vonnie: here watching "daybreak: asia," coming to you live from new york, sydney and singapore. annabelle: we are counting down to asia's major market opens. shery: good evening from bloomberg's world headquarters in new york, i am shery ahn. the top stories this hour. haidi: the central negative rate policy may end if wages keep rising. president biden's has china's economic downturn may reduce the risk of a taiwan invasion, as india cements its status as a rising power to counter beijing's influence per arm is set to price shares a top or above the market range, with key apo orders expected monday. vonnie: vonnie: that is one of the things we are watching for this week, it will be an exciting week in terms of ipo's. we have not had that much activity in that arena all year, so everyone will be watching the arm initial public offering extraordinarily closely.

the other thing is wednesday's cpi data. it is expected to tick a few notches up, we will have to wait and see. the fomc will, with the decision the following wednesday. it is a blackout period for fed speakers this week. it will just be the market on its own. we will see what they price in. participants of the market have priced in another price hike, but not at the september meeting. it was a short week, but every day, the indices were down. the s&p and the nasdaq starting off september with a doom and gloom footing to it. so far, it looks like we are pointed higher, but it is very early going in the session. we have bond futures down as well, but it looks very early going. crude oil is about $87 a barrel, holding up there as su keenan was telling us earlier. brent is still above $90 a barrel. bti is above $87 a barrel.

interesting comments from janet yellen on the way back from the g 20 summit, she is optimistic that the u.s. economy can avoid a recession. she also said interesting things about china's economy. she said it seems that china has more tools in its policy belt. quote "they have made what seems to me like relatively small adjustments in monetary policy,"," interesting thing to point out as well, belle. annabelle: you mentioned the softbank listing plan. we are getting more details because these are in focus in the next couple of weeks -- instacart and birkenstock. but at the top of the last hour, the reuters' report coming through in terms of the pricing. that range, $47-50 one dollars apiece for the shares, we are

understanding it could be priced at the top range of that or even exceed it. that the company could be seeking a higher valuation to raise more funds for. the company. not issuing more shares, because we would know that softbank wants to retain a 90% stake. but it is certainly something we will be watching. we will have more details on that in the hour. there is still the focus around japan. a lot of the moves being found so far in the early trading session in terms of the japanese yen. we are seeing some strength coming back into the currency, now trading 0.5 percent higher against the greenback. it was up earlier 0.7% permit what is driving that, firstly, the pivotal interview the boj governor gave to local media in japan. what he is saying is that by the end of the year, he will have enough data to understand whether it is the time -- the right time to exit away from negative rates. that is one factor. the other one comes down to the g20 and raising geopolitical tensions. we know the yen is a safe haven play. haidi: speaking of geopolitical tensions and all things

geopolitics, india's g20 summit has wrapped up on a joint communique that included consensus on russia's war in ukraine. let's bring in our number markets coanchor haslinda amin who has been covering the summit. despite xi jinping's decision to stay away, this is being seen as a win for moody and a wing for -- a win for modi and a win for india. haslinda: xi jinping's absent gave him a way to step up and play the role. modi is taking the helm. we talked about how the communique was at risk coming into this particular summit, but not only that india managed to cobble up a communique, it came on the one of the two-day summit which is a feat for india that was huge disparity in terms of

opinion, huge risk that it would not succeed because the division was so wide. india managed to convince the u.s. as well as its allies to use the language that is acceptable to everybody at the table. they turned down the language and pushed back in with the u.s. wanted, which was russia's aggression against ukraine. so here with a communique, everybody is feeling pretty triumphant, including the european union. there were other successes as well. we know that in terms of the loans being extended to emerging economies, the u.s. has agreed to expand the capital to the world bank. we have been talking about the structuring of multilateral department banks. that was part of the conversation. also a win, the g20 will include the african union. . just like we saw the expansion of the brics summit a week and half ago. vonnie: vonnie: with china or not there, it has allowed for

all different of alliances and breakoff meetings and that is where these came from. or did we hear about the u.s. wanting to counter china's belt and road initiative in the middle east? haslinda: er right, it was not just an opportunity for india, it was also an opportunity for the u.s. to engage better with everybody at the table, including the members of the global south. a deal was struck between the u.s., india, the middle east, israel, as well as other middle eastern countries. it is significant, because we saw how the middle east and the u.s. came together. crown prince mohammad bin salman actually shook hands with president biden, along with m odi. it was a three-way handshake. it was not too long ago that biden called the crown prince "the pariah." they agreed to work together on

rai and maritime projects to counter china's belt and road initiative, but it was not intended to be. according to european union officials, it is not a bad thing to have the u.s. at the table, countering what china is 20 to terms of influence. haidi: president biden missed the second day of the g20 as he made his way to vietnam. some pretty interesting comments when it comes to china and taiwan. haslinda: that's right, in fact, president biden talked about how economically weakened china is right now. and because of that, it is limited in terms of its capacity to attack taiwan. in fact, he said that likelihood has been reduced tremendously. let's take a listen to what he had to say. >> i don't think it is going to cost china to invade taiwan, in fact, the opposite, it doesn't

have the same capacity that it had before. but as i said, we are not looking to her china. -- to hurt china. haslinda: remember that not too long ago, biden called china the ticking bomb. so it is in the right vein, the comment coming from biden. vietnam has elevated their partnership to the highest level that it accords to only the likes of russia as well as china. it is a pushback to china, addressing its exact is engaging and it is looking to raise the partnership with the u.s. remember, vietnam is a communist nation, never to be an ally of the u.s., yet here it is establishing very close relationships with the u.s. vonnie: interestingly and perhaps in a more superficial

level, i noticed in the comments that the vietnam leader gave to biden, extraordinarily flattering comments. give us some of that color, haslinda. [laughter] haslinda: plenty of color. first, we had prime minister to do getting stuck last night because of his apparent technical difficulties with his plane, so there was a lot of food. he missed the gala dinner organized by modi. coincidentally, he had to stay in yet another day because of troubles. one moment that really stood out for me was the hug between prime minister modi as well as prime minister rishi sunak of the u.k. we head to sunak quipping that he is the son-in-law of india, given that he is married to an indian, and he is of indian heritage as well. that hug was pretty apparent as some kind of, i guess, a warm moment between the two leaders.

the other moment that stood out was when modi led to other g20 leaders barefoot to pay respects to mahatma gandhi. it was quite a sight to see here at the g20. vonnie: you can only imagine. haslinda, thank you, for covering it all weekend. bloomberg markets: asia coanchor haslinda amin, at the g20 summit in new delhi. let's get to some of the other stories we are tracking, bloomberg has learned that italian prime minister maloney privately informed china of plans to exit the belt and road initiative. a source tells us she told chinese premier li qiang at the summit that italy intends to withdraw from the pact while still looking to maintain friendly relations with beijing. italy had signed on to the pact in 2019. u.k. prime minister rishi sunak says he raised significant concerns about beijing, li qiang. he says he confronted li at the

summit, this afternoon is that a prime entry researcher with links to conservative party mp's was detained on suspicion of espionage-related offenses. haidi: another big story we are watching closely, moroccan authorities are racing to reach possible survivors after the most powerful earthquake to hit the country in over a century. more than 2000 people were killed after the quake struck friday night. 1400 others are injured. rescue efforts are being complicated by the remote mountain location of the hardest hit region. the military has deployed specialized rescue teams, engineers, suppliers, and field hospitals. still ahead, japan's group has launched a new fund seeking to invest in companies breaking free from the inefficient use of capital. we have an exclusive interview with the ceo later this hour. but first, japan is said to be

benefiting from the relocation of international funds and an improvement in corporate culture. we have more on market strategy next. this is bloomberg. ♪ (sfx: stone wheel crafting) ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently.

