shery: welcome to daybreak: asia. we are counting down to asia's major market opens. haidi: the top stories this hour, the u.s. and taiwan agree to boost trade ties. the first steps in initiative that faces tense competition from beijing. it comes as president biden and other world leaders meet in japan. g-7 nations are ramping up pressure on russia with new sanctions. and alibaba's much anticipated breakup against as it tries to revive revenue growth. the tech giant will explore ipo's for two units will spinning off its cloud's nest. shery: take a look at how u.s. futures are extending gains in the new york session. s&p 500 finishing at the highest level in nine months. the nasdaq 100 at the highest level since april of last year. we did get some comments that were perceived as a little more hawkish from the dallas fed president. the two year yield finishing at

around the highest level in about a month. yields rising across the curve with the 10 year yield above the 360 level but it was of the focus on the possibility of progress on debt negotiations that kept the risk rally going. the only one bucking the trend in the equity space were chinese adrs with the nasdaq golden dragon index down for a third session and alibaba wiping out half of the gains we saw in the past week with the sales growth numbers disappointing. we are seeing oil prices rebounding in the asian sessions above $72 a barrel. haidi: we are seeing a mixed start trading as we get into the open in asia. this fueling fears about the chinese slowdown, the patching is of the recovery but some tempered optimism we will get a deal on the debt ceiling potentially soon. sidney futures up by a quarter of 1%.

kiwi stocks trading in the green, a 10th of 1%. watching japan in particular because this market has been running so hot atop five market globally this quarter. a sixth week of gains for the nikkei and the topics if we end in the green today. this is the longest weekly winning streak in five or six years for both indexes. even as we see signs of overheating potentially further to run when it comes to the japan equity rally. ftse china futures, seeing a little bit of softness. perhaps unsurprising given we did see the golden dragon index lower overnight over some of these concerns of alibaba's growth trajectory. shery: g7 leaders are set to increase pressure on russia with additional sanctions as they begin their summit. a senior biden administration official told us they will reaffirm their commitment to supporting ukraine. our chief north asia

correspondent stephen engle joins us live from hiroshima. a busy day ahead on the first day of the g7 summit including those new restrictions on russia. >> that is right. geopolitics will play front and center roles in the dialogue that begins today and runs through the weekend. russia will be at the top of the list. issues with china will be high on the agenda. russia and china are not part of the g7. they're also not part of the g7 plus as invited guests. the united states and other g7 leaders as they invite the global south and other leaders from countries like brazil, india, indonesia, vietnam, south korea will be trying to send a unified voice on the war in ukraine by russia as well as policies towards china. against the backdrop of all this is going to be a visit today by the g7 leaders to the hiroshima peace memorial park as

well as the reminder of atomic weapons and that is the atomic dome in that memorial peace park. they will be visiting that this morning on a very rainy day. war is front and center as well. some residents of hiroshima. last night i walked through some of the covered shopping streets. there was a large but peaceful orderly protest going through the streets of hiroshima. this is known as japan's peace city. they are opposed to any moves to wage war with china. those are some of the placards they were holding up. they are essentially against some of the moves by the g7 chaired it does not necessarily represent the entire nation of japan which does have a pacifist constitution but there are moves afoot originally by shinzo abe and she should us on to be closer to the united states and change the pacifist constitution. there was the protest going

through the streets. russia and its war in ukraine will be front and center with the the protest. some of the sanctions we are hearing that could be brought forward at the g7 include about 70 entities from russia and other countries receiving u.s. exports by adding them to commerce departments export blacklist pair there will target 300 entities vessels and aircraft for allegedly circumventing existing sanctions and they want to close loopholes of products going through third-party countries to help fund the war in ukraine. he also or perhaps going to try to track the gem trade, diamonds out of russia. tracking them. haidi: china and how to deal with beijing as a collective will loom large in these talks. >> absolutely pit china is not

representative but some people have been using the representative china's economic coercion as something the u.s. ambassador to japan rahm emanuel will be on bloomberg television within the next couple of hours with annmarie hordern. he has use that term economic coercion from china. china has fired back at that term and using their own terminology with coercion in and it and that is diplomatic coercion. china saying in a report the united states is exporting implementing coercion to limit china as well as harming the world. john kirby, the u.s. national security spokesperson, also told annmarie hordern last night biden and the g7 leaders will spend a considerable amount of time discussing china. see the g7 leaders he says all speak with one voice about the challenges china poses in the

indo pacific at the g7. shery: our chief north asia correspondent stephen engle joining us from hiroshima. later this hour we will speak with the center for american progress and the u.s. ambassador to japan rahm emanuel will join us live in the next few hours. and of course we are watching the latest on monetary policy with federal reserve officials seeming more divided than ever over continuing rate hikes or pausing and now another possibility that is being discussed. a skip. our global economics and policy editor kathleen hays is here with the latest. this is a much more nuanced fed. >> a fed that cannot make up its mind so it has to make up a few more terms. let's start with what we have heard and put this skip in context. philip jefferson from the board of governors is online to be the vice to chair -- vice chair replace lael brainard.

he said today he is leaning toward a pause. he agrees inflation is still too high. he needs time to assess the impact of tighter lending standards after all the banking turmoil. what is that going to do to the economy? the ability for consumers to get loans, businesses to get financing. he is ready to cause. he makes that clear. jim bullard who has been hawkish for some time says disinflation is moving lower than he would have liked. and in fact he is calling for more rate hikes as insurance against inflation. when pulling -- i am pulling this caught up for you because it is a good reminder for investors and people following the fed. our main risk is inflation does not go down or turned around and goes higher as it did in the 1970's. when that happened under arthur burns that got the fed into or trouble. in 84 they had to come back with more rate hikes. that caused a deep recession. let's move onto lori logan president of the dallas fed. lori logan saying a case for a

pause is not clear to me yet. she is not too dovish. she says tighter credit conditions are mainly due to the fed tightening. not to banking stress. that has been going on for it while. she said the data in coming weeks could yet show it is appropriate to skip a meeting as of today we are not there yet. she is still hawkish. what is skip a meeting? we first heard this from rafael, president of the atlanta fed at his bank financial conference. he said if he had to vote right a pause could be a skip or it could be a hold. so you have to ask yourself, this seems to have developed at the fed. there has been no formal statement about we have a third option now which is a skip. i think it is inherently hawkish because if you are going to pause, presumably you are saying we are pausing now. we don't have to hike rates more now. that is the pause.

