>> you are watching daybreak: asia coming to live from new york, sydney and hong kong. >> we are coming down to asia's major market opens. >> the top stories this error appeared asian stocks set for a positive open ahead of economic data that could fate -- could shape the feds rate decision. qualcomm jumping after apple extends the semiconductor deal in a sign the iphone makers own ships are taking longer than expected. we a gauge of china's consumer recovery speaking exclusively with apple's greater china ceo gary rosen. shery:shery: take a look at how a look at how u.s. futures are trading shared seeing a little pressure after u.s. stocks gained ground under the session. we have the nasdaq 100 seeing its best day in two weeks.

tesla rallying on the morgan stanley upgrade. we had qualcomm gaining ground with apple extending its agreement with the chipmaker. watching treasuries. minimal action in that sector. treasuries ending pretty mixed. it touch below the 430 level. still awaiting the monthly cpi data. for more clarity on where the federal reserve goes from here. oil holding steady. we saw a little pressure in the new york session. technicals looking a little stretched at the moment. annabelle: really when you take a look at what we have for the asian set up, it is going to be taking some cues from what happened in the wall street session. we have futures pointing high across the board nikkei futures, the most liquid of -- in china. indicating to us more investors are going to continue by and

said the bank stocks. -- by into the bank stocks. whether we could start to see an exit or more signaling around the negative rates. that is the start of play -- state of play. the focus is still on what is happening in the currencies market. keeping an eye on what is happening with the dollar yen. trading fairly steady in the early hours. still we are keeping a close watch on the gap between the fed and the boj. this chart taking a look at how the dollar-yen has been held hostage to what goes on with the fed rates. that is why the inflation print tomorrow is still a focus. will the price pressures be how enough to have more anticipation we are going to see the fed hiking again later this year?

that will keep us on watch for any further signaling around intervention from japanese government officials. haidi: that is going to be key, the divergent story. let's get more with the head of investment strategy at fire trail investments good such a risk for investors to be second-guessing, planting so much of their expectations on one single piece of data and how that could impact fed policy. >> what has been the story of the last 24 months. in 2022, 10 out of the 12 most trading days were cpi prints. it goes to show the sensitivity the market has the fed a reaction at the moment. if we do see potentially a more sticky inflation number than the .66 expected by economists or .2 encore, i would expect to see the bond market start to price in another rate hike before the end of the year. potentially as early as november. so we haidi: may not have peach when it comes as -- so we may

not have picked when it comes to yields? >> we believe the u.s. federal reserve has afforded itself enough time to approach the wait and see mode. probably will not see a rate hike. much will depend on incoming data. that will have ramifications for the yield curve including the long bond yield. shery: what are you expecting for the cpi numbers in the u.s. on wednesday? do you position ahead of that? >> we don't pay too much attention to the noise on month on month data prints. that can be highly volatile. we are not positioned in any particular way in terms of the rating on wednesday. what we are doing is taking a fundamental standpoint with a three year view in looking outside of the mecca cap names

that have driven market returns this year. we are seeing great opportunities in the mid to small cap part of the market. this is where we are looking. those companies that have pricing power they can afford to pass on rising labor costs or rising import costs to the end consumer. shery: talk us through what is happening in the em conflicts especially when it comes to the focus on china because i see you do have an overweight on the ems but you are not necessarily exposed to chinese stocks. we have seen traders pulling out so much money on the emerging market etf's that are exposed to china and bring them elsewhere where they don't see exposure in china. do you see this trend continue given the concerns over the economy? >> yes or lower portfolio currently has your exposure to

china. i think it is right to be cautious. certainly in terms of the incoming economic data. it does suggest a slowdown in china and i think given those concerns, many fundamental investors have around chinese companies at this point in the global economic cycle, if you are a high conviction investor, there are better opportunities elsewhere. the opportunities we are finding are across a range of em economies including a bank in brazil. we own a couple of exit can infrastructure plays via mexican airport exposures. we have exposure to higher copper prices via canadian listed first quantum. a couple minor assets in zambia. we think there are better opportunities within the global equity market outside of china

which at this moment looks like a binary investment in terms of which way they could go. shery: if you are underweight asia-pacific on equities, what do you like? is that company specific? some calls in indonesia, some other calls in terms of commodities as well? >> it is really from a valuation perspective. the underweight we have in the portfolio to asia-pacific is offset from an overweight in u.s. and europe in particular where we see evaluations are particularly compelling. particularly on our investment time horizon. we both are in large caps. we unmake a caps including alphabet and microsoft. we on a large caps in europe including schneider electric to we also on some smaller names including tenable holdings for example listed on the nasdaq in the u.s.

