we have been able to reach over 100 million people impacted and affected, and at risk of hiv. the rocket fund takes all of the work that we're doing, all over the world, and looks at the most effective ways, to get resources to them, to get services to them. the idea that we have saved five million people's lives, it's overwhelming. it's everything. haidi: you are watching

"daybreak: asia." >> we are counting down to the major market open. shery: the fed chair signals possible rate hikes. jerome powell joining peers morning that the inflation fight is not over. traders weighing hawkish signals as they position for the end of quarter. micron deliver strong but warns of headwinds. plus, thanks ace -- banks ace stress tests. haidi: take a look at u.s. futures, the upside, after the mixed finish in new york after fluctuating between gains and losses. we were seeing traders digesting jerome powell's hawkish signals not to mention the end of the quarter so more positioning adding to volatility. nasdaq 100 on the best ever

first-half pace. chipmakers under pressure but not so much and that after our session after micron jumped on the upbeat forecast and sales will be much -- as much as 4.1 begin dollars in the fiscal fourth-quarter and we are watching treasuries advancing, mainly during the u.s. afternoon session. um, despite the fact we got those more hawkish comments, the 10 year yield fell to that 3.7 zero level. let's discuss the hawkish commentary because several central bankers have like further interest rate hikes and saying inflation is not tamed but that leaves japan is the big outlier on the monetary policy stage. kathleen hays is here with the latest and let's start with the fed, ecb and bot. >> some of the most powerful central banks and it is at the top of the list and one reason they were onstage at the annual conference in central portugal.

jerome powell, andrew baylor -- bailey, christine lagarde. but start with chair powell, it's not that he was more hawkish than we heard lately. he was certainly hawkish after the last meeting when he paused but said more rate hikes are coming and he testified to congress and again, reiterated more rate hikes. so today, uh, he started by saying you know what? policy has only been restrictive for of the a while. it needs to get more restrictive and when asked about back-to-back rate hikes, he left the door open. let's listen. tirone powell: we will move the decisions with a little bit more time between them in an effort to get more information to the data to see how much restraint is coming from these you know, the pipeline from rate hikes we only made now in many cases six, eight, nine months ago but i would not take moving at consecutive meetings off the table.

kathleen: christine lagarde at this meeting yesterday, the opening day of the conference she was very clear that more rate hikes are coming and unless something big happened, another rate hike in july, and when asked about how much the ecb will have to do and how aggressive they will have to get , she says a man has to do what he has to do and a woman has to do what she has to do so christine lagarde making it clear that no matter the gender, more rate hikes were coming. there was more humor at the event today but let's go to andrew bailey because the boe surprised with a rate hike and left the door open more rate hikes. he basically said they will do what is necessary to get inflation back to target. he sees inflation getting to target more quickly than jerome powell who said not until 2025 will the fed get information back to 2%.

christine lagarde thinks the key inflation rate could be 3% next year, still above target but a lot closer, so unequivocally, central banks will do what has to be done and if we had any doubt, we should not have doubt now. haidi: the doj new governor still not ready to give ground when it comes to a policy shift. this is about a level of confidence for the central bank right, that inflation will remain at levels we are seeing or slightly under? kathleen: that is the theme and message he has been giving since his first meeting in april, uh that yes, inflation has been above target but the boj thinks it will come down and cap even below target on on one of the key measures so they are not ready to do anything until they are sure they can say sustainably and stably above 2% but sees progress on what he calls underlying inflation which is what he's most worried about. the headline or the core cpi are

these underlying factors and when it comes to wages, yes, they are not rising quick enough but faster than they used to and by next year we could see more that -- of that because more companies realize after raise wages to keep up with companies that have done it ahead of them. he was funny and probably the most humorous person on the panel and talking about the fact that the boj has not done substantial normalizing or policy tightening in 30 years so when you look at the lags in boj policy and how they will work to the economy, it could be at least 25 years if you look at when the last time was we started tightening. u he had a number ofh comments that said this new governor is taking things seriously but certainly knows how to deliver a message that is very palatable, if not humans -- humorous. haidi: kathleen hays bear. the 23 largest u.s. banks have passed thefed's annual stress test clearing a key hurdle for returning billions of dollars to investors. let's bring in vonnie quinn for

a look at the details. this has come as you know us as something of a relief after the turmoil across the sector we have seen. vonnie: a little relief for sure. they were anticipated to pass and indeed they did all ace the test, the fed's words, and this is a snapshot of the balance sheet on the criteria device before the most recent banking turmoil. there are more regular tory actions later in the summer so a little bit of relief and not too much relief yet. they were the 23 largest banks in the country as well with assets more than $250 billion according to the rules this year which came into effect during president donald trump's tenure as president and other banks will have to submit next year. they did all past and this was under the most stringent of scenarios so u.s. employment rising to 10% in commercial real percent 20 percent and at 30% decline in home prices all with the dollar surging and all banks were able to withstand that.

-- the fed further tested the balance sheets a turmoil center of the ones with large trading books to see if they could withstand the shock, and they passed that as well. we did see losses in the hypothetical worst-case scenario of over $500 billion, but that it's ok because the system can handle that. wells fargo analyst pointing out that this could be the beginning of what could be a regulatory bank summer as we have the rules coming out later in the summer, potentially quite soon in fact, and also have the federal reserve itself coming up with new rules for supervision under michael bar, this after the signature and all those banks that would not have even submitted to the stress test anyway because they would not have had the assets required. michael bar came out with the statement pointing to the fact that all of these stress test and the results would not have saved us from the turmoil earlier this year saying "we should remain humble about how risks can arise and continue our work to make sure banks are

resent to a of economic scenarios, market shocks, and other stresses." rate that is the thing right -- shery: that is the thing right that these are supposed to be the biggest stress for capital planning but this year we have to look at so many other factors the could impact the returns. vonnie: this is jet it. one reason we look to the stress test is that after the stress test is when shareholders hear about dividends and share buybacks and you have the capital plans for the banks coming out and the fed has asked the banks to wait until at least friday afternoon to start talking about that but banks may not be willing to do it that soon in this event anyway and this year because there are so many hurdles and they still have to cross this summer and they have to figure out what is coming down the pike when it comes to what kind of capital they have to hold in reserve according to the new basel three endgame roles and according to the fed, we know from jerome powell last month at the biggest banks could literally face a 20% increase in the amount of

capital they have to set aside under the new basel three rules and says the eight biggest years banks will probably bear the brunt of bets are likely with smaller banks they will have to not put aside that much more but you could see some of the banks needing to raise capital in order to give more of a christian. just on that note we should point out that some of the banks that had the lows capital ratios are stressed capital buffers did not do so well post market, although they did pass into to have the minimum but we should mention that mmt bank on citizens financial and years banks ratios were lower than the larger banks. rate vonnie quinn with the latest on the fed stress test. shery: let's get back to micron after it delivered a strong forecast. su keenan has more on this and it was an upbeat report but of course we know that the investigation they are facing in china continues and that could impact the outlook. >> yeah, the ceo says the cybersecurity probe they are facing in china present significant headwinds, about was in negative, although on the

