it's an amazing thing when you show generosity of spirit to someone. and you want people to be saved and to have a better life, then you don't stop. the idea that we have saved five million people's lives, it's overwhelming. it's everything. >> this is "bloomberg daybreak:

europe third lizzy burden in london. the bank of japan surprised global markets as it is just the yield curve control program. yields jump. we will have the reaction throughout the morning. the ecb president christine lagarde says the september is a life policy meeting after a ninth straight rate plus, standard chartered announces a $1 billion share buyback after reporting better-than-expected second quarter profits. don't miss our exquisite interview with ceo bill winters at 6:30 a.m. u.k. time. good morning. happy friday and we are going out of this week with a bang. there's only one show in town and is the boj. it has kept policy rates at -0.1% but adjusted the yield curve control program, not widening the band but giving more flexibility. we will bring you full team coverage let me bring you up to speed on the market moves.

the yen slumped against the dollar and then the traders realized this is a change in the band effectively even if not officially. now we are at 138 handle. you have seen dollar strength after strong u.s. data yesterday and then speculation on the boj ruined it taking yields another leg higher. of course, the yen on treasurers have a difficult place but the fed has to stop at some stage and the boj had to start. we look ahead to the welsh reopen, s&p e-minis have been all over the place but currently they are pointing to a higher open. these markets are confused. we have got for the morning roundtable david inglis. he has stayed on a marathon ship throughout the morning and we also have as always valerie tytel. thank you to you both. the bank of japan has jolted financial markets and announced an adjustment to the yield curve

control program, a step that will likely spur talk of potential policy normalization and marks governor kazuo ueda's first job from taking the home. this man is credited with the concept of forward guidance and yet he has shocked the markets this morning. write down his policy decision for us. david: one of the analysts that we talk to called him a good communicator, and i guess in some ways, if it was deliberate, it was genus in some ways because this time yesterday, this decision was not an event largely speaking. there was always a threat of a surprise because it is the boj but looking at the market reaction, it was a nonevent. then we had the nikkei report 10 or 11 hours back which raised expectations of the boj might up to something. when the statements came out, there were a lot of details and they over delivered arguably

when you compared to the nikkei report which was short in details. we are about 90 minutes divorced from when the statement dropped roughly speaking, and the interpretation of these markets is now in some ways clearly more hawkish. the dollar is that a session low. you are seeing yields on a 10-year jgb pushing higher, the highest level since march and the highest level above that rigid ceiling that the boj had penciled in at 0.5%. all the commentary coming out is certainly a guessing game. to what extent will the boj tolerate yields moving up and at what level do they step in because they have kept that optionality in their with 1% daily by as far as jgb's are concerned -- daily buy for jgb's. it was a surprise for sure. lizzy: japanese banks had a lot riding on this. what is the broader equity picture? david: that's

interesting because this group, to take a massive step back, that has underperformed the broader japanese market. i'm talking about the topics baked index. -- bank index. when you start from january until this time last year, it underperformed the topics index. rates were florida and a group of companies that was the victim of monetary policy, now that they started adjusting on the margins, we had to adjustment last year, the market started to outperform. what happened today when the news dropped, we are up 4% and we are now one hour until the close, on track for the best day for japanese banks going back to the start of this year. lizzy: valerie, take us through how this is rippling through global markets. valerie: very interesting. we are seeing the yields on the japanese 10 year rise from 10 basis points but not a lot of

pressure on the treasury market yet. the 10 year treasury is just up shy of one basis point. they are searching to year to date highs. they took a very largely forward by the close yesterday. of the year to date high on the 10 year yield is 4.09%. we are not just above 4%. i am interested to see if we get more clarity is in the press conference. if we don't see another bout of yield surging globally if the jgb's take another left higher. overall, ok sentiment in the markets. e-minis in the green up 0.2%. nasdaq futures up 0.3%. maybe it is a hawkish tilt on the bank of japan but globally, markets are not very reacting as risk off as they did the nikkei report late last night. lizzy: thanks to bloomberg's david inglis. we will let off to rifle through the pdf documents ahead of the press conference later.