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for finding me looks that work for me and my budget. now getting dressed is so easy. -you just get me. -they get me. -you just get me. -and they'll get you, too. take your style quiz today. haidi: let's look at the key events we will be watching this week. economists expect core inflation to remain steady at a zero point 2% month-on-month. janet yellen said every measure of price pressure is on its way down. china's monthly activity data on friday may show its economic problems extending into more sectors. the pboc is expected to lower its one-year mlf rate by 10 basis points on the same day.

european central bank officials will debate a quarter-point interest rate increase on thursday. that decision could go either way, although the commentary is expected to remain hawkish even if they opt for a pause in the hiking cycle. jobs numbers out of australia and south korea. cpa from japan, court machine orders, u.s. initial jobless claims and retail sales also in focus. vonnie: exactly, so much around the world this week. joining us to talk about this is philip palumbo, ceo and cio at palombo wealth. how much are you anticipating we will hear from officials in these countries that will change your strategy this week? because we will get a lot from the united states as well. philip: not much at all. i think for mr. moody stole the show at the g20 meeting. when i think about china, their economy is weakening, property

inflation, trade wars, geopolitical tensions and consumers are seeing it by not spending money. i think they overbilled over the last 10 years. and an infrastructure plan will knock you the solution for china as it has been in the past, it has to be money being thrown to the consumers so they can spend to bring the percentage of gdp higher than 38%. because of that, you are seeing investors skittish about the country and moving into areas like japan and india. japan, their corporate culture is improving tremendously. they are doing buybacks now, increasing dividends, all of that is positive for investors. in india, the demographic, and the leadership from prime minister modi is changing the dynamics in that country. vonnie: how are your clients investing in these countries? haven't they already run up so much, aren't you a little trepidation that may be now is the time to pull back? philip: we are long-term

investors. i do think it's all about valuations especially on the indian market. it is my view that with high interest rates all around the globe, i think there will be some type of shock in 2024. i think an entry point for these two countries will be better than it is today. any new capital that looks into investing in brand, i think you will get better entry points at some point in 2024. haidi: japan specifically, a lot of these factors make sense, right, some of the newer factors of -- the fluids being redirected from china. what makes you think that this time is different for japan? philip: when you change corporate culture, that is a positive for investors. we're looking for companies that are looking to buy back. that increases shareholder value. when you sell off non-core businesses, that is very positive for investment

standpoint. so i think the better. we'll be india. but i do think japan does look attractive and there is more money being made in that particular country. haidi: where do you find value? valuations are pretty stretched in the u.s., but even these asian market darlings like india and japan have had a big run up. philip:. philip: as far as value, i think all markets around the world today are overvalued. you look at the s&p 500, multiple of 25, 21 times, we have interest rates where they are today, the treasury bill at 5% permit you can buy municipal bonds and get 4% federal tax free. that is a taxable equivalent of six, 7% or 8% in some cases. i would argue that all markets around the world on the equity front are overvalued.

with interest rates continuing to move up higher, i think a shark could happen at any point, and that is my major concern. so, from a value standpoint, there is value in bonds today overstocks. vonnie: what are you turning your clients and investors about the united states? where are they invested here? philip: over the past couple of months, i have been adding to energy, particularly occidental petroleum. energy, with short supply, we will continue to see some movement here. it has been a profitable trade overall. commercial real estate has attractive opportunities within permitted there is a lot of distress, continued distress in commercial real estate. a lot of these loans are coming due, the owners of these properties, these rates are being reset at sometimes triple the rate they had before, they are not able to afford it and they are filing bankruptcy. we will be able to get those properties at attractive valuations. i think commercial interest rate

in the next few months will be a real value in the u.s. market. vonnie: that is a bold call from and what are we supposed to think about tesla and about ai stoxx, nvidia in particular? philip: as i think about the ai movement, i think it is overhyped. at the end of the day, why are markets or relieve the s&p 500, the magnificent seven stoxx is 70% of the s&p. that every stock is up 3% to 4%. the benefits to ai is that it will increase productivity in the front line of these companies to increase margins. that is the main point behind ai. question is, when is it actually going to happen? i would argue that it is going to be longer than many people are anticipating, which means these stocks ran up way too fast in the short-term, like it always does. either way, this is just the way markets work, things get

overhyped. it is the fear of missing out, investors hopping on the bandwagon. i do want to say, ai is for real and it will increase profitability within companies, i just think it will take longer to filter through. haidi: great to chat with you, philip palumbo, ceo and cio at palombo wealth. you can get caught up on the stories you need to know to get your day going on today's edition of "daybreak." terminal subscribers can go to dayb . you can also customize the settings as well for the news on the industries and assets you that matter to you. this is bloomberg. ♪ good night! hey corporate types.

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arm will be able to price its shares at the top part of the range of a company prepares to make its highly anticipated public debut. for more, our guest joins us. we know from reporting that it is about 5x oversubscribed. tell us how this looks to you in terms of the expectations we have held going into its debut. >> it has been a tumultuous road for arm to go into this initial public offering. softbank had originally tried to sell the company to india and then it has been preparing for this initial public offering for more than the past year really. as they have come to market, we have seen a valuations bounce around. initially the company was looking for valuations of $60 billion and 70 million dollars, looking to raise $10 billion and that would've made it one of the largest ipos of all time. they lowered those expectations

for a number of reasons, in part because softbank had bought shares from its vision fund. they decided they would raise $5 billion. now we are hearing demand for these shares is strong. softbank and arm may increase the amount of it so that the valuation is not the 54.5 billion dollars they were targeting before, but something north of that. . probably not as high as $60 billion, but something a bit higher than $54.5 billion. not to disagree with our guests about ai, but there is strong demand for trip stoxx, and arm is playing a part in this -- demand for trip stoxx, and arm is playing a part in this. vonnie: there has been very little ipo action so far this year and the markets open up quite substantially. you would think there would be people that have cash just waiting to be deployed. could that be a factor as well?

peter: you are exactly right. there has been a shortage of ipo shares for people to buy at this point. arm is a very interesting name especially in the tech sector. they do chip designs that they sell to other companies that are licensed widely and they have a bunch of customers that are cornerstone investors in the initial public offering. that is pushing up demand. investors are seeing an opportunity to get into one of the rare ipos coming out. it will most certainly be the biggest ipo of the year, so you are getting a chance to put in the tech space, in the trip space, and in the ai space altogether. vonnie: or executive for asia technology, peter elstrom, thank you for joining us. another story we are watching closely, country garden's major test coming monday, when creditors finish voting on the potential extension on more bombs. the chinese property developer is looking to stretch permits for a group of yuan notes by

three years, with the main focus on a $200 million bond that has a september 14 put option that allows investors to demand repayment. haidi: take a look at the set up this monday morning as we get into the start of trading. a huge economic week ahead including key inflation readings from economies including the u.s., but also across asia as the domestic activity data from trader will give us more indication as to how the chinese slowdown is perhaps starting to spread. . stocks are set for a cautious the year and has been moving higher on those comments from boj governor ueda so... i know you and george were struggling with the possibility of having to move. how's that going? we found a way to make bathing safer with a kohler walk-in bath. a kohler walk-in bath provides a secure, spa-like bathing experience in the comfort of your own home. a kohler walk-in bath has one of the lowest step-ins