conference call they described the situation as uncertain and fluid. investors were cheered by the fact that the outlook for the company much more upbeat than expected and an indication that the chip glut, they are the biggest u.s. maker of memory chips, appears to have eased. sales as much as $4.1 billion in the fourth quarter the company says. mike rounds ceo believes the memory industry has passed its trough of revenue and expects margins to improve as supply/balance is restored in the chip industry as a result of recent actions and china where the government has decided that micron's products are a security risk. like many of its peers micron has suffered in a collapse of orders after sluggish demand and smartphones led to that big -- inventory. instead of microns outlook, they

are not predicting a rapid return to growth in 2023 and see that pc shipments are expected to decline and that they will reach a although the pre-pandemic level and predict that the smartphones will contract by a percentage and then did single digits from a year ago. that said, a lot of green on the screen and the key takeaway is that the glut seems to have been worked through for many of microns clients. haidi: what is the latest view on the continued exposure of course to the geopolitical rivalry and instability between china and the u.s.? su: micron has major rivals in korea such as samsung and sk hynix and unlike its korean competitors, this geopolitical rivalry between china and the u.s. has hamstrung its outlook and its sales. the cybersecurity administration of china uh probing the company now and also borrowing its chips from what it calls critical

infrastructure and for this reason micron is warning that about half of its sales tied to china-based companies will be affected, representing a low double-digit percentage of global revenue. some analysts say hey, a lot of these memory chip clients are savvy and can find ways to navigate around the sanctions. stay tuned on that. back to you. haidi: su keenan. let's get you to look at how we are setting up for markets. annabelle: we had those stronger micro-numbers coming through with a solid outlook from the company plus that wall street session, the move into stocks, trader shrugging off those comments from the likes of jerome powell and his peers at the g10 central-bank, but actually when you look at the board here, you can see futures one hour out from the open but sydney, so, korea, tokyo looking

next but range bound. perhaps trading volumes were expected to be slower and some investors have been saying that as we approach the end of quarter trading to expect volatility in the last couple of days ahead. in terms of what else we are setting up for, the focus of asia is coming through into china and the economy as well. it is not just the yuan, rather we have been focusing on the yuan with the yen and it is weakening past that 7.2%, not just a function of the dollar strengthening, but a reflection of the pboc starting to remove some support, fixing, and expressing perhaps it is -- has not quite single line in the sand yet. the currency could soon slide further with the weakness that we see in the local chinese economy. haidi: it is the last day of the

world economic forum. our chief north asian correspondent stephen engle has been covering it for us. what is coming up today in terms of wrapping up these conversations you have been happening -- having? stephen: we started and have one interview in the books before the scheduled meeting outside this convention center here. we just spoke with a representative boston consulting group and talked extensively about ai, but coming up we will have a chat with the standard bank chairman, chairman of africa's largest bank. that one you will not want to miss. as well as a little bit later on in the 9:00 hour, we will be talking with noted professor at cornell university, he was just here talking at the world economic forum yesterday about china's urgent need for forceful stimulus through interest-rate

cuts or other forms of stimulus, if the economy continues to stumble, and he laid out a cold that beijing needs to kind of outline its plans to boost the private sector, so lots to talk about on this final day, which wraps up here midday here. shery: stephen engle joining us from china. coming up next, the wealth consulting group ceo jimmy lee discusses their strategy and why they expect a surprise to the upside in the second half. this is bloomberg. ♪

christine lagarde: we still have ground to cover. jerome powell: although policy is restrictive, it may not have been restricted enough for long enough. wristing lagarde: we are data dependent. >> we will be evidence driven so we will wait for the next set of resin -- set of resident -- evidence. >> that is why we are keeping policy unchanged at the moment. wristing lagarde: if our baseline stance but then also know we will very likely hike again in july. jerome powell: we will move the decisions and make them with a little bit more time in between them. >> we will do what is necessary. jerome powell: i would not take

moving at consecutive meetings of the table. shery: shery: shery: our next guest says that inflation will come down faster than most investors think, the ceo of wealth consulting group jimmy lee joins us in the new york studio. good to see you in person, jimmy. let's talk about all the commentary out of it, except that the bank of japan being the odd man out. everybody else seemed hawkish. and we still avoid a recession at this point? jimmy: i really do think so and i have been saying that for months and months and i know i am in the minority, may one out of six people -- shery: you're not even expecting a soft landing? jimmy: [indiscernible] a lot of the economic reports i was seeing from leading economist in the u.s. and abroad was that the u.s. was going to be losing you know several hundred thousand jobs per month in the summer months. i just don't know how we get there from here so i i think in certain sectors there are

services and the job demand is still very strong. you know i was just talking about traveling to asia and i was in seoul, korea, in tokyo, those markets look strong too.i have been in europe and mexico and it seems like people are ok, and i know i am in tourist areas in those countries, so on a global basis with china hoping to stimulate more and grow their economy, i think it will help out asian countries on a global basis, but in the u.s. i think we will avoid a recession. what shery: are the implications for the markets? how can inflation come down faster than expected without tricking a recession and without uh uh more give in the labor markets, and if that is the case in the central banks continued their tightening path, would that not be negative for equities? jimmy: i don't think we will get a major correction. i think we will get surprised to the upside.

the sentiment is still so awful right now that most people expect a recession and a lot of people are still you know professionals are expecting something bad to happen and then, equity prices following. if that does not materialize, which i think there is a chance it doesn't, then we get a surprise to the upside. a lot of historical data says that when you started strong as we have this year and it looks pretty good, so i think we can get some surprises to the upside. now based on what chairman powell said in july, do we have enough evidence of inflation coming on fast enough? probably not based on what you heard today, but the market shrug that often so whether it is 25 or 50 basis points, i am not sure investors care about that. we have a range where rates will top out and where i think inflation looks better is when the housing or shelter data starts reflecting the current numbers that we see for cpi, i think that will potentially make

that headline number look a lot better, and then maybe the political pressure will be off the fed. haidi: jimmy, do you hedge by looking at international opportunities given the divergence narratives and asia, in which markets are sectors do you think are constructive? jimmy: you know in developed markets, um, i think you have an opportunity and international development is versus the u.s.. the index beat -- for the first time in a while and that was before tech stocks started taking off. it was, also better than the s&p 500 now liking a little bit but the story overseas is that valuations are better than in the u.s. in terms of stock prices or equity prices, which i do agree with but i also think the recovery in certain areas in europe and in asia with china stimulating, i think it can help those markets do a lot better so we are actually adding in have added to international equities

relative to the u.s. in terms of what her asset allocation looks like party, and i think there is a potential falling -- follow-through for emerging markets so we are constructive on international equities. haidi: so a lot of that is hinging on meaningful and effective stimulus from china? jimmy: it is, but i also think that you know, there are great quality companies that not just here in the u.s. but also oversees, you know, got sold off, just like the stocks here did, and it's not surprising in the u.s. that we have had such a huge run you know in the nasdaq and you know, in the s&p 500 if you did not on the top seven mega tech companies that were down so much less year, then you are really liking you know the indexes this year, so for investors it is ok to be liking the s&p 500 if you're investing in the united states so far, because you really would have had to have been over allocated into tech, but i do believe that

when rates finally start going down that tech will have another leg up, so i think there are a lot of opportunities, uh private credit, even real estate, so if you have first capital with all the concerns about the commercial mortgage market, i think there are buying opportunities for investors who have cash. haidi: great to have you with us. shery: plenty more to come on "bloomberg daybreak: asia". this is bloomberg. ♪

haidi: red stories on the terminal, and the bank of montreal cutting about 100 positions in response to a week environment for deals and tells us that half the jobs are roles in canada and the bank says it is focusing on managing expenses while providing support to employees affected.

its revenue dropped in the fiscal second quarter. tiger global has been said to have turned down multiple bids because offers were too low. the firm explored selling stakes in mid-stage delayed state startups to provide cash to investors in older funds. some assets were bought at higher valuations in recent years. coming up next, disappointment with the boj governor remaining cautious on the shift in policy sense. we get more from him next. this is bloomberg. ♪ back in the day, sneaker drops meant getting online to wait in line. now with xfinity mobile... ...we get the fastest mobile service and can get the freshest kicks asap. i got this. save hundreds a year over t-mobile, at&t and verizon with the best price for two lines of unlimited. nice job, little sis!

they grow up so fast... i'm a fan. from xfinity. 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.

