>> you are watching "daybreak: asia." >> we are counting down to the major market opens. >> top stories, asian stocks, gains, driven by tech, a high frenzy outweighing broader market concerns over default. the yen touching 142 the dollar the boj governor meanwhile keeping policies speculators in the dark about his next moves. economist surveyed by bloomberg trimming forecast and expecting a cut to the reserve requirement ratio later as the recovery loses steam. >> u.s. futures muted after the s&p 500 gained ground on the nasdaq gaining, everything ai -related railing even in the after our session with marvell technology for example forecasting the revenue around

ai products would rise and rallying 20% as well. we also had solid economic data with fourth-quarter gdp revise higher and fewer than expected jobless claims and treasury yields rising across the board and we have a little bit more optimism over the debt ceiling negotiations. not a lot of movement in oil prices. we had them gain ground on little bit when we heard from russia downplaying the possibility of another production cut. haidi: let's get more analysis when it comes to the u.s. economy, as well as the patchy recovery in china. our chief economics editor joins us now. we saw these two gauges of economic activity diverting, is it because of tighter credit conditions? >> um, it is interesting. we had mixed signals from the first revision of the first quarter gdp data.

efflandt gdp revised up, pointing to steady unspectacular growth, but another measure, gross domestic income which measures stable income for the u.s. economy and should in theory it is same as the gdp data pointing to a sharp contraction. what is the signal from this? well frankly, like a lot in the global and u.s. economy now when the signal is mixed. our interpretation though is that gross national income contraction flags potential trouble ahead how usd sticking with the cult at 500 basis points of fed rate hikes would tip the u.s. economy into a shallow recession in the second half of the year. haidi: and yet traders pricing in a 25 basis point hike in the next two meetings. what are we expecting to see when it comes to the broader economy in the u.s. given of course also be uncertainty over the u.s. debt ceiling negotiations question mark tom:.

um, equity markets pretty stable um focused more on ai it appears that debt talks taking place in washington, d.c. and perhaps they are right we have had this go around a number times before and in the end it turned out to be a lot of theater and democrats and republicans got to yes ahead of the ex-date. if it happens again this time with the u.s. economy continued to grow and inflation still hot and the rate hikes which mentioned in markets and uprising in could be on the table for the fed over the summer. if they don't well, look out below. haidi: this time we might not see the pboc come to rescue without cyclical growth effect but take a look at this chart we are barely halfway to the year and we have a lowering of growth

expectations when it comes to china and the consensus forecast for the full year 2023 falling inmate. we had so much exuberance a couple of months ago, where do we go from here? is this building the case for more action from the pboc? tom: so so much excitement about china at the start of the year, exiting covid zero earlier than expected and rebounding more robustly than expected, but in the last few weeks that excitement has dissipated in april activity data very disappointing went into a sharp sequential slow down and china's economy. expectations are that the may pmi numbers will also be pretty weak. so where does china go from here? best policy space but not a huge amount. the pboc can do a little bit on rate cuts, a little bit on the reserve requirement, fiscal

policy can be frontloaded providing more funding for infrastructure projects. that will be enough to prevent the chinese economy tipping into a worst-case scenario downturn. growth expectations for china this year now that the to bit more muted than they were just a few weeks ago. shery: why do just a little bit? is this the concern over leverage or the diversions also with other major central banks? tom: so, um, the trade-off and china has always been between the desire for immediate growth and the fear that that growth was driving imbalances, driving debt to high and overcapacity in real estate and industry. and in the past, um, though sort of long-term concerns about imbalances and debt with their but they were always just a little bit in the background. what has happened in the less for years is that those concerns

have come up into the foreground and you now have a pboc in the top leadership from xi jinping down who are much more concerned about the structural stresses, that means whilst the pboc can do a little bit to support growth and we expect that signal and the second quarter, they do not have nearly as much space as in the past and we will certainly not be seeing that shock and awe stimulus we have seen in the past. haidi: tom orlik with the biggest risk in the u.s. and also in china. shery: let's stay there. we have seen those tiny stocks paring back half of the gains we saw since covid zero reopening. let's turn to annabelle for what she is watching in the markets. annabelle: thanks, this chart putting that growth story into perspective that we were expecting but has not really appeared so this chart looking at the performance of mainland stocks, the csi 300 index and yellow -- we detract over the

course of the with sweet that it has erased all of its gain so far this year and it's what we see for the msci all country road index with gains of plus 5% and also in blue is where were seeing the biggest underperformance with the hang seng china enterprises index. what is driving that is concerns of the fragility of the consumer-blood rebound and that has played out in other parts of the world, for instance this week we were tracking the moves lower for luxury stuck in europe with the owner of lvmh and gucci for instance, raising about $60 billion in value in two days. the question of course you were discussing with the tom orlik is where we see any support coming through from the pboc but the broad expectation so far is that it is likely to be extreme the targeted. changing on because central banks are in focus and expectations coming back into markets today is that we will see the fed hiking by 25 basis points within the next two two meetings having ramifications

and other asset classes spoke notably in asia are the moves for the japanese yen, because we kept that 140 level and again this is more of a dollar-strength story and of course we also have the settlements coming out from the oj. shery: let's delve into what the governor has indicated when it comes to his desire to hold onto policy flexibility by playing down the importance of wages, is there any single economic data set that is a trigger for change? take of this and peered >> >> it might lead to policy change -- >> it might be to policy change. if we have stable inflation of 2% it is natural that we should also rise. the key point for our policy decision is whether inflation will rise in a stable and sustainable manner at 2%. shery: for more let's bring in japan-korea economy editor paul jackson.