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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. >> bloomberg a pillion columnist

says the fed faces more complications i had a future policy decisions. he told us the latest cpi data due this week may change the central bank's policy path after its september meeting. >> cpi next weekend will definitely change it, not september but it can change the next rate hike at the end of october or beginning of november. the bigger issue here is -- i think the discussion is going from whether they will hike her not to what is the overall impact of the level of interest rates. there is also more discussion of how long are they going to stay there and underneath all that are some really challenging technical issues about monetary policy from what are the real lags in play -- this is a very complicated time for the fed and markets should not jump to

conclusions too easily as to what is going to happen be on september. >> speaking to those complications some contradictions in the economic data this week alone. jobless claims are the lowest we have seen since february, the isn was pretty punchy base book screams slow down. i've been asking all week, how much weight should i put a -- put on each data point coming out. what is good -- giving me a clear story of what is happening? >> i think the consistent story is services are strong and there strong in employment, in wages, and an output. that is a very important thing to focus on. beyond that you have massive ambiguities. beyond that you have also the dependence on the rest of the world which is in a very different place than the u.s.. i think the key issue is get services right and if you can get services right you can explain much of what is going to happen going forward. but there are other issues that are going to become more

important as we go deeper into 2024. >> what you think those issues are? >> is the supply side. in the way it plays out. whether it is labor negotiations, whether supplies of oil stays high when chinese demand is under pressure. what is happening to apple in terms of geopolitics and what that does to supply chains and what that does to demand. there is a lot of aspect but supply is number one. we have transitioned from a world of insufficient aggregate demand to a world of insufficient aggregate supply and that is going to play out for not just one year but for a number of years. >> bloomberg a pillion columnist there speaking to bloomberg, let us get you to bell for a look at the markets. belle: we are about halfway now from the opens of sydney, tokyo and seoul at the start of the week and futures are pointing

towards a fairly muted beginning to trading for us. when you take a look at this chart here with the weakling change we see in the index yesterday or last week, that was a week of losses capping what had been two weeks of gains prior to that so there is a lot investors are going to be mulling over in coming days but among that will be the u.s. inflation print that is due wednesday that is going to set the tone for the fed and its meeting in the following week and guide the direction for stocks from here into the end of the year. this is the state of play as we end the week here, japanese futures just coming online in singapore and that contract and focus for us particularly because japan is set to watch, fairly steady as we look to the open. japan is still in focus for us and that is really what is happening in the japanese yen because we are seeing it strengthening across all of its g10 peers as we get trading underway. 410 of a percent higher against the greenback at this percent,

what is driving that? there are two different things we are looking at. firstly there was a key interview that the boj governor gave to local media over the weekend and in this he said that by the end of the year he is going to have enough data around jobs. he is going to know if those wage gains are satisfactory to possibly exit away from the program of get of rates so that is also putting yield curve control and another? over that. another reason is down to geopolitics and what happened around the g20 over the weekend so a lot of different factors. the yen a safe haven currency. haidi: thank you. north korea's leader kim jong own is expected to travel to the russian city this week to meet with vladimir putin. putin earlier said he was looking to strengthen ties with pyongyang on all fronts. bloomberg's east asia government editor joins us now. and he so far that kim has left for moscow?

>> no signs yet, when we learned he went to moscow -- his state media put out in advisory about a day before he was going saying he was going. can jong own likes to travel by a luxury armored train which is easy for spat -- satellites to see. we do not have any indications of a train moving or anything of that sort but the border from the russia north korea order to there is maybe about 150 kilometers so once he crosses over it should be a relatively short time for him to be there. >> what does putin want from this meeting? collects i think that pollutant is looking for help with his war in ukraine and he's got a friend in kim jong-un. that friend also possesses some of the largest stocks of munitions in the world and these

are munitions, a lot of which are interoperable with the soviet air systems that are on the front lines in ukraine. this would be artillery, rockets, also putin might be looking for some antitank missiles. these would be things that would help the war keep grinding on. not the most sophisticated types of weapons but these are weapons that north korea has an abundance and something that pollutant has been burning through as his forces have been fighting in ukraine. >> how could this help kim jong-un? >> north korea's economy is relatively small so any sort of armed sale even if it is just a few hundred million dollars, $250 million is like the equivalent of 1% of such -- north korea's gdp so any amount of cash she can get would help. he might be looking for technology, he has pet projects like deploying a nuclear powered submarine. he wants to deploy spy satellites.

he is trying to militarize nuclear weapons to put them into more armaments so the country is always short of food. bloomberg reported earlier that some russian foodstuffs have made their way into north korea in recent months and north korea might be looking for more for russia -- from russia to help feed its people. >> are east asia government editor there in tokyo. coming up next are exclusive conversation with sparks group founder and president. with the new era of value investing in japan. this is bloomberg. ♪ ♪ explore endless design possibilities. to find your personal style. endless hardie® siding colors. textures and styles. it's possible. with james hardie™.

>> it is time for japan ahead on daybreak asia, watching the yen of course. we had that strength in the yen after the comments from boj governor a way to. really the comments about negative rates are stoking some speculation about the path of policy. here we had some sustained gain -- yen weakness coming into this session on the back of dollar strength. sitting at 147 level which last year would've been a threshold where we saw intervention but most analysts say that that level is now being raised to

about 152 the dollar. singapore futures are looking flat at the moment. quite a bit of caution across the region as we get into the start of trading today. this is really the start of a big week when it comes to eco-data from the u.s., from china as well. as some of these other economies including japan get coal up orders. let's get to these yen moves, potentially hawkish comments coming from the boj governor with fx rates and joining us now for more -- 147 at last year would be the point we did see intervention. the threshold seems to have moved somewhat. is this just a short-term or spite given the relentless rally we have seen in the dollar? >> i think the reaction we saw this morning down to about 146 67 from after closing 100 points or so higher is probably about right.

to answer your question it is more of a pause and a correction in the fact that we cannot break the asia low which is i think 146.50 nine on friday, we are still above their and we bounced above that this morning. that sort of seems to give the indication that may be those that did try to solve the headline and after reading the copy that came with it later on, wanted to take back those short dollar long and positions to where we are now about 14720. it is a nice way to start the week but reading into the governor's comments, i would not necessarily be canceling my christmas plans just yet. he did mention when he was first installed as governor that he would be doing an across-the-board review and this is one of the results which as a

timely landing for the interview. he has perhaps painted himself into a small corner in that he has given the market a timeline. not so much a dollar-yen or jgb level but he has defined the timetable a little more. come here and all eyes will be on him and the boj's response to whether or not wages can actually handle a rate hike. the reason why wage pressure -- there is talk of a global rage price spiral and if that would include japan at that would really make things interesting coming into the new year. as far as dollar-yen is concerned this 14659 is just another point on the way down. that could be broken sometime later on this week may be. vonnie: so could be this week but also could be thanks to the u.s. cpi right? what is the potential for that having an impact on dollar-yen? michael: we are in a fed blackout.

