>> you're watching daybreak asia coming to you live from new

york. -- new york, sydney and hong kong. >> counting down to the major market opens. >> the top stories this hour, china fires the latest salvo in escalating tensions over semiconductors, saying that micron products delta passes security review. president biden's participation in the g7 is overshadowed by the debt ceiling, resuming talks in d.c. as markets brace for volatility, watching his clear intentions and the debt crisis, and investors say that japanese stocks are the place to be. >> some of the major things for watching at the start of another trading week. asia, kicking off with those debt negotiations ongoing in the u.s., traders awaiting any sort of resolution there and investors saying that if in the event the impasse extends past one week, stocks could dropped 20% in the u.s.. they also focus on the outlook

for the fed here with traders starting to pair their bets now for a hike at that next meeting around 25%. in terms of what else be watching that is really flowing back into more haven place, like the japanese yen and trading in currencies. we also see trading rate -- range found in the areas where looking at. we also have the poc temping down and click election in its currency but as you mentioned, it that rising geopolitical risk, particularly china now buying the purchase of certain micron semiconductors. let's change on and take a look at how we are setting up in the equities picture, because we are an hour from the opening in japan and austria. futures pointing to the downside including in the nikkei contract as well, that one less liquid. so much interest coming into japanese stocks but it is overseas investors coming in for

a seventh straight week, certainly one of the key ones we are watching at the open. this debt ceiling debacle hangs over the entire world. people say it would hit the u.s. economy so hard it will push it into a deep recession and hurt the global economy. we know why everybody is watching it so closely. on friday, a two-day rally that took the s&p to a nine month high was. when joe biden to go to japan without getting any kind of deal even agreed with kevin mccarthy, the house majority leader. you can see this negativity not so bad. small decline in the stock futures matching declines that occurred on friday. the team at ubs said that the -- if there is no deal it will drop to 4480, but they commit a 50% chance that it will get past, a short-term extension at the least. while markets have been going with this as well. the debt ceiling, no deal, percy

economy etc., the other part of the equation for bonds is that jay powell got on the i think maybe we should pause in june to get more information about the impact of all these rate hikes upon the economy and that can be more of a plus. let's also mention that crude oil barely moved but on friday it had its work -- first weekly gain in about nine months. oil is looking better. >> australia bracing for that volatility as we continue to watch the developments when it comes to those debt deal negotiations. staff level talks have resumed ahead of another meeting between president biden and health -- house speaker kevin mccarthy. in terms of potential height and volatility risks, where are we seeing them show up in the markets? >> good morning. part of the problem is that we are not seeing them show up in the markets yet. where you might expect there to

be that haven demand, for example, the japanese yen is not there. the yen traded at its weakest this year on the backend of last week. the has been demand for some gold this year put that backed away from the highs, and even volatility is fairly low. i think the problem is that everybody is waiting for that kind of wake-up moment, when markets start to suddenly think hold on the second, this could go wrong, and that is no moment where you might see some of those measures and demand for haven assets that you would expect to respond well in this scenario to suddenly go up. it's kind of a wait and see and who twitches and who goes first scenario. we have that negative -- had that negative reaction in u.s. equities on friday when the talks were suspended. we have not got a big responsys morning in the futures market at least now that the talks have resumed. it's hard to attach too much importance to the talks in the

markets at this moment. but there is going to be that wake-up moment where if we don't get something closer to a deal soon. >> most of the reason for that is that when this scenario played -- has played out, at the 11th hour, they always get the deal. so, what if this time is different, what are the scenarios going to be like? do you just get out of everything? >> that's the consideration that everybody has got to make. and part of the pressure that lawmakers, under in these situations comes from the market. they always need to field kind of the negative headlines in sort -- in order to coalesce and realize that something has to be done. in a negative scenario, you don't expect stocks to weaken and to build on that, that's

what we saw in 2011, much lower equities, and surprisingly, a rally in treasuries even though that was one of the assets under pressure. i think there -- if there is a default that will play out differently but at the same time people will want to look for haven assets. the flipside is if we can't get it -- to get a resolution, we can't say that is a fully risk on move either. there is the argument that when the u.s. is able to raise its borrowing again it will come to the market and sell a lot more bills and that will mop up some of the excess liquidity. and that might tighten financial conditions and turn out to be negative for stocks as well. >> paul dobson helping us figure out what happens if the debt ceiling is not raise. china delivers its latest salvo in the semiconductor ballot -- stop -- battle. micron failed in internal security review from china.