i will take you through the other development are watching out for today. after yesterday's ecb decision, we have french inflation for july coming in it 7:45 a.m. london time, expected to up on slightly thanks to lower price food and nonenergy industrial goods. at 1:00 p.m. we have the same for germany, inflation likely only to have taken a baby step down before a bigger fall in the coming months. you might even see core inflation climbing to a record high. finally, at 1:30 p.m., u.s. data for june likely to send mixed messages the need for restrictive monetary policy. bloomberg colonists say the headline figures could probably fuel soft landing that -- bloomberg colonists -- columnists say it could be a soft landing. valerie: it depends on what they

think the effects of the inflation is now that the economy is slowing down. there is soft data out of germany and the economy is slowing there. the prince today, don't forget we have not just one inflation print but to rounds of inflation print between now and when they meet again. yesterday's data is important but it will not be the be-all and offer what the ecb does in september. lizzy: terms of u.s. data, there is uncertainty about how big, would, distributed american savings are. valerie: pce data today will be important, the fed's favorite measure of inflation, the core pce number with the consumer expenditure data today. i want to know big -- within the gbc -- the gdp data we got a quarterly figure we can back out what the monthly figure is from that. it is likely to comments up-to-date which again is great news -- come in soft today which

is great news. the gdp coming in at a huge surprise yesterday and inflation components continue to soften. this is opening the door for a soft landing. besides hawkish surprises from the bank of japan, that would be a gateway for more equity returns. lizzy: thank you valerie tytel. hubley -- she will be with us throughout the program. you can get a roundup of the stories to get your day going in today's edition of daybreak newsletter. today, they lead on the boj and have standard chartered. we will bring you the seal interview off the back of those earnings later in the program. they have a story about saturday's first global mining deal. check out all of that by going to dayb on the bloomberg terminal. you can see we have lots of earnings this morning. today, 11 more companies reporting on the s&p 500, 40 and stoxx 600 and we can bring you

those right now. let's start with bbva, the spanish bank. it has reported second-quarter net income of 2.0 3 billion euros, beating estimates. it also got tier one capital ratios of 13%, slightly lower than estimates there. it is buying back up to one billion euros of shares because of this profit jump. yesterday, bbva named the new ceo, a 20 year veteran of the bank. has been caught in the headwinds of the ecb rate cycle drawing to a close and political uncertainty in spain which raises questions about the bank levy there. the shares are up almost 30% year to date. let's stick with spanish banks but move to barcelona because we have bank earnings from caixabank. net income of 1.2 8 billion

euros in the second quarter, beating estimates of 1.4 billion. the bank plans to start a new 500 million euro share buyback net interest income also. we will hear from the ceo at 7:30 a.m. u.k. time. let's stick with banks of a move to standard chartered. has raised forecasts for income growth for 2023 and double down and share buybacks. rising interest rates propelled earnings. the bank reported a 27% rise in pretax profit the second quarter, comfortably beating estimates. the asia focused lender announced a $1 billion share buyback program which will start imminently. off the back of the earnings, do not miss the exclusive interview with the standard chartered ceo bill winters at 6:30 a.m. u.k. time. coming up, if surprise from governor ueda. what does bank of japan policy

change mean for market? this is bloomberg. ♪

lizzy: welcome back to

"bloomberg daybreak europe." the bank of japan has halted financial markets after announcing a tweak to its long-term yield curve control policy. governor kazuo ueda's first surprise move is sending japanese banks surging. joining us now is mark cranfield for more. the boj is front and center today. break down the significance of this move for us. >> one of the ironic things is he's the only central banker this week but did not that he was data dependent. that is exactly what he has done. he put japanese bond market on a path to data dependency. it is confusing about what they are saying but essentially, we have a new limit for japanese yields at 1% rather than 0.5% which we had before today. depending on how the data goes, japanese yields, if the data stays strong, japanese yields

will gradually work their way towards 1% target. it seems like a long time ago now but our day started with tokyo cpi surprisingly hot. it usually means that when there is an upside to tokyo, we get the same the national cpi figures as they come out later. we already had a market under a bit of pressure even before the bank of japan meeting, and now it begins to make more sense. japan will have stubbornly high inflation, then it does not make much sense to try to keep yields down. the bank of japan is not going to leave the market alone completely. it will be there to stabilize the market is all good dental banks to when there is high volatility. they will come in and smooth the market, especially the bond market, the one they don't want to get completely out of control. they've also made it fairly clear that if the data is good enough to push yields higher, they are not going to stay -- stand completely in the way as long as on a day-to-day basis the yield don't rise to quickly.