paul, the reason we are focusing on wages is because that was mentioned in april with those first policy meetings and so what will investors be focused on now? paul: uh, well, i think the bank of japan has been talking about wages for several uh months for a long time, saying the wages need to go up as well to support inflation so that it is sustainable and in his first policy meeting, ueda introduced an element of wages into thick guidance on policy so of course everyone is thinking, all right, ok, wages are a key point and we have to wait for more evidence of wages going up before they will move on policy, and so this led to a view that maybe ueda wanted to wait and text -- until next year to see this bring results before moving policy. this is all in the larger picture of trying to temper

expectations on wind the boj will move but judging from those comments, it sounds like the boj does not need to wait for wage gains to be seen next spring. uh, also interesting from his comments is he said they were very unsure about the price outlook. again, he was talking more on the downside, would prices fall in than start to come back up again? that is the inflation rate falling below 2% and come back up again -- he said he was not so sure, but, and we have tokyo cpi numbers about the drop -- the main interest is the risk to prices more on the upside? and judging by those comments were he's talking about where we must look at prices, if prices proved to be too strong and stay about 2%, i think we should be on watch for possible change. haidi: at the same time, the broader economic outlook looks good for japan right now right? the government's own assessment

being rise for the first time in 10 months and they see gains really across the board. arthur moore downside risks the boj might be looking -- are there more downside risk the boj might be looking at? paul: i think that we have to play through the crisis taking place over the coming months and there is a bit of a lag in terms of how it affects energy prices and japan, so the boj has saying they expect the inflation rate to fall below 2% in the second half of this fiscal year, fiscal year starting april, so that is towards the end of this year, of the question is they are not so sure about how much it will accelerate afterwards. uh, still, if inflation does not cope below to prevent -- 2%, that is about look for a bank that is not changing its stimulus. shery: paul jackson with the latest on the bank of japan. let's get you to su keenan with

the first word headlines. su: default worries have intensified in the u.s. as the treasury's cash balance drops to the lowest since 2021. the data shows it fell below $50 billion wednesday as the debt ceiling standoff continues. the treasury's bank account has been under downward pressure recently as government implements measures to avoid breaching the $31 trillion debt cap. now according to one republican negotiator, the republicans in white house and narrowing their differences but still have not reached a deal to divert a default. tuesday is emerging as a likely date for a house vote, the senate would then have to poke quickly before the june 1 deadline. >> we need to have an agreement worthy of the american public. the reason why we are here is we have more money at any given time coming and our country but with the democrats and the majority of it they are spending more than at any time in history

and our debt is higher than at any time in history, that let's get this right. >> to turkey now>> on the turkish central bank keeping its benchmark rate on hold to stabilize the currency. the lira is near a record low ahead of her runoff election on sunday. president erdogan has a chance to extend his two two-decade rule after leading the first round of voting this month. and perhaps a sign of the times, the tough trading times, brahman capital is closing its stockpicking hedge fund and returning cash to cleanse after more than three decades in the business. the fund has lost money in the past two years, including an 18% decline in 2022 and has been flat this year through april. a source tells bloomberg the firm will run its long-only fund to capitalize on market dislocations. global news powered by more than 2700 journalists and analysts in

over 120 countries. i am su keenan. this is bloomberg. ♪ haidi: las vegas sands opens its luxury british-themed resort in macau. the gaming hub sees a rebound and presenters -- visitors and we will get a live report and hear from the ceo and as you can see, special guests. but first, the boston fed president susan collins is the central bank may be nearing an inflection point to pause. we will discuss the outlook with tribeca investment partners next. this is bloomberg. ♪

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>> labor market is strong. if you are an employer, that is a challenge. manufacturing, construction, nurses, truck drivers and the veterinary assistants, that is still crazy hot. >> while inflation is still too high, there are promising signs of moderation, and i believe we may be at or near the point where monetary policy can pause raising interest rates and this will provide an opportunity to more fully assess other action that needs to be taken today.

haidi: speaking on the state of the u.s. economy. our next guest says the market is close to pivoting. joining us now is the portfolio manager at tribeca investment partners. happy friday. always great to have you with us. that inflection point keats shifting because you -- keeps shifting. we just don't know when it will come and if it will be the last. >> absolutely. happy friday. eventually they will cut. we think there is another rate rise to come and whether it is one or two is dependent on the data points we see, but the opportunity is the market is so fixated by the next great direction focused on we are so close to the top of the interest rate cycle, much closer than the top, so in that context, we are

very close to where th expectation will be in the inflation you know is heading the right way for what we want to see. it may take a little bit longer but it is still heading the right way so we are hearing from all the corporate set things are slowing down an activity is slowing down somewhat and consumer corporate employment market is heading the right way so you know in six months, we will really be looking at the potential for rate cuts, so when you put that together it does seem that the environment is pretty good for equities. haidi: i have to say i find your commitment to the china trade more interesting. we had the bloomberg survey released today and take a look at this we are seeing a revised for the first time this year the expectations of gdp growth for china. just a couple of months ago pretty much every investment house was scrambling to get no up there projections where they think the chinese economy will be in now we are seeing those

expectations being reined back in. are you convinced this will turn into a self-sustaining recovery? jun: absolutely. what is interesting is this is probably the animal spirits in the markets. when the china reopening took place the rapidity, speed and actual of reopening was so quick you know how we saw covid went through the economy and they essentially reopen the economy. so, it was very quick and every investment bank wanted to jump on board and say, oh, look, it will grow faster but in reality things will take time. um, you know for example if it is trouble with the backlog for a visa, the pipeline and when china reopens people wanted to get job so you know people [indiscernible] need to find a job and all of that so things does take time but still it is very strong and compared this to what some of the other economies -- remember, australia, we had two years,

whereas china is trending the right way it's just that the expectations has run ahead of itself and this provides an opportunity for investors to have a second go at this the medic. shery: is it also a pboc gain, like we have the fed put in the u.s. that would backstop volatility in the markets if we see anymore deterioration in the chinese economy can we expect monetary and fiscal authorities to step in? jun: yeah, absolutely and we have seen their commitment this year and we have seen earlier in the year that the credit growth has picked up exponentially and it has slowed somewhat but the government is very committed to meeting its growth target. now if you remember we were talking about the investment bank forecast for china gdp, most have gone ahead of the targets of so far at the moment most people still expect them to seek the target and the government was certainly not disappoint for the next one. how much shery: would china have to compete against tech heavy

markets like korea like taiwan given this frenzy over ai and the fact that chinese tech remains pressured? jun: yeah that is very interesting um absolutely um, china has been developing a lot of it's on technology within its business and it has been pressured and it's very consumer-oriented. in the current environment it looks like they will go through a slower trajectory to recover but hopefully, the regulatory reform and changes and challenges is now behind us and with the valuation they are trading on it looks very attractive. haidi: where else are you finding value? jun: look we do see the value across the board because investors are seeing a lot of them fixated on the shoulder volatility with inflation interest rates and lots of uncertainties. we see opportunities across the commodities. with the china reopening, we continue to have that take place, it will be the only economy that has growth, strong