a skip means we are still inclined toward hiking. this is how i am interpreting. but we are not sure so we are going to skip this and leave a door open to rate hikes. that is what i think this is. if you are ready to skip, i think you are not super hawkish but you are not ready to pause so you are not dovish. you are somewhere in the middle but leaning probably toward the option of hiking when you are sure you need to. haidi: our global economics and policy editor kathleen hays. alibaba has shared more details and how it plans to split into six units. this as the company posted another quarter of single digit revenue growth. spring in annabelle for more details of the earnings. the breakup -- this is what investors are looking for. more details of the split up. >> how the company was planning to split into six different business units. we got more details coming out in the earnings overnight. the first phase is going to be splitting off the cloud arm.

choosing the start is significant because this has been one of alibaba's fastest-growing businesses. when you take a look at the latest earnings, the first ever cloud revenue drop. it came in at -2% revenue gains versus projections for 6%. you can see in the chart. it is a signal of how important it is to bring in new investors to try to revive the growth or the company also says in terms of its projections, for where the cloud unit can go to, they say it could rival alibaba. some concern about that vision given we are seeing beijing increasingly preferring for data to be stored on state backed servers. that is perhaps an issue that could arise in the years ahead. there is more business units to come. most immediately is the plans to list its grocery arm, fresh hippo. that should come within the next

six to 12 months. don't attract, the logistic arm is the next one to come. it should be done within 18 months. shery: what are we expecting when trading starts in hong kong? >> the 6% drop or near. not a great signal for alibaba listing in hong kong. other tech stocks as well. we can expect weakness at the open. when you take a look at where the share has traded versus where we were at the point when the listing was first announced in march, it is back at the same level preceding that so it is perhaps a signal that some investors, analysts are not necessarily buying into alibaba's vision. when you take a look at what we have heard from different analysts tracking the stock, one of the consistent areas that has been highlighted is the slow growth in its e-commerce arm. we saw sales coming in over 208 billion yuan for the quarter

pent the figure as you can see in the chart is reinforcing the concerns that the consumption of chinese consumers has not rebounded and we are well off the levels we were at pre-covid. it has a few issues for the ipo or business units yet to be spun off including fresh hippo, the logistics are. for the weakness it raises the question, what is going to be the catalyst and growth driver for the business units in the years ahead? haidi: a lot of uncertainty paired a lot of questions when it comes to alibaba. you feel that in the investor uncertainty. some of the color on their earnings in hong kong. let's get you to vonnie quinn with the first word headlines. vonnie: the u.s. and taiwan have agreed to boost trade ties under an initiative announced last year. initial agreement will streamline customs, reduce wait times for trucks and vessels and improve regulation. the initiative is not a formal free-trade agreement but as part

of the broader drive to deepen trade. u.s. house speaker kevin mccarthy and senate majority leader chuck schumer are making plans for a bipartisan deal to avert a u.s. debt default. mccarthy says negotiators may reach an agreement in principle as soon as this weekend and is letting up a vote in the house. schumer says the senate would take up the legislation after the house. he has alerted senators they may be called back to washington to vote next week. mexico's central bank has lowered its inflation forecast for the end of 2023. seize the inflation rate at 4.7% at q4 compared to a prior estimate of 4.8%. the central bank has halted its steepest ever series of increases. it has also promised to keep rates stable for an extended period. authorities in pakistan say they are planning to search the home of former prime minister imran khan for supporters accused of attacking military facilities. a provincial government official

claims he is sheltering dozens people thought to be involved in last week's unrest. officials say they don't plan to arrest him again. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. i'm vonnie quinn. this is bloomberg. shery: still ahead, as the g7 summit gets underway in japan, we discussed with the center for american progress whether president biden will be able to push for a unified stance toward china. first, two central banks hit a pause in rate hikes. adult investments joins us on whether the fed has cause for pause. this is bloomberg. ♪ ♪ (upbeat music) ♪ ( ♪♪ ) ( ♪♪ ) ( ♪♪ )

-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.

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. and your store was also the first time you realized... well, we can do anything. cheesecake cookies? the chookie! manage all your sales from one place with a partner that always puts you first. (we did it) start today at godaddy.com

>> history shows monetary policy works with long lags and a year is not long enough period for demand to feel the full effects of high interest rates. shery: federal reserve governor philip jefferson on the rising rates over the past year. egypt, philippines and mexico paused on rate hikes as inflation eases in those countries. our next guest expects the fed

to be holding rates in june. let's discuss the market implications with the chairman of dalton investments. always great to have you with us. we heard from governor jefferson. we also heard from the dallas fed president lori logan today saying the case for pausing june was not clear. what does this uncertainty and potential divergence with other countries mean for how you position in the markets? >> we do not really have to make a bet based on what the fed will do in june because we invest for the long term. we invest one company at a time. with that said, i think moderation in inflation from the 9% peak to 5% in the last print allows the fed to take a pause especially when coupled with weakness we have seen in the employment data as well as the bank failures that have apparently led to tightening

credit conditions across particularly regional banks. the combination of all of that i believe allows the fed to take a pause for now with the message they are willing to increase rates again should inflation proved to be stubborn and not continue to decline over the rest of the year and closer to the 2% target. the question of whether they can get to 2% as another question altogether and one i think is much harder to answer. shery: does that mean you are factoring in the higher for longer narrative and what does that mean for your portfolio? >> i do not really know what to make of the inflation forecast going beyond this year. for us because we are focused on asia, the weight it impacts -- the way it impacts the way we invest is to bring it into consideration when it comes to the currency and also in terms of the discount rate for future

earnings. the reality is the u.s. dollar has been so strong that we believe that the asian currencies in which we are invested particularly the yen have more upside than downside at this point. in japan in particular with the handover from kuroda, there is a possibility now for an increase in japanese interest rates. haidi: we have got to talk about japan because that has been the one market in asia and potentially globally that has seen these idiosyncratic reasons for perhaps the foreign inflows paired take a look at this chart where we are seeing the love foreign investors are showing japanese equities. positive floats for japanese stocks for a seventh straight week paired a lot of this has been to the detriment of u.s. equities. a lot of investors are leaving china in favor of japan. we are starting to see signs this is the market that is starting to overheat when you

take a look at some of the technical trading bands and the rsi. that does not necessarily mean there are no good reasons why we could not continue to see this rally run. >> we believe there are a lot of lengths to this rally. the reality is the japanese market has been cheap for a long time and for good reason because managements were not willing to share their profits with investors. that has come under attack. certainly encouragement from the japanese government and the tokyo stock exchange. in particular what is most notable is this year in january when the tokyo stock exchange announced specific listing requirements and deadlines for companies to be able to adhere to to be listed in the prime section. if you recall in april last year they reorganized the stock exchange so there is a prime section and main section and growth section. this really puts the pressure on