before the fomc on the 21st so this is the major economic release between now and then. if that came in hot, again the bond traders would have to reprice from a higher for longer stance to baking in maybe a november maybe not september but probably in november hike. even more so so that would put the governors reaction very much off the top shelf and we would be looking around that 148 level again being tested. we have touched 147.97 twice in two days and everyone is talking about where is the boj line in the sand. i think it is north of 150. what you can see the reaction function of traders to do releases and things like that they are keeping the cards

pretty close to their chest. haidi: bloomberg's fx an rates reporter michael wilson. japan's soarx group has launched a new fund, -- japanese firms in the past decades looking to raise $2 billion by 2024 taking a cue from warren buffett's recent investments in the country. i spoke exclusively with the ceo about a fundamental shift in mindset. now emerging among japanese managers. >> definitely this time is different. this time start entering into the new era, the past 30 years since i started my company sparx japan was in a very deep deflationary environment. as a matter of fact we are in deep deflation rather than being deflationary so it was very

difficult for any business to be profitable although many companies in japan are profitable as you know. but something was sacrificed. they sacrificed the increase of wages. they sacrificed the increase of capital spending. and research and development and so forth. future investment was quite limited. but now many smart top management people understand, time is changed. they can be a lot more aggressive and if that can be started it is a most attractive place to be invested. >> does that mean you see the start of the virtuous growth in investment cycle at last? >> finally they are getting out of this trauma of the bubble bursting cycle -- psychological damage. that i think will change the whole scenario of japanese business. there are many companies that

became even stronger during this time since i started sparx 30 years ago but the risk requires you and me to be a little more patient. haidi: in terms of the risk outside of japan's borders is that something you look at, for example increasing tensions again with china? >> increasing tensions with china is the problem of the world. it is not just only for japan. and i don't think china is a risk we should deal with. but there is something we can deal with. chinese people are there. as long as people live there we can trust those people.

what they want, we serve. and they like japanese products. they may not like the japanese government much but they like japanese products. and business people here understand that. so they will deal with it. haidi: before he let you go you are obviously very optimistic at the juncture where japan is at the moment. what is one change that you think japan needs right now? most urgently? >> i hope that management people will understand that time has changed. and i hope that top management people look for new growth. as i said we have been captured by this charm of the bubble burst and many of the top management people my age are the ones who joined the companies that they work for today when they were in trouble.

after the bubble burst. in the core value of many corporations at that time was to repay debt. and make their balance sheets stronger. that belief is still continuing after they built the property excessive strength of their balance sheets. many companies carry their equity more than 90% of their total assets and that's ridiculous in near terms but it is very common in this country. and that will change because it is not culture, it is what they believe but their belief will change. as time has changed. then it will be very interesting for you because it is cheap as of now. haidi:sparx group founder and ceo there. and as you may know at this point we have a result in the u.s. open men's final, the tennis results. that is djokovic is the winner.

actually in three sets in the end. 63 76, 63 but it looked in the middle set might be a very long match because it was taking a long time to break serve but he finally did and he was seemingly to win it pretty easy in the end. he is not the oldest and he was only 36 but that makes him the oldest u.s. open major champion. haidi: when it comes to the women's final over the weekend it was a triumph when it comes to youth, we saw that magnificent performance from the teenager, the 19-year-old cocoa golf securing the three set victory making her the first american teenager to win the open since serena williams in 1999. one of her idols. it was an extraordinary match and very dramatic and now we have the men's result to round that out.

more to come here on daybreak asia. ♪

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and annabelle in singapore. it is so strange because it was just a few months ago that he agreed to leave. annabelle: that's right, this was a sort of succession plan that came a couple months ago when he agreed to cede his two positions as the ceo and chairman. he was taking up the cloud division. it has been one of alibaba's key growth drivers and one of the divisions that the company had highlighted and tipped to be a monk the first to spin off but he decided to quit via internal memos seen by bloomberg news yesterday. the reason he is leaving the division, that is a little unclear. he did assume that post after seating his dual roles as chief executive officer and chairman. it has been an interesting story of tenure for him at the time it had become china's largest company entering into areas like

physical retail and has become one of the company's fastest-growing businesses. the former ceo is still going to be part of the alibaba landscape because he is going to be steering a $1 billion tech investment fund and that is on alibaba's behalf. vonnie: we are seeing -- taking the helm. annabelle: these are two key players there is eddie wu and then joseph sighed who have both been very close confidantes of him in the past and their formerly -- formally taking up their positions now. essentially those are dual roles of ceo going to eddie wu and simon taking up the role of chairman. those two roles had been occupied by daniel zhang but certainly a complex net -- landscape for this couple to be navigating. this is about trying to unlock further growth drivers for alibaba and trying to spit out several different standalone

companies and sectors in cloud services that daniel zhang had been helming. online shopping, all different key areas so they now have to short -- shoulder that burden of turning around alibaba and trying to help it regain its footing. you can see stocks trading fairly flat today but we have seen the tech sector there generally under pressure. both of these men are business heavyweights within the company for a time and they have been focused on that tack and the strategy part of alibaba's business. and that has been key to its success so far. haidi: what is the latest on the breakup then? annabelle: this comes down to the different divisions that alibaba is trying to spin off and one of those that had been highlighted is fresh hip and what we understand now it is putting any potential plans for an ipo listing in hong kong on the back burner and that is amongst week sentiment. in hong kong we have seen a lot of foreign investors leaving the market, there has been a lot of pressure on different sectors in particular but consumer stocks

is one. source is not telling us that alibaba had held early talks with investors and what they found out out of those was any sort of valuation that the unit had been looking for was unlikely to be quite as high so they had wanted up to $10 billion and now we're hearing from investors that a likely valuation would be around a $4 billion mark. so quite a big gap here and that is why they decided to take it off and put it on the back burner. haidi: annabelle there in hong kong, we are watching -- very closely because a huge move when it comes that 10 year yield climbing to 0.69, that is the high since 2014. we knew that was going to be quite a bit of pressure for a declining japanese bond amid the boj governor's comments. ♪

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>> this is daybreak asia we are counting down to asia's major market opens. it is going to be interesting particularly in japan as we know there have been comments from the boj governor causing the yen to advance substantially and also jgb futures sharply lower. it is taking all the spotlight right now even as we were prepared to talk about the week to come. haidi: yes it is a lively start when it comes to japanese assets, that pressure coming down. let's get you to bell for a look at the open. vonnie: annabelle: that has been the focus these last couple hours and that is the advice we are seeing for the japanese yen across the g10 space. not just first is the greenback as we get trading underway so the opens now for japan, south korea and australia. diving into the boj governor's comments in detail. he gave an interview to local media over the interview and in

that he said that by the end of the year he is possibly going to have an data specifically around wage growth to determine whether or not the boj can start to exit away from negative rates. that is obviously putting other policies and focus including yield curve control and off that we have seen a big reaction coming through in japanese bond futures and also as i said that japanese yen. we are still really -- still holding up around half of a percent against the greenback. we have 10 year cash treasury yields coming online fairly flat but we do have u.s. cpi data due later this week and that could set the stage possibly for the fed to hike later this year. again that yield gap between the fed and the boj has really been focused on by investors. let's look at what's happening in korea. we also expect oil, we had some trade data coming out. this is the first 10 days of september and we have seen a contraction again in exports

coming through down 7.9% on the year. korea is a bellwether for the global trade economy so that weakening sentiment we are seeing in terms of externals -- shipments does not bode well for that recessionary outlook but the south korea imports data coming through and we are seeing another decline there down 11.3% on the year for september. that is the first 10 days so it is a bit of a leading indicator ahead of the 20 days of the final month data. we do have korea stocks coming online and we are seeing fairly muted gains here but we do have that tech sector very much in focus and one that has been very sensitive to rising rates but we are still seeing a little higher as we get on the way. at the korean won it fractionally weaker against the greenback. it let's take a look at what is happening in australia because the asx 200 is just coming online. so far the early sentiment is fairly flat for us. it we are watching the aussie dollar. it is a little higher again against the dollar as we get underway for the day.