john, the back-and-forth continues, this decision comes less than two months after beijing announced an investigation into imports from micron and we know that sense of hostility is not diminishing, and it may even get worse as the g7 talks about economic coercion by china. where will this take the relationship? >> i don't think it is going to make anything better. i think it will highlight how tense a situation is. mention president biden saying that there was a chance that relationship could be getting better soon. it is not going to be soon if countries keep retaliating against one another, the latest of court, beijing saying that it has discovered some relatively serious security issues with micron chips, banning the sale

to infrastructure providers. we don't have the details of what concerns they did discover and what exactly or which chips will be part. micron makes memory chips which do not run software and do not run code so they are not considered a security threat. this is why there is such suspicion that this is mainly geopolitical move, rather than a political -- chemical or security one. -- technical or security one. >> it comes at a time when president biden says he expects the relationship with beijing to improve shortly. are we seeing any signs that a conversation or a phone call or even a meeting could be imminent? >> well, we have had the chinese foreign minister meet with the american ambassador here in beijing, there was also that meeting between jake sullivan,

the national security advisor and the top diplomat on chinese site -- the chinese side. this seems to be actions building towards the call that we know biden administration has wanted to have between president biden and president xi jinping, and there has been an attempt to set up a meeting between the secretary of defense and china's defense minister. president biden is adjusted at the g7 that maybe they would remove sanctions on the defense minister to paperweight for meeting to happen. this doesn't seem to be that happening. -- there doesn't seem to be something happening. >> the gc some -- g7 conference show that the u.s. to try to win over swing nations also quarter by china and russia. it was a pretty lukewarm response when it came to some of these key nations, india,

indonesia, as well as brazil on the topic of ukraine. >> the g7 is pretty much in unison on its response and it has been communicated and -- all the way to the leaders meeting that they condemn the quote unquote illegal war in the ukraine. the g7 in itself is in unison. again, the host of the g7 summit in iraq -- harassment did invite those global south patients, persaud, india, indonesia, vietnam, as you can see. so called middle ground countries, i'm not going to put australia necessarily in the middle ground country list, but countries that have not taken pacific sites condemning russia or supporting ukraine and the like.

this opportunity with with the g7 to go and broaden their unity and bring in these other nations to support the condemnation of russia. i'm not saying that it backfired by bringing in solesky, i think zelenskyy took the opportunity had flew from the arab league summit to hiroshima late saturday and spent most of sunday either meeting directly with g7 leaders and leaders from middle ground countries, he met with modi but not lula da silva. efforts fail at the last minute to get them together. resident officials told us, i was there as well, we were telling us that some of the brazilian delegation felt it was a bit of a trap to have zelenskyy there and to foresee meeting between lula da silva

and zelenskyy because many outside of the g7, not many, some nations feel that the g7 has taken a side and that is not helping towards finding a peaceful solution in ukraine. >> all of your interviews and all of your conversations on this side, how do you gauge what the g7 nations are feeling, what the invited attendees from the global south are feeling about this push to get them to come over and pull away from russia, and be on board with us? >> i think the people that we spoke to within the g7 felt that there seems to have been some movement, especially with zelenskyy arriving on sunday. it changed the dynamic. they help -- had the opportunity to meet face-to-face with zelenskyy and some in the german

delegation felt that there was a bit of a move from those middle ground countries that i just talked about to have a little bit more alignment, if you will. but again, there is still hesitancy. india is one key country. obviously there are in the quad security agreement with united states, australia and japan. but they buy the book of their military weapons from russia, also, the indonesian prime minister has been ill of the road. he wants to find a peaceful solution rather than taking sides. and it lula da silva, we know his comments, similar to others. did this move the needle, having zelenskyy within the other g7 ministers, it did because they are all in unison and we are not necessarily feeling that those global south key countries, brazil, indonesia india, which

make up one quarter of the world population, whether this move backfired or moved the needle. we have to see. >> stephen engle there. let's get you to vonnie quinn with the headlines. >> south korea's president asked the japanese prime minister have held their third seven in two months. they held talks after visiting a memorial for the korean atomic bomb victims in hiroshima. it was a first display of unity between u.s. allies as they confront threats from north korea. the ukrainian president has suggested that bucklew is falling -- box mood-- bakhmut is falling. his spokesman said that journalists misunderstood his comment. the u.s. will provide 375 million more dollars in aid to ukraine. neel kashkari is open to

skipping a rate hike at the fed meeting in june. it would give officials more time to assess the risks of more rate hike and the look out the output. he also objected to any sufficient that they are done raising rates. global news 24 hours a day on air and on bloomberg quicktake powered by more than 2700 journalists and analysts in over 120 countries. i am vonnie quinn and this is bloomberg. >> still ahead, we speak to japan's biggest pagemaker, after they posted strong quarterly earnings. we discussed investment strategies with vanguard after jerome powell hinted at a pause during the bank taking cycle. this is bloomberg. -- tightening cycle. this is bloomberg. ♪\

the first time your sales reached 100k with godaddy 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