management to do what they have to do to get their company into the prime section. if you do not, somehow you have lost face and disappointed your employees, shareholders, banks and everybody else. it is important to be able to comply to this. since then, we have seen a drastic change in the behavior of managements. we have seen a lot of companies that have never done this before make much higher payouts of their earnings. we have seen record share buybacks, record dividend increases and a huge increase in activism in the japanese market. all of this has encouraged foreigners to come back into the japanese market. and for good reason. haidi: how optimistic are you when it comes to chipmakers as a part of that really because we are starting to see signs perhaps of the cycle bottoming and we also saw some big gains

in japanese chipmakers after the news that micron was getting these financial incentives from the government. >> we are also of the view that the chip cycle is near its bottom. we do like that sector. the companies we invest in are not necessarily all chipmakers but they are crucial to the chip supply chain. so it could be anything from materials to software to testing and also the chipmakers themselves or distribution. it is a very wide industry in terms of the types of companies you can choose and there are many in japan we think are fairly priced, well-run and now incentivize to treat shareholders better and share the profits with shareholders so we are optimistic there valuations will increase. we actively are pursuing as well as have discussions with

managements to increase dividends. shery: always good to have you with us. chairman at dalton investments. we have more to come. this is bloomberg. ♪

conventional thinking delivers conventional results. at allspring, we break away with purpose. harnessing data-driven insights and boundless curiosity. we dissect the market from every angle. helping to build portfolios that redefine what's possible. because investing isn't one size fits all. allspring. purposefully divergent.

>> take a look at currencies trading. some strength in the u.s. dollar. the longest winning streak in more than a month cared right now holding steady as we are also following the japanese yen strengthening a little bit after falling to the weakest level of the year. the offshore 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: we have breaking news out of japan. we are getting the cpi numbers.

the core data excluding fresh food year on year growth of three point 4% matching economist expectations for the month of april. on acceleration from the previous month. this would be the eighth consecutive month the core cpi number is above the boj 2% inflation target. we have seen this cost push price surging from non-fresh food items. bloomberg economics thinking the boj will have to raise its inflation forecast. the headline you're are on your growth number, 3.5%. that would be in line with expectations. acceleration from the previous month. it's take up fresh food and energy and you have growth of 4.1% slightly below expectations but still in acceleration which shows you how we are seann those price pressures surging. in japan the only issue is this

is showing a cost push price pressure the boj still things might not really be sustainable. let's turn to annabelle for another check of the markets. >> it is the cost driven and the boj is after demand driven inflation instead cared that is perhaps a signal to us why the boj is unlikely to shift its policy settings anytime soon given wages are not keeping pace with those price gains. it is eroding the power of consumers. we have seen the yen barely budging on the data that has come out now. you can see here equities across the board gearing for -- the focus on what we are seeing in japan today, the contract for the nikkei just coming online. one of the more liquid once that gets underway and a good indication we will see gains extending into the session. the question is how much further upside there is.

if you change now, a lot of interest coming through from foreign investors. this chart says -- the data released from a weekly basis from the japanese government but is foreign net sales and purchases of japanese stocks. we have seen inflows for a seventh straight week. we have been discussing a lot of the reasons for this. there is the economic side, improving fundamentals in japan, a dovish boj p the corporate side lot of buybacks, stronger corporate governance reforms coming through. other factors including the warren buffett effect including he has shown more renewed interest. if you change on now, we have been tracking a range of different technical tools across the course of this week. a lot of those indicating perhaps we are at overbought levels including the rsi. the reading at 81 as of the close on thursday.

certainly is a big question mark of whether we are going to see the sort of really being able to extend even though we see an options activity. there is still a lot of bullish signals coming through from the data set as well. shery: the u.s. and taiwan have agreed to boost trade ties under an initiative announced last year that faces opposition from beijing. sampson ellis is in taipei and joins us with the details. this is not necessarily a free-trade agreement and it does not necessarily address tariffs either. what is this deal about? >> that is a very good question. . it is important to highlight this is the first step in trade and she give the u.s. and taiwan have been negotiating for the past few months. this is part of an ongoing informal trade talk between the two sides.

the initial agreement does cover things like customs. it will streamline customs processes. it will reduce wait times for trucks and vessels and improve regulation. what it does not cover our trickier issues such as import tariffs and things like that kid from the taiwanese side they have said for the longest time tariffs are not really an issue for them in terms of their trade negotiations with the united states. more than 70% of taiwanese goods flowing into the united states only have minimal tariffs or no tariffs. the tariffs issue is not one of the biggest issues. one of the biggest issues for companies operating in taiwan especially american companies is the issue of double taxation. there is still some room to go in terms of what can be covered in these trade negotiations. they are something of a reward

for after -- a reward for the president. she took the step three years ago to remove the taiwanese ban on the imports of u.s. pork. haidi: how much is this going to help the? economy -- the economy? >> there is probably quite limited room for this trade initiative. the u.s. taiwan initiative and 21st century trade as it is called. the majority of taiwan's exports do go to china. export orders where the end demand is, that is predominantly coming from the united states. the goods that end up shipping out from taiwan predominantly go to china. minimizing customs regulation and processes and things like that probably is not going to do a whole lot.

i think more than economic, today's agreement is much more about politics. this is a political signal from the united states taiwan we value your relationship. we want to give you some kind of tangible signal that we value you and a reward for the president for removing the ban on the imports of u.s. port. -- u.s. pork. this is unlikely to have too much of an impact on taiwan's economy. haidi: u.s. president joe biden and his g7 counterparts are in hiroshima, japan. the question is whether the debt ceiling impasse back home will be a distraction from focusing on rallying a united stance against china. it's bring in stephen engle and our guest, a senior fellow at the center for american progress who previously served as a

deputy to a u.s. trade representative for japan and china. always great to have you with us. it is a legitimate question. this is already a trip that has been truncated. he is not coming to australia. he has had to cancel the png trip which would have could been critical to his unifying washington is series about counterbalancing the influence of china in the pacific. is this going to be a weekend u.s. influence as we get into the talks? >> i do not think it is such a significant problem he is having to cut short his trip. if he had to cancel his trip to hiroshima for the g7 that would have been a very significant. the fact he is in hiroshima meeting with the other g7 as well as other country leaders, i think they will be able to have some type of an office type of meeting in hiroshima because he is not going to australia. it is not a huge step back i shery: what does japan want to achieve from this g7 summit?