>> inflation is still a bit lower than 2%. that's why we are keeping policy

unchanged at the moment. >> the boj governors saying dovish on the policy for the short term. he's coming to us -- unlikely to provide support for the weakening yen. he's covering that key psychological level of 145. obviously, even with that job earning that we had yesterday, please, in terms of staying the course of the governor until the boj sees a certain level of confidence that inflation will stay at these levels is hardly building a case for the bulls. michael: it's not really -- i think what we saw last night in central governor latest -- the governors package paying currently is, there's a lot of if's and a lot of codes and i don't think that it's on the right side of the trade.

anything that would scare them out of their positions and people who with add to existing long yen positions are literally just feeling the pain, it's a cost to carry the trade, it's not cheap and it's just going to drag on until, probably the actual intervention because so far we both agree that it hasn't worked. shery:shery: at what point coule actually see intervention like we did last year? michael: in october last year was a time, in a run-up to the intervention, dollar-yen ran up nine weeks straight. so the words used were one-sided. we are seeing much of the same language. but this time around, dollar-yen has risen five of the last seven weeks. so whether the ministry of

finances seeing that conviction amongst investors where they have literally gone all in, they want the trade to become as crowded as possible, like they did last time, so they get the best bang for their buck when they do enter the market. but in terms of levels, personally i think we have to wait until we get to that 150 plus level. i think the difference here is it will affect fun rates that was 200 points lower back in october, and that has to be priced in, it probably is around these probably is around these levels, i consider the argument the 145 but personally i think maybe 150, that would come down quickly, we are in the steaks on friday, and we actually have them speaking -- powell speaking again tonight, i'm not sure if he can add to what he said last night. it's as balled up as they could possibly be, but there are a couple of flags, a couple of

risks that might change it, if they change the direction, you have to come from the fed because currently you have the bank of japan ministry of finance or just waiting for the audible to become top-heavy so we could get maybe a 4% or 5% pullback on the day like we did see back in october. >> michael wilson our effects and rates reporter there with the latest on the yen. let's stay with japan because the finance minister is now set to meet his korean counterpart in tokyo later, thursday. this in order to discuss a currency swap agreement. our policy reporter joins us now from tokyo. what are we expecting out of today's agreement? isabel: as you mentioned, the headline out of this meeting we are expecting is that we will revive the currency swap agreement, which was allowed to

expire by both parties eight years ago when relations between the two sides were becoming worse and worse over this continuing historical dispute about whether japan has compensated sufficiently for its colonial rule of the korean peninsula. so, it may be in out today, we don't know if your absolute sure and we are expecting that later in the day and what it is is something that would allow either country in the event of a financial crisis to get access to dollars more easily. it's not something that either side needs at this point but i think the effect is symbolic. it's a hand of friendship they are saying to one another, if you get in trouble, we will be there to help you out. so that's what we are expecting today. >> this comes with a number of moves with japan and south korea patching up relations on a range of issues. this japan reinstating south

korea as a preferred trading partner, is at about cooperation with the u.s. as allies against regional threats? >> yes, i think that's very much the angle that the south korean government is taking, as you mentioned on the trade issue, again, it's a somewhat symbolic move, but japan is effectively saying to south korea, we trust you as a trading partner, we think you will do the right thing, you won't send our equipment to places it shouldn't go. that is a symbolic statement of trust between the two. the two governments are working more more closely together and therethat is a symbolic will bel summit with the u.s. coming up possibly at the end of august in washington, but one thing that is missing in this pattern, even as they go closer and closer together -- >> bloomberg's isabel reynolds there, let's get you to hong kong where annabelle is taking a look at the view from asia as we

get closer with just about 25 minutes away from the cash of start trading -- start of cash trading. >> in terms of what we are watching today, it looks kind of quiet. but one dataset will be getting out in the next 15 minutes or so will be the foreign buying of stocks and bonds in japan highlighting this chart ahead of it because it shows that level of interest we are seeing from foreigners, 12 straight weeks of buying the japanese equities. we will see if that trend continues when the data comes out in about 15 minutes. comes out in about 15 minutes. the session is looking quiet. we had positive factors in the wall street session overnight. for instance, those numbers out after the bell, but also, just that general understanding that we are nearing the end of the fed tightening cycle, so that was something traders were brushing aside the comments we got from jay powell and his comments around the need to continue fighting inflation

overnight as well. so today in the session we are looking for range bound trading. some stocks online. kiwi in particular. singapore will be shut, so we haven't got futures on that contract. that still the chicago when we are seeing. haidi: annabelle in hong kong ahead of the open. let's look at the other stories we are watching from around the world. china has passed legislation for the right to retaliate against foreign sanctions. state media says the relations will serve as a basis for moves for what they called western hegemony. beijing has imposed sanctions on foreign firms, including lockheed martin and raytheon technologies over armed sales to taiwan. pakistan is reportedly in talks with the imf or a $2.5 billion quick standby assistance program with the existing program expiring on friday. the newspaper says a short-term agreement includes an upfront disbursement of 1.1 billion

dollars in the next 15 days. pakistan has been taking steps in line with the imf's prescriptions to gain access to 6.7 billion dollar bailout program. president joe biden has touted his economic agenda as he seeks to bolster his reelection prospects. in a speech outlining his policies he contrasted his margin makes with republican small government philosophy. biden says his more interventionist approach is rebooted u.s. industry and added 13 million jobs. president biden: on the trip of economics it in matter whether you made things as long as you help the companies bottom line, even if that meant seeing jobs in industries go overseas for cheaper labor. supply chains and key products moved overseas by china and much of asia. haidi: coming up, the chair of one of africa's biggest lenders joins us exclusively to talk about her economic outlook in

relations and investments with china. this is bloomberg. ♪

stephen: welcome back to bloomberg daybreak asia. i'm stephen engle and we also welcome in our global listeners on bloomberg radio for our next exclusive and soon to be fascinating interview. our guest is -- she is the