growth for the next 12 months compared to everywhere else and we want to see areas where you know they leverage to the china reopening where there is some of the consumer stocks that cells into china and whether it is commodities, and selectively i think from that perspective we are seeing companies being sold off because the earnings weaknesses and we see them as great buying opportunity. i think one is incredibly valuable at this point. um you know china is about to change some of the tariff inputs on this business, and the share price is not pricing in that, and with a strong balance sheet and strong growth we don't think a business like that will be listed for long if it is cheap. haidi: always great to chat with you. much more to come here on "daybreak: asia." this is bloomberg. ♪

haidi: take a look at how currencies are trading at the moment. we are seeing strength for the japanese yen after it went beyond the 140 level for the first time since september with that divergence between monetary policy in japan and in the u.s. playing apart, so we have the u.s. dollar strengthening and jumping in the new york session, the longest winning streak since october. we do get inflation numbers from tokyo today so watch out for that as traders are ramping up bets on japan's inflation that it will reach the highs this year, and one of the emerging market currencies we were watching is the lira at the lowest level on record against the u.s. dollar, ahead of sunday's presidential runoff, and after the central bank cap it's key rate at 8.5%, study

again for a third month of what that means is real rates are deeply negative at the moment. we are seeing the increased risks for the turkish economy. take a look at how credit default swaps have been trading. we have heard the central bank has been telling lenders to buy dollar bonds aimed at keeping borrowing costs stable in preventing a spike in cds's default swaps. they have come down a little bit , especially after the first round of voting. plenty more to come on "daybreak: asia." this is bloomberg. ♪ when i was his age, we had to be inside to watch live sports. but with xfinity, we get the fastest mobile service and can stream down the street or around the block! hey, can you be less sister, more car? all right, let's get this over with. switch to xfinity mobile and get the best price

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haidi: all right, we have tokyo

cpi numbers crossing the bloomberg, coming in at 3.2%, softer than expectations, and softening from 3.5% in april, and stripping out food, study at 3.2%, again, a little bit lower and if you take out volatile energy costs, bet comes in at 3.9%, bang in line with expectations and a little acceleration from april, coming after the central bank governor ueda indicated his views on policy flexibility, playing down the importance of wages in wage growth or any single data set is a trigger for change for po sheet -- boj policy in his first interview since beginning the top top and continue to emphasize sustainable 2% inflation as key, so a bit of a ship when it comes to perhaps not targeting wage growth, but we are seeing uh tokyo cpi

coming in broadly when it comes to excluding fresh food and energy, a little bit higher but the other two gauges softer than expectations. let's get to a look of -- at the markets. annabelle goren -- annabelle: yeah. that's what we are tracking the boj wanting to hold onto policy flexibility so the question is what is the data without will convince it to change his policy settings and also the timing of when we do see some sort of shift? but as he said, that the concern for the boj is that the inflation reading for -- is being driven by the cost side of the equation so this year it really plays into it because we have inflation as spreading in the pan. this chart looking at the percentage of rising price items the line in white and it hit the highest level on record and what the boj once to see is really being driven by the demand side, and they have been focused on those wages that are certainly

not keeping pace with rising prices. it is something we are tracking in the boj looking to stay steady at this point in time. if you change that now, that plays into the moves we are seeing in the dollar-yen trade because we have seen it since that hitting that 1-40 -- 100 40 level. we had the 25 basis point hyping christ and in the next two two meetings for the fed officials and also as well a bit of dollar strengthening in with the debt talks extending plane into the haven status of the greenback. in terms of what we are watching in the session today we are watching the trade-off, what are investors most focused on? nvidia earnings, we saw that index gaining around 7% in the session, helping markets like japan, korea, taiwan, and futures higher, but weaker in other markets, including china, but australia, japan, korea,

opening in the next hour. shery: we are watching those casino operators with las vegas and celebrating the reopening of londoner macau as the world's biggest gaming hub continues to gain steam. let's bring in stephen who caught up with the ceo robert goldstein and also a very special guest. steve? stephen: yeah, the global ambassador i will get to him in a minute but of course last night's big celebration was sands, las vegas sands china reopening come the londoner casino here which was soft open in 2021 but the building open in 2012 or thereabouts. it was known as the sands -- central company not a great branding but it was a rushed property as macau had six license holders are competing for gamblers. times have changed significantly. the endemic decimated macau.

there were no gamblers here. the bordeand that gave sands chn opportunity to rebrand this property and it is now londoner. they have three key properties here. they have definition over here with the venetian tower. they have the parisian here with the eiffel tower. and of course the end here. i have a cornered right here but this really felt less not as kind of a reopening for macau after the pandemic with gross gaming revenue still on the according to analysts half what it was in 2019 pre-pandemic, even though sands china the coo told me it was two thirds of pre-pandemic levels, but keep in mind there have been two golden week's this year, so revenue was higher in occupancy was higher in ebitda earnings at the big casino makers especially mgm was much better on a year over year aces in the first quarter but there are still lots of -- basis in the first quarter but there are still lots of challenges and

opportunities in other parts of asia and here is my interview on the red carpet is not with the las vegas chairman rob goldstein as well as yes, david beckham crashed our interview. here it is. rob: we just keep building wonderful products and we will keep the same blueprint we have had for 20 years which is to build nice spaces and entertainment venues and retail venues and restaurant venues to build spa, nothing changes. we keep marching for the building the same kind of things you're seeing tonight. how concerned are you david beckham just walked by. you have heard of him, yes. how concerned are you? rob: that is him. that is him right there. >> come on in. what is the partnership like? rob: radiant. david has been a brilliant partner. he's the kind of guy we are thrilled to be around. he brings elegance and sophistication to our building. he is also british, i think. >> he also brought some design