focus for us of course because we are speaking with a lot of different investors in terms of the outlook over the final couple months of the year and actually they are saying with the aussie dollar could rebound. a lot of that coming down to stimulus hopes from china and actually some of the local media headlines that are dropping this morning from china newspapers is that we could see better credit numbers coming through the course of this month and we could see a further cut. at some of the other factors we are watching. brent crude still online holding above that key $90 a barrel level. vonnie: let's talk a little more about what's happening now with the jgb futures. let's bring in head of aipac applied research at contee go. it is quite the move. i know we are early in the week, but ostensibly these hawkish comments from bank of japan governor on the negative interest rate policy, he told a newspaper it's possible the boj

will have enough information by year end to judge if wages will continue to rise and that will be a key factor in deciding why cc. we know he is thinking this. so why is it having such an impact on the very early part of the week's trading? >> i think it is a lot in anticipation. ever since the dollar yen it has broken to 146 level, people have been anticipating the boj to intervene and it has not. yen kept weakening in the dollar was at 14760, 14780 and nothing happened. still no movement in the boj. we knew the boj has now had 17 consecutive months where inflation is higher than the target level so they met their goal of trying to get inflation to come back to japan after 20 years of deflation. i think there's a lot of anticipation they would do something, if it's not intervention it would be something with the rates and as soon as that came out a lot of

traders jumped on it. haidi: will they continue this move or will the move get faded at some point? >> japan is at the beginning of its inflation cycle unlike the u.s. and the eu and most of the rest of the world which is near the end of its inflation cycle, japan is at the start. so we should expect that rates will stay a story for sometime in japan and this differential with the u.s. and the eu will gradually come down and this is probably not very good news for equities in japan because they have been riding the wave of the yen. it has been a yen story mostly, is the hostile work of zero interest rates or negative interest rates. if that switches or changes that might be bad for equities in japan for a while. haidi: do you expect there to be a meaningful recovery or policy response from beijing at this

point, as we are expecting this week's data to point to that broadening slowdown? >> i think what we know from the authorities in china is that they will do whatever it takes to meet their goal. they failed last year so they are very sensitive to failing a second time around. i think most investors are expecting them to keep trying. the last couple stimulus did not really support the market. still nothing at to turn the boat around. global trade is slowing down, the u.s. china relationship is also a drag on the economy. they have to do something. they have to do more than what they have done it i think people are still expecting them to, it is just very confusing right now to guess what it could be. we talk about rates coming down some more, sure that could help properties and others but that's not going to turn the economy around if global trade keep slowing, if unemployment keeps rising. it they have to do more.

they have to do something to get domestic demand to come back up because the global demand is falling. haidi: how problematic, if we continue to see the momentum in the u.s. dollar rally is this going to be for some of these asian trade heavy partners like china and japan? >> it is problematic more for the borrowers. we have got lots of debt from property companies in china at that are due in the next 18 months. with the way interest rates are on u.s. dollars this is going to be a very big challenge for the authorities in china to deal with that. all of these are triple c but all below investment grade and they all mature in the next 18 months so what we saw with evergrande was just the first of many to come in the authorities are can have to deal with that. that is really where the focus is for investors. can you avoid a lehman moment in china and the next 18 months? vonnie: janet yellen seems to

think china has a lot more tools in its toolbox and yet we have spoken to many people who suggest that perhaps china does not want to use them are really can't because it involves local governments and that heavy burdens and so on. what else do you think janet is referring to? >> she does say china has lots of money, it has foreign reserves that it could use. i think it just does not really know where to aim those stimulus packages to correctly because for the last 20 plus years and has benefited from globalization and now we are in a deglobalization mode. this is something totally new for them. it highly stimulates domestic demand instead of capital-intensive in a way that we are used to for the last 20 years and it's going to take them some time to figure that out.

vonnie: head of aipac pride research at contee go great to have you with us. let's get you back to ballot we are seeing a big move when it comes to japan thanks. belle: that's right this has been one of the most closely tracked stories over the past few hours. it is an interview that the boj governor gave to local media over the weekend and and it he said that possibly by the end of the year he's going to have enough data on hand around a wage growth whether he is seeing sustained moves there to justify any sort of changes to key policies. the focus is on whether there could be an exit around -- away from negative rates. boj has been in negative rates for quite a time now. we are seeing japanese bank stocks moving off that because financials do you like when you start to see rate hikes. in terms of what else investors and traders are watching, we have seen big moves in japanese bonds and the yen as a result and there is that speculation of

what it means for the program of yield curve control. this is one sector we are focusing on very closely we have seen a lot of interest so far in this boj governor interview to local media. another story that's been closely tracked that's still in japan and relates more to softbank's arm ipo. this could take place later this week and we are seeing some gains here for softbank at the start of the day's trading. this relates to as we had a report out of reuters this morning saying arm may price its arm -- ipo at the top and an shares had been looking to be priced at 47 to $51 apiece. the could actually look to go to the top end of that range or possibly exceed that. this does come as we await that listing later this week. there has been a lot of investor interest around this so even if they come in at the lower end of the range the company is still looking to be one of the biggest u.s. ipos over the course of 2023 but that $4.9 billion

figure refers to the low end of the range. at the question is whether they go around 5.5 billion at the top end of the range or whether they move higher off of that. vonnie: we are going to watch that closely. it still ahead s&p global ratings as china is slowing facing limited stimulus as its property crisis weighs on economic growth. your global chief economist joining us later in the hour. but first g20 nations hailing india's success in reaching an agreement on 40 issues including russia's war in ukraine and climate change policies. we are alive to new delhi next, this is bloomberg.