>> japan has several. showing a and supporting ukraine. tightening sanctions on russia. having a unified stance toward china both on the defense side and the economic side. thirdly japan wants to show and exercise leadership with regard to their notion of trying to bridge the gap between the g7 and the so-called global south. japan feels a bit uncomfortable with the black-and-white democracy versus autocracy line the biden administration is pushing forward. they are trying to get the global south together as one thing. because it is in hiroshima and the prime minister is from hiroshima and he has had a long-term interest in trying to reduce nuclear weapons, that will be another theme. just yesterday the prime minister met with the ceos of

major semiconductor companies from the united states, taiwan, south korea and japan was that more investment, direct investment to strengthen semiconductor supply chains with like-minded countries vis-a-vis against china. those are some of the things and exercising leadership on the free and open and a pacific at august with australia along with the united states. there are a lot of things on the agenda. >> stephen engle here in hiroshima. thank you for joining us. the europeans like to use the terminology de-risking relations with china. not decoupling. decoupling is already underway on many fronts especially with china and the united states not having any high-level discussions. our reedy couple? -- are we decoupled? >> that depends on your definition of decoupling. i'll think by the administration has openly called for decoupling.

what they have called for is in strategic industries to reduce the dependence on china and strengthen supply chain with cnc and reliant -- supply chain resiliency. the term decoupling is kind of too vague. i don't think there is decoupling going on although there is clearly a sense of reducing risk regarding china. >> you brought up the semiconductor meeting yesterday with kishida and tsmc. micron, there is this deal to bring advanced chipmaking to japan. we know taiwan semiconductor manufacturing is building a big plant in kema moto. how significant is this? reenergizing japan's tech base by sort of de-risking the supply chain issues that are associated with being located in taiwan. > i think it is very

significant. in the 1980's and 90's when i was in the u.s. government we were involved with negotiations with japan. now with the rise of taiwan, south korea and china the fact that japan and the united states are cooperating with taiwan and south korea is very significant. i think japan is eager to have more foreign direct investment in japan and be a greater center for higher technology including advanced semiconductors. i do think this attempt by japan to bring in the semiconductor industry from around the world is significant in terms of not only the economy but also in terms of strengthening economic security. >> on the one hand is that economic security and securing supply chain. what is it going to mean for the japanese economy? there has been a wave of sentiment toward. depend inflation as we got cpi

numbers creeping up. you have the weaker yen. do you see a real turnaround after a couple decades of deflationary stagnation in japan that japan is turning the corner a bit? >> i think the environment in asia is such a that japan is the most stable economy and the most stable political system of the g7 countries. with a week yen, japan is increasingly attractive as a place to invest and i think the japanese are very eager especially because of the demographics in japan, the need to have more innovation, more start ups, more technology, those are all things the japanese think are very important. there is a good meshing of the interests of other countries with wanting to reduce risk with china. the same time japan becoming more attractive. i think the potential for japan to benefit from the environment is pretty significant.

shery: good to have you with us paired senior fellow at the center for american progress and our chief north asia correspondent stephen engle joining us from hiroshima at the g7 summit. catch our conversation with u.s. ambassador to japan rahm emanuel on bloomberg markets china also coming up live from hiroshima. it's get to vonnie quinn in new york with the first word headlines. vonnie: fed officials are sounding increasingly split over whether to raise or pause interest rate increases at their next meeting. all governor philip jefferson made the case for patients, dallas fed chief lori logan said she is not ready to pause tightening. she is floated the idea of skipping action at the next month only to return to it in july. the philippine central bank will public you rates unchanged i the next two or three meetings. the -- the central bank on thursday held a key rate at six and a

quarter percent as inflation cooled for a third month. the top u.s. bank regulators are felling to act quickly on long-delayed worlds decline in on executive pay and bonuses. move comes after former executives at failed lenders faced criticism from lawmakers over there generous compensation. the rules were mandated by the two thousand 10 dodd frank act to discourage executives from taking risks that lead to the 2008 meltdown. global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. vonnie quinn and this is bloomberg. haidi: coming up next we take a closer look at the lasting health impact of wildfire smoke on people in australia and the legacy it is leaving for the next generation. this is bloomberg. ♪

♪ old school wisdom, with a passion for what's possible. that's what you get from the morgan stanley client experience. you get listening more than talking, and a personalized plan built on insights and innovative technology. you get grit, vision, and the creativity to guide you through a changing world. ♪

haidi: the fallout from australia's worst fire season on record is pointing to graham health impacts for the next generation. a toxic legacy leaving children gasping for air years later. let's discuss in more detail with our global business reporter. we all went through this. we will bought -- we bought air purifiers at the time because

the buddy was so bad. this has become a longer-term issue. >> we wanted to see what the longer-term fallout was especially for kids who were either in gestation at the time three years ago or were in the early months of their lives. we knew what the immediate impact was of those terrible fires three years ago when 80% of the australian population was affected by smoke to some degree. we wondered what does that do to the human body especially to kids in the longer-term. over several months a colleague and i interviewed moms and families with small children, moms who were pregnant at the time and it is clear there are ongoing troubles of these kids are facing. some with respiratory diseases. taking breeding medication day and night. others with more troubling cognitive issues. others with physical challenges like balance.

speech. fine motor skills and it is clear there is a hole in the research. do not know what the impact will be from wildfire smoke and that is the big question researchers are racing to answer. shery: we know the financial burden on these households as well as for the entire country has been huge. tell us about that as well. >> it is clearly not just a physical toll on families. the economic toll is climbing. some estimates put the economic cost at 36 billion. that is just a figure for the u.s. incidentally. $36 billion a year. if you extrapolate that into the future, that is a figure that is going to only climb and also take its toll on productivity and economic output. there are other figures forecasting some to end have

thousand deaths in australia -- some 2.5 thousand deaths in australia. it is clearly an economic toll and emotional and physical toll as well. shery: is the government doing anything to mitigate the pain here whether it is on the financial side of things or for the years ahead so this does not happen again? >> this is a key question. when you look at the outlook for wildfires around the world, just this week at the unitive nation said we are likely to have a record hot year at some point before 2027. we know meteorologists are forecasting more intense wildfires more frequently with more destruction. it is a question not just australian authorities face but governments in obviously fire prone areas like california, the mediterranean but in other areas

that perhaps are not used to wildfires in recent years. we have seen areas of the arctic touched by wildfires. alaska, greenland, canada in recent years. it is a question for governments to say how can we mitigate the effects of it but also how can we prevent them from happening in the first place. then it comes down to practical measures like air filters, safe refuges for communities with masks, with proper building insulation more resilient to smoke and then the prevention point of view. it is down to climate change. these fires generally are a barometer of a warming world. if you can reduce the pace of temperature change or reduce it, you're likely to see fewer fires. haidi: our global business reporter in sydney. you can read more on the story at bloomberg.com. it is on the terminal.