it is also good for japanese banks, of course. you can see it is heading for a great day because they can expect wider interest rate margins. there are a few winners out of this. it has been very volatile and we will learn more than a press conference later. lizzy: mark, give me a breather from the excitement about the boj. let's come back to the ecb. we had a 25 basis point hike with christine lagarde saying she will keep an open mind for september. what are you reading? mark: they are in a spots. inflation is still too high. ecb does not want to relax on inflation and get the bond market, especially the european bond market which could get ahead of itself. if they sound to dovish on the inflation point of view, they could have yields going much slower to quickly. they are trying to keep an open mind and september telling the market they would be ready to hike again if necessary. for most strangers, the reality

is they see the ecb on hold and they would need to be really shocking inflation data for the ecb to hike again in september. we will play this game for some time because they cannot sound too dovish just in case the euro crashes and bond yields come down to quickly. that would be destabilizing for everybody. they go back and forth over the data points the next two weeks but most people think the ecb is done and it will be a long pause. lizzy: meanwhile, in the u.s., consumers on the economy have been looking quite resilient the second quarter. does that backup jay powell's decision is week? mark: the fed must be patting themselves on the back because it looks as though it will achieve their soft landing which 11 people did not think was possible with the inverted yield curve telling you a recession is not far away. most people were very skeptical that the fed could achieve a soft landing that looks

precisely like what they will do based on the data we have seen recently. don't forget, there are two months until the next fed meeting and two sets of cpi and job numbers plus a lot of other things as well. it is a very fluid situation but certainly, the fed has put themselves in a strong position where they may be able to pause and convince the market that they will hold the fed funds rate above i percent for a long time which is what they have been trying to tell the market all year delete. lizzy: we still have the bank of england decision to come next week. is it as simple as following the fed and ecb and going for a quarter-point? mark: they might be tempted to from to load the temptation for the bod -- inflation is higher in the u.k. than most places. they might do another 50 basis points but signaled that they will pause for a long time. that might work out to be a smart move. it would take the market lately

by surprise and give a bit of confidence to sterling and probably settle the bond market down quickly. it would be a bold move but given that they have had problems with communication and the market is skeptical of what the bank of england is doing, they might be brave enough to go for a big hike but say they are pretty much done for this cycle. lizzy: mark, as i always say, you cannot load at the back and. -- back end. we had fed the -- the better than expected inflation print. thank you to mark cranfield for that tour around the globe in central banks. i want to bring you breaking news out of unilever. it has named a new chair designator. we will have more news on that front the morning. we also have breaking earnings from airfrance klm. airfrance klm second net income coming in at 604 million euros, a big beat on estimates there. the second quarter operating

income coming in it 733 million euros, another big beat estimates of 648.6 million euros. second-quarter revenue is 7.6 2 billion euros, another slight beat their. for airfrance, it has been a sharp end of the capacity issues with the amsterdam airport and cost inflation. the shares are up 27% year to date. we will speak to the cfo steven zaat on those issues at 6:45 a.m. here on "bloomberg daybreak: europe." stay with us for that conversation. this is bloomberg. ♪

lizzy: welcome back to "bloomberg daybreak europe." the bank of japan has jolted financial markets after announcing a tweak to its long time yield curve control policy. our markets reporter valerie tytel joins us now. what are you watching? >> it will be about how the market figures out with the bank of japan means when they are going to manage yields higher. right now, we know they are dropping the harsh control over the basis points and of the market can jump to conclusions that perhaps the bank of japan will manage slowly jgb yields, 10 year yields rising to 1%. i have to say if that happens, i want to take a look at what happens to treasuries. if you are someone who is a treasury bowl, someone positioning for the u.s. to slow down and effective cut on the

