are in the session. you can see the huge moves coming across. have micron gaining 1.5 billion dollars worth of incentives to produce chipmaking equipment in

the country. we are understanding that the prime minister has been meeting with the heads of major chipmaking companies to encourage them to bring their factories to japan and to team up with the local companies. we are seeing that reflected in that action today. the question is the strength of the moves we are seeing in japanese stocks. indicators that we have been discussing, stochastics indicating over the board trends. you see here, the price moves in thee nikkei 225. the trend is extremely strong. shery: we are watching the filipina central bank after waiving its most aggressive war on inflation in two decades, the bank is expected to take a break at today's reading and wait to

see if prices cool off. our global economics and policy editor kathleen hayes is here. what are we expecting? >> we are expecting them to pau se, because the governor of the central bank has said that is what he is going to vote for. inflation has come down for three months in a row, from 8.7% in january, 26.6% in april. it is moving in the right direction. what he said earlier this week, if for sure this is a permanent trend, clearly we must pause. we have been surprised many times before. along with inflation falling, we have seen the key rate for the philippines going up as much as

50 basis points in march. a lot of progress. we don't only have the governor himself saying he is ready to vote for a pause, the previous governor, the finance minister of the philippines, has said he is ready to vote for it. he says he can't speak for the entire word. -- board. the fed has caught up with everybody and surpassed them. particular as the federal reserve signals, it might pause or cut rates further. haidi: the spotlight is on two things, jobs numbers out of australia, and how many jobs

need to be added to soak up the surge in international borders and labor supply resuming. we are also watching the new zealand budget. >> there is a big day in many ways. let's start with the australian labor numbers. we had the wages numbers yesterday, closely watched by the rba. a pause is expected, but they may figure they have to move rates up even more. the labor market is going to cool off in terms of the number of jobs created. not a bad number. on implement holding at 3.5%, a 50 year low. a little less heat, but a market that looks strong for jobs, held up by the participation rate adding butter, population growth and more.

when we look at what is happening in new zealand, it is a tricky budget. grant robertson, the finance minister, presenting it a couple of hours from now. the fact that the budget is constrained in terms of politics, a general election in october, i sense that they have to make good on promises to limit spending, these are the things. and a weaker economy in new zealand. we are looking at the central bank, saying they will keep fighting inflation. and the chief economist at anz sees a 25 basis point hike next week. she sees another 25 in july.

the expectation is they are not done fighting yet. haidi: let's get you to su keenan, with the first word headlines. >> president biden expresses confidence that regulators would reach an agreement to avoid default, even as republican lawmakers criticized his decision to travel to the pan for the g7 summit. fighting and congressional leaders have agreed to a narrow round of staff level talks in hopes of reaching a deal. he shortened his asia trip to continue negotiations. micron is poised to land $1.5 billion in financial incentives from the japanese government to help it make next-generation memory chips in the country. sources tell bloomberg the company will make chips in its facility in hiroshima using advanced tech. the deal is the latest step to bolster its domestic semiconductor production.

to india, the top court has asked the markets regulator to close is investigation into the allegations against the adani group. those allegations include corporate law, violations of insider trading conglomerations -- treating. a six-month extension after submitting a tentative report to a court last week. the patriarch sp hinduja has died at age 87. he had suffered from a form of dementia. his two daughters called him a visionary tighten of industry and business, saying they will continue to uphold his legacy. global news, 24 hours a day, powered by more than 2700 journalists and analysts in over 120 countries. this is bloomberg.

shery: taiwan's main opposition party has ousted -- second election in the row. " more on this with our bureau chief. the nomination, what is it mean in terms of implications for the january election? >> it means the cost of main candidates is set, and the campaign it was an interesting choice, to go for hou. in the end they went for hou, who is seen as a policeman, he rose to become taiwan's top cop for switching to politics.

he is seen as a competent administrator, and has a good manner with people. they have gone for a sensible, low-key choice. which is in contrast to the past couple of elections, where both of the candidates fared poorly. he is up against the vice president. what this means is they have ended the uncertainty around the nomination process. the fact they had these two strong candidates to choose between meant the nomination process took longer. that allowed him to build a lead and start campaigning while the kmg was trapped in an internal debate. picking a candidate will allow

hou to chip away at the lead. it will lead to a competitive election. shery: where does the founder of foxconn stand on this? >> that is the big question right now. terrry gao has made no secret of his presidential ambitions over the past few years. he had tried to become president four years ago, he didn't get the nomination. he spent the intervening four years trying to bolster his image as a presidential figure. he went about it in a more political, smarter way this time. he still fell short. the big question is, what does he do now? does he accept the result and fall back behind hou?

or does he consider an independent bid. so far, he has indicated -- he congratulated hou and will support him 100%. is there a possibility of him joining the ticket to run as the vice president? haidi: coming up next, oasis management founder seth fischer tells us what he sees opportunities in china's higher education sector. this is bloomberg. ♪