>> we will be watching several central banking decisions on wednesday. the rbnz is expected to deliver a final rate hike taking the cash trade to five and a half percent. indonesia policymakers will be waiting for more definitive signs that inflation is waiting -- waiting before reducing the benchmark rate. at the bank of korea will release its rate decision at consumer prices have eased for a third straight month in april. speaking of inflation, we will

be getting cpi data from tokyo, hong kong and elsewhere this week. we are watching china's lower prime weight as well as ppi data from japan and south korea. >> jerome powell gave a clear signal that he is open to policy interest rate increases next month as he said that credit conditions could mean that policy peak will be lower. >> while financial stability tools help calm conditions develop it's there are contributing to tighter credit conditions and will weigh on economic growth, hiring and inflation. our policy rates may not need to rise as much as it would have to achieve our goals. the extent of that is uncertain. >> jen wong is the -- john wong-- qian wong here, he said that they have hiked a lot,

lights always occur in monetary policy. he say that restrictive leading could get tighter. he did not say that he was ready to pause or skip a meeting when it comes to rate hikes but he doesn't seem to be signaling that. with all of the central banks, watching their inflation getting stabilized and deciding on rates, what does it mean for them? >> first, it's not a done deal that they will pause in june. i think they will depend on a data-driven approach, deciding whether they will pause work hike. -- or hike. they don't want to confuse a pause with the end of a tightening cycle because we do feel that the fed has more work to do. that said, i think that for the central banks in the region, the fed actually approaching the end of that tightening cycle will give some room for hs central

bank to take a breather. especially with the macro backdrop with the easing and the inflation pressures that has been present. i would say central banks will be comfortably sitting on hold, and that is where i think this week you will see korea and indonesia staying on hold. >> china skipped the mlf caught that there were expecting last week, with that low primary move to get the bank to lower their rates, you are expecting a rrr rate cut, were served meant ratio for banks, how badly does china need stimulus and how much will a rrr rate help? >> it -- their economy is in a transition from a narrow fest

rebound to a broad based but slope recovery in the private sector. i think the data was showing that demand is fading past -- fast, but it takes a long time to heal the private sector confidence and balance sheet. to that extent, i do think that additional policy support is needed. but i think monetary policy tightening and easing itself in terms of breed depositing will be affected. at this moment i can see the central bank is elected to cut policy rates but they are trying to guide it the market interest rate by injecting more liquidity. last week, he saw the higher scale of the mlf, and to that extent i think it's more likely that a policy rate cut. >> is there a confident strap in terms of some of these concerns about how self-sustaining the recovery cycle is in china,

potentially feeding into that negative feedback loop of being damaging to confidence? >> i know that is causing a lot of concern. you see that the recovery still has a lot of pent-up demand in the goods and services sectors, it the public sector, not the private sector. the confidence in households is pretty weak. i do think that is where the policymakers need to be vigilant and they need to do something to support that confidence. but i think that there could be a risk of complacency because the year on year growth number could be well supported by a lower base points per year, and the target is pretty conservative. i do think that they need to do more, most likely on the fiscal side of things, with this fiscal

stimulus measures. -- those fiscal stimulus measures. >> when it comes to a more sustainable consumer rebound, given how much household wealth at confidence is tied up in the property sector, is that what we need to see before we get more certainty? >> i think the recovery is still on, it just takes longer. it's slow. we see service consumption picking up, service employment growth picking up, and income growth will follow. i think that will help to support consumption. especially in terms of normalizing to pre-pandemic trends. that will take time. i think in terms of that sector we need to realize there is a structural downturn in property demand in the near term in terms of weaker demographics and slower urbanization at

persistent oversupply. i don't think the rebound is going to be that strong, even if the government relaxes much of the restrictions in the past several months. >> our chief economist of vanguard pacific there. more to come on daybreak asia this is bloomberg. ♪ you know doug, ever since switching to workday you've been a real rock star. rock star? what do you know about rock stars?

billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart!

>> who are watching lula da silva speaking there in russia and since 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.

republicans are playing a risky

game in the debt ceiling drama. mike also talked about america's trade ties with china in an exclusive conversation with anne-marie. quick the president has made clear that congress has time to and needs to act to lift the debt ceiling. i would say what we have really seen over the past couple days is american leadership on display. whether that is leading on delivering a tough new sanctions package, other that is leading around providing a common approach on china, and forth to the south, these are all demonstrations of leadership and republicans would put that it risked with their debt ceiling, putting us that is what is playing games on the desolate

they are. >> china seems to be one of the biggest drivers of this entire trip macron has this deal in japan. in the committee k, it says the group does not want to decouple from china, it wants to do risk. >> at think china was a very key topic of conversation. want to be sure they were communicating and they saw that in the joint declaration. we are each going to take as countries understand approach on china. when it comes to the core principles that unify us, there is a common approach, they're talking about de-risking, not decoupling. but that means is -- there is a

set of places we have coercion. things like their desire to acquire the most advanced technology to advance military me there is still room for a broader, for the g7. decoupling concerns. christie day one of the most that all g7 countries would get on board with is de-risking outbound that is what we are talking about here.