horizon, this will be one key risk that you have to have in your portfolio. if you see jgb's slowly moving 50 basis points higher towards 1%, it is definitely going to eventually have pressure on treasury yields will be higher. we are not saying that this morning which i am finding surprising. 10 year yields are back to flat just above 4%. we have seen bull steepening is in the curve retracing the movement yesterday. 2-year yields moved substantially higher yesterday after the positive u.s. data. if we get more news on the bank of japan's press conference that leads the market to believe that the bank of japan does going to manage the yield higher, we will evidently see pressure on the 10 year yields. watch out for that later today. lizzy: what is the equity market reaction? valerie: quite positive which is a shock because when we got headlines from the nikkei overnight around 6:30 p.m. london time, indented the equity market rally. s&p futures were kicked lower by

nearly 1% but so far, the hawkish comments from the bank of japan has not dented risk-on sentiment this morning. s&p futures up 0.24%. nasdaq futures doing well. this depends of -- depends on if we get more clarity from the press conference on what they mean about managing yields higher when it comes to jgb's. lizzy: thanks to valerie tytel. she will be with us route morning. -- throughout the morning. let's recap earnings. we had spanish banks, bbva to start off with announcing net income of 2.0 3 billion euros, beating estimates for the second quarter. also, the tier one capital ratio is at 13%, just slightly missing estimates. yesterday, bbva named bravo at the -- as a new ceo, a 20 year

veteran of the bank and has been caught in the winds the ecb rate cycle drawing to a close and uncertainties in spain with questions about the bank levy. the shares are up almost 30% year to date. we also had caixabank reporting net income of 1.2 8 billion euros in the second quarter beating estimates for 1.1 4 billion euros. the barcelona-based bank plans to start a new 500 million euro share buyback. net interest income also beat. we will hear from the ceo of caixabank at 7:30 a.m. u.k. time. meanwhile, we also have standard chartered having reported its results this morning and raised forecasts for income growth for 2023 and doubled down on share buyback's as rising interest rates propelled earnings. the bank reported a 27% rise in

adjusted pretax profit the second quarter, comfortably beating estimates. the asia focused lender announced a new one billion-dollar share buyback program which will start imminently. off the back of those earnings, don't forget we will have an inclusive interview with the standard chartered ceo bill winters at 6:30 a.m. u.k. time. i am sure we will be asking about the drama that has been taking place in the u.k. banking around politician turn hundred nigel faraj. stay tuned for all of that. this is bloomberg. ♪ hi, i'm lauren, i lost 67 pounds in 12 months on golo. golo and the release has been phenomenal in my life. it's all natural. it's not something that gives you the jitters. it makes you go through your days with energy, and you're not tired anymore, and your anxiety, everything is gone.

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this is "bloomberg daybreak: europe". i'm lizzy burden in london and these are the stories you're waking up to. the bank of japan surprises as it adjusts its yield curve control. the yen web saws and yields jump. ecb president christine lagarde says september is a live policy meeting after a ninth rate rise. standard chartered announces a $1 billion share buyback after better-than-expected second quarter profits. our interview with ceo bill winters is up next. good morning, happy friday. there is only one story in town this morning. it is the boj. it's kept its policy rate unchanged but it has adjusted its yield curve control program, not widening the band but giving more flexibility. let me get you up to speed on market moves.