chairman of standard bank africa's largest lender. they cue so much for joining us here at such an early hour on the final day of the summit davos. what has struck you about the meeting so far in the tone? there's lots of global stresses, china is in focus as are reopening and try to attract business to come back to china and restore confidence. we all know about the stresses, the debt issues in africa, i inflation is still persisting, we have war in ukraine, what stood out in your conversations so far? >> what has been quite fascinating here is that the politics haven't been quite as big a topic at this davos. it's not quite like switzerland where we normally have quite a big portion of the discussion centered around geopolitics. particularly strange given that geopolitical tensions are so high. stephen: i find that the worn ukraine is not talked about at

all. >> at all, what i would say is that the messaging from premier li has been straightforward. the world means peace, the world needs security as the foundation for prosperity and for growth, and so he kept coming back to that theme, so i think that was, number one, clear. the second big thing, and again, in his private meeting with business leaders, was this issue of cooperation, china will remain open, china is integrated and intertwined with the global economy, he sees no way of pushing it out or pulling it out. so there is a concerted effort from chinese authorities to just remind the whole world of the risks of this decoupling idea in the name of de-risking so there has been quite a push to just

say the world really did benefit from an open global system, and so we should retain that. stephen: china has played a critical role in the restructuring deal, some call it a monumental deal because it has been ongoing for a couple of years and it's not just sam beer, it's other countries having a debt issue caused by a number of things, whether it's the king dollar or high inflation, there has been a credit crisis, -- debt crisis, but china says other creditors, like the world bank and the imf, they should be taking the haircut, it shouldn't just be china as the biggest creditor to the continent. how importunate was this deal last week with zambia and how can it be a precursor for other debt restructuring in africa? >> the zambian restructuring was a fright for african governments. there is quite a bit of debt

distress. they haven't quite defaulted, but the risks are high. so the fact that it would take two to three years to do debt restructuring was a bit scary, and the issue really became all of the multilateral institutions have got a framework. josh preagreed and they were and they were just going to fall into that six months later it's done. with china being such a big standalone bilateral lender, they had different rules, and those two rules did not quite mesh evenly. and you are pointing to that as to who takes the cut, etc., and the multilateral institutions wanted china to come into the framework and china wanted the opposite. zambia became the grass on which the elephants fight, and when that happens, you get trampled. so it's been concerning the way the whole thing has been done,

but we did not see that in ghana. ghana happened superfast because china was in a big eye lateral lender to ghana, and the multilateral particular imf led in that process, so the rules were straightforward, they had been used before, and i think ghana is very close now to the finish. stephen: what role do you see china playing in africa? i know you're big investor and partner is the world's biggest bank, about see china playing in africa? 20% invested into standard bank, what kind of trade and commercial deals are you seeking here between china? >> just as you say, just a little factoid, the back end of this week, actually tomorrow, the bank is bringing 50 of our african china -- client to trade with china in this kind of bilateral trade relations in building further on what we do with the chinese companies.

but if i just talk rod lee, if you think about the evolution of the relationship between china and i'm going to call africa as if it is a country, but it is 53 countries and it is different. but essentially with commodity producers, it was give us oil to make us steel. so very much export led from africa to china to have a relationship on the other hand because africa wasn't manufacturing or buying manufactured goods from china. that stage i. stage two became the infrastructure bill. they build in ports and express raise, etc. what i think we seek now as third stage is bring us technology, bring the low level manufacturing to the african continent, which, perhaps the

labor rates in china have risen to the point where it is no longer as competitive as it used to be where labor rates in africa remain there. stephen: sort of a higher end belt and road rather than just the roads railways and bridges, which can lead to what some would claim debt diplomacy. but you want higher value and some are calling it a green belt and road where you can help with climate change. >> i think the greening of the planet gives that opportunity because now, instead of just pulling out the core values and bringing it here for processing, build the first several processing plant in drc. zimbabwe is doing that with 3m. zimbabwe has been in the export, so the very first chinese firm has been given a license to do the first stage processing in zimbabwe. but i think the issue is somewhat more complex than that,

so if you think about the free trade area, the african continental free-trade area that hopefully before i in my life, will be fully implemented, but it is in the early stages. you then suddenly create all of these much more joined up markets on the african continent , not so fragmented, and because it's free within africa, you have the opportunity to create manufacturing habits for local or original consumption. suddenly you can then create a compelling proposition for a chinese manufacturer to come and manufacture in africa for consumption. that is the other angle that might just give impetus to wet i am going to call the third phase. stephen: thank you so much for your time, next time let's take a whole half-hour to discuss all these issues. too much to discuss in a short amount of time. we like to thank our listeners

on bloomberg radio globally and sending it back to you guys. >> coming up, renault is said to be closing in on a deal with seeing more investment from the ev business. we have the latest, this is bloomberg. ♪ shop now only at sleep number.

haidi: take a look at the latest

numbers when it comes to what we see crossing the bloomberg on japan retail sales. for the month of may that year on year number coming in higher than expectations from the survey, 5.7% against five .2% from that survey consensus. also releasing a much faster pace growth than the 5% in the previous month of april, which was also revised a little bit higher to 5.1% on a month-to-month basis. that translates to 8/10 of 1% in gain. a little bit weaker on that, remarkably stronger compared to the contraction on that month on month 1.2% that we saw previously. this is we continue to see evidence of continued inflation pressure building in japan. think of japan governor still striking a tone of caution saying it is possible to start normalizing monetary policy, but only if the bank becomes confident with a pickup in inflation for the next year. underlying inflation in japan

remains below 2%. we could see potential credit -- price increases if you look at the bank of japan assumption, that they could start to slow towards the end of the year. retail sales on the consumer side looking like it's picking shery: nissan andrew no are said to be accelerating -- nissan and renault are said to be accelerating. they are repairing their troubled alliance. for more on this let's bring in bloomberg auto and aviation reporters. what do we know about this potential agreement? >> as we start with talks between renault and nissan, there is an internal power clash. but since he has stepped down on tuesday from his position, we are hoping that there will be talks because he gained a few times.

after discussing his departure we see that it would accelerate. also, they are in japan and they will have an alliance board meeting today. there are hopes that they are going to make a huge progress from now on. they are just waiting for this and there is a hope. haidi: in terms of what we are expecting from the takeaways of this meeting, and our expectations higher for any kind of agreement? >> we can't say that agreement, but it is how much nissan will

invest nissan will invest in their ev. we don't expect in agreement, but in the coming weeks we might see. and has we have also seen, the plans for going to japan. this all is to be cautious that both companies are hoping that something comes up soon. today's meeting is going to be a form of the plans, if not, lead to an agreement. in might have been in a couple of weeks. haidi: joining us from tokyo. let's take a look at some of the stocks we are watching when trade opens and. , japan and australia. investors get a chance to react to the news of that investment. the nikkei is reporting the home appliance retailer will start

selling mitsubishi electric vehicles. the department store operator is among some of the companies that will report theirwill report thy and watching chip stocks after micron technology gave that up the forecast for the current time. coming up in the next hour, standard chartered's head of equity strategy explains the two extreme scenarios they see in the second half based on whether or not the u.s. could avoid a recession, whether it's a soft landing, no landing or deep recession. we get in out landing when it comes to the yen. the market opens in sydney, seoul and tokyo. this is bloomberg. ♪