>> leaders so that concerns around china's most advanced technologies to further their technology. it is about the tools to prevent china from doing just that. this is all about taking steps forward. there is an understanding that an outbound investment has to be in a toolkit to prevent that. >> mike speaking to bloomberg there. let's gey there for a look at the markets. specifically if we will see some of the market reaction to u.s.

china tensions. >> absently. there has been a big focus of the g7 summit. in terms of all this today, they focus on what has been considered by some as our retaliatory move from beijing which is to essentially stop chinese companies buying micron chips. in terms of what we are watching here is that focus on japanese and korean chipmakers. the supplies could be more active when the session gets underway in about half an hour from now. there are other themes in focus here. the debt negotiations in the u.s.. traders are waiting on any further progress here. different analysis coming in. ubs saying we could see up to

20% if the u.s. is unable to pay its bills for one week or more. in terms of what else we are keeping an eye on, it is also down to these expectations of where the fed is going to go next. we are seeing traders pair their bets to 25%. we are seeing more flows into those safe havens. the japanese yen is one gaining .2% in the early hours of trade. all they can we will be watching that fix very closely from the pboc and also the central bank in china. let's charge on. the focus leads to the recessionary environment. we can see some sort of economic contraction here. this is the closely watched ratio it is named after. we are not trading at the lowest level since early 2021.

that has been a good indicator in the past of when the session is near. we have seen the copper down. gold has risen about 10%. it is down to that demand and mixed risks we are seeing on the horizon. >> let's get you back to new york with vonnie quinn. >> china has delivered this as we are escalated the chip or with the united states. micron products have failed to pass a cybersecurity review. beijing has warned operators against buying them due to relatively serious cybersecurity risks. micron says it is addressing its next steps. the philippines finance chief is not inspecting food prices just -- to spike as the comedy races here. the extreme weather pattern is

on the specter to cause a slight drop in foreign output. the government is preparing measures to mitigate the impact. john the is reportedly planning to lead a one-week delegation to singapore, malaysia and indonesia in july. the south china morning post reports that top government officials and hong kong has been pushing to join the economic partnership and global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. trade deal. >> all after he announced his plan to step down in the next 12 months. this after earlier discussing the succession plans was underway. >> at thought given my age, a

five year time felt very reasonable. >> it takes a long time for talent to rise. >> will one of those women with -- will one of those women be that ceo? >> there is a distant possibility. i am giving the board choices. >> we had -- we have had three executives that could replace me. ultimately, the board will decide who is best qualified to run our particular company at this point in time. >> who are the three contenders. >> they were not mentioned by name by gorman but clearly these three top executives will represent. let's take a look. the key contenders are ted pick. he runs the securities group.

also, danielson quits. -- daniel will have a part in it. that is a huge driver of growth. they took over at a time when the bank's business model was under fire and he were struggling to recover from the financial crisis. you are stepping into big shoes. transforming the bank after a nearly collapsed. look at the statement he issued on friday. it is the board and my expectation that is the current expectation in the absence of a major change in the external environment. outside of significant volatility ahead. saperstein has been an engine of

growth. when it be mild if the pic was him? there will be a lot of focus on this in the months going forward. >> that was su keenan there. or to come here on daybreak: asia. this is bloomberg. ♪ but by the third or fourth cup, your stomach might not feel so good. if that sounds like you replace your afternoon cup with 5-hour energy. it's perfect for when you're feeling coffeed-out. coffee in the morning... 5-hour energy after. your stomach will thank you. discover 5-hour energy. ♪♪

time for japan ahead now on daybreak asia. some of the stories we are watching. this comes on the back of their trilateral meeting. beginning machine orders in just a few minutes time. activism investors are post to make record amounts for shareholders. for more, let's bring in the senior agent stop reported here. why hedge fund activists and funds?

" reform has been talked about here for a while here. people may wonder why it is being talked about here now. new thing is the tokyo stock exchange plan. people have been talking about more diversity, etc.. this time, they came up with a specific idea. that gives investors very strong support.

that is what they have been calling for for a long time. >> these new brands of potential governance reforms and other forms -- >> what we are looking at at the moment is share buybacks. there are indications of a lot of companies with lots of cash. there are already a few examples of the total amount of share buybacks. this year is near record level. the bigger question is whether

that will lead to long-term growth. you're basically just tinkering with financial numbers. that has to do with the company bottom line. whether they can expand their margins, that remains to be seen. for the moment, people know about the outlook of the market. >> we are very excitedly looking forward to the start of trading in japan after that 33 year high when it comes from japanese stocks. this is the largest paint maker in japan. they manufacture pants for industrials.

they have been looking to buy assets overseas. only to finance deals by borrowing in japan where bates miller -- rates remain low. great to have you with us. do you share the high expectations when it comes to how japan's economy and markets are performing at the moment? give us your take on whether the enthusiasm we are seeing from investors is warranted from a corporate outlook point of view? quick thank you for having me. we don't position ourselves as a simple japanese economy. a lot of growth comes from the entire world. as it relates to japan, it is

important for our strategy that we use a low cost in japanese yen. i think it will benefit in the long run. i think that is the story many companies should pursue. we know industries like yours are just going up and up with china. >> thank you again. i think it is twofold. one is from the overall market perspective and one is from the performance perspective. from the market perspective, it is somewhat within expectations that it will grow. especially after the covid lockdown.

there was a lot of pent-up demand. i will be cautiously optimistic. there are some signs of recovery. as it relates to liquidity. on the other hand, there are slower signs of the economy. i would be cautiously optimistic. they have gained market share in the stuff and run. i have strong confidence in our chancing that they will continue to deliver. >> have to ask you. i follow the bank of japan. we all do. this question, inflation japan, will it be sustainable? as a businessperson, i know and 85% of your business is overseas. you must see something if your materials cost as much etc.. what is your view about whether

or not it will last? quick maybe two things. everyone from the currency standpoint and the other from the raw materials standpoint which both interact with the inflation environment. we are not really exporters. that is kind of mutual. as we continue to see potential deals come through, i think we are at a bit of an advantage because other regions have higher interest rates. pandas not really. that is good. on the material side, we have a benefit from the softening.