annabelle: is there anything appealing about having china exposure or into bank china exposure -- or indirect china exposure? >> the philosophy we follow our sustainable earnings and sustainable business models. it is too difficult for us to get a good understanding of the outlook on the three to five year view of what the earnings trajectory is for a number of these companies particularly given the changes that seem to be getting headlines every week from the chinese policy makers in terms of trying to support the respective sectors within the chinese economy. haidi: we were speaking to carl bass earlier talking about this using ping induced volatility. always great to speak with you. still ahead, gary rosen will be along with us telling us where they are seeing room for growth in the mainland hospitality sector despite signs of a

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shery: the odds have shifted to the yen's favor at the start of the week but it may still be vulnerable to sharp movements print this as the cpi print and central-bank meetings loom large. let's discuss with paul jackson. we see this curveball coming from the u.s. cpi numbers. >> we could do. obviously we are going to be looking at market reaction. we are expecting a speeding up of the headline figure but also slowing down of the core figure so there is going to be lots of moving parts on wednesday. we will be looking at how the market reacts to it. i guess the main point to make

here is while the yen has been is to strengthen and rally, we are not out of the danger zone of intervention. we cannot will out that possibility. sharp moves in the yen are still possible. we have plenty of catalysts coming ahead. we have the ecb fed meeting, the boj next week. our first catalyst looming large ahead of us is that u.s. cpi print. shery: what do you make of the market reaction haidi: -- what you make across jgb, broader yen? were they taken a little too far do you think or has that significantly reset expectations of policy change? >> i think it will have reset expectations in terms of putting the bumping up of short term interest rate, getting rid of

negative interest rates. it has brought that on the radar for a lot more people in terms of the timeframe. in the interview with japanese local media, he said he could have enough information on wages and inflation by the end of the year. i think we are going to see economists bringing forward their forecast for policy change into the first quarter or second quarter of next year. the prospect of the end of the last major negative interest rate in the year -- the world ending is starting to become clear. one point we also need to make is on the yield target there is still a yield target of zero. although we have this effective upper limit of 1%, the target is still zero. you cannot have a negative interest rate removed up to zero and still have your long-term rate at zero. that would be flat across the line. there are some decisions to be made on why cc which would have to be made before, the same time

as raising the negative interest rate. shery: bloomberg's japan, korea and government editor with the latest peer we are watching qualcomm shares surging after apple extended a deal to get semiconductors from the chip giant. the move signals the desire to generate chips in house is taking longer than expected. bloomberg intelligence believes an extension could lead to an upside in sales estimates. an analyst joins us for more. let's take a look at the qualcomm side. i should say the apple side in terms of what it is implying. the complexity of being able to bring this technology and design in house. >> developing a 5g modem chip is a complex process. you need a working solution

across globally across different regions, different spectrums, different bands of 3g, 4g, 5g. you have to qualify them across service providers across different jurisdictions. this is one step to having a working solution. apple needs to have a solution that at least matches qualcomm in performance if not better. it would not be ideal for apple to have their flagship iphone shipping with a subpar chip while other funds are shipping with a better qualcomm solution. there are multiple herders when it -- multiple hurdles. haidi:haidi: what is the impact on qualcomm revenues and estimates? >> the estimate of 5 billion to 7 billion to topline sales coming fiscal 25. this is when analysts are assuming apple would have its own solution and drop qualcomm. that is a significant addition.

haidi: knowing what we do, how do we think apple will phase in these solutions when they are ready? >> from our perspective, we believe they will phase in starting with the lower priority devices like the wearables, the watch, the ipads, the macs rather than replace the flagship iphones. they would want to try across multiple volume devices to see how their solution works. shery: what else to me know about the licensing agreement extension? -- what else do we know about the licensing agreement extension? >> blazing egg -- the licensing agreement was supposed to expire in march of 2025. there is an option for their two year extension. that covers the part of where the chip is supposed to last into 2026. the agreement is separate. looksee apple was able to design their own ships earlier.