some of the other big take stories at and i big take go. want to come on daybreak asia this is bloomberg. -- more to come one day brooke asia. this is bloomberg. ♪ 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: foreign investors were net buyers of japanese equities for a seventh straight week helping to fuel one of the best rallies of 2023.

since mid-march the nikkei 225 and the topics have rarely registered a losing week with technical signals now also flashing signs of overheating. for more let's bring in our senior asian stock reporter. how much is is this sustainable of foreign inflows and how much is this just a fad? >> that is a very tough question. some analysts think we might be starting to see one of the biggest waves of foreign investment in japan in recent years. as we have just said, we have seen six straight weeks of net buying by foreign investors. the biggest catalysts for this is the news in april that mr. warren buffett increased his investment in japanese trading houses.

and he mentioned geopolitical -- geopolitics as one of the reasons for his investment in japan. that seems to sort of highlight the fact that japan is in a unique position at this point where the tension between china and the u.s. seems to be intensifying. that related to another appoint -- another point about investment in japan. a lot of people at the beginning of this year thought the reopening of china is one of the biggest -- after we have seen disappointing data from china, people acting to wonder if that is going to work out. some money seems to be shifting to countries like japan. haidi: i don't how many years we

have been talking about corporate governance reform and the need for it in the japanese market. how real is at this time because every analyst we speak to seems to say this is the driving force behind this rally and that is why they think the rally has a real legs. >> yes, that is one of the hottest topics at the moment in this market. this has been an issue for a long time since former prime minister shinzo abe started corporate governance reform 10 years ago. one of the main reasons is that the tsc has -- haidi: we are going to have to leave it there but we do have the tokyo open next. am i? ya! save 50% on the sleep number limited edition smart bed. shery: this is "daybreak: asia." plus, special financing. only at sleep number.

after a risk on session, we had come as from the dallas fed president that were perceived as more hawkish. we are watching japan with the cpi numbers and possibly new highs in the markets. haidi: and potentially developments, the theme of trying to find a unified stance against an ever rising china. annabelle: we are a few moments away from the open in japan, korea and australia. they are focused very much on where we see the nikkei trading. we are watching for it to breach its highest levels since 1990. we are watching for 30,670, and we have passed a that, so we are

at the nikkei since august, 1990. this is a three decade high for the benchmark. we are seeing signs that the nikkei, or japanese stocks overall are overheating across technical indicators but wall street firms say they are bullish on the potential for further upside for japanese stocks. the moves are partly driven by expectations of further dovish policies from the boj that could extend. that view is being challenged by the inflation data we had in the last half-hour. we see every acceleration in the month of april, the core reading in line with estimates well prices excluding energy, fresh fruit and quickening since the fastest pace since 1981. that tells us the boj will we be forced to revise its outlook. we will see any policy

tweaks from the boj soon. the yen following -- following to a low. these price pressures are coming from demand or the supply side, and wages are keeping pace either. that is impacting the health of consumers. let's look at what is happening in korea. given the focus is on geopolitics, we have the president visiting hiroshima to attend the g7 gathering. as well as a trilateral summit that will take place with president biden as well. the focus at this gathering will be on the economic outlook, inflationary costs of living pressures, russia's continued war with ukraine, the issue surrounding china and ai. it is a lot for leaders to get through.

the korean won is holding fairly steady. emerging markets are trading at their weakest in around two weeks with the resurgent dollar coming back in. we have the asx 200 coming online, and at the start of the day we are seeing stocks trading fairly flat. not a lot of catalysts for the australian benchmark. we are watching brent crude coming online slightly higher. the refocus we are seeing on the debt ceiling talks and the progress. we are recapping the headline, that is the nikkei trading at its highest since july 31, 1990. we are seeing big gains for the nikkei at the start of trade. the question is if we see those extending throughout the session. haidi: let's get more analysis when it comes to the rally in japan.

our next guest is cautious when it comes to the japanese market. with us is massimiliano bondurri , ceo / founder, sgmc capital. perhaps you find that is a contrarian view given the enthusiasm we have been seeing from the big investment houses. take a look at this chart. some of these technical indications look like overheating when it comes to the japanese stock arc it. -- stock market. that does not set us up for any correction and it could have further to run. things are looking a little overwrought. are there reasonable fundamentals that are driving this level of enthusiasm? max: japan is actually the only country which is seeing a continuing accommodative and supportive central bank. the fed and ecb have been hiking, the boj has been

incredibly accommodative. you see that in the equity valuations and the yen movement. in the short-term that is likely continue. technically the balance could have more legs and could keep going, but longer-term we grow cautious because we have seen how it ended last year when the fed started to rain in their accommodative policy. the boj will eventually have to do that. we are seeing inflation pickup in japan. they are not in a rush to become more hawkish, but this will happen. short-term there is enthusiasm, but room for valuations to increase, but longer-term we are cautious. do book those profits. haidi: if not japan, where are you finding areas or markets or sectors around asia that are compelling? max: in terms of asia as a

geographical story, we like indonesia. we think that market offers great opportunities from a macroeconomic perspective. we have slightly reduced singapore, not because it is not as attractive but we think there will be a little risk on rally. higher data countries are likely to be outperforming. do keep in mind exposure to china and hong kong. names which are likely to do better in a risk on environment like the one we are seeing now. haidi: you do not think the rally in china can be sustained? the catalyst for a sustained gains in that market has materialized. what do you want to see there? max: unfortunately it has not. we had a great beginning of the year in january but the valuation came down since then. from a valuation perspective,

they are cheap and relative terms, but in order for a rally to be sustained then keep going, something we have not seen yet, you need more clarity, with respect to the economic environment from a fiscal point of view. but especially in terms of regulation and legislation, global investors need to feel more confident with the fact businesses will have a little more freehand with respect to growth and growth opportunities, and their policies going forward. once we have that, the market will rally because valuations are cheap. that spark has not happened yet, and hopefully will happen soon. shery: that geopolitical uncertainty with china leading to more semiconductor focus. we saw investment into micron in japan, is that an area you are willing to bet on? max: we have been very bullish on conductors and have become increasingly bullish of them.