we have been hurt in the past several years. request he received an asset assembler model. how do you make it work? in an industry like heat and chemicals, what are you looking for on the mna side forward mark >> think you for asking. i will not take all the credit. they have to have a good brand, good management, good talent and good probability. we also have to acquire it at the right price. that is only the beginning of the story. what is more important is that

paul's acquisition. we don't control the companies. it is about respect for the talent, the heritage, the success of the companies. this contains a lot of resources globally. basically, we give them autonomy but with accountability. i think that is the key. it is a little different from the western style where you will up your sleeves and you send troops. i think that has worked up or the well. the parent is not always smart of than the child. they know much better than me. that is why olcott -- autonomy with accountability works in our industry. >> speaking of m&a, what are your targets at the moment? what are your key strategic priorities? quick thank you for asking that. i cannot give you any specifics.

we are not really bounded by geography or business as long as it serves for shareholder value. if the risk makes sense, we would go for it. why not go for a? ethic we strive for continuing to make money. >> great to have you with us. we are just taking a look at some of the latest economic indicators. we are actually seeing a contraction of 3.5%. that is a year on your number. for the month on month number,

we are seeing a contraction. also, extending the loss of 4.5%. there were expectations. given that they have been pretty robust. more to come on daybreak asia. this is bloomberg. ♪ even better? they save me a trip to the mall. th fit and make me feel even better? like a more stylish version of myself. i keep what works, and send back the rest. no subscription required. no commitment. just my style. stitch fix.

>> we are continuing to hear from our brazilian president. they failed to hold one-on-one talks about attending that summit from ukraine. they will have their currencies as we talk about this. ♪

if your business kept on employees through the pandemic, getrefunds.com can see if it may qualify for a payroll tax refund of up to $26,000 per employee. all it takes is eight minutes to get started. then work with professionals to assist your business with its forms and submit the application. go to getrefunds.com to learn more.

>> >> counting down to the major

market opens. looking at japanese stocks. a 33 year high. we will see the debt ceiling in the u.s.. time to see if it carries over. wesley was a more volatility emerge. all as we wait for further developments in this next round of debt talks. let's look at how we are setting up in asia with that market bell. >> we are just a few moments away from the open in japan and korea and australia and certainly a number of factors traders are watching as we get underway. it really does come down to where we are at in the debt ceiling talks in the u.s.. that has been range bound trading overall. the japanese yen has been strengthening hello bit on that haven demand even though we had seen it actually touching its lowest level against the

greenback. at the same time in the u.s., we are seeing investors start to reach their expectations for the june policy meeting. in terms of what else we are watching, that is the state of pay with the nikkei coming online. investors are preferring this market. foreign investors piling in for a seventh straight week. let's change on. geopolitics are certainly in focus. we did see china barring purchases on chipmaking. micron is in focus. south korea dropped nearly 36% on the year.

china the largest reading partner for the country. those experts are down 23.4 percent on the year. broadly, it is a picture we are seeing exports continuing to contract here. all of that given those rising -- those rising job local tensions. this change on. we are seeing the government arguing for further increase in minimum wage to keep pace rather than with inflation. we could see investors waiting any sort of resolution. we are seeing oil just a little higher here.

>> monetary conditions are improving here in asia. we have the head of asian equities. great to have you with us. we will know more when it comes to the rbnz. how do we see that potential advantage when it comes to investors looking at this part of the world first the fat? -- fed. >> we are probably toward the tail end of the rate hike cycle. the monetary conditions are probably going to get a little more competitive in the few quarters ahead.

that is a pretty good set up i would say. inflationary conditions are now softening across the region. we have actually seen some of the central bank's already pausing ahead of the fed. this set up makes a pretty reasonable and good for the central bank decision-makers to pause in the quarters ahead even ahead of the fed. >> what you make of when it comes to the china factor western mark do you think that

is a catalyst for more exposure to chinese risk assets? >> the data in april has been a little weaker than what investors have been expecting. i think you some should has been good for some sectors but generally speaking, it has been much than expected. there maybe another round of fiscal stimulus from the central government to further support groups. you can be looking at the property investment site that has continued to see contraction. that is probably something they are monitoring very carefully.