they would still be under the licensing agreement with qualcomm. shery:shery: joining us from san francisco. you can get a round up of all these stories you need to know took your day going in today's edition of daybreak. terminal subscribers go to dayb . also available on mobile in the bloomberg anywhere app. can customize your settings so you only get the news on the industries and assets you care about. this is bloomberg. ♪ ♪ is it possible to fall in love with your home... ...before you even step inside? ♪ discover the magnolia home james hardie collection. available now in siding colors, styles and textures.

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haidi: jp morgan ceo jamie dimon is taking aim at higher capital requirements u.s. regulators have proposed for banks. he says he would love to know what they really want to accomplish adding the plan would be a huge negative for american banks over time. he also questioned whether

regulators have learned the right lessons from the bank failures. >> the federal reserve's are the ones who told the world rates are not going up. it was not the federal reserve in general. each one of them independently. it was each central bank. if i were them i would have a little more humility over stuff like this. shery: bloomberg has learned ubs is cutting hundreds of asia wealth management jobs months after completing its takeover of credit suisse. vonnie quinn has more on this. the asian wealth teams were supposed to be free from cuts paired what happened? funny: this would happen when the merger -- vonnie: this is what happen when the merger finalized in june. that it is not where the bulk of the cuts was going to come. as we know these things don't always pan out the way they are initially planned. particularly given the slowing economy in china which is a little bit of a surprise

post-covid it did not bounce back to the extent we were expecting. and muted client activity. it seems like the wealth management jobs are getting hit. better news is it is not hundreds and hundreds. the source we are talking to are telling us it could be as low as the low 100s. it will happen between now and the end of november it will be mostly concentrated in an area with the two banks have created a behemoth with more than 1400 of the wealth management and client relationship jobs. more together than both rivals combined. it sort of makes sense for ubs now to cut some of the jobs and luckily it is not an entire flood of jobs in the low 100s. haidi: do we have any details about where they would hit? vonnie: for the most part it is going to be hong kong and singapore. as you might expect because that is where the concentration of jobs are.

obviously there are jobs across the region and we are hearing in australia and india jobs are safe for now. everything is conditional. we know for example way back when the merger was completed ubs's global wealth boss hosted celebratory events in hong kong and singapore suggesting they would literally own the region in terms of wealth management. of course that has not come to pass. it should be noted bankers who have been in this for a while saw this coming. we have seen a trickle of senior bankers in these units leave. even ones hired recently. it has been visible within the bank that some of these jobs were going to go. we know domestically in the united states and europe ubs has said it is getting rid of at least 3000 and some of those are jobs that are the same job. the so-called synergies we look for when two of the same titans in an industry.

haidi: vonnie quinn with the latest. we are tracking other corporate stories including oracle for those shares have slumped in senate trading after a slowdown in quarterly cloud sales growth. it was down from the previous quarter 54% search. oracle is focused on expanding infrastructure service to more forcefully compete with amazon, microsoft and alphabet. tesla shares jumped over 10% after morgan stanley upgraded its rating for the ev maker. it is the highest on wall street. morgan stanley believes tesla supercomputer for its automated driving systems could add $500 billion to its enterprise value. charter communications is said to offer disney's flagship streaming service at no additional cost to its cable providers.

sources say charter will pay disney a wholesale price for the service. instacart and backers have set the stage for an ipo that may value the grocery delivery business as much as $9.3 billion. the expected valuation is a significant decline from its last fundraising round in 2021. let's get more from abigail doolittle. >> the ipo window is open and one well-known name is considering pricing its listing on tuesday, september 19 through nasdaq. at a significant discount at what reflect back on its heyday. about a quarter of what it was in the pandemic. this will allow the largest grocery delivery company to raise $616 million by offering 14.1 million new shares for 26 to $28 each.