elements. this is not a normal ambassadorship. you got into the nitty-gritty in the blueprints with the david beckham suites? david: i did. i have been part of the family for a long time now. and you know to be here, to spend time here on the to be part of this process, me and robert talked about it for a long time. i'd like to have long-standing partners, longevity and being able to work with rob in the sands community has been very special but with the rooms, we created something that felt when you walk into it, it is very welcoming and it feels like home for me. >> i saw you in beijing a few years ago when you were in ambassador to the super league up there and you obviously have huge interest in this part of the world. how important is it to get goodwill between china and the united states and with the westin china right now? rob: it is critical, isn't it? these countries have to figure it out and communicate. china and the u.s. are pivot

countries for the world so we hope we can encourage dialogue. we are not in the business of politics. we are in the business of running hotels and casinos that i hope we can see better communication and dialogue for all of us to benefit. >> he said this feels like home? david: it does. and i arrived here seven days ago and getting out of the car and seeing big ben, it felt like home. so the rest of asia, tylan might be relaxing gambling laws. we don't know. they have a new government being formed right now. we know you jumped out of osaka in japan so is there anything that would make you think about japan again or thailand? rob: we look at everything. no door closes. it has to be the right structure and regular tory body. we are sensitive where we spend our money. macau's special pure we are open to any place, including in new york right now. we are not closed minded about japan or thailand but it has to be the right circumstances for

us to invest in. stephen: of course the rest of this morning we will be right here live from -- i almost said las vegas, las vegas sands, of course, it is macau, the las vegas of asia, if you will, as it tries to recover back to the world's biggest emmy market as it was pre-pandemic and we will have analyst commentary and live interviews the rest of this morning from macau. [bird singing] haidi: let's get you to new york for the first word headlines. su: jp morgan notified about 1001st republic bank employees they will not be given jobs following its takeover of the failed lender. a source told bloomberg they offered transitional rose to 85% of workers still at first republic went collapse. those not offer jobs will were received paid benefits covering 60 days.

ubs's takeover of credit suisse may take longer time to finalize. sources say the completion of the deal could be pushed back to june instead of late may, this as ubs in the swiss government haggle over terms of the guarantee. this was back in march, when a 3 billion-dollar takeover deal was brokered to prevent the total collapse of credit suisse. the bank of japan governor ueda says the doj balance sheet is not necessarily in a normal state given the large holdings in bonds and ets. ueda has also played down the important of wages or any single economic data set as a trigger for change. this suggests his desire to hold on policy flexibility, leaving speculators cassettes -- guessing about the timing of a policy shift. >> >> [speaking foreign language] translator: we are not doing wage growth itself. if we have sustainable and

stable inflation of 2%, it is natural that wages should also rise. the key point for our policy decision is whether inflation will rise in a stable and sustainable manner at 2%. su: billionaire mining investor robert friedland told bloomberg that the tumble and copper prices is a temperate setback. the note that confidence from him comes after china's economic activity disappointed expectations. the founder expects china to stimulate demand in the second half of the year. he says that he is very very bullish on demand. >> it is important to understand that mines take 10 or 15 years to build. it is not supply you can turn on, so we are breaking down the world economy and we see a crisis of supply not demand.

we are suppressing demand by raising interest rates but long-term supplies definitely constrain. su: global news powered by more than 2700 journalists and analysts in more than 120 countries. i am su keenan. this is bloomberg. haidi: still to come on "daybreak: asia." this is bloomberg. ♪ how can you sleep on such a firm setting?

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haidi: may is aapi heritage month. a list was released this month on those who have made great cultural and socioeconomic contributions in the u.s. this year. let's discuss the progress on asian representation and the challenges that remain with the ceo at -- thank you for your time. what progress are you seeing in the type of support in sentiment out there? bing: we are seeing incredible waves of progress on the creative side. the casts and film is now the

most awarded of all time, and when you look to series, tv shows, squid game's is still the most viewed show on netflix. we are seeing the rise of incredible executives to greenlight this as well and we are seeing a litany of new executives, traditional corporations are new companies. i favorite statistic recently as 41% of the forbes midas list identifying top venture capitalists around the world are actually of asian descent. moreover, 42% of the companies that have ipo in the last two years have one asian cofounders, sourcing a lot of incredible partners, both on the creative or socio-side as well as companies. haidi: you have a venture funded investment that asian businesses, right? tell us more about the intent there and what sort of entrepreneurs you are looking for? bing: absolutely.

it is the definitive fund focused on asian-pacific founders and we invest in all stages and in all sectors and probably 50% of our portfolio is comprised of asian women founders. the reason we created this was twofold, one a commercial imperative. we were not born is not. we saw returns and we are so far in great shape. as you just heard for some reason asia-pacific founders are exceptional both in funding and funding companies, and on the funding side we have the great privilege of partnering with several of the top asian managing directors and partners in the world's most incredible funds to share deals. second the is also the cultural imperative as a fast follow-up to this quartile returns. according to harvard business view as you may know it is the least likely demographic to be promoted to management and asian women in particular are the least likely inclusive of board roles come so we actually take one expeditious of the most expeditious way to reverse this

negative stereotype and upward mobility is to found in thunder and companies. uh, moreover if were able to do so, it can uplift other marginalized communities. haidi: i find that misconception is interesting, these ideas of what asian-pacific people are able to do within the community. where do you think these misconceptions come from him and how harmful is it in terms of siloing issues that need more attention than the public perception will give credit to? bing: absolutely, from three stereotypes good one is the minority that that all asians are smart, wealthy and the gainfully employed and so forth. it happens with the model minority myth is because people think a portion of us are employed in the for instance in technology or a third of the total population silicon valley, we are fine, but the reality is we are single digits embassy suites, finance, law, there is

no better so the model minority myth puts us in a middle place. uh, the second challenge we face in this sort of bamboo ceiling is asians are grossly objectified in media and women are grossly objectified and sexualized and men are emasculated in when we assert our dominance or assert our authority, often there are other pernicious stereotypes like yellow peril where we are made into the villain and so there is this unfortunate to a perception that we are either week or we are too dangerous and we are trying to actively dismantle. the final piece candidly is the world is interesting run by a minority, that is a lot of western europeans of course. this is because of a litany of colonialization and imperialistic underpinnings. our own time zone is based on gmt despite the majority of the world being asian, 5 billion out of 8 billion of us that there is not necessarily a full reversal but a need for greater parity and based on a representation of