we have seen data start to weaken little bit. there is likely another set of data that the government can probably move on. >> what if the united states goes into recession? that is hard to tell. maybe we can get away with a soft landing. if a possession does star, let's say the denim it does not work so well and things start getting back, what does that mean for investing in asia? is there enough resilience there? >> it is always good to talk about decoupling. what we have seen in the last 12 months as well is a lot of the

economies have the talent of the recovery. this is in the second half of the her. they probably will be able to see the central banks in this part of the world. this could serve support for growth if conditions continue to weaken. >> a great story on bloomberg. the terminal or the website on how investors are seeking shelter in emerging markets as

growth risk in the u.s.. are there industry sectors? are there countries that you like? >> we like some financials. and a subsection of v vehicle battery makers. this could be on the top line growth. this is all ahead of a potential slowdown or recession. what we are also seeing is we're seeing inventory results fairly quickly across the board now. major players are capping very quickly. this will help the inventory

cycle adjust more quickly. >> thank you so much for joining us. let's get the vonnie quinn with the first word headlines. >> thank you. the south korean president has held their third summit in two months. they held talks after visiting a memorial. it was a fresh display of unity between the u.s. allies on north korea. the minneapolis had president said he is opening to skipping a rate hike at the fed's next meeting engine. he said it will give officials more time to assess the effects of past rate hikes in the inflation alley. he also said he would objective and declaration that the fed is done raising rates.

tony burke is backing an increase of the minimum wage that measures inflation. he says the government does no employees to go backwards went pressed on whether he supported a 7% pay rise in line with inflation. the minister also pointed out they will be for the consumer price releases before the pay decision is taking. -- taken. it is seen as redemption that fell short six weeks ago. his victory is the first major title for liv golf. chris we are just in japan and korea.

we are watching some of these chipmakers that have a big story. we had seen china delivering the latest salvo in the escalating semiconductor wars with the u.s.. it is announced that micron will pass a security review. it has approved a stock split to take this later. let's change now. these are looking fairly mixed here. permission to try to address that the client breath, that has been a big issue for the country. we are watching some of these names in particular.

this is all with the relation to buy now, pay later firms. these are under pressure as we get underway with trading in the asx 200. that is with the government moving to regulate some of these names and bring them under credit laws. that will be joined the line. bloomberg intelligence has a note that saying that as it is better placed than other blocks to do this area it all the credit licensed in the country. >> let's look at what is coming up now. we will talk to the executive director about progress in indo pacific trade talks in singapore. ahead of that, g7 baiters are seeing a long and winding road ahead. we will have all of that next,

this is bloomberg. ♪ oh booking.com, ♪ i'm going to somewhere, anywhere. ♪ ♪ a beach house, a treehouse, ♪ ♪ honestly i don't care ♪ find the perfect vacation rental for you booking.com, booking. yeah.

>> we are not looking to decouple from china. we are looking to do risk and diversified. that means taking steps to diversify our supply chains and we are not that -- and i that way we are not depend on anyone

country. it means resisting economic coercion together. those elements are all agreed on by the g7. >> that was president bynum speaking on china. the g7 summit in japan over the weekend has shown the u.s. and its allies need to do more to win over goebel swing nations also being courted by china and russia. stephen engle joins us now. she impact in terms of what has been happening just the past 48 hours. where do you want to start? on what the g7 has said? is it about china and micron?

the term and hourly -- terminology that they have used. the gop and all (s). that is the risking the relationship with china rather than decoupling. it is a bit of a softening. joe biden also alluded to the fact that he believes there could be dialogue and relationship improving in the near term. we don't know. he kind of struck an optimistic tone. that being said, he said we need to do risk and diversify the exposure to china. that means building and some supply chain zillions. we saw that with the man you see

on your screen right now. inviting those chipmakers to the g7. micron which is in the face of the cybersecurity investigation. we have micron getting from bloomberg sources 1.5 u.s. dollars from the japanese government. you can see this, bringing that key supply chain to friendlier nations like japan which has the expertise. it has been a bit of a backwater over the last couple of decades because of deflation and the emphasis on china and taiwan.

in the fight the monitor him is sifting toward japan to bring this key technology's to from their shores for the goebel supply chain while relying less on china. russia was kind of the other top story as well. i guess we will talk about that. >> it is hard to avoid. as we listen to some of the views here. it was to this point, it was a struggle for the g7 to make progress, for ukraine to make progress with some of these nations. >> the g7 is in unison. at least on paper. they are condemning russia's illegal war in ukraine. they invited the other graph

countries who prefer they would like to see peace. he does not necessarily want to take sides. i am paraphrasing. it is kind of a hindrance here. in india, india is in strategic alliance with australia and japan. they have strategic autonomy if you will. getting these third-party countries, there called the global south. they were brought on board to the g7 on the sidelines to see if we can move -- if the g7 can move the dial on getting some of their support to the g7 communique points. the problem is solesky arrived

late at night on saturday. he did not meet because of scheduling conflicts. resilient sources are telling us that brazilians felt it might have been a bit of a track -- trap to have a forced meeting with solesky and to basically be forced to say they support ukraine verbally and publicly. it is not a matter of brazil not supporting ukraine. it is about not picking sides at a time when they prefer the two sides find a middle ground to seek peace. in that sense, it might have been a missed opportunity or it might have backfired getting the goebel south on board with the g7.

it is getting the go south on board. maybe the optimistic side is seeds are planted. we shall see. i am sure you will be telling them all about it. you can get a roundup of the stories on today's edition of daybreak. it is also available on mobile and the bloomberg anywhere at. this is bloomberg. ♪