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shery: this is "daybreak asia",

counting down to asia's major market opens on the back of hawkish commentary coming from the central bank including the fed, ecb and boe. but the big outlier is the bank of japan. haidi: the question is for most of these global central bankers and the questions investors have, how higher we going to go and how long will we stay there for the bank of japan it's when we are going to come off these ultra easy settings and they really have just been consistent messages in terms of more confidence in that inflation outlook from the governor. annabelle: big disappointment from those comments to any yen bulls out there. the open for japan, south korea and australia. for japan, south korea and australia. the start of the day is focused on what we heard from the global

bank meeting happening or panel happening between powell and his colleagues at the g10 central banks. in terms of the key takeaways, it really was an expectation that there needs to be further tightening. powell flagging to more hikes this year so it will be a fast end to that rates pause. the take away for investors is that we are nearing the end of the tightening cycle. the wall street session we saw those comments brushed aside. in terms of the reaction we see in asia today, we have seen the end still holding firm around that 144 level. we had been tracking any signals of further intervention we could get. jawboning has been the key theme this week from government officials. the nikkei 225 is coming online just a little bit for making it for 10th of a percent higher and we will be tracking any micron or chip related stocks given we had that stronger forecast coming out. let's change on because we have the open of korea today. at the start we are focusing on relations between korea and japan because we are expecting

finance ministers from those countries to meet later today and they could be discussing a currency swap deal that was allowed to last just under a decade ago. that will be a key one to watch. in terms of other focuses, chip stocks, news around micron and keeping a check -- track of what's happening to the korean won. we see more firmness coming into the dollar, so we can see the korean won trading past that key 1300 level. let's change on because australia also coming online. at the outset we are seeing the asx 200 fairly flat in the session. but put it in context because we saw the asx 200 rising by the most in more than two months in the prior session, that was after we had that much weaker than expected inflation data coming through. still elevated but weaker than what economist were expecting. that boosted the case for the rba to pause. the next dataset we are watching for his retail sales do in the next hour. about 90 minutes away from now.

lastly, checking how oil is coming online. brent crude is under pressure this morning. the assessment for the trade is now less focused on the fundamentals and more back on the recessionary outlook. more focused on the issues around u.s. stockpiles. haidi: let's bring out our next guest who sees two extreme narratives in the second half of the year. with us now is daniel lam, head of equity strategy at standard chartered wealth management. it's a difficult, if binary, situation that sets binary, situation that sets up investors. is there a middle ground where you can comfortably hedge the possibility of either scenario? daniel: basically, we are looking at paying the money into the high quality bonds because we believe that, yes there are likely to be two more rate hikes from the feds, but it is coming to the end of the hiking cycle.

so, typically, in times like these, these bonds would be doing pretty well. haidi: that's your bond strategy, what about equities? daniel: in terms of equities we are overweight japan and also asx japan, we are neutral in u.s. equities because we believe that the economy is doing well in the u.s., as chairman all has commented. so the recession probability or the recession timing has been pushed out to the first quarter of next year. ofof course, tech stocks contine to be relatively strong, and that's the major relatives stays for u.s. equities. one would be seeing two things. of course you are hearing that the fed narrative stays hawkish in a way, and also the fact that

the economic expectations has been revised upwards in the u.s. it becomes much harder for u.s. economic data to beat their expectations. so there economic surprise was really one of the key reasons why u.s. equities up and doing well over the last few months. if the hurdle gets higher and higher and investors may be rotating into other regions, such as chip and asia. shery: i want to get here to call, especially u.s. tech, but let's go with japan. the japanese yen, very weak. what happens if the boj does pivot? it doesn't look likely so far from the commentary, but we know this is adding more pressure to the bank of japan. daniel: correct, that dollar-yen, we got the watch levels around 148 to 150. that's the key resistance zone for the dollar-yen. at that place, they may be forced to do something.

intervention of some sort because it's just getting to weak in terms of the yen. if the yen were to strengthen because of this intervention, then, it is likely that we may see a correction in japanese equities because of the typical correlation between the dollar yen, also the japanese equities. stronger yen would hurt copper earnings. that's a major driver, but on the other hand, if you are like a dollar denominated in japanese equities, basically you would be gaining from that front. plus the fact that this time around, unlike the last 10 years or so, there's a new factor in japan. that's a structural factor. so we believe that if there were to be strengthening yen, which may hurt japanese equities, it would be added to the japanese equities at that time. shery: u.s. tech, can we still at their because we are already at high levels?

daniel: in terms of u.s. tech, we would be looking for pullbacks. if you look at -- not so much of the top tier tech next, but more like the end of the top tier and top of the second, those names have already shown signs of tightness. i would call it. basically, one would be looking to add if the nasdaq 100 falls to 14,005, around that level, that would be a reasonable level to look to. shery: have you talked about china yet, because of course there is still mixed sentiment around what we could expect around china when we aren't necessarily quite sure where beijing is headed, but at the same time we been waiting for that stimulus measure to come.

daniel: the stimulants we were used to in china, big scale stimulus, they are not likely to be as prominent as before, that's not the intention of this new government. the intention is to try to steer the chinese economy into a higher-quality economy. and that would involve stimulation in consumption, consumption of maybe the smaller items, not too much of the building bridges, but the smaller items, high-quality end. the chinese growth has been scaled down over the last four to six weeks, and that makes the

chinese economy easier to beat a lower hurdle. so that's important. also the fact that -- the money goes around the globe, every market is collecting. if investors see that the u.s., yes, the fed narrative is getting more and more hawkish, the tech is looking top he, etc., then they should look to rotate out of the u.s. we reallocate some of the u.s. equities into other markets and we believe that with this cheap valuation, china is likely to be a beneficiary of that. shery: especially with the pboc going in a different direction. daniel lam, thank you for being with us. when we talk about china, we also have to talk about they geopolitical implications, the tension with the u.s., especially when it comes to the tech sector. what are you watching? annabelle: one of the companies as face that geopolitical headwind.

it was micron and it was something they spoke about in the latest earnings call and saying they continue to face challenges in china. we have an up eat forecast coming out from the memory chipmaker. essentially it was indicating that the industry block that they face could ease their sales to as much as 4.1 billion u.s. dollars in the fiscal fourth-quarter. we saw micron rising 4% in extended trading. these are big suppliers and again, you can see they are moving to the upside, just a quick note because we are 10 minutes into the session, asian stocks are higher. trading volumes are off the 20 day moving averages. also noting something else that came out, data fed has released every thursday at 7:50 a.m. hong kong time. essentially it is the buying and selling of japanese stocks and bonds, it tracks the data ending the week prior. this reading taking a look at

the week at the week ending the 23rd of june. essentially it shows the first net outflow we see in 13 weeks. 12 straight weeks of gains that we just ended that streak in the late -- latest dataset coming through. haidi: still ahead, the boj governor says a policy shift may be possible if inflation picks up next year, we get reaction. the first, china aimed at hitting back against western sanctions. we take a look at impact for global sanctions, next. this is bloomberg. ♪