existing shareholders are selling 7.9 shares at the same price aware it is determined to win. the $9.3 billion valuation is not finalized. it could still move higher based on investor demand. it is a tremendous and noticeable drop from the pandemic hike valuation in 2021 of $39 billion. at that time there were versions of lockdowns and difficulties for people to shop in stores. the same year the company did replace it ceo. in conjunction with the ipo pepsico is buying when under 75 my and dollars of its preferred convertible stock. at a from a broader perspective instacart's listing could help on state the backlog of companies whose plans to go public have been stymied by the longest lull in u.s. listings since the financial crisis. haidi: we are looking like a mixed start to trading.

when the cash session begins in australia. sydney stocks marginally higher. a 10th of 1% higher. we did see wall street rising ahead of because of the cpi print expected to show how close the fed is when it comes to wrapping up the tightening cycle. seeing futures trading in japan looking flat. new zealand managing to eke out a 10th of 1% when it comes to a gain. watching for some of these chip stocks. we sell tesla rallying 10% after the upgraded assessment from morgan stanley on the dojo supercomputer. watching some of the call, jason after we sell that a climb. apples deal with the chipmaker as well. s&p futures a little softer paired down a 10th of 1%. shery: take a look at how currencies are trading. we had seen the dollar retreating after the record streak of gains after we saw asian central banks coming into

action. the pboc giving a strong warning to regulators to steer clear of destabilizing the yuan which is why we saw strength for the offshore you want. right now trading at the 730 level. he also heard from the boj governor taking a more subtle approach at hinting at the possibility of an eventual policy shift but that also led the japanese yen to see its best day in two months. right now at the 146 level. the aussie holding steady at 64 u.s. cents. up next we speak exclusively to gary rosen about spending appetite among chinese travelers. this is bloomberg. ♪

shery: china's latest economic data showing signs of stability as credit demand improves and deflationary pressures ease. the august numbers suggesting july's grim figures may have reflected the worst of the slump when consumer prices tipped into deflation and monthly lows plunged to a 14 year low. domestic tourism has been seeing a strong rebound. let's get more on the sector from our next guest, gary rosen, greater china ceo at a cora. when we look at the headline numbers out of china, we are still seeing pretty weak figures. what are you seeing on the ground? >> it is interesting. there is certainly the sentiment is a bit cautious. people are making choices that are a little reminiscent of going back into savings mode. people are spending less on certain items. what we have seen is coming out of covid people have continued this pent-up demand for travel.

that has had an amazing effect in terms of the rebound. in the summer we have a record-breaking summer performance mystically which is back to the level of 2019. we see that continuing as we transition from summer holidays into the backdoor corporate environment into september. i think one of the things people are pulling back a little bit in terms of spending on items. traveling is something people want to continue to do. is this opportunity to rediscover the domestic market. it has been wonderful to see you. always remain cautiously optimistic. certainly the impression is one of positive nature for coming through the balance of the year. shery: you are about to sign a record of about 125 hotel partnership projects across china this year. how are you so confident about what is happening in china and is it your asset light model

where there are joint operations the reason you are able to go more in-depth and have all of these partnerships? >> that is a great point. it is the combination. our approach to china is we have our partners we have master franchises with and our brands. we have another master franchise. with fun yard for our lifestyle brand. we can grow through our master franchises and we are growing organically with ourselves through our premium brands like pulmonary swiss hotel through high end luxury including raffles which i'm sitting in today and we just opened our newest at galaxy mikell. it is a combination. that combination but i think most importantly our approach to working with chinese operators is what is allowing us to field live growth when you have the partnerships in place. haidi: you have talked about the

curated experience. we are seeing a value becoming a much more important theme when it comes to a lot of chinese households and consumers. does that mean you have seen an impact when it comes to the higher end part of the portfolio? >> actually know. that is really interesting. when people are thinking about their travel experiences, this is a comfortable spending. they do want to have the great experience. our raffles, we have three in greater china. mikell has open to a full house. delivering great results. we see consumers still ones that luxury. quite honestly we are seeing a growth across all sectors with you go from midscale through high end luxury. it shows you the best nature and the number of domestic consumers traveling that it is able to fill all the difference egg's of hotels.