based on our socioeconomic contributions that companies like ours and many others are trying to rebalance. haidi: how hopeful is visibility. crazy rich asians was groundbreaking. i'm wondering how difficult it is to keep that momentum to transform that visibility into longer-term viability? bing: everything is hard to reverse. it is exceptional our community has proven there is a market for asian thames. we have crazy rich asians, parasite, everything all at once and we've done this a short order in the last five years. i think that there is no choice but to be optimistic through action was that one is continuing to invest in our incredible executives, whether amazon studios, netflix, others, disney, condon asked entertainment. second is in executives at

existing companies but investing in our own companies. there is a litany of incredible new asian producers who produce asian creative for asian communities but really produce all sorts of incredible multicultural content. one for instance is the most decorated producer in history, as you can hear from her maiden name, she is one of ours, so investing in executives is green lighting power, number two. third, we need to look at our community not just a sort of a community that is strong but a community that is inventive. people often forget that the most lucrative, accretive franchise pokémon was created by that team, and then we have squid game, so we need to lean our hyphenated backgrounds, i was raised between shanghai and tennessee, we need to rely on that hybridization and thinking to create new industries as well whether pokémon or youtube.

haidi: really great to have you with us. great conversation. joining us for bloomberg equality. plenty more to come here on "daybreak: asia." this is bloomberg. ♪

shery: we are getting the japan services ppi growth 1.6% year on year for april. the estimate was 1.4%. this is surprising to the upside. it is a deceleration from the previous month. we will see how pmi services translates into broader headline inflation. the party have tokyo core consumer prices coming information that had decelerated a little bit but we are seeing traders ramping up bets and demanding protection and hitting fresh highs for the year. haidi: yeah i would despite the data today maybe supporting the boj view they can hold policy for now and we will not see of policies which at least in the neil -- near term. we are still seeing major japanese investors sitting out of the market rallied largely

driven by foreign inflows. taking a look at official data showing investors have boosted holdings in japanese docs for eight consecutive weeks but local banks have been sellers. let's get more on this from our asian equities reporter who us out of tokyo. tell us about the disconnect between local and foreign investors. we know part of this has been the warren buffett effect and reallocation from u.s. stocks to japanese equities. winnie: morning. yeah, that's right. we are hearing strategist saying that there seems to be a perceptual gap between um foreign investors and domestic investors towards the recent rally in japanese equities. it seems like um domestic investors are less optimistic um about the country's economy in general, especially after they have professionally and personally experienced um the last three decades in japan, so

concerns that they have, some of it is you know whether this shrinking population and um um whether this freaking population is action going to be able to support demand, but some of the changes they feel will still take time to um to to evaluate. for example, we talked about inflation. is it actually going to sustain and stabilize around 2%? wage hikes and price hikes, are they going to form that positive cycle but we are expecting, and at the same time our companies changing fundamentally is always another question. yes, the reform has announced companies with share buybacks, however those might just be short-term. are we looking at profitability looking -- improving in the long-term? shery: thank you.

that rally in japanese stocks, that earlier this week reach that 33-year high and a lot was driven by foreign investors. take a look at how we are trading in the currencies space after the dollar touched that uh longest winning streak since october after gaining after a fourth consecutive session in new york. we are seeing the aussie not doing much but a lot of weakness in it comes to the chinese yuan topping that seven level. we want to watch the japanese yen, because we are seeing right now the 140 level coding -- holding steady, weakest against the dollar since november. the market opens our next. this is bloomberg. ♪ 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. fresh, warm hot dogs!

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>> this is daybreak: asia.

we are counting down to is as major market opens after that everything ai rally. i'll this by the fact that we had yells rallying, traders fully pressing and another rate hike. >> not a lot of uncertainty when it comes to the bank of japan. which growth is perhaps not one single kind of economic data set that we would be looking at. they stay consistently on hold for some time. let's look at how we are setting up this friday session. >> we have the opens of korea, australia and japan. it is that focus between the boj and the fed and central-bank

action. in japan, it was that inflation reading it came out over the last hour for tokyo that showed cpi slowing the orbiting coming in at 2% for me. overall, supporting the boj. the prices are unlikely to snow in the months ahead. they expect the core inflation to drop below 2% in the fourth quarter of this year. in terms of how this sets up, the boj unlikely to switch time for now. traders now fully pressing in a 25 basis point hike within the next two meetings. that puts that your differential in focus. the japanese yen trading at that 140 level for the first time since november. it is something that can boost japanese stocks overall.

we do have that flow and effect from the wall street session where we had more amounts coming through from the blowout earnings. if you take a look at how that is setting us up for trading, we are watching the moves in the cause deck. we had a very strong session for the military semiconductor. even though we do see nasdaq futures settling in in early hours. the s&p 500 was up around .9%. there were concerns around the debt limit talks that way on sentiment somewhat. still, there is no dale -- no deal on the table. we are seeing cried a bit of strength for the greenback. they did leave losses in asia.

tengion on, looking at australia today, we have a very eco-focused session. the asx 200 flat ahead of that. watching from the consumer confidence perspective. that dipped in new zealand. we had some headlines from the rbnz. brent crude has been snapping that recent rally. russia set about is unlikely to take any steps at his next meeting. >> our next guest -- willis now is the head of asian equity research. is it more important than ever to find those bargains?