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>> we still have ground to cover. >> although policy is restrictive, and may not be restrictive enough and has not been restrictive for long enough. >> we are data dependent, we will decide on a meeting by meeting basis. >> we are evidence driven. >> on the line, inflation is a bit lower than 2%. that's why we are keeping policy unchanged. >> if our baseline stands, we also know that we will very likely hike again in july. >> we are going to move the decisions with a little more time in between them. >> we will do what is necessary. >> i wouldn't take meetings off at all. shery: top level central bankers

flagging further interest rate hikes, agreeing that inflation is not yet tamed. japan remains the big outlier in the monetary policy stage. kathleen hays is here with the latest. let's talk about the fed, ecb and boe. kathleen: nothing has changed. inflation is not under control and they will keep hiking rates. it was interesting to hear them in conversation. to hear them speaking in a relaxed manner, going over there latest thoughts. let's just go back over the things we heard, starting with jay powell. to me, it jumped out when he said policy has only been restrictive for a short time. you go, they've hiked rates by more than 500 basis points, what's not restrictive about that? what he is referring to is, in a classic sense, until you get the inflation funds rate above your inflation rate, you would have a real fed funds rate, then you are not restrictive.

he seemed to be indicating he will stay restrictive for a while. he's not ruling out they could do a july hike after having paused in june and move again in september. by christine lagarde, she talked about being data-dependent. the july hike she indicated in the first day of the forum, the forum in portugal, probably with the july shift coming unless something really extraordinary shifts in the economy, but she is keeping the door open to september, making it very clear it's about the numbers. andrew bailey, president of the bank of england said -- or governors said that he open the door to the rate hike. they surprise the 50 basis point rate hike. some of the gist of the questioning to him was, well, another 50, what do you want to do, what's driving it. he has to see the goods prices inflation coming down purities confident it will come down. for now, he won't commit to any size, just the fact that the

door is open and that's probably where they will go next. andrew bailey, in particular make -- making clear more rate hikes are needed and not so close to a pause. christine lagarde, if they do in september and stop there, i guess they are pausing. jay powell is a question mark. they think they have done enough for a couple more hikes become the end of the summer they have a better idea of where they are. haidi: japan inflation is rampant right now. the governor has no love for the yen. kathleen: of course he doesn't like having them out there but when he was asked about it, he differed quickly. he says, that's not what the boj does, that's the job of the ministry of finance. he said, yes, it's being monitored, but it's something they are watching but he quickly made it clear, that's not what's driving policy. what's driving policy is inflation and we aren't confident yet that even though some key measures, the headline,

the core cpi that takes out fresh food has been well over 2% for more than a year, he's still concerned about what wages will continue to do. will they continue to rise? confident that they may. he seemed to open the door to if they can get confident, that inflation will be sustainably at or above 2%. maybe between, whatever the first one is, could start this year. he didn't say they would wait until 2024 to see, just over the course of the year, where they think it will be. but it sounds like it's got very finely. probably nothing of the july meeting in just a few weeks, even though they could be forced to raise their inflation forecasts. when i was last in tokyo a lot of people think october is the likely meeting where they could start making a move. haidi: global economics and policy editor kathleen hays. the ticket look at our futures in europe. so much focuses on global

central banks. how high they go and how low they are really going to stay there as we hear from -- we see u.s. -- euro stocks 50 futures a little higher about 2/10 of 1%. we saw stocks in the region rising modestly. the recent declines in textures seeing a decline in real estate tracking bonds higher. the futures up by 2/10 of 1% as we continue to really watch the concerns over the economic downturn across europe and the ecb warning that the hiking cycle is unlikely to end anytime soon. shery: china has enacted a foreign relations law, giving it a right to take retaliatory measures against sanctions. state media gives beijing a legal basis to tackle western hegemony. our greater china senior executive editor is with us from beijing.

why do they actually need a law? we have seen beijing put retaliatory is sanctions in the past. >> this law is more interesting if you look at it as a declaration of intent instead of a blueprint for action. as you said said, beijing has nt been shy about using sanctions, they've put tariffs, they blocked trade when it comes to -- look at australia, for example. they did it again south korea when seoul decided to install radars from the united states a few years ago. that has been happening. it is possible that with this new law, with a more solid legal backing for actions such as that, that we might get a more clear cut, forthcoming declaration of such sanctions, where in the past, when they've taken action against australia or south korea, that has been

more covert. the australia sanctions were never publicly acknowledged. could it potentially provide more clarity when it comes to foreign nationals working, investing in corporations and organizations within china? there are others that talk about the endangerment of national security and the like, which, in purpose and content overlaps with some of the other policy crackdowns that we've seen. > i think there is an obvious restricting of access to information and data that's happening in china. the chinese authorities would explain it as a need to better protect national security, and that's why they are doing that. obviously for foreign business people and investors, it makes it more difficult to do business in china. the florida relations law that has been passed, i think that potentially will provide more insight into future actions and

policy planning, but i do not think it would change the overall trajectory of where china is going in terms of the actions it will take. as the relationship between the united states, china and the west deteriorates, i think we will see more sanctions, punitive actions by asia. shery: bloomberg's greater china senior executive editor with the latest. plenty more to come on daybreak asia. this is bloomberg. ♪

>> what we are doing differently at this media outlook is to break that out and explicitly call out a conviction in the developed market, ai, which ai,e

have had indirect exposure to, but now we want to call them out explicitly because the interplay between the cyclical framing and the structural mega force is so complicated and nuanced that we cannot afford to model them and mix them up together. shery: our global chief investment strategist on why they singled out ai as a mega force that could drive returns even in a tough macro climate. take a look at how some of those chipmakers across asia are training. take a look at samsung. we are talking about gains of 6/10 of 1% rising for a six consecutive session. this will be the longest winning streak since june of 2020. it's also at the highest level since january of last year. that's the same case for tokyo as well. over in japan it's been gaining ground for three sessions. of course it hasn't been helped by micron having an up forecast in their earnings results. today, let's discuss more with su keenan, but we had to watch

the impact of the china investigation for micron. su: that's really creating significant headwinds is the word that the ceo used in it's really cramping their outlook, which was much more upbeat than expected because it seems that micron is signaling a huge backlog in ships has finally been worked -- in chips have chips have finally been worked through and investors seem to be cheering the news on. the largest u.s. maker of memory chip says sales will be as much is four point one billion in the fiscal fourth-quarter and that beats the estimate of roughly 3.9 billion of the ceo saying he believes the memory industry is past its trough in revenue and expects margins to improve as the chip industry supply and demand balance returns to normal. that said, he points again to those recent actions in china where the government has decided that micron's products or big problem, and basically welders trip does chips from critical infrastructure. you see shares that rose earlier

as much as 4% after hours, mainly on that positive outlook, but microsoft has warned that half of its sales tied to china headquartered clients could be affected by the china probe and that presents a low double-digit percentage of its global revenue. but significant nonetheless. shery: especially given i was talking about samsung and sk hynix, they don't face a probe in china. su: you saw green on the screen for the korean competitors. we have -- they have this advantage of not being caught up in the geopolitical strife taking place between the u.s. and china. on the conference call, micron ceo said the situation in china remains uncertain in fluid and that micron is working to mitigate this impact over time and expects quarter to quarter revenue to ease out in terms of variability. the company's long-term goal is to retain global market share. clearly, the situation is taking a bit of a hike.

some analysts say a lot of clients based in china will find ways to navigate through this situation and the right will not be as significant as into sedated. shery: bloomberg su keenan in new york with the latest on micron as we continue to watch those semiconductor makers across asia. more to come on daybreak asia. this is bloomberg. ♪

haidi: this the last day of the world economic forum in china and our chief north asian correspondent stephen engle been covering the event for us.