haidi:haidi: it is your expectation or outlook when it comes to room rates? historically they have been much lower in markets like middle china. is that unlikely to change given the economic outlook? >> no. since the opening -- the reopening i should say -- have seen an increase in rates. our rights are continuing to increase on a respectable level. overall hotel rates are lower in china than they are in other parts of the world. as the demand continues to grow, so will rates. we have seen significant growth since reopening in january. haidi: what about macau? how are you feeling about the revival of gaming in that market? >> actually incredibly positive. just walking through and coming across yesterday, the hotels are full. certainly the opening up from the greater bay area and the

ability to come into macau. macau is well above 2019 in terms of its results and we could not be more pleased. that is a great sign to come. it is a great indicator people are traveling. people want the experiences. especially where it has transitioned from gaming but also a huge amount of entertainment coming into the market. there is a demand for it. you have your traditional gamers but you have those people who are seeking more experiential, more talented or talented concerts etc. that is driving a different type of guest as well. shery: we are seeing a lot of volatility in the currency space. we have seen incredible weakness in the yuan. how are you being impacted by the currency fluctuations? >> the interesting thing is currency is always going to fluctuate whether you are talking about the r&b or the euro. you have to factor that in.

from a result standpoint, we look at local currency, the like for like it is actually delivering strong results for this year so far. that is what allows us to remain tall his late optimistic since we are certainly still in this year of transition coming out of the last three years of covid moving forward to as i mentioned, the interesting thing again when we are talking about consumers decisions about how they are spending, travel was one they are not cutting back on. haidi: great to chat with you. appreciate your time should greater china ceo at acco >> speaking of fx, -- taking a look at some of the moves we have seen in dollar china.

we annabelle: annabelle: were just talking about the moves and a the weakness but what was interesting in the session yesterday we were all about the yen. there a lot going on with the yuan and combine the currency, helping to drive or put pressure on the greenback here. what drove that? there were a couple of different factors. one is chinese officials coming in to say they are concerned about when we moves in the market. they will move to correct those as well. that was one of the factors that led to the jump we can see here. the biggest one since six months. what else boosted it along was economic data. we had the aggregate financing numbers coming in better than expected telling us there is a little stabilization going on in the china property market. another supportive factor for the currency. we have seen a lot of stronger-than-expected fixes coming through from the pboc in the early part of the morning. that came through yesterday.

something else that helped to lift the yuan off of the week end of its trading band. a lot of focus on the chinese yuan. a close track on it. a lot of economists saying if we do see that aggregate or the monthly activity data coming on friday, we could than expected, that can be something to push to 7.4 against the greenback. shery: that will have implications for real prices holding at this year's heights. we have seen a little consolidation given the 10% gain in recent weeks. columbia state run is latin america's third biggest oil company. oil and coal account for half of columbia's exports but now the country's leftist government is seeking to transition away from fossil fuels. i discussed the implications in an exclusive conversation with the ceo. >> there is a clear intention

from the higher government not to hold grounds for those interested in searching for oil and gas resources to bid on and acquire regions and areas for gas exploration. if you don't do that we currently have a portfolio of 48 contracts for oil and gas exploration. we have identified eight additional contracts that have an suspended for various reasons. in which you can surely delve deeper and search for more oil and gas reserves for columbia's energy system should >> are you focused on exhilarating investments into wheel production or transitioning faster towards renewable energy? >> we will continue to maintain our explosion, induction and production resumes we have today. fulfilling the value promise we have made to our shareholders and the market in our 20/40 strategy. looking at the long-term horizon and the next 17 years, there will be significant allocation

of resources toward renewable energies. currently these low omission businesses include natural gas and clean energies represent around 20 to 22% of the most significant investments we have made recently. shery: oil and coal account for 25% of foreign direct investment in columbia. you have been speaking to investors in new york. as there a big divergence in what the government wants and business interest? >> i believe what we are continuously witnessing is a greater understanding between the government and private investment regarding the true energy transition. this implies the element emphasized which is the driver. the driver of the project is capital discipline. it is a discipline that entails the energy transition does not happen at any time at any price. .