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>> we have just received some good news because of the hard work done by our team in collaboration from all of you, we have been able to achieve consensus on the new delhi g20 leaders summit declaration. my proposal is also that we adopt this leaders declaration. i declare this declaration adopted. haidi: prime minister modi there speaking at the summit in new delhi. let's bring in haslinda who has been covering the summit in new delhi and despite xi jinping's decision to stay away this is being seen as a win for india. haslinda: that is right a win

for india, a win for prime minister modi. stepping up and sealing his position as leader of the global south. xi jinping's absence allows him to do that. i allowed him to say he shot himself in the foot and also win for the u.s.. it is in the interest of the u.s. if india succeeds as a way to contain and counter china's influence so you can say it has been a triumphant weekend for the g20. remember this also comes on the back of a very successful brix summit. it is needed for the g20 to do the same. we talked about that communiqué, the fact they succeeded to come up with one is a success and it self but bear in mind it came on the first day of a two day summit. the unusual and a feat for india. of course india had the backing of the u.s. as well as the western countries, they managed to tone down the language

expressing the war in ukraine. the u.s. has been adamant about using the phrase russia's aggression against ukraine but it agreed in toning it down. perhaps a reflection of how it is important for the u.s. to get everybody on board. it is a way for the u.s. also to engage in it president xi jinping's absence and allowed biden to do just that. other wins for the g20 this weekend, it is expanding its grouping to include the african union. of course they have also agreed to expand loans being expanded to developing nations within that grouping. something they have been wanting to do. vonnie: what was fascinating about the communiqué was russia's foreign minister welcomed it remotely because russia was not there. but what is this we are hearing about the u.s. wanting to counter china's initiative in the middle east?

haslinda: a deal was signed between the u.s., the middle east and saudi arabia. as well as israel and india. they have agreed to work on rail as well as maritime projects across the region. this is the way they say to counter china's belt and road initiative. it is quite initiative that saudi's crown prince mohammed did shake hands with biden not too long ago biden called him a pariah. biden in a wooing the middle east yet again and trying to contain china. and establishing better relations and no longer badgering some of these nations on human rights issues. for instance showing perhaps an understanding of how to engage with these countries. haidi: biden missed the second day of the g20 because he was making his way to vietnam where

he made some pretty interesting comments on china. >> i don't think this will cause china to invade taiwan. in fact the opposite. it has the same capacity it had before but as i said, we are not looking to her china. sincerely. we are all better off if china does well. haslinda: it is a week in china and we have heard biden express that before. saying that china is a ticking bomb given the way its economy is right now. it is grappling with a lot of issues and that is one reason why she has been a no-show. one he says is pretty strong, china's weakened position perhaps will decrease the likelihood in the risk of china attacking taiwan. vonnie: i sure there's always

some standout moments and maybe some more superficial moments and moments of likeness at these events. can you give us one or two? haslinda: the chancellor of genoa was quite a sight. he came with an eye patch because of a jogging incident. also the hug between prime minister modi and prime minister rishi sunak. sunak had said earlier he is the son-in-law of india given that his wife is indian and he is of indian heritage. the warm embrace between the two showed a kind of bond and it was quite a highlight to see. vonnie: exactly in vietnam's prime minister had kind words for the u.s. president joe biden on his appearance and lots to talk about. that was bloomberg markets: asia coanchor who has been covering the g20 summit for us in new delhi.

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haidi: just taking a look at softbank up 1.9% now, that is really only up fractionally in the topix up about 4/10 of 1%. of course softbank anticipating the rmi po -- ipo. its chip design will be able to price its shares at the top or even above its 47 to $51 range.

this all is the company prepares to make its public debut. for more, executive editor for asia technology joining us now. what changed with the appetite situation because last week it seems like all manner of people from sources to people at the company were trying to lower expectations and now it looks like we are seeing expectations raised. peter: this is the process that companies and investment bankers go through as they are heading towards their ipo. originally we had heard that soft bank was targeting evaluation for an arm of 60 to $70 billion for the company and then you are right as the company went through the roadshow last week those expectations were tamped down a little bit. as you mentioned at the top end of the range, the company would be valued at about $54.5 billion. they also lowered the amount of money they were looking to raise. it is now about 5 million -- $5 billion.

they were thinking about eight to 10 originally. they tamped down the expectations for a number of different reasons including because softbank had bought some shares from its vision fund arm and now they have gone out there on the roadshow, talked with investors, they've been able to get a strong lineup of anchor investments -- investors for the ipo and they are looking at bumping that valuation up a bit from the 54.5 billion -- not as close to the $60 billion but something about that range. because they are seeing strong demand from investors. vonnie: it is definitely not what it was going to be at one point in time but -- will probably take a wind of something like this is what the price ends up being. with all of these anchor investors too. peter: that is a good point. he bought the company for $32 billion. it saw bank owns 100% of the company so anything above that is certainly in positive territory. at one point they were looking at a much higher valuation.

when softbank bought this chunk from its vision fund arm they valued the company overall at $64 billion so that target was out there. i think some people had hoped that arm was going to be able to price around that valuation and it looks like it's going to be a little softer than that. but this is just the initial valuation as they go public. there is a lot of room for the stock to trade after. it typically investment bankers want to price this a little low so there will be a pop as they come out. there will be some reward for investors here. you may expect that even if they price at the top end of the range they might anticipate some upswing on shares as they begin trading. vonnie: right and then there is the danger that the shares don't pop are they declined. could that be the catalyst that bursts the bubble or causes chip stocks to start getting revalue? peter: that is a good question. this is certainly a test of the demand for chip stocks and ai stocks overall.

we have seen this tremendous run for nvidia in particular. the company that makes the graphics chips that have been powering so many of these ai models that we have seen. it seems like a very powerful trend from where we sit at this moment. arm has been benefiting, arm sells the designs for many of these chips including those for nvidia's chip so they benefit from some of that strong demand. at softbank and arm have worked hard to position the company as an ai play. they expect they're going to be able to contribute to that momentum so we will see whether it continues from here but certainly softbank is betting this is just the beginning of the trading for arm. there is a lot of upside for the company, especially if it is able to move beyond its historic strength in the smartphone market and move into servers and higher and computers that take advantage of the armed designs and the low end energy consumption that arm has in its design and really push into that ai space. which as you mentioned has been a huge growth area for the chip

industry overall. haidi: our executive editor for asia technology there, we are just seeing some big moves when it comes to japanese bonds this morning on the back of the boj governor's comments really stoking further speculation as to where we go when it comes to unwinding of extraordinary monetary policy here. at that big move when it comes to the japan five-year yield rising for basis points to the highest since january. we are also sing that big move forward when it comes to japanese banks as well after at the governor's comments on negative rates. we had expected some pressure to come from the start of trading in jgb's and the yen and we have seen an advance in the end on those comments from the bank of japan governor. vonnie: as i say, all eyes are on that arm ipo and that is sending softbank shares higher but for the most part stocks across asia are taking their cue from last week's u.s. finish.

in friday's session we saw the u.s. have a down week and it looks like that is what we are starting out like in the asia pac region. we have the nikkei two to five just on fractionally, same with the kospi in its sole the asx 200 down about a 10th of a percent and new zealand down about 2/10 of a percent. a lot is going to ride on with these traders do with this 10 year yield in japan the yen strengthening following these negative interest-rate comments from the boj governor. it coming up we will dive deeper into the outcome of the g20 summit with the global chief economist from s&p global ratings. that is next, this is bloomberg. the power goes out and we still have wifi to do our homework. and that's a good thing? great in my book! who are you? no power? no problem.