where are they? >> good morning. it is always important to try to find bargains. we had a pretty good first half of the year. especially with the u.s. and tech. they position for it to be a little bit more defensive into the second half of the year. in terms of finding bargains. there are pockets of bargains out there. a couple months ago we published a note called pix and shelves for generative ai where we were taking the view that if you want to play the generative ai trade, it is kind of hard to pick the platforms. there is a lot of equipment around semiconductors that needs

to go into building the infrastructure to support the next wave in generative ai. that has played out a lot over the last couple of days. >> how much of those opportunities can be found in japan? we saw this incredible rally. there were foreign investors with domestic players staying on the background. does that mean we could even go higher? >> the return of the domestic investor has disappointed many people over many decades. japan is a market where nothing happens for long time. that is what we are having right now. in the background you have the

improving corporate governance story, it is taking a while, the third era back from the beginning. it is still a long-term driver. one of the things that happened over the course of this year, the tsc has put pressure on companies to improve corporate profitability. you have a big portion of japan, a lot of cash sitting on a very conservative balance sheet. companies have taken this, pressure from the tsc to do a number of things including improving dividends, some blockbuster buybacks being announced. that is an easy way to prove your valuation. we think that is a bit different this time. we talked a little bit about

that earlier. this is generally a tailwind for japan. unless the boj continues, we should expect the yen to strengthen, offsetting the tailwinds. >>, bit confused about what we are seeing in china versus but we are not. are you suggesting it is geopolitical fears that has investors ignoring chinese equities at the moment? >> definitely, that is part of the story with china. even a periphery of china where you saw berkshire hathaway take a long stick, almost immediately sell it, for that reason. it is definitely a factor that is out there. overall we think a couple of are

going on with china. one is the reopening story. you had a very strong performance from the end of october last year to chinese new year at the end of january. officer markets for china almost 60%. the exit has been a bit more complicated than straightforward. harvey said the pbs he is sitting on the sidelines and we don't have the extra push from there. and then the slow burn in the background of how china is now facing the rest of the world with a little bit less cooperative stance. that gives global investors on the sidelines until it becomes too painful to not be involved but we haven't had that yet.

>> does a pboc put come sooner than expected with clear signaling of policy support? >> certainly, it could. we have been waiting for a long time for that. china has its own agenda. at some point we probably expect some action from the pboc. they said 5% is the gdp growth target. they said they are not really focused on gdp. if it is not disappointed to the domestic audience if they had five, the application is it will hit higher. >> always great to have you with us. let's get a look at some of the early movers. quick take a look at some of these and theme things here in asia.

we had those blockbuster and is coming out after hours. the only benefit from the search. 10 minutes into the session. we are seeing moving to the upside. this ai frenzy has pushed out across the session on wall street. we saw the semiconductor going higher. still around the debt ceiling talks. let's change on. another sector we are focusing on is further into outer space. south korea has launched its homegrown space rocket, nori. it is really a critical step in the countries space program. payload satellites into target

orbit. >> republicans in the white house are now still not reached a deal to avert a default. they are now spending more than any time of our history and our debt is higher than any time in history south let's get this right. quickly turkey turkish central bank destabilizing the currency. they are coming to a record low.

president erdogan has a chance to see dick kaegel. bloomberg has learned that the takeover for credit suisse maybe taking longer than they thought to finalize. all this is the haggle over the terms of the state guarantee. global news, 24 hours a day on air and on quicktake, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> we will discuss the key challenges from's tourism industry.

we will take a look at these in your forecast next. this is bloomberg. ♪

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ahhh ahhh >> juliette: wages might lead to policy change.

we are tracking wage growth itself. if we have sustainable ablation of 2%, it is natural that we also rise. the key point for a policy decision is whether inflation will rise in a sustainable manner into percent. as you heard in his first interview since taking over as governor of the boj, he set this is not the main trigger for major policy shift. our policy editor kathleen hays here with the latest. does this open the door for more flexibility? >> it certainly does not shed it to type. >> i think in the conversations that were had since he took over in april, he did mention wages in the context of stable and sustainable inflation, holding onto that target, some people

thought they will put a lot of emphasis on july when the final results of the negotiation will be in. 3% or more, that is what has happened here. this is the best in about three decades. some have even been conjecturing that that means the bank of japan and the governor might say i'm going to wait until next year 2024 in that round of negotiations because what if inflation does not stay up? wages are not the main thing. he even said that it is not about decimal point when it comes to maintaining or holding onto that 2% target, it is broadly what is driving inflation. the other thing will be very important at the july meeting because that is when they will put out the new outlook for inflation.

a new number for 2023 that shows inflation coming down to 1.9%. if they change it, that would be the kind that would perhaps lead to normalization. those are going to settle down. he is noticing himself that taxis and hotels have grown up in japan. services, it is interesting that he would say i am seeing signs of more inflation. maybe he is also thinking more about sustainability. >> when it comes to the fed, to top that reserve officials are weighing in on the economy today.

susan collins spoke at an event today and she acknowledged inflation is still a little too high. here it is coming down, let's listen. while inflation is still too high, there were some promising signs of moderation and i think we may be at or near the point where monetary policy can pause raising interest rates and this will provide an opportunity to more fully assess the impact of the actions we've taken to date. >> there is no doubt that inflation is monetary if you look at this bloomberg terminal chart, that is the main inflation gauge. maybe it is leveling off now

because the headline numbers rising from 4.2% to 3.3%. the super court unchanged. another part of this is jobs. they were talking about the labor market being quiet tight. he was talking about the demand for skilled laborers in -- crazy strong is what he said. and lumber economics says the next employment report, the contents for that survey is 180,000 down from 253,000. >> it is motivating, getting weaker. that is still pretty healthy number. the kind that will not reassure the fed that the job market is cooling enough to slow demand, to bring down inflation. it may not be one of the most conducive numbers they're going

to get. request kathleen hays of bloomberg with the latest on the fed. we are also watching china's economy. showing an expectation that growth will come in slower than previously expected. respondent also expected the people's bank of china to make a cut on the ratio. let's bring in james from beijing. are there is really that bad? a few months ago it felt like we were scrambling to keep up with the number of growth projections that had been upgraded. now it is all being reined in. >> if you are following what economists think will happen, there were investment decisions based on that. everyone was very bullish about what they were seeing. some very early numbers which

came in stronger-than-expected pounded everyone to raise their forecast. we are seeing weaker numbers. >> if you look through that noise, the government set a 5% growth target. if the economy continues as we are seeing it right now, it will probably come out about that 5% target. if you're looking at a china's economy looked thinking should i invest or not invest, you should think about the targets the numbers actually set as opposed which bank is raising their target for this year. >> what does that mean for chinese authorities? we have seen they were trying for these prudent monetary and fiscal policies given the long battle against leverage there. >> if you look at the various different things in the economy right now, the government has a lot of contradictory problems. the first one is leverage.