if you think respect to everything happening, we will be needing faster, smaller semiconductors going forward, and a lot more of them. the semiconductor story is a structural long-term secular growth story, what you need to be exposed to. it has done well year-to-date but we think there is more to come. do add semiconductors in the u.s., asia and european names as well to get the geographical diversification. he must be exposed because there is a lot of growth potential there. shery: always good to have you with us, massimiliano bondurri, ceo / founder, sgmc capital. let's get to the first word headlines. >> u.s. house speaker mccarthy and senate majority leader chuck schumer are making plans for a deal to avoid a debt default. mccarthy said negotiators may reach an agreement this weekend as is -- and is lining up a vote

in the house. they may be called back to washington to vote next week. fed officials are sounding increasingly split over whether to raise or pause interest rates at their next meeting. one governor made the case for patience, but another is not ready to pause tightening. she floated the idea of skipping action next month and to return in july. mexico has lowered its inflation forecast for 2023 and sees the inflation rate at or .7% in the fourth quarter compared to the prior estimate of 4.8%. the central bank halted its rate increases, keeping its key rate at 11.25%. the philippine central-bank will probably keep rates unchanged and there next -- in their next 2-3 --the most aggressive

monetary rate at 6.25% after inflation cooled. global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. haidi: let's look at the earlier movers. annabelle: there are stocks we are focusing in this morning at the start of trade. we have toshiba tec online now, and this is a report coming through from the nikkei, saying, they are looking to combine their offers around the production of printers, copiers and other office machines. that report coming in without attribution, but the plan is to merge operations into a single company by 2024. we are expecting some announcement, or the nikkei report will see announcement

coming by friday. another group of stocks in focus this morning liz the japanese chip ones. these are big movers in the prior session given the report that micron could get up to $1.5 billion of incentives to start production in japan. we are seeing this morning stocks looking more mixed. we did get a report from applied materials, and they are warning of a sales declined. they say that what happened in the third quarter with the broader drop in the memory chip sector. we did see the stock index down 3.2% in the session in the u.s. on thursday, but we are seeing a mixed outlook so far in the session today. we are keeping a look on the nikkei trading at a 30 year high. shery: do not miss our

conversation with the philippine central-bank governor, felipe medalla. first, g7 leaders are set to increase pressure on russia with additional sanctions. we are live from hiroshima, japan with more details. this is bloomberg. ♪

haidi: g7 leaders are set to increase pressure on russia with additional sanctions as they begin their summit. the biden administer ration official told us they will reaffirm their commitment. stephen engle joins us from hiroshima. what is topping the agenda? stephen: russia-russia-russia. also china to a certain degree will be a topic of agenda among many of these leaders gathered here in hiroshima. g7 is trying to show a unified front on the war in ukraine, offering not only economic and humanitarian support for ukraine as zelenskyy as well will address the g7 on sunday by video link. more sanctions could be coming down the pike against russia.

what we are hearing from sources is the u.s. will cut off 70 entities from russia and other countries receiving exports by adding them to the commerce department blacklist. they will target 300 entities, vessels and aircraft for circumventing existing sanctions, or financing and facilitating the war. they want to close the loopholes. janet yellen has talked about those. loopholes that found russia is using sanctions evasion by finding those loopholes. we are hearing as well that the g7 will start tracking russian gem exports including diamonds while falling short of an all-out ban. this is controversial in countries like belgium that use a lot of these gems from russia. those come through third countries like elgin. if you choke off this supply,

they say it will just go elsewhere. the g7 is exploring loopholes russia is using to help its exports turn into much-needed funding to fund its war in ukraine. what you are saying -- what you are seeing, it is not a surprise the g7 meeting is in hiroshima. it is a stark reminder of 78 years ago when the atomic bomb was dropped on hiroshima. these are protesters against the g7 and any notion of war whether it is russia or increased rhetoric around taiwan and china. pluckers say "no war against china." keep in mind -- placards say, "no war against china." there will be a trilateral meeting to discuss the security threats whether it is north korea, china, taiwan and also

russia. shery: what specific things can we expect against china? stephen: that is what we will have to see. supply chain resilience is a big catchphrase we have seen at all these g7 meetings. that is code word for relying less on china for critical technologies and critical components in the supply chain. we did here late last night, annmarie hordern, interview john kirby, the u.s. national secured he spokesperson, saying biden in a g7 leaders today and tomorrow at the summit will spend a considerable amount of time discussing china. russia and china are not part of the g7, not invited as guests either. the g7 leaders will all speak with one voice about the challenges china poses. some officials, including rahm

emanuel, the u.s. investor to japan, he is coming up on bloomberg tv shortly, in a tweet this wiki use that terminology that has been bandied about. china fired back last night saying the u.s. has used diplomatic coercion around the world. shery: our chief asian correspondent, stephen engle, joining us from the g7 summit in hiroshima. the u.s. and taiwan have agreed to improve ties in the face of opposition from beijing. we are in taipei with the details. it is not necessarily an fta or address tariffs, so how much is it expected to support taiwan's economy? >> it says it will boost the economy and trade but we will have to wait and see. what the u.s.-taiwan initiative

actually does is it will streamline customs, making it faster and easier and cheaper for american companies to bring their goods into taiwan. it will shorten the wait times for vessels they are bringing in goods they are bringing into taiwan, will provide assistance for small and medium sized enterprises looking to trade across the pacific. what this is not is a formal free-trade agreement, which is something taiwan has sought from the united states for a long time. it does not address the tricky issues like import tariffs, and things like that. it may remove minor barriers and help smooth processes but it is unlikely to do too much to boost taiwan's trade with the united states. taiwan is the second-largest trading partner after china for

the u.s. this is much more of a political win, especially after the biden administration excluded taiwan from its indo pacific economic framework last year. this is something of a recognition from the united states for helping bolster trade and ties with the united states. haidi: obviously they are sensitive when it comes to beijing. have we seen much of a reaction? >> it is not a surprise they have not reacted particularly well. they said the u.s. might not negotiate agreements with sovereign implications for official nature with china's taiwan region. no surprises they are against this, china poses any countries from interacting with taiwan in any way that implies taiwan is a

country. china of course claims taiwan as part of its territory. one thing of note, this agreement came hours after the chinese embassy in washington said the chinese minister of commerce is scheduled to meet next week with the u.s. commerce secretary in washington and the u.s. trade representative in detroit. throughout the next day we will see if there is further reaction. that will certainly be one thing to watch as things move forward. haidi: alibaba's shares fell on thursday after the company gave details about their spinoff plans year it it said it is kicking off the first phase of the breakup with the $12 billion cloud business. how bad were the results to have

the reaction from investors? we knew it would not be strong, and the focus would be split up. >> yes, the key thing that stood out from the results, there were a couple of revenue misses. interestingly, you see for the first time the business revenue fell historically. we continue to see some weakness, even though during the call, the company did address things are improving for the china commerce business. they are seeing improving gmv's. that part, it seems like the china consumption recovery is also kicking into the books. there are a couple of misses but nothing that stands out from my perspective. shery: there was a lot of optimism there could be cash

released from the restructuring. is there anything exciting for investors in what was announced? >> i think it is a little too early to tell right now, given that what was laid out for us are some of the key units that could see some corporate actions in the next 6-18 months. we might actually see the first action from grocers, not the most exciting thing but one step at a time. i think we will really have to see whether the money goes back to alibaba's coffers. what i would like to highlight is the company remains committed to the share buyback program, which is good news. shery: joining us from singapore with a breakdown of the alibaba results. plenty more to come.