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>> bloomberg a pillion columnist is fed faces more complicate kish -- complications ahead of future policy decisions. he told us the u.s. cpi data do this week may change the policy bank -- the banks path after its september meeting. >> cpi next weekend definitely change it. not september but can change the next rate hike at the end of october or the beginning of november. the bigger issue here is -- i think the discussion is going from whether they will hike her not to what is the overall impact of the level of interest rates. there is also no more discussion of how high -- not how high how long are they going to stay there. underneath all of that are some really challenging technical issues about monetary policy to what are the real lags in play, this is a very complicated time for the fed. markets should not jump to conclusions too easily as to

what is going to happen be on september. >> speaking to those complications some contradictions in the economic data this week alone jobless claims are the lowest we have seen since february. the ice and was pretty punchy, the base book screams slow down, i've been asking all week how much weight should i put on each data point coming out at the moment? what is giving me a clearer story? >> i think the consistent story is that services are strong there strong unemployment, they are strong on wages, and that is an important thing to focus on. beyond that you have massive ambiguities. beyond that you have also dependence on the rest of the world which is in a different place than the u.s.. think the key issues is get services right and if you get services right you can explain much of what is going to happen going forward. but there are other issues that are going to become more

important as we go deeper into 2024. >> what do you think those issues are? >> it is the supply side. the way plays out. whether it is labor negotiations, whether supplies -- the price of oil stays high when chinese demand is under pressure. what is happening to apple in terms of geopolitics and what that does to supply chains and what that does to set -- demand. there is a lot of aspects of supply -- supplies number one. we have transitioned from a world of insufficient aggregate demand to a world of insufficient aggregate supply and that is going to play out for it not just one year but for a number of years. haidi: that was our bloomberg opinion columnist, u.s. treasury secretary janet yellen says she is increasingly confident that the u.s. is on a path to avoid a recession while a rating in consumer prices. she spoke to bloomberg on the way home from the g20 summit in

india. headline u.s. inflation has slowed without any decline in payrolls or gdp. joining us now is the global chief economist at s&p global ratings. lovely to have you here in sydney. let's start off with janet yellen. is this idea of a goldilocks scenario still playing out for you, because i think you perhaps worried it is running almost too hot for the fed? >> the baseline, we have got enough strength in the labor market that the fed and other central banks can probably engineer a softish landing. at that means we don't undershooting the target at the end of the cycle but the risk is actually there is still too much demand pressure in the economy. i would say real interest rates are not particularly high. financial conditions are not particularly tight so i would say the baseline is for a soft landing. the risk is the fed might have to do more.

haidi: i am thinking primarily we have seen this huge one up when it comes to the u.s. dollar and it is hard to see that those fundamentals will change. does that create pressure in this part of the world? >> yes a strong dollar is very much part of the story where the fed stays higher for longer in u.s. growth outperforms the rest of the advanced economy. if you've got dollar debt or you are worried about capital inflows are investors are looking at rate or growth differentials, or you are a deficit country. that is a warning side for you. those countries would not prefer to have higher dollar for longer they would prefer a moderate dollar path for certain economies that is a risk. haidi: how much are you worried about china because it does not feel like -- our previous gas said beijing is willing to do whatever it takes. are they though? >> first of all the surprise has been the comfort around what apparently looks like a miss on the growth target. i know the target is about five

-- five we are about to put out a new forecast. we are leaning lower but this risk we have been worried about for a long time starting to manifest. the structural -- the overbuilding of property which feeds into confidence which feeds into weaker sales which feeds into weaker revenue. the strategy -- strategy so far seems to be to tweak it and maybe the state banks lower rates and maybe the extended pretend model, is that going to be enough to right the ship or do we need something more structural to get some sort of asset management structure involved. for now we will have to wait and see the chinese have a good track record of being able to trick the economy and create growth. for now i would say china is going to underperform on the growth front. if you are exposed to chinese demand, the chinese consumer story never picked up the way we thought. those are the stress points for the u.s., maybe not so much but this part absolutely. vonnie: feel free to give us that new forecast for china growth right now.

>> know for compliance issues but we are at five to in the previous round and let's just say we are leaning lower. we're going to be publishing in a couple weeks. that is the narrative, that's what i just told you. the expected burst coming out of the household sector post party congress last year kind of fizzled and now we have stress in the property sector. the questions, the comfort level of the authorities for weaker growth and then whether these small surgical moves are going to be enough to restore confidence because is that loop now between the health of the property developers and local revenue in the consumers and finishing the houses in the buildings and everything that is all interacting with and pushing down growth and confidence. can we engineer a recovery with some tweaks or do we need to do something more fundamental is the question. vonnie: echoing what janet yellen said," and her relatively small adjustments and policy,

what about the united states in the debt ceiling drama? are you preparing for another round of that in a couple weeks? >> sovereign team is focused on that. it seems -- first of all the u.s. is set up for drama. we approved the spending at a different time then we approve lifting the debt limit so it is set up for maximizing political drama but in the end we have reasonable people coming together and doing it. for us the issue is more the u.s. deficit is quite high especially when he think about an economy that is running a bit hot. the structural deficit looks like it's too high for the u.s. only get through this inflation period and get back to normal and things are starting to look more sustainable, we would look for a decline in the deficit to gdp ratio in the u.s.. we have added a lot of debt in the post-covid period and it's probably time to get that trajectory on a downward motion. haidi: when it comes to the euro zone is a sense that the markets might be underestimating how

much hawkishness we could see? >> that was a bit tougher because we can tell the u.s. economy is running a bit hot in there is a positive out -- output. in the euro zone it is not quite so obvious. they have clear weakness on the industrial side. but because of the pent up consumer demand they have a bigger inflation problem than the u.s.. if you look at your rules of thumb about where the ecb should be they look a bit low nonetheless we think there are enough signs that the economy is slowing and that lagarde and company will be on hold but that is a trickier call because you don't have the excesses but you do have inflation. and you do have the geopolitical tension overhang and the weakness in the industrial sector so i think that is a trickier call than the u.s. but we think the ecb is done or largely done in that economy has got a lower growth forecast going forward than the u.s.. haidi: i guess a more existential question, if there is a risk that china fulfills to -- fails to fulfill its growth potential because of a self-fulfilling mester policy,

do you see india replacing that because india has had a moment with the g20. is this finally time for some of these emerging markets to step up? >> we just put out a big piece a couple months ago for g20 and it was india is getting the growth baton from china. part of that is china success, they were not going to go for six or seven 8% forever but india seems to have found the right combination. good policy, good geopolitical location and everything. the missing bit of the india story has always been private investment. the numbers that came out for their first quarter or second quarter recently, it looks like there are signs that that is actually happening now. if india can get the confidence around the corporate sector to help complement all the state investment they could be and a good six to 7% growth path. they are small relative to china. china is going to be driving global growth for the foreseeable future but india is probably one third the size of china. but if that happens for a long

period or a decade or so maybe we could be talking about china driving global -- sorry india driving global growth but we are not there yet it is still a china story. haidi: that is kind of good news so we will leave it there. great to have you with us. global chief economist s&p global. it's get back to bella for a look at markets. belle: thank you, just looking at the investor reaction so far. what has been one of the biggest headlines of the day, the boj governor giving an interview to local japanese media at the weekend. in it he said he is perhaps going to have enough data around wages, wage growth by the end of the year to start to move away from negative policy settings or negative rates. off of that we have seen a big move higher for japanese lenders. of course the bank financials like rising rates environment to an extent so this is the reaction we are seeing so far in terms of equities. it is also being very felt in the japanese yen and we have

seen it in the early part of the asian trading session moving higher against all of its g10 peers. you can see that gain of 6/10 of a percent against the greenback but every single g10 peer is higher against those. it is that story of what it means, that exit away from negative rates. it has been that yield differential between the fed, the boj and other central banks that has kept the yen under pressure or so much of this year. we are also tracking the reaction in the bond space, we have seen a big drop in japanese bond futures. we have the 10 year yield hitting its highest since 2014 and again it is that prospect. that perhaps we are going to see some sort of change around the program of yield curve control as well. vonnie: thank you, plenty more to come right here on daybreak asia, this is bloomberg. ♪