you are seeing increasing numbers of cities around the country who are basically indicating they are out of money. you saw them pay a bond payment at the last minute. the subway system is out of money basically and has not paid wages for a couple of months. you are seeing asking help from the central government. mongolia is also struggling with this situation. there are these various different places struggling with debt and the government is trying to deal with this. on the other hand, there are a lot of problems with employment as well. youth employment is at a record. more people are coming to the job market in the middle of the year as a graduate from university. the government wants to increase the economy so they can provide

more jobs. they have these two contradictory problems and they're trying to thread the needle. i think the pboc has been very clear they don't think they have a responsibility to add massive stay most of the economy. you see a lot of economists going out and saying they should cut interest rates. the pboc has made it very clear they don't think there is necessity for a massive increase in stimulus right now. what people think the government should do what i think the government is pretty clearly saying they are going to do, which have to see how that plays out, we don't know what the government is doing. fiscal policy has been very contractionary. there is basically fiscal tightening.

we don't see there is the necessity for a lot of stimulus. maybe they are wrong. we will have to see. those james joining us from beijing. you can get around about this story and much more on today's edition of debris, bloomberg subscribers on the terminals and also available on mobile. you can customize your settings so you only get the news and the assets that you care about. this is bloomberg. ♪

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

15,000 people this year, pushing back on reports that the firm is laying off employees. the chinese e-commerce giant characterize reports of layoffs as rumors and said employee departures are part of the normal flow. they pointed to his recruiting system as evidenced that the company is still hiring. the fourth quarter revenue jumped 27% driven by higher spending on travel operating profit and the core business more than doubled. they jumped over 40%. we have more to come on daybreak asia. this is bloomberg. ♪

>> this is daybreak asia. we have a check on markets.

we are 30 minutes into the session now for japan, south korea and australia and at the sound of the day, there are quit a few themes for traders to be getting their heads around. starting off with the fed because we have investors now fully pricing in a 25 basis point hike between or within the next two meetings. that's with inflation still very high globally. we'll have the numbers out of tokyo just a moment but still tight labor market conditions in the u.s.. the reaction is playing out in the bond space. we are seeing yields track a little bit higher with treasuries overnight really lead by that front end of the curve. it has been that debt talk impasse that has extended. we have some -- both sides saying there is progress but a deal is not yet on the table. we see della strength playing out from that and currencies from this part of the world looking lower.

the japanese yen are the big watch point this morning. it has gone to that 140 level, jefferson 143 within just 3 -- just a few days as possible. the dollar store is the direction of that. in terms of how that is playing out in the equities picture, it is something that we could giving the nikkei a bit of a boost. it is putting gains up a tense of a present. what is interesting to note is when you put the gains we are seeing for the nikkei there and you can see the taiex is here. these key markets are the ones that can benefit all this frenzy we are seeing around stops linked to artificial intelligence. blockbuster numbers out for nvidia. certainly something us we are tracking. bring up this terminals are now. this is more of the story of

what is going on in china. a lot of concerns around the health of the economy. that has been playing out into metal prices. both copper and -- copper and iron ore have reached levels that they previously wanted. singapore breach of $100 mark. now we are at the point where we have undone all of the gains that have come in. since child of covid zero policies. >> let's get to su keenan with the rest word headlines. >> we start with the debt ceiling drama. the treasury cash balance dropped to its lowest since 2021. that shows it fell below $50 billion on wednesday. this is the debt ceiling spend off continuing. the treasury bank account is also under pressure recently as government implements measures to avoid breaching the debt cap.

the cycle that devastated large parts of new zealand's north island in february has been less inflationary than first feared. they initially estimated cycle gabrielle would add zero points. the central bank has since downgraded. the copper prices were 50 -- considered a temporary setback. the founder expects china to stimulate demand and the second half of the year. >> it is not -- we are seeing a

relatively low price because we are breaking down the integrated oil economy and we see a situation where we really have a crisis of supply, not demand. we are suppressing demand by raising interest rates. >> global news, powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> taiwan is set to review how much of a session has undermined the economy this year with the deteriorating economic picture becoming a key campaign issue in upcoming elections. let's bring in our deputy bureau chief. what we expect with the gdp numbers? >> at 4:00 p.m., taiwan will announce its revised data. people will be watching very closely because the taiwan

government only reported that economy falling into recession as it announced up the lunar data last month saying that taiwan's economy for the first three months of this year following 3% from a year earlier. that is the worst since the global financial crisis. the main reason for that is the weak global demand for a time. so far we have seen little signs of using because earlier this week taiwan reported that orders were dropping for eighth -- eight straight months. the key focus for the announcement later today would be whether the government will cut its forecast for a second time. the latest forecast is they want the gdp to grow 2.1% in 2023. lately, officials have been hunting they may be challenging

for the economy to maintain. we will see the latest government forecast for the 2023 gdp but also 2023 inflation and exports. it looks like we have seen exports for the first half of the air will not be good. this is bad for taiwan as it is a trade-dependent economy. >> despite the external pressure largely out of the hands of the leadership this will not bode well for the ruling party come critical elections. >> exactly. taiwan will have this very critical presidential election coming up next january and the ruling progressive party is fighting a very tough reelection fight because lately there are more and more people unhappy about rising inflation, rising interest rates and a slowing economy.

the inflation is not really that high when compared to other asian countries. people here would not compare the gdp to other countries but compared to the history. the inflation forecast for over 2% of between 23 is high for many people here and they are complaining a lot. that is not going to do well for the presidential election of the ruling party because the economy is going to affect election results just as well as the china tengion. we have seen the inflation risk is already that the taiwan central bank to have a surprise interest rate hike in march. that is a fifth consecutive rate hike for the tammany central bank. officials will be keeping a close eye on the latest inflation forecast from the government this afternoon and that could lead to maybe another rate hike engine meeting.

who knows. all the key focus will be whether the inflation will be above 2% and whether the economy can maintain 2% growth for the year. >> that was the economic backdrop for the taiwan elections. another but we are watching, this one this weekend is a presidential runoff happening in turkey. between president erdogan and his key rival. the reason we are watching this very closely is not only the implications for turkeys alliance with the west but what is happening with the turkish economy there already under so much pressure and given how the first round of voting went for the president did much better than expected, is alliance actually kept the majority in parliament, the expectation is that any change to more conventional policies will be very challenging.