this is bloomberg. ♪

haidi: we are seeing the french president, emmanuel macron, with the japanese leader in their meeting. we are live in hiroshima where the g7 nation leaders are looking to increase pressure on russia with additional sanctions as well as restrictions on what is used on the battlefield. we are also looking for a unified way to deal with a rising and confident china, what is called economic coercion exercised by china. we are seeing these meetings running through to sunday. shery: we will have plenty more from the g7. here is a check of the latest business headlines. disney is closing a luxury hotel at walt disney world and hotel amid a high-profile fight with

governor desantis. it is dropping plans to relocate 2000 california employees to a new corporate campus it was building. the star wars lactic cruiser will also shut down at the end of september. walmart has left its annual profit forecast after reporting an earnings beat. walmart's cfo says the company is keeping a cautious view on the u.s. consumers. this is bloomberg.

>> this shows that monetary policy with long lags, and that

a year is not long enough for demand to feel the full effects of higher interest rates. shery: federal reserve governor jefferson on the rising rates over the past year. federal officials seem more divided than ever over continuing rate hikes or pausing . another possibility being discussed is a skip. kathleen hays is here with the latest. kathleen: new terms coming up, they are getting more creative around what they will do next and what they will do with the june meeting, hike or not. philip jefferson making the case of the doves, it is time deposits. he says it can take a full year for the impact of interest rate hikes to work through the economy. he talked about that you need time to assess how much banking

turmoil leading to consumer households not getting the loans they want and what that will mean for the economy. let's look at jim bullard. jim bullard is saying that disinflation is moving slower than i would have liked. and that he would like to see rate hikes as insurance against inflation. our main risk, he says, is that inflation does not go down or it even turns around and goes higher as it did in the 1970's. in 1982 they stopped hiking rates and thought they were done, they were not. in 1984 they push the economy into the deepest recession since the great depression. lori logan is shifting more to the hawkish camp. she is the president of the dallas fed. she talked about, i'm not worried about tighter conditions

because it has been going on for a while, since last year because a fed rate hikes. that is making conditions for lending tightening. then she says, the data could show that it is appropriate to skip a meeting. as of today we are not there yet. skip a meeting? don't meet? you will just sit home and talk on the phone? i'm being sarcastic but think what they are talking about, is what bostic said, if they are going to pause, it could be a hike or a skip. this is making us wonder, what are they talking about? i think they are talking about the fact that they may want to say, look, we are inclined toward rate hikes. bostic said last week he would hold his vote if he had to

decide today. but he thinks if they move again, it will more likely be a hike than a cut. this seems a way to keep the door open for hiking. it is getting confusing and is hard to explain because they have not told us what they mean. it is interesting that two officials said it. shery: japan's inflation re-accelerating -- haidi: japan's inflation is real accelerating. kathleen: it seems like the kind of thing that if we see more of this, how could it not? inflation had been coming down, and the boj is convinced food prices. rising. when they stopped rising, inflation will not come back to percent but below 2%. i love this chart because you can see everything is above the

2% target. for june, japan's core cpi above 3.4% -- excuse me, not for june. the latest month, may, three .4% year-over-year. -- 3.4% year-over-year. the core cpi taking out food and energy, the core that takes out even more is at its highest rate since 1981. where does this leave the boj? it supports the view that they will raise their forecast for inflation. it is not 1.6%. if inflation goes up, you cannot forecast that. a rising cpi is urgently necessary for the new governor of the boj to start that shift. these are important numbers for the boj.

if this continues, we will have a meeting in june and certainly july. haidi: that's get you back for a look at the markets. annabelle: picking up on what kathleen was saying come up even though we are seeing that inflation data coming through, expectations that the boj could rethink its policy settings is not something hurting the equity picture at all. the expectations we see is a further dovishness from the boj. we are seeing the nikkei trading above its highest levels since august, 1990. it is broadly risk on in the session. all major markets are moving to the upside. we are half-hour into the session for japan, korea and australia. further strength across the board but focusing on the japanese, it is strengthening.

perhaps that is a reflection of the bet building that we could see a shift. a live is very much in focus. we have broadly seen over the last few sessions dollar strength. that has been with this case, perhaps a skip or a lack of clarity on the outlook of fed rate hikes. plus, what we are hearing around the progression of the debt ceiling talks. those moves are helping to put commodities under pressure. you can see them dropping, including steel, copper down zero point 7%, as well as reflecting the weakening demand outlook from china. a lot of concerns around the economic recovery showing signals of petering out. hong kong already positioning for the weakest drop of 1% at the open in the next hour. a contrast from what we are seeing in north asia.

one stock we will watch closely is alibaba. we had those numbers out overnight, and we did see single digit revenue growth. it is much lower from what we have seen pre-covid, so another indicator of the weakness coming through in the chinese consumer. what is also interesting is the focus out of the earnings was the plans to split the business into six different units and spin them off. the cloud will be the first to be listed. logistics and grocery is next in line. this chart shows the stocks multiple is back to the levels it was before the announcement. a single to us that investors are not buying this vision from alibaba for its future plans. shery: let's get the first word headlines. >> japan's inflation has re-accelerated after months of cooling. fresh food rose 3.4% from a year ago.

prices excluded the impact from energy and food. those quickened at the fastest pace since 1981. the view is that boj will bump up its price outlook bringing it a step closer to price normalization. the u.s. and taiwan agreed to boost trade ties. in the agreement, it will streamline customs, reduce wait times trucks and vessels, and improve regulation. it is in the form of a freak -- it is not a free-trade agreement but is to deepen trade ties, and has heightened tensions with china. authorities in pakistan are planning to search the home of the former prime minister. his supporters are accused of attacking military facilities. the claims are that he is sheltering dozens of people involved in last week's unrest.

the top u.s. bank regulators are bowing to act quickly on long-delayed rules to clamp down on executive pay and bonuses. the move comes after former executives at failed banks faced criticism from lawmakers over there generous compensation. the rules are mandated by the dodd frank act. a new study says the world can keep global warming below two degrees celsius if all countries meet the goals they made. this includes medium and long-term climate commitments. a report says 2030 goals will not be enough to keep temperatures below two degrees. global news, 24 hours a day, on air and at bloomberg quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. shery: we have more conversations to come on "daybreak: asia."