>> alibaba is former ceo daniel zhang has decided to quit, months after agreeing to leave. this adds uncertainty as the china's largest e-commerce company just as it is navigating a complicated breakup. let's bring in bloomberg senior intelligence analyst, catherine we are getting worried that the transition is now completed with eddie wu assuming the ceo position. this is very surprising. it is just two months since he took over as cloud chairman. what do you think went on behind

the scenes? >> as you mentioned this is a complicated process that alibaba has embarked on. particularly i think with cloud given that we do know that right now they are looking to bring in some of the state owned investors and there is that natural shift towards a lot of the state owned contract. it does need a bit of that government backing. honestly speaking if we actually look at it itself i think we are still going to the transition but i'm not overly concerned about daniel leaving the management of the cloud business itself, he is still within the ecosystem running a technology fund of one billion going forward. haidi: what does that tell us about what is going to potentially influence strategy going forward given this existentially critical point in the company structure?

>> i hear you. i think for the cloud business there is a lot of state considerations that have to be factored in going forward and it does help having some of the government presence in their. my expectations right now is that we will continue to see the management team, the board of directors on the cloud intelligence unit evolving ahead of the spinoff and the ipo through may 2024. haidi: bloomberg intelligence senior aipac analyst with her take on these leadership changes that alibaba. what we are watching, china property very keenly country garden facing its next major test with creditors voting monday on company request to extend more bonds. for more let's bring in our bond and loan reporter. as we look to these extensions,

can china buy more time for -- companies like country garden. what is the likely outcome on the vote today? >> there are eight bonds in question that investors have to vote separately on an country garden has proposed this schedule for all of these bonds and essentially they will get extended for around three years. we think it is likely investors will have to agree to that schedule because we think they are worrying about the worst outcome which is the default of country garden on its onshore bond that will have a ripple effect for developers. so i think right now the priority for the company is to get more time for survival in their are a few key payments are watching out for. over the weekend there will be two thai baht offshore coupons and also a dollar bond coupon do for country garden so that is key for offshore investors.

vonnie: one of the things that stood out to me is on some of these issuances they want to extend by three years. that is a long time for bondholders to wait great is that how long is going to take for country garden to turn things around? catherine: i think if you look at the actual schedule they are proposing, for the first year there only proposing 2% of the payment and then from the second year onwards they going to pay gradually so you're talking about 20%, 25%. things like that for the company. i think there is an expectation that at least within one year it is not going to turn things around that quickly because home sales are still stagnant and what is key is country gardens project in the second and third tier cities to recover. that is what a take much longer than the first year city which are already getting help from

the government seizing policies. haidi: bloomberg's loretta chen there with the latest when it comes to country garden that in the key vote today. take a look at how fx pairs are trading across the board. have a little respire when it comes to the momentum in the u.s. dollar rally we saw through to the end of last week. a little more weakness for the greenback against the g10 peers, just getting underway but it had been the story of the yen on the back of those boj governor comments on wage and really giving these markets that had been on the lookout for excuses for a policy tweak from the boj to really take that story and run with it when it comes the yen. as well as for jgb's, the yen outperforming all of those g10 currencies. investors reacting also to biden's assertion that china's economic woes have diminished its capacity when it comes to a potential invasion of taiwan. it dollar yen they are falling more than 6/10 of a percent, we

are seeing it still just shy of that 147 handle at the moment. we did see that gain on the friday session for the dollar with that weekly gain to 1.1% in the yen was overdue for that rebound given that it has weekend five out of the past six weeks. we're also watching the aussie dollar and it we are potentially seeing a rebound, investors are betting the aussie dollar will continue to weekend. they may want to consider -- we consider that given any prospect of china stimulus and any rba hike prospects could see a reversal given the aussie fell to a 10 month low last week. with a record net short position as well on the currency. vonnie: u.s. futures are trading mixed, unchanged right now after we had a down week last week for the major indices but they were ending the week with very small moves. not much conviction it seems except in the mega tax so we did have a three day drop for nvidia

for example. it tesla did not have a great week. apple did bounceback but it erased almost $200 billion in value a few days before it unveiled some new products like the iphone 15. we will be watching the tech space particularly when you get the arm ipo pricing as well and later in the week's cpi which is going to be very important for the fomc decision the following week. in the press conference after. coming up high records of youth unemployment in china has not stopped gen z from shelling out for travel in measure. we will have more on that next, this is bloomberg. ♪

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so, it is a competition. save 50% on the sleep number limited edition smart bed. plus, free home delivery when you add an adjustable base. shop now only at sleep number. vonnie: youth unemployment in china is at a record and growth is faltering but china's gloomy economic backdrop does not stop gen z for shelling out for travel and leisure. for more details let's bling it -- bring in our consumer reporter in hong kong. tell us what you found in terms of numbers. what are gen z spending on? >> it actually quite surprising, we are seeing chinese consumers especially the young consumers are still splurging in experience led shopping experiences. for example going to cinema, going to tourism spots, live

concerts, enjoying beauty services and exercising outdoors. these are bringing options for consumer companies and the like and on the others they are cutting back on spending on large gadgets or saving for long-term goals such as owning a home. they're the only generation in terms of thinking as owning a home as a criteria for success, over the past few years that number dropped. while older generations are thinking homes are more important. haidi: how are we seeing brands tweak their marketing strategies and narratives to try to appeal to this? >> exactly. with this jobless rate at a record high we are seeing brands emphasizing this kind of cheering yourself and owning self-respect and we talk to budget retail and they're having a campaign showing big smiley's and we talk to coach, they are also emphasizing this self worth

out of consumers. with these campaigns we see retailers stressing their concerns over uncertainty over china's consumer recovery but at the same time there also doing promotions and supporting sales. vonnie: thank you so much for that that is bloomberg's consumer reporter in hong kong. some stocks we are watching ahead of markets opening in hong kong and china, insurers are in focus as china eases rules for the sector to boost stock investments. this includes lower minimum capital requirements. we will of course be watching alibaba amid the leadership changes of the tech giant. joseph has assumed the role of chairman and eddie wu has taken over as ceo. we are keeping and and lenders as well, china is expected to continue cutting its rrr to boost its economy. haidi: take a look at japan bonds, we have seen that big

move when it comes to jgb's. as expected, it was expected to be a fiery start given those boj governor's comments. we have seen those bonds dropping on the back of those comments on negative rates. this as we continue to watch some pretty sizable moves, the governors saying the boj man know enough about wages by the end of the year. the yen advancing against all g10 peers and government bonds really slumping their as we see across with the five year as well as the 10 year yields. and given of course we see 10-year treasury yield's above 4%, pretty difficult according to strategist to report the dollar yen to test that downside. to adjust that speculation -- we will see how long that impact lasts. much more to come as markets coverage continues here, this is bloomberg.

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