or emphasizing these three elements that underlined the decisions through which these projects have a possibility to develop over time. haidi: that was the exclusive conversation with the ecopetrol ceo. this is bloomberg. ♪

haidi: a much criticized -- be central to japan's nodes or ambitions. bloomberg energy finance has the country could become a major carbon capture and storage market as more japanese firms enter into such projects at home and abroad. let's bring in the head of bnef's japan and south korea research. how big a role do we see it playing in the net zero journey for japan? >> if we look at japan's carbon emissions by sector, power industry sectors account for 60% of total emissions. tcs could play a key role in decarbonizing both of these sectors. based on our analysis we see ccs abating up to 10% of japan's cube look to the missions between now and 2050. it plays a particularly important role in decarbonizing the steel and cement sectors. it is because we expect the

cross of dust the cost of green hydrogen which is a competing technology to be more expensive than other parts of the world largely due to the higher cost of who renewable energy in japan. shery: how does the japanese government plan to scale its carbon capture and storage industry? >> japan's game plan is to scale the industry by focusing on four areas. setting ambitious compact and pause production targets. establishing legal framework. exploring international partnerships with countries like australia and india and asia. -- indonesia. japan aims to have six to 12 capacity by 2030. this could be achieved at all seven large-scale projects currently under development. the 2050 target of 240 million tons of capacity, that is in 18

fold increase from the 2030 levels. we think this will be challenging to achieve under the current level of support. haidi: what would be required for japan to be able to meet these ambitious targets? >> the government would need to scale up public funding on projects. so far japan provided 270 million dollars in subsidy. that compares to 24 billion any the u.k. and 14 billion in the u.s. we will need to see japan's carbon prices rise significantly to spur investment. the current price of two dollars per ton is not only to low but japan exacts that tax for steel and cement where ccs could play an important role. japan could also benefit from developing large-scale ccs hubs. we estimate they could reduce the transport and storage costs

by 75% for economies of scale and that could help japan achieve these ambitious cost targets. shery: japan and korea head of research at bnef. we have more to come on daybreak asia. this is bloomberg. ♪

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shery: the u.k. chancellor of the exchequer germany hunt says the government is focused on finding inflation with prices remaining high. speaking with bloomberg after the g 27 he says the treasury may not have extra headroom for tax cuts or other giveaways. >> i think it is unlikely because since the spring budget one the last numbers were published, we have seen inflation stickier than was forecast at the time. that means that interest payments are higher. we don't have the numbers from the office of responsibility. this is speculation for you and me both. our priority is to bring down inflation. when you're trying to bring down inflation, you have to be really careful not to pump extra money into the economy. much as you would like to not

pump extra my into people's pockets because that can push up prices and keep inflation higher for longer. one thing i can absolutely say is our focus will be on bringing down inflation and delivering both the prime minister's goal to have inflation and the bank of england's target to get it down to 2%. >> inflation has eased but not as much as other countries. much lower in terms of the rate of easing. do you think the bank of england has done a good job? >> i think in fairness to the bank of england lots of central banks around the world underestimated the persistence of inflation. they were one of the first to raise interest rates when they did. and we brought inflation down from over 11% to 6.8%. so we are making progress. at the same time we have discovered the u.k. has gdp that is higher than pre-pandemic

levels and has recovered better than any other major european country. the economy has shown it is resilient. long term future for the economy depends on getting inflation down and that is what we are focused on trade haidi: the u.k. chancellor of the exchequer germany hunt speaking exclusively to bloomberg's haslinda amin in new delhi. it's get a look at the top stories we are following. a vietnam airlines has signed an agreement to buy its first bowling planes in a deal worth up to $10 billion. the airline only uses airbus in its fleet. news of the order comes as president biden visits vietnam. announcing deals in areas like semiconductors and infrastructure. rocco says expect the imf and world bank meetings will go ahead despite a major earthquake that has killed almost 3000 people. rocco strongest quake in 120

years struck late friday in the high atlas mountains tearing across some of the poorest regions and shaking a city among its top tourist destinations. rescue efforts are ongoing with the who putting their number of people affected at some 300,000. canada's armed forces say prime minister trudeau may finally be able to leave india on tuesday. he and his delegation to the g 27 have been stranded over they -- when the government jet arrived on broke down. shery: north korean leader kim jong-un is headed to russia in his luxury armored train ahead of talks with president vladimir putin. let's bring in our east asian government editor. interesting because this is his first trip overseas after four years ago. he actually met with coaching.