we are seeing turkish assets right now under pressure. >> especially the lira. there are concerns we could see further depreciation after the elections perhaps even regardless of the outcome. you can see when it comes to net reserves, turkish net reserves falling below zero for the first time in 21 years. as defined the international monetary fund. the central bank has laid been revving up its efforts to defend the lira head of that residential runoff and investors just want certainty. this has broad implications not just for turkey itself but across the broader emerging-market complex. >> especially we have so much pressure on turkish assets and the turkish lira, we already have a strong dollar and emerging-market currencies under pressure. the central bank and turkey seems to have bought himself a little bit ofad of us on a runoff.

they held the key rates steady this morning at 8.5%. look at that chart. if you look at inflation past 40%, the real rate is still around -35%. it is not a lot of comfort for where the lira is going but as the central bank is using the south currency market interventions that have really put pressure on those reserves, also telling lenders to. -- to buy dollar bonds to keep buying costs stable. we have seen some of those measures already. more on daybreak asia. this is bloomberg. ♪

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>> what is critical is these two countries have to figure out how to communicate together we are hoping we can -- we're not in the business of politics, we are

in the business of running hotel casinos. we are hoping to see a better communication and better dialogue. >> that was rob goldstein speaking to bloomberg during the reopening of the london and macau resort. you might have recognized david beckham as their as well. they are celibate in grand reopening that had been stymied by the pandemic. recovery in the world's biggest gambling hub continues to gain steam. the spring at stephen engle was with our next guest. >> yes course, last night was las vegas and sands china's biggest night. this was an underperforming big casino until about 2021 went it stuffed up in happened and then it really renovated through the pandemic.

i've been telling you, the streets here and the buildings here were empty for three years through the pandemic. we will talk about that. bentley is managing partner. it is a consulting firm. you are here through the pandemic. you've been here 18 years. how bad was it and how would you say the recovery is going? is it sustainable? >> it was really quiet. basically a small shrinking pool of us here. knowing that people were leaving the cow, the streets were empty, restaurants were shutting down. this year, things reopened with a huge boom. if you were to look at in terms of the recovery and whether it is sustainable or not, we are writing on the back of china's domestic revenge travel phenomenon.

chinese authorities reported that they were at 68% of 2019 level for q1. the cow was about 44% in the same year, macau is benefiting from lack of chinese traveling overseas right now. chinese aviation authorities report this to and from china internationally. >> there is revenge spending. i think a lot of chinese are hesitant to go abroad. they are seen macau as a domestic destination. >> visa and passport permits and from comfort. >> how is the crackdown on junk it's going to impact these casinos? they became the envy of the gaming world because of those junket vips that came down and

spent a lot but there were low margin and high-volume. now the junkets have been cracked down upon. will that have a material impact on their earnings report? >> absolutely. they will tell you that the junket segment is low margin. the margin is run by 13%. that is pure margin, no cost. all the services are provided by the junkets. they might spend maybe a billion hong kong dollars, there was spend $10 million. it was low margin but high-volume. without that, we will not be able to get to where we were in 2013 and 20 19 in terms of dr and profit. that is gross gaming revenue. >> in terms of mass market, we

expect to get back to protect as pre-pandemic level toward the end of this year. for the vip we are currently running about 24%. that is purely because the junkets have not been able to travel. when the other markets to open up, we expect the recovery to actually fall. >> without these vip, the high rollers through the junkets, there is the added this for these big resort operators to really build that up. who is best positioned to catalyze the most on that? sands china really trying to import the convention, the model. they will go to singapore.

the meetings and conventions market? >> it is not one of our key competencies. we don't have to labor number one. singapore despite being a? it at best he was about 13%. request back to you for macau. >> ray conversation, stephen engle with the latest on macau, we have more to come on daybreak asia. this is bloomberg. ♪

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the macro perspective is everyone thinks commercial real estate is in the tank and it is really just focused on the office market. when you look at the data center market, it is white-hot. people who are developing data centers don't even get them to develop before one of the leases happen for 30 years. i have a friend that was working with 30 data centers. a multi-decade deal and they just leased the whole portfolio. data centers are white-hot. you know we are dealing with this. we have samsung building in texas. the u.s. is reassuring on ensuring this high-powered ship business and nvidia is leading the way. first with their giving chips and now ai stuff which is just

white-hot. i would not short nvidia. i think it has a long way to run here. >> when you talk about a long way to run, how should we thinking about this? is this a generational shift we are experiencing here? in 2000, we had to have a massive clear out before we figured out who is actually going to be top dog on the internet. are we going to have to see something similar here? we are going to get a lot of people coming at this from different angles. how do we clear out and figure out who will be the loser? >> i look at this from a different perspective, especially on the losing side. i keep reading every thing from wall street telling me ai and generative ai is going to be jobs positive. i have an impossible time believing that. we have 3 million service workers that run cash registers.

we have 3.5 million truck drivers. i can look through the businesses but i am fairly certain we are going to see millions of job losses and i don't think you can train doses -- those specific people into the high-tech market. i am worried about the long-term job possibilities because think about how many pallets are out there and how many pallets we are going to need when we get really right now big planes essentially find themselves. i think about how many jobs will be put out of business. >> to that point, your thinking ai is this huge trend, it is a structural shift, you will have big patients for the job market. do you play that? do you tray that? do you go by data centers? how do you capitalize on this sort of evolving trend? request developing data centers

stocks, securities, that has given chatgpt and the amount of computing that is taking on the back end, i am hearing that microsoft and amazon and the rest of the cloud providers are struggling desperately to keep up with the amount of computer that is going on with chatgpt and that will only grow as a i get stronger. >> that was kyle bass with guy johnson. here to check with the latest business flash headlines. this etf closed in january, missing out on the recent rally. the chipmaker rallied to around $560 billion in market cap since she dumped her shares. investors have mostly been left out of the blistering rally this

year. jp morgan is reportedly developing a chatgpt like software service to help select investments for customers. the bank has applied to trademark a product called index gpt. it is said to utilize cloud computing software using ai for analyzing and selecting securities tailored to customer needs. that is it from daybreak asia. more markets coverage continues as we look ahead to the start of trade in shanghai and shenzhen. standby for bloomberg markets china open. this is bloomberg. ♪ mmmm, your morning coffee hot delicious comforting. 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.

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