at first, the yen slumped against the dollar then traders realized this is a change in the band, now it is at a 138 handle. and then there is speculation on the boj taking yields another leg higher. both again and treasuries have been in a difficult place, but the fed had to stop as did the boj, having to start. s&p e-mini's have been all over the place this morning. currently they are pointing to a higher opening. these markets confused as we await the press conference at 7:30 a.m. london time. let's get back to the earnings story. joining us is i'm pleased to say the standard see ya, bill winters. you've had pretax profits beating for the second quarter, you have raised your full year income forecast and are starting a billion dollar share buyback

imminently, can we assume no more job cuts to come? bill: we are so happy with the results and things are going well for standard chartered. the asian markets where we operate are doing well. we heard about the slowness in china which is true. the recovery has been sporadic but fundamentally the region is opening up. economic growth is strong and that is the backdrop for all our colleagues. we have added thousands of people over the course of the past year. we're also aggressively digitizing our business, that means people are coming and going all the time but net-net this is a growth story. lizzy: let's hone in on asian markets. he say it is positive, your cfo said last month that china's property market is not getting better. since then, there has been lots of public support for the private sector. are you saying there is no further pain in chinese commercial real estate? bill: we took more pain in the second quarter.

we took impairments against china real estate. we have a substantial overlay, we have taken a provision against risks that haven't materialized but we fear might. refill provided against further downside. but it feels like things have stabilized albion at a lower level. the public support and government support is picking up, that's encouraging, but it hasn't lifted the market yet. it will take another 6-12 months before we can say this market is back on track. lizzy: another thing that rumbled your sector is the credit suisse takeover. how are you benefiting in terms of wealth management? bill: we had really good inflows in terms of net new money in the first quarter. some of that came from credit suisse, some of that is organic growth we have been experiencing for years. wealth is rising across the markets where we operate. and we are picking up market share. we have to see how things settle out, but it feels like we are.

it's a combination of some credit suisse money diversifying away now they combined into ubs. ongoing chinese and asian investors accumulating wealth and wanting to invest in high-quality international product and general economic trends. lizzy: we have had lots of discussions about central banks this morning. we look ahead to the bank of england decision next week. what are you expecting, quarter-point hike? bill: inflation has come off the peak but is still quite high. there will be debates for some time the degree to which this is structural, and to which this will rotate off as energy prices stabilize, although they are going up again. each of the central banks, the boj and bank of england as well, have said we have to nail this inflation problem now, so let's take the steps necessary to indicate our firmness. lizzy: if they are going to nail

it, why not go for a half-point? bill: there is caution, underlying economic growth is good but they don't want to kill the credit resilient ongoing recovery in the face of higher interest rates. lizzy: so are you positioning for u.k. recession? bill: we don't have too much exposure as a practical matter. if we went back a year ago and looked across the west, europe, u.s. and u.k., we would've said recession was more than likely. it seems less so today. let's say it recession is avoidable, slowdown in growth is not. maybe we can avoid actual recession. lizzy: you mentioned the ecb and the fed. further out, do you see the ecb cutting before the fed? bill: the ecb has some way to go to catch up to the fed. the inflation dynamic is different in europe. they may get to the point where they can pause earlier and keep

structurally lower rates. to cut before the fed would be surprising given the structural nature of inflation in europe. lizzy: what do you think of this boj news this morning? bill: central banks are struggling with this last phase of the inflationary period, while inflation is quite high. japan is particular in terms of needing to overcome decades of embedded disinflation expectations, so we will have to see how the market settles out on this one. lizzy: in the u.k. earlier in the week, we saw alison rose stepping down as ceo of natwest over the issues with nigel farage. you don't have a retail arm in the u.k., but you have a large international retail presidents. -- presence. would you draw a customer over their political views? bill: we wouldn't. we follow the law, and the compliance regular around

customers you can bank are complicated and very from market to market. we start with the plethora of sanctions all over the place between the u.s., europe, the u.k., china and back again. that's enough to navigate, we don't need to wade into the views of a politician. lizzy: a clear answer there. have you checked that there isn't overreach from your team? bill: we checked regularly to make sure our reputation risk process is consistent with best practice. we have millions of customers and thousands coming in and out every day. we have never seen any sign of overreach in our handling of customers. when it comes time to exit a customer, usually because they have been sanctioned, that would trigger an action and we're careful in the way we do that and help the client within the confines of the law. lizzy:lizzy: u.k. government has