>> an indication given my age that a five-year time the very

supportive of that. >> it takes a long time for talent to rise. >> a big battle underway to determine who will succeed james gorman. this contention would be closely watched and it is very

interesting because it is significant and it may perhaps underscore the confidence of the succession plan. i would say this is the international -- institutional securities group. you have daniel simcoe went who oversees asset management. this has been a huge driver of growth for the firm. that is why they are seen as the real contenders here. they took over at a time when the bank's business model was under fire. it was struggling to recover from the financial crisis. many say he transformed the bank at a time when it nearly collapsed. they plan to step down. it was at the board's annual meeting that he announced his statement.

it is the board and my expectation that the transition will occur at some point in the next 12 months. if there is volatility, they will adjust accordingly. this is wendy archegos capital collapsed and caused a lot of disruption. what will this mean for the stock? >> short-term, a bit of volatility. we did see the stock close about 2% down on friday. a lot of analysts are saying uncertainty over the c-suite is

going to be a very short-term negative. many view him as a phenomenal ceo during his tenure. it has been one of the best foreign bank stocks since they took over. there is 20 more to come on daybreak asia. this is bloomberg. ♪ these days, our households depend on the internet more and more. families grow, houses get smarter, and our demands on the internet increase. that's why we just boosted speeds for over 20 million xfinity customers, on us. so you get more of the speed you need for day and night streaming. more speed you need when you're work from homeing. and more speed you need as your family keeps growing.

check in on your current speed through the xfinity app or upgrade to the speed that's right for you today.

> the latest on the excellent chip over the united states. the net and that micron products

are failing to pass the cybersecurity review. all due to quote relatively serious cybersecurity risks. it is assessing its next steps at look for to continuing discussions with chinese authorities. boxwood is falling as russian claims for control of the area. solesky said he does not -- the spokesman said the journalist misunderstood the comment. the u.s. will provide another three enter $75 million in will terry aid to ukraine. -- military aid to ukraine. he was looking for a meeting with brazil's president and officials said scheduling issues prevented it from happening. brazilian officials warned that they were unnerved by solesky is unannounced trip to japan.

and representative's who have a number of industries. hong kong has been pushing to join the regional coverage of economic partnership. the philippines finance chief is not his betting food prices to spike even as the country embraces for the -- braces for the el niño phenomenon. expect the country will experience a week tomorrow. the government is repairing measures to mitigate its impacts. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. i am vonnie quinn. this is bloomberg.

>> republicans are playing a risky game in the debt ceiling drama. mike talked about trade ties with china in an exclusive conversation with annmarie hordern. >> the president has made clear for a number of weeks now that congress has time to and needs to act to lift the debt ceiling. for the past couple of days, we have seen on display is american leadership. whether that is delivering a tough new sanctions package against russia, whether that is a common approach on china. republicans would put that at risk.

that is what is at risk. that is republicans plan the games with the debt ceiling that they are. that is a huge play when it comes to economic war. it wants to de-risk. what is the difference? you saw that in the joint declaration. this comes to the core principles that unify us. this is an underlying approach here. that is something leaders agreed

to. what that means is there are a set of places where there are concerned. things like china's market policies and practices. things like their desire to acquire the most advanced technology to advance their military capability. these are places we will take action. that does not mean there isn't still room for a broad economic relationship between china and the g7. last year was united states record year. that is the approach. record trade is not decoupling. there are a set of d -- there are a set of concerns. >> do you think those core principles would be restrictions when it comes to outbound investment? what are the next particle steps

-- leaders spoke about their concerns around china's desire to gain access to further their military and modernization. they talked about the tools that are needed to prevent china from doing just that. one of those tools alongside the inbound investment regimes are taking steps forward on new outbound investment restrictions. i think there was a common understand -- understand here. this will allow us to prevent that. >> that was international economic affairs, speaking as closable to bloomberg.

>> a growing pile of local government debt has helped you. many other regions are set to follow suit. this is a looming 23 truly darla local debt crisis that could have far-reaching implications. let's get more from our china government. debt gets shifted around and treated in china, that has been a legacy issue for decades. what was unique about what happened and the challenges that it is now facing russian mark >> one of the main points of the story is it is the first in china, the first city in china to actually come out and say it. a lot of the problem is about the lack of disclosure of these issues. even one went to visit the city just a couple of weeks ago, there is huge sensitivity around

the topic and we were followed by the security personnel. this is true for other cities in china as well. we are having financial issues. you're going to have to do something about it. that definitely is a major sort of significant point that is different or -- different in this case. >> how does the debt problem layout in daily life for people in this city? >> as i mentioned, it is difficult to interview people on the streets. the people that we did speak to, we spoke to dozens of people of the space of two or three days, we had all sorts of complaints ranging from street cleaners, sellers have been delayed, hospital worker whose contract had been unilaterally changed employers and she is also facing salary delays. teachers worrying about whether there will be job cuts and so on and so forth.