this is bloomberg. ♪

haidi: let's take you back to hiroshima where g7 leaders are meeting through to sunday. we are seeing the president of the european council as these group of g-7 nations look to increase pressure on russia with

additional sanctions expected over the next few days. the focus is on an ever rising and influential china. g7 members have called economic coercion from beijing. this is a short trip for president biden, he has canceled additional legs to poplar new guinea, where he would have been the first president to visit. shery: these conversations are happening with the backdrop of macroeconomic challenges. the philippine central bank has halted its most aggressive monetary tightening in two decades in a move it calls a prudent pause. the central bank also signaled the rate will likely be unchanged through the third quarter as inflation cools. joining us now is dr. felipe medalla, governor, bangko sentral ng pilipinas. you made a significant decision

in your latest policy board meeting. what are some of the factors that could potentially lead you to resume rate hikes? we have seen a couple of those decisions made by other central banks as well. dr. medalla: if the u.s. cuts, they have room to cut, i think. shery: if the u.s. were to cut rates later this year, you are saying you would follow the u.s. move? dr. medalla: yes. the only reason to cut is much of the market thanks the policy differential between the philippines and the u.s. is already on the narrow side. shery: we have seen other central banks go in the opposite direction and resume rate hikes here it is there a chance you might be forced to do that at

some point? dr. medalla: right now the economy is strong. we are forecasting the economy will grow by 6%, a little more this year. that is the other reason the pressure on us to cut is not that high. the other reason is what we call the output gap. demand, it is still slightly higher than what we call potential output. there is no deficiency on demand. on the other hand -- on the other hand, as i already told you, we still want to make sure we will be able to deliver headline inflation that is below 4%.

as early as possible. in the current scenario, the fourth quarter of this year. in this sense our inflation target -- shery: are you concerned about the impact on the currency, particularly if there is a move by the fed to change the direction? dr. medalla: i think the risk is if the peso is depreciating too much, then the new expectation might not be our inflation target but the changes in the exchange rate. if this leads to more aggressive wage adjustments, then our forecast -- this is the main factor, the extent to which

wages will adjust too much to upset our ability to hit our inflation target by the fourth quarter of this year. shery: is there intervention in the fx market? dr. medalla: we do but sometimes we sell, sometimes we buy. and right now the level of intervention is much less than in august last year. late last year, the third quarter of last year. shery: you have repeatedly said the bsp has the tools to manage

the rate not just directly by policy rate but by the supply of money. given that pandemic measures will end in june, what are you looking to do? dr. medalla: ok, we have this relief we gave. loans to small industries. that is about to expire. if we allow that to expire, that means tightening reduction of money supply. what we plan to do is match that . more or less neutral effects on the money supply growth. we actually have three

facilities. the weekly term deposits, the two week posits --two week deposits. if money supply is high, [indiscernible] [indiscernible] -- this is the position we are in. we got new powers from the government to borrow from the republic. we are confident we are able to manage the money supply regardless of what happens. haidi: have you heard back from the president about a possible reappointment? are you still open to that? dr. medalla: it is an honor to serve.

it is an honor to serve, but i have yet to hear anything myself. shery: going back to fed monetary policy, to your first point, that you would cut if the fed cuts, when do you expect the fed to make that move? dr. medalla: if you believe the markets -- shery: don't believe the markets, tell me what you think. dr. medalla: i will be a little more cautious. i think the market is underestimating the determination of the fed to bring down inflation. it may be much later, maybe next year. i think the markets are overoptimistic. shery: as always.

dr. medalla: i think like that. if i were in their shoes, i would be reluctant to cut. that is the reason i do not see a cut in the near term, because i actually do not think the market is right here. let's believe the fed, and what the dot plots say. that is the reason for our caution. haidi: governor, it is always a pleasure to catch up with you. dr. felipe medalla, governor, bangko sentral ng pilipinas joining us. you can catch up on the interview and watch us live on our interactive tv function, tv . dive into any of the securities. become part of the conversation

by sending us instant messages during our shows. this is for bloomberg subscribers only at tv . this is bloomberg. ♪ what do you see on the horizon? uncertainty? or opportunity. whatever you see, at pgim we can help you rise to the challenges of today, when active investing and disciplined risk management are needed most. drawing on deep expertise across the world's public and private markets in pursuit of long-term returns... pgim. our investments shape tomorrow today. shery: here is a quick check of

the latest business flash headlines. alibaba will ask for ipo's for its logistics and grocery arms, while bidding office $12 billion cloud business. this is the first phase of an much anticipated breakup. alibaba has posted single digit revenue growth reinforcing concerns about the chinese consumer spending rebound. a sister app long by meituan taking the world's largest food delivery service beyond mainland china for the first time. they say it's meal delivery service will serve in the heart of hong kong. they are looking to move beyond its market where it dominates as local businesses grapple with an uneven recovery and regulatory crackdowns.

grab shares fell to the lowest level in 14 months after slowing customer spending. the food delivery firm says its first quarter gross merchandise value grew 3% to 4.9 billion dollars, which is lower than estimates of $5.2 billion. the company says its user growth slowed as rivals lured customers with promotions and lower prices. disney is closing a luxury hotel at walt disney world in florida amid a high-profile fight with governor desantis. it is also dropping plans to relocate 2000 california employees to a new corporate campus it was building. the former ceo's pet project, the star wars galactic star cruiser, will also shut down at the end of september. walmart has lifted its annual fork cast -- forecast after an

earnings beat in the first quarter. it expects adjusted earnings of up to $6.20 per share, higher than its previous forecast of $6 .05. the company is keeping a cautious view on u.s. consumers after noting sales weakened in march and april. haidi: we are seeing asian stocks rise this friday along with u.s. equity futures on these rising hopes of a deal in washington. we are also looking at further advancement when it comes to japanese equities. a fresh 33 year high. 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? (jennifer) the reason why golo customers have such long term success what, we have a ton of mulch.

is because we focus on real foods in the right balance a literal ton. so you get the results you want. when i tell people how easy it was for me to lose weight on golo, they don't believe me. they don't believe i can eat real food and lose this much weight. the release supplement makes losing weight easy. release sets you up for successful weight loss because it supports your blood sugar levels between meals so you aren't hungry or fatigued. after i started taking release, the weight just started falling off. since starting golo and taking release, i've gone from a size 12 to a 4. before golo, i was hungry all the time and constantly thinking about food. after taking release, that stopped. with release, i didn't feel that hunger that comes with dieting. which made the golo plan really easy to stick to. since starting golo and release, i have dropped seven pant sizes and i've kept it off. golo is real, our customers are real, and our success stories are real. why not give it a try?

♪