>> we see a lot of value in the financials, everybody hates them. not everybody is the same as svb. >> we have a lot of strategy invested in india. india as an economy is benefiting from the geopolitical shifts. >> if you look at the fundamentals, the move downwards is speculative in nature than

fundamental. if we can buy copper equities at a discount, that is a great thing. >> the china reopening play is not just about mining stocks, it is about trade, it brings in japan, the whole of asia. >> everybody was expecting an exponential recovery, i don't think that's coming. i think it is slowly getting there. shery: it also march of the return of chinese stocks after they were absent last year. let's bring in our next guest, who was one of the speakers and says there are opportunities in china's education sector. with us now is seth fischer, founder at oasis management. this is an interesting call, there are concerns about regulatory crackdowns, this is a sector that was hard-hit. what do you like? steve: i like the prices, you

are right, people don't like to look at the sector because the sector has been hard-hit. the government has been clear, they are not going after the vocational schools. a lot of these schools are continuing to transition to for-profit. it is priced as if it is on investable -- un-investable. shery: what about the broader market in china? there was a debate about the invest ability of chinese assets given we weren't sure where beijing was headed. seth: government policy changes in all countries. there are no bad assets, only

bad prices. there was a change in government policy, 10 years ago everybody wanted to invest in internet and education. there has been a change in what was being permitted to go forward in the internet space. for good reason. in the educational sector, people were spending revenue to get afterschool tutoring for the big test. that is a fortune for an average chinese family. what i was talking about was vocational training, which is productive for the workforce of china. it is in line with government policy. haidi: you say that the risk

relative to evaluations is attractive. does that mean it doesn't matter , we continue to see ongoing signals from beijing that it will get harder for foreign investors, to do due diligence? seth: yes, it is getting harder to do certain things. the fun part about the particular companies i talked about, you can see a lot of this stuff online. you can see the different education companies, what enrollment is like, what pricing is like, how they are ranked, what degrees are available. the fun part is, you can track revenue by looking online. this doesn't require on the ground to diligence -- due

diligence. haidi: where are you seeing potential opportunity for returns? there is too much exuberance when it comes to ai, are any of the chinese players interesting to you? seth: i haven't spent a ton of time in the ai space, i have been looking at the property space. there has been a downdraft in property company investments. some of those pricings are attractive. shery: away sis has been known for pushing for corporate governance improvements. is this what you are seeing in japan? look at where we are at in equity levels across the

country. seth: it is fun that the japanese index is back to 30 year highs. there is real change, a dramatic change in corporate behavior, buybacks, earnings, dividends. systematic change across the board. a particularly bullish japan, and the corporate governance changes. we feel it with japanese management. they are genuinely interested in improving the market and their businesses. they are at a fun inflection point of improving profitability dramatically. haidi: that is seth fischer. continuing our live coverage of the sohn conference.

this is bloomberg. ♪

shery: a quick check of the latest business flash headlines.

nintendo shares rising in tokyo after the latest legend of zelda game sold 10 million copies in three days. the game maker says it sold more than 4 million units in the americas. the game could boost sales for the console, which has been in declining demand in recent months. nomura has caught pretax profit targets following a slump in investment banking revenues. the target for the year ending march 2025 has been lowered to ¥288 billion from a previous goal of ¥350 billion. the move underscores the continuing challenges for the ceo, who took over in 2020. haidi: the deadline is nearing for evergrande's restructuring

plan. what are the markets looking out for now? >> as you were saying, today is the second time that it is facing the consent deadline. it is the day before which creditors can get compensated, they can get a small amount of upfront fees if they show their support for the plan. this is not the final result, it is a good indication, creditors will get compensated, of what they will eventually be able to gather for its restructuring plan. for the restructuring, it is trying to do it through three separate schemes of arrangement. it is dividing creditors into four groups and will need to get over 75% support from each group in order to get the

restructuring done. this is the second time, we will watch out what is different. in that time, there are two creditor groups past 75% but to remaining. what happens if they don't meet the threshold? >> they can choose to extend the deadline, as some of the peers have done. what is different for them is it has something else at stake. it is facing a lawsuit, investors trying to wind up the company and potentially liquidated. time is ticking. to get enough creditor support is part of the package he has promised the court that it will do before the next hearing. it needs to do a committee hearing and sanction hearing.

there is a long to do list until then. shery: we are watching the nikkei, stocks close to the 23 year high. the level to watch is 30,670. the topix already highest since 1990. this is bloomberg. ♪ we work with empower, even if we do live to 100 we don't have to worry. eh, not worried. take control of your financial future to empower what's next.

hey corporate types. would you stop calling each other rock stars? you're a rock star. you are a rock star. no more calling co-workers rock stars. look, it's great that you use workday

to transform your business. but it still doesn't make you a rock star. so unless you work with an actual rock star. hi, i'm ozwald. hello ozwald. pam, you are a rock- i wasn't going to say it. ♪♪ (announcer) enough with the calorie counting, carb cutting, diet fatigue, and stress. just taking one golo release capsule with three balanced meals a day has been clinically proven to repair metabolism, optimize insulin levels, and balance the hormones that make weight loss easy. release works with your body, not against it, so you can put dieting behind you and go live your life. head to golo.com now to join the over 2 million people who have found the right way to lose weight and get healthier with golo.

♪ david: this is my kitchen table, and it is also my filing system. over much of the past three decades, i've been an investor. [applause] the highest calling of mankind, i've often thought, was private equity. [laughter] and then i started interviewing. i watched your interviews, so i know how to do so