what's coming up when it comes to this final day and some of the takeaways for so many conversations at a critical time to be held in china at the moment. stephen: absolutely, he hit the nail in the head right there as far as the world economic forum happening here in china. the first since 2019. just to have the new premier speak to the international business community with his message is simply saying, china is open and welcoming. xi jinping is in the meeting with the new zealand prime minister after he was at the world economic forum, he went to beijing and met with president xi and he relayed the message that china is open and welcoming. sort of blessing, not by name, but blasting efforts in the west, in particular, the united states for lacking sincerity and essentially limit china's developments. those are well-worn messages, obviously from beijing, but again, the key takeaway has been

china's effort to lure the business community and to strengthen business-to-business tiesties while diplomatic ties e probably strange, at best, and military ties between china and the united states are almost nonexistent. but we will keep on going with our coverage. we had another noted interview coming up in the 9:00 hour with noted economist and professor of corner does cornell university, he wrote the book, and i've been going through it, it's a wonderful book, and it's called the future of money. we will talk about cryptocurrencies in the future of banking. he has already given a few doorstop interviews on the sidelines at the world economic forum. he is calling on china to unleash more stimulus in the form of interest rate cuts or other stimulus if the economy continues just butter. we will talk about that as well. we will talk a little more about the foreign relations law that was just passed by the standing committee of the national people's congress, it was just

revealed overnight that essentially, the standing committee has passed this. it's not a lot new because china has always taken its right to punish, if you will, any kind of aggressive moves diplomatically to limit it in to break what it regards to be international law or international good practice. but this will enshrine xi jinping's efforts to be able, legally, to counter any most of diplomatic pressure and again, this is in response to some of the moves that have been happening by the united states either through export controls or impending executive orders on the high-tech export. bus to discuss this morning and we are in the best place to do it right here at tengion somewhere davos, final day wreps up midday. shery: stephen engle joining us from the world economic forum. as now, back to annabelle for a check of the markets. what's moving?

annabelle: probably a question of what's not moving, because it is quiet in the session half an hour into trading for japan, australia and korea. trading volumes are well off their 20 day moving averages. does that tell you that is just a lack of catalyst to drive any sort of momentum in either direction. picking up on the different things we are tracking of the session. we had micron numbers out after the bell. memory chipmaker forecasting a strong outlook so you can see when looking at the equities picture, there is the performance of the tech heavy sectors. the nikkei and also the kospi. when you move across to take a look of a look of the currency space, we continue to track a few in particular. the offshore yuan standing out naturally past that 7.2 mark, but it is a reflection, more of the dollar strength coming into the session, which is weighing on the commodities complex because you have these metals that have been dropping. we have seen them rising a little bit but it was more down

to the expectation that china would be forced to issue a larger scale stimulus. but again, the dollar strength is over taking the picture today. bonds were muted, not very much for movement in either direction, it does tell us perhaps investors, largely brushing aside what came through at the centura meeting or form between jay powell and his g10 central-bank peers. he's flagging further hikes to come that was understood by investors who also said, we are near the end of the tightening cycle, so 25, 50 basis points doesn't really matter too much. shery: i was hoping you would give us more exciting and juicy and the markets, but, yes, it has been a quiet couple of hours on the breaking news side of things and even the japanese yen is stabilizing. after falling to the seven month low against the u.s. dollar. they are now holding at that 144 level. let's bring in our next guest who says he's an unashamed

dollar bull. with us now is the director of the -- group. the expert to cheer us up. give us expert in exciting commentary on where the yen is headed if you are an unashamed dollar bull. >> it is quite straightforward in the sense that you've got at least three big forces. you've got the raising interest rate differential, you've got -- for the corporate world, a very ruthless america first industrial policy. every japanese ceo i speak to his thinking about raising, building a new factory in the united states because america has become very focused on america first, you have to produce there, so that's capital flows. on the negative side you find that japan's exports are not really picking up, so the trade balance continues to be in deficit, which does point to a weaker yen, stronger dollar.

shery: when does it become a problem for policymakers for the boj, and when can we expect them to act and will acting actually help? >> i think for all intents and purposes, the plan is very clear in what they want to see. they want to see domestic demand full inflation. evidence that it is actually opening their purse here, that you have price power not because of inflation from higher import prices. we are still far away from that. so the n weakening to 150 1, 60 is not a bizarre forecast. haidi: there's been concerns and criticism over other central banks starting their inflation fight too late in the complication of this endgame. are there policy risks for the timing of when the boj governor does or does not act?

>> there is always risk, with they are missing is japan is embarking on fiscal tightening. remember that just six months ago we did get another covid support package, so the unwinding of fiscal support measures over the next nine to 12 months, is actually going to be a break on aggregate demand, and to some extent that does tie the hands of the bank of japan, so here you get fiscal tightening rather than monetary tightening in japan. haidi: how different and contrasting are the circumstances when you take a look at the last time we had intervention in the yen or verbal intervention in the yen and how likely is that going to be effective this time around? >> i don't to get will be effective because the interest rate differential is wider, if the fed does follow through and give us another 25, 50 basis

points to further interest rate differential, if you are in the business of making money through arbitrage, that is a gift you will take. i think the bank of japan is not going to fight the fed, they will only intervene if it becomes clear that these two rate hikes in america are off the table because if they intervene while u.s. interest rates are going up, that will just be money thrown into the wind. shery: given what central banks like the fed and the ecb npo a year doing, and we continue to hear more hawkish rhetoric, how helpful is it to establish back this currency swap with south korea? shery: you are now coming to the interesting points. policymakers are very aware of tightening the safety net. if and when the next global

aviation global aviation stock starts to rise, and it will because we are in a capitalist system, what is the safety net that needs to be billed, so from that perspective the japanese minister of finance coordinating with korea to tighten those swap lines to have liquidity provisions in the case of the next emergency, is very, very important because we do need to know that there is a strong safety net by central-bank for the next round of risk. shery: what are the implications of the week japanese yen relative to its neighbors, who compete against japan when it comes to those exports. >> now it gets interesting. i think it's not about dollar, that's what we all like to talk about, but the reality of trade complications comes from asia-pacific and of course from the people's republic of china. really, everybody here in tokyo, we are all very focused on if and when the people's republic

of china will be forced forced o devalue its currency, and i don't mean a 2%, 3% up creep or down creep of the renminbi. we are talking about a stepped evaluation. that's what the real next crisis will be about. haidi: great to have you with us. some of the other stories from around the world we are watching, china passing legislation, enshrining the right to retaliate against foreign sanctions. state media says the new -- will serve for moves for what they call western hegemony. beijing will impose sanctions on lockheed martin and raytheon technologies over armed sales to taiwan. pakistan is reportedly in talks with the imf or a new $2.5 billion quick standby assistance with the existing program expiring on friday. they propose short-term agreement with an upfront disbursement of $1.1 billion in