and so the city is trying to increase opportunities to raise revenue. none of the place we also heard was that there was a lot more strict application of fines for taxi drivers. that is an effort from the local government there to increase revenue sources. >> tell us a lot more about china more broadly. is it just because it is the tip of the iceberg when it comes to local government debt? >> exactly. what we are seeing here, we have some initial indicators around the country that other cities are experiencing. and where it is problematic on a more national level is the policies that xi jinping has set aside. including things like closing the income gap between rich and poor. if the cities continued to his

the problems and receive further cutbacks and inability to boost the economies, remember, this city is a declining culture and. what you might see appear in the country is a two-tier system where you do have prosperity in the more developed coastal cities and many towns and the remote region of china, you would see a lack of development. this is not a good message. this is not something the chinese government would like to see. >> let's look at the markets. >> one of the areas say most of the concern around china's economic health being reflected

in the economy there has been what we have seen anyone. they have pushed past that handle. interns but we are watching, you want fix is very much in focus. we have not seen this much pushback from the pboc.

as to where the biggest winner is on all this, southeast asia is the region of the topic. southeast asia has a strong track record of macro or -- they have better demographics. this region here coming out again. 60% saying the region will provide the best returns. coming up next, 14 countries in the indo pacific trade talks are said to be nearing a supply chain deal. this is bloomberg.

♪

>> nearing an agreement on supply chain coordination.

talks provide early one is when countries see a risk of supply chains being interrupted. let's bring in deborah, the founder and executive director at asian trade center. give us some background. what is this group? you're looking at supply chains. in the context, the bigger question of trade. >> yes. your previous story indicated how important southeast asia has been and is becoming. for that reason, it is important for the united states to be better tied to this region. it has had historic ties. it doesn't have a trade agreement in place. they tried under the transpacific partnership to be part of the integrated region. now they are transylvania with the into pacific economic framework. the idea is to connect united states better to most if not all of the country of southeast asia.

you need to fix those. how much of this is a geopolitical endeavor by the u.s.? trying to get closer to these countries? >> at think there is a lot of geopolitics behind the scenes and even quit upfront. as a result of that, businesses when they see the outcomes will really struggle to understand what difference this makes to their bottom lines because even in the supply chain discussions which are going to wrap up this weekend, what we are talking about mostly is developing committees to discuss events

evolving over the future. it is hard to tell your c-suite that you have made a committee to discuss something that might make a difference at some point in the future. that is not the same kind of deliverable. that is the hard part. to set up the structure for conversations that that are for the future. that is very important. >> we just were checking on how under the radar this letters development flow. are you seeing multilateral trade adjacent negotiations and proposals become less ambitious as a result -- it has been very

difficult to push through. >>, see that at all. they want to be part of the regional comprehensive style trade deal. i think there is a real appetite in asia and increasingly europe to sign is continuing trade deals. i think with this, the challenge is how do we make a different kind of agreement that is attractive? at the moment, the business community in particular is not paying a lot of attention to this.

we take it is harder for business to justify. i think the business community enthusiasm is white muted. >> globalization was a concern only saw the pandemic your bottlenecks. we have been seeing re-globalization. class they will still define ipad as not being about china or anti-china. from the list of participants,

notably absent is china. i think the challenge there is it is not clear what this will do in terms of building cooperation. it is hard to say. maybe we coordinate. you could create a love committees that do a lot of potential interesting things. this results in very little movement of markets. let's be honest, who makes supply chains? it is not government. government can say all they want about the imports of having sustainable, resilient inclusive supply chain is that our managed to handle anything. that at the end of the day, it is businesses that do that.

you don't get the kind of inclusive resilience, whatever it is that government anticipates. close always great to chat with you. more to come here on daybreak asia. this is bloomberg. his note

if your business kept on employees through the pandemic, getrefunds.com can see if it may qualify for a payroll tax refund of up to $26,000 per employee, even if it received ppp, and all it takes is eight minutes to get started. then we'll work with you to fill out your forms and submit the application; that easy. and if your business doesn't get paid, we don't get paid. getrefunds.com has helped businesses like yours claim over $2 billion but it's only available for a limited time. go to getrefunds.com, powered by innovation refunds.

>> japan's automotive ceos are backing toyota and seeing hydrogen and other alternatives as necessary to reach carbon a child. let's bring in craig. toyota making the case that trying to quickly shift is not like visible but won't deliver the effect. this will rub some people the wrong way. >> yes. i think there is a perception that the nuanced argument that they're making a sort of excuse making or in any way are talking of their book. i think this is the case that

the company has taken a close look, the better supply chain has a very good understanding of that. for many years to come, we are going to be short of lithium and cobalt. copper and other materials are going to be needed for this transition. they also have a good understanding of the infrastructure. that is really important to the missions. >> what really jumped out at you in terms of those conversations? >> what jumped out to me was the

diverse set of situations these copies are in. not only is this an issue of getting electricity to customers in a market where the penetration of electricity is not 100%, they are talking about using that for alternative fuel. this is trying a lot of things to reduce the carbon coming from our cars. quickly posting their fastest pace of growth in a year. let's break down all of this.

watching china tech this week. they are already suspected to be one of the highlights. >> we have a very heavy focus on china tech this week. we have seen and even recovery in the china tech sector. we are anticipating a very strong growth here. the lunar new year holiday in china should have been a part of that. investors will be looking for an upbeat outlook which predicts the e-commerce cells. >> i am -- ♪

david: good morning from hong kong.