had a role in this and been proud of its response to the situation at natwest. how do you think it affects international perceptions of u.k. banking? bill: for starters, natwest was until recently majority-owned by the government so it is a different animal, it is some people will to begin with. -- semi-political to begin with. in terms of international, i don't think it's one way or the other, people appreciate the clarity around how banks are expected to behave vis-a-vis customers. lizzy: but you are on the u.k.'s vicar's commission. you haven't had a big role in banking reform in the u.k.. you think the u.k. response on debanking has been timely, or is this an exceptional campaign by nigel farage? bill: i know it was a one-off

incident. alison rose apologized, and the head of coutts apologized, and they both resigned. i will chalk it up to errors of judgment along the way. apologies delivered. it would be nice if they were accepted, and we can move on but not my call. lizzy: bill winters, great to have you on the program after those earnings from standard chartered this morning. i want to turn to breaking news out of france. we have second-quarter gdp breaking. it grew 0.5% in the second quarter, the estimate was 0.1% growth. social unrest has eased in france, you had four days of protests in the second quarter compared to 10 in the first. it comes back to the question of whether the ecb is done with hiking. germany is already in recession, but the ecb doesn't have a

growth mandate so it might overlook this. we will get more data across europe from spain on inflation. next up, let me take you to breaking earnings from sanofi for the second quarter. the main focus on sales of its eczema drug dupixent, i hope i have said that correctly. it has raised its full-year year business eps growth forecast and we will bring you more shortly. the shares only up less than 10% year to date. we will also be looking out for news on the ongoing litigation on its heartburn medication. those liabilities have been bumping up against the eczema drug boon. the bank of japan has jolted financial markets after announcing a tweaked to its longtime yield curve control

policy. valerie tytel joins us. what's the latest? valerie: we're seeing dollar-yen backup of 139 after a bout of strength from the yen, as jgb yields leapt higher. we are now seeing weakness. it has been a whipsaw of a morning. jgb yields are now 10 basis points higher, trading almost five basis points above the original 50 basis point target. we have the 10-year yield six basis points above the previous target from the bank of japan. and then japanese banks, again a steeper yield curve is a good thing for japanese banks. we're seeing japanese banks surge this morning, up 3.8%. one of the best sess of this year for those banks. lastly, u.s. 10-year yields are

back below 4%, after searching to 4.08 yesterday they are headed for year-to-date highs after strong data and speculation on the yield curve control break. we're seeing them just shy of 4% at 3.99. a bit of a whipsaw in markets this morning, lizzy. lizzy: thanks for that update. here's what we're watching out for the rest of the day. at 10:00 a.m. u.k. time we get eurozone consumer confidence, at 1:30 a.m. u.k. time we get u.s. pce for june. the feds preferred measure of inflation. bloomberg economics sees it rising 3.3% year on year. at 3:00 p.m. we get university of michigan consumer sentiment numbers. we speak exclusively to the cfo of air france-klm, the courier is seeing strong demand for air

travel but shows no sign of abating. this is bloomberg. ♪

lizzy: welcome back to "bloomberg daybreak: europe". air france-klm reported second-quarter earnings that beat expectations amid strong demand. the courier says it's booking trend remains strong with no signs of abating. to take us through is air france-klm cfo steven zaat. thanks for being with me. these are stronger than estimated results for the second quarter. but i want to talk you through the macro backdrop. you've got job cuts starting to come through in the u.s., inflation crimping demand in europe, and in the u.k. rate

hikes meaning people are staying in cities to save money. is the party over? steven: we had a fantastic quarter. the best quarter we had in our history in the second quarter. we see still very strong demand. if you look at bookings for the third and fourth quarter, it's actually stronger than what we have seen in the first quarter. so, we don't see any drop in demand. and we still have high yields. i looked this morning at the yields of the last week in july, it's beating what we have seen in may and june. for us it still going strong. my personal view is as long as employment is they are, this demand will stay. there is a difference in supply and demand. still the industry, especially on the long haul, is not back on 2019 levels, so there is still

under supply in the market which brings up high yields. lizzy: you had short-haul demand tapering. long-haul has had this lag in terms of the post-pandemic rebound. is it likely that long-haul demand will taper, too? his revenge travel over? steven: i just talk about what we have seen compared to 2019. we are still not back on the 2019 levels. if you talk about short-haul, our domestic network in france, we reduce it already with more than 50%. we reduced it even more this year compared to last year. that is part of our strategy. to reduce actually our domestic point-to-point network in france and increase capacity.