the next 15 days. pakistan has been taking steps in line with the's prescriptions to gain access to a $6.7 billion bailout program. president joe biden has touted his economic agenda as he seeks to bolster his reelection prospects. in a speech outlining his policies, he contrasted his by an mx. with republican small government philosophy. biden says his interventionists approach has rebooted the industry and added 13 million jobs. president biden: trickle-down economics didn't matter whether you made thanks, as long as you help the country's bottom line. that meant seeing jobs and industries going overseas for cheaper labor. supply chains and key products moved overseas like china and much of asia. haidi: coming up, wall street's biggest banks passing the banks annual stress tests will face higher capital requirements from

regulators. more on that is next. this is bloomberg. ♪

shery: take a look at trading across asia, we are seeing sectors in the green on the utilities under pressure right now. health care and information technology, biggest gainers. we have those semiconductors

gaining as micron had an upbeat forecast. financials are also in the green. haidi: we've been watching these stress tests on u.s. banks. 23 of the largest lenders in the u.s. passing the fed's annual stress test, clearing a key hurdle for returning billions of dollars to investors. let's get more from bloomberg's finance editor. what did we see in the results, this doesn't necessarily pave the way for confidence in announcing these payouts. >> know, but i think if you look at the reactions and markets, it's quite instructive. you did have a little bit of a rally, look at bank of america up 1%, 2%. so the idea here is really the overall -- there weren't big concerns that came out of the stress tests. this was done post of what we went through in march in the early part of the year. the regional banks coming under pressure. the top level for the biggest banks is there's no real kind of

concerns here. a lot of this is really about waiting on the new capital rules and the new requirements depending on how much of a buyback and how much of the dividends investors will get back from some of these big banks. but in the sense, i don't think this really changes the landscape too much for that. it's really about a judgment on the economic outlook on the judgment on business areas going into the back half of this year. shery: what can we expect in the back cap for these banks then? >> i think really what this leaves us in a position of, as people like jamie dimon and jp morgan has been out here for some time, it's not the same time to have the requirements on banks are on capital requirements of banks. on the regional level banks are going through rebuilding of capital post everything that's in happening in the regional bank sector with some of the blowups there.

but on the bigger end of town, with some of the bigger banks swallowing up these assets from the regional banks, they are in a position now or they are facing still continued pressure on the investment banking side. areas like m&a are still under significant pressure, and even though the economy still looks pretty fragile, people concerned about when the fed might need to start cutting rates into next year, even if they do one or two more hikes, it still leads a pretty difficult environment for the things to hang back significant capital to shareholders. of course if there is still room there for some buybacks and dividends, but it's not at the scale that we might've seen if we think back to of, 18 months of the last just as with the economic picture was looking far more worse than it is today. shery: our finance minister with the latest on the fed stress

test results. some of the stories on the terminal, bank of capital markets unit is cutting about 100 positions in response to a weak environment for deals. a source tells us about half of the jobs lost are those in canada. the banks says it's focusing on managing expenses or providing support to the employees affect it. it's capital markets revenue dropped to 280 $7 million in the fiscal second quarter. tiger global is said to have turned down hundreds of bids for its private assets because the offers were too low. our sources say the firm had explored selling its stakes in mid and late stage startups to provide cash to investors and some of its older funds. some assets here look to unload more at higher valuations in recent years. money manager seeing record losses for his oil hedge fund. an investor letter seen by

bloomberg shows that his flagship fund fell by another 7% this month, extending this year's losses for about 51 percent. lower oil prices have challenge the bullish call that it may exceed 140 dollars a barrel by the end of the year. be sure to tune into bloomberg radio to hear more from the days big newsmakers, getting the analysis from the daybreak team. listen through the app, radio plus or bloombergradio.com. plenty more ahead. stay with us. ♪

haidi: taking a look at the landscape across commodities, as of course, uncertainty over central-bank policies as well as a risk of recessionary conditions, really putting some downside pressure when it comes to some of these base metals, including iron ore continuing to potentially lose more ground. we are still on rate for china stimulus, perhaps that is where the optimism is coming along from, but that risk of disappointment is certainly there when it comes to underperformance going forward for iron ore. we are seeing weakness when it comes to copper dropping as that week china data follow to three week low when it comes to copper

prices, the factory data, the surgeon the dollar weighing in terms of overriding hopes of fresh stimulus out of beijing. saw industrial profits from china down 13%, and copper being that key growth is headed for the first quarterly growth drop since the first quarter of last year. also watching oil, pretty steady. a little bit of weakness when it comes to trading, as well as crude, we did see further declines in u.s. stock files, and that has given a little bit of optimism when it comes to this broader market, which has been way down more on the demand side. shery: swire's pistachio swire up for because become the second notable hong kong company to announce plans to offload assets. it's reducing debt in the face of rising borrowing cost. for more, let's bring in our china credit editor. what are they selling? >> swire's is selling a

u.s.-based beverage distributor in 13 states mostly on the west coast, and it selling it as a day after a developer in hong kong called new word -- new world is selling a property group of assets to an internal -- a major shareholder. we have two major shareholders in two separate companies within two days of each other buying assets from listed entities to give them extra cash. shery: does this signal any signs of concern or a lack of confidence with these firms? >> it doesn't seem so because these are controlling holders and both of these firms that are injecting assets -- injecting cash into these companies. but this really boils down to the interest rates being higher for a longer. central banks around the world have indicated that there is not going to be any near-term interest rate cuts. if anything we might see more

interest rate increases with the ecb, the eu, the u.k. these companies are setting themselves up for making sure they have enough liquidity, enough cash to make sure they can write out any extended long-term. we've seen what's happened with chinese property developers last two years on the liquidity crisis they have faced in these hong kong companies don't want to find the same fate. haidi: our china credit editor. this take a look at the stocks we are watching ahead of the markets opening in hong kong and china. chipmakers and asia are very much in focus. micron technology giving that upbeat forecast for the current time despite these ongoing geopolitical concerns. we will watch the likes of tsmc, smic as a smpte as well after those signs that the chip is in fact easing. this is the logistics arm with alibaba will offer same day or next day delivery for merchants on all the bubbles platforms.

we will watch tencent to allow overseas visitors to china to add international visa credit or debit cards to their we chat accounts. and people -- a lot of people have been waiting for this and it has been a hindrance in the past. byd has a plant in brazil. as we just heard from swire excelling gets u.s. beverage business to the controlling shareholder john swire and sons were $3.9 billion. shery: take a look at how stocks are trading across asia right now, we are seeing the nikkei gaining about 8/10 of 1%, and we have now tech and health care, energy and utilities under a little bit of pressure, the cost be great -- the kospi gaining ground. this as we see samsung electronic with the longest winning streak since 2020. we are keeping a close eye on those currencies as well, given that the japanese yen is strengthening a little bit, but

still very weak against the u.s. dollar, we are talking about levels we haven't seen in around seven months or so. still to come, hsbc says that while trips surge during china's recent holiday capita for spending has and overcome. the bank's chief asian economist looks at the recovery timeline later. we will also look at chinese consumption trends and some ride sectors with macquarie capital. that's it from daybreak asia were markets coverage continues as we look ahead to the start of trade in hong kong, shanghai and shenzhen. this is bloomberg. ♪ i was told my small business wouldn't qualify for an erc tax refund. all these walls gotta go! ah ah ah! i'd love a second opinion. take the first step to see if your small business qualifies.

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