you see that demand to spike a fact that we are above the levels of 2019, is even stronger than a year ago. booking factors are higher than what we have seen last year. lizzy: i was speaking to your counterpart at ryanair this week, he said the cost of living crisis means people are flocking to cheaper carriers. our people trading down within your airline? are you seeing people fly economy rather than business? steven: we see the rivers. more premium traffic. a load factor above the 2019 level for premium. this is a story of ryanair and it fits their story. they said with high inflation that would be impacting especially legacy carriers. but we see stronger and stronger demand even on the long haul. i think at this moment, the long-haul situation is better than what we have seen in the

europe situation. of course, there is a difference in product between us and ryanair. we have a different customer base. i don't see anybody stepping down to low cost this month. lizzy: are you still interested in tap, portuguese carrier? steven: it's a public process. we're watching that carefully. we're preparing and hiring advisors, etc. but first there needs to be a valuation done. two valuations actually which has to go to parliament. then the process starts. we are waiting for that and it will probably start after the summer. lizzy: i want to ask about these boiling hot temperatures in the mediterranean. long-term, how are you adapting your strategy? the you plan to change

routes and specifically frequencies? steven: our main capacity is on the long-haul. on the long-haul, there is less impact i would say from the very hot summers. we will be adapting as needed. it can be better for us, because of people are going more long-haul during april and may we have less pressure in july and august. in july and august we can sell any ticket, we do not have the capacity to fly is all. if it spreads more equally over the year, it is better for our industry. lizzy: briefly, since you are so optimistic this morning, do you see air cargo coming back? steven: air cargo is a different story. volume is down more than 40%, very different than one year before. we are 10% higher than where we were in 2019. in that sense, we're getting to a more normalized level. it has to do with shipping

prices going down. plus the fact that we have increased capacity in our passenger business planes. that is the reason that we are having increasing capacity which leads to lower load factor. it is lower than on a full freighter, but there is softening demand. lizzy: air france-klm cfo steven zaat joining me. the bank of japan jolts financial markets by loosening its grip on bond yields. we will bring you the latest reaction next. this is bloomberg. ♪

lizzy: welcome back to "bloomberg daybreak: europe".

the bank of japan halted financial markets after announcing a tweak to its longtime yield curve control policy. valerie has been following this throughout the morning. how are japanese markets faring at this point? valerie: what a web saw this morning. when these announcements first came out we saw a bout of weakening in the, then strengthening, now weakening again. now back above 139 shall i say. it's all about the trajectory of where jgb yields are going. are they going to 1% quickly, or is the bank of japan really going to manage yields higher, let's check in on how 10-year yields are faring. 10-year yields took a jump of 10 basis points higher. we are having the ctd of the basket, that liquid 10-year bond trading five basis points above that original harsh line of 50

basis points. the bank of japan tells us they are no longer defending this harshly, but intend to manage it flexibly. what that means for jbg's is yet to be determined. we are seeing a early actio -- reaction in the treasury market. but we are actually seeing treasuries just hovering above 4% level. yesterday they nearly hit 4.08, we are headed for year-to-date highs but we are seeing them hold steady which i find surprising but we await the press conference in 30 minutes. lizzy: first markets doing pretty well. >> they are doing pretty well. the brunt of this move was around the nikkei headlines when they came out last night. we're seeing s&p futures rising 0.2 5%. nasdaq futures also doing very well. it bodes the question maybe it

was last night's big risk off move which was most of the move the bank of japan wanted to see when they leaked that story. again, the hawker surprise wasn't what we thought it was and we are seeing risk markets bounce. lizzy: don't miss our exclusive conversation with the astrazeneca ceo. that's at 7:10 a.m. u.k. time. we have another exclusive interview this morning with the caixabank ceo at 7:30 a.m. u.k. time. this is bloomberg. ♪

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♪ >> this is "bloomberg markets: today." i am anna edwards live in