what is on the agenda this time? >> the agenda will probably focus on arms talks. while russia and north korea have denied any arms transfers are going on or will go on it is something the u.s. has made accusations of for several months. are a lot of things north korea has that russia wants, mostly munitions for the soviet era weaponry on the front lines in ukraine should the howitzers, artillery. looking for antitank missiles and rockets launch artillery. these are things north korea has. same caliber as soviet era equipment being used in ukraine and something putin needs because he has been burning through these shells rather quickly. haidi: are we expecting to hear much when it comes to any sort of updates or the substance of this meeting and what each side is getting out of it at the end

as deliverables? >> i don't think we are going to hear all that much. we were talking about two countries. russia and north korea that have very heavily controlled media. . we will get some sort -- if this goes to for my guessing we will get some sort of perfunctory statement the two have decided to deepen ties. kim's delegation was seen with top military officials as his foreign minister -- his state media released photos of his departure. we can see the people he is taking with him are involved in weapons and armaments. this may be a focus of the discussions but what actually comes out of the countries in terms of statements will probably be not that explicit or heavy on details. shery: how do we assess north korea to -- north korea's military capabilities in a country that suffers from hunger and poverty?

>> you have to look at north korea's capabilities in terms of the numbers it has. it has enormous supplies of artillery, artillery shells. it is making missiles at a high pace. the technology is closely older technology, 20th century technology. it is producing these things at large numbers. we are not going to see the cutting edge weapons that have made it to the battlefield from nato partners for ukraine. north korea does not have the technology, the semiconductor capability to make the weapons at the higher end but they can make -- these are lethal weapons. these are devastating weapons. it has missiles that are nuclear capable and quick to deploy. it has enormous numbers. these are things that could help russia as it fights in ukraine. haidi: east asia governor john herskovitz. take a look at some of the

stocks we are watching. softbank and chip maker's will be in focus. of course we did see the big move up when it comes to qualcomm. watching apple's asia suppliers at of the new iphone really scheduled for later on tuesday. also some of the crypto adjacent stocks could see moves. bitcoin briefly dipping below the $25,000 level for the first time in three months shery: coming up in the next hour, we will take you to cl essays flagship hong kong forum taking place throughout this week. we will speak to their chief economist. we have an exclusive interview with a microsoft asia president. the market opens our next. this is bloomberg. ♪

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belle: shery: we are counting down to asia's major market opens after we saw u.s. stocks gaining ground in the new york session. the u.s. dollar retreating after a record run. we are now watching the japanese yen and the chinese yuan given the central -- bank actions. belle: the fed threat from the cpi print is still very much in play. if we get that sort of expectation of a more hawkish fed potentially going forward we could yet again see further we miss potentially intervention from the pboc in the boj and japan. let's get over to bella for the start of trading. belle: that yen strength we have seen could be short-lived if we do get that higher than expected inflation print coming through but the open is upon us for japan, south korea and japan. there are a couple different sectors we're watching so topics

banks is one of them. we will wait to see that liveperson on the contract but essentially a lot of investors really buying back into japanese financials. on this assumption we are going to see some sort of change from the boj and its meeting next week. whether that means any sort of indication that there's going to be an exit away from negative rates. changes to the yield curve control program as well so i am seeing that still rising for a second straight day of half a percent adding to yesterday's gains of near 5%. what else we are seeing in the session is still at focus, will people watch on japanese bonds. we saw futures dropping yesterday all around that reaction we saw and markets to the boj governor interview with local media. in terms of the direction for stocks today we are pointing a little higher as we get underway. one of the names will be watching a softbank. you can see it unchanged which tells us perhaps they are not quite matching yet but what we are waiting for is more details on its arm ipo because we are hearing from sources that orders are already 10 times

oversubscribed. they could end up shutting the order books early on tuesday which would be another signal of strong demand is so pricing still expected on wednesday. at that company could start trading later this week. that is the start of play for trading in japan let's change now and look at what's happening in korea with markets coming online. what we are watching at the start here is a little geopolitical tensions and focus because we had reports this morning that kim jong-un and his train has departed for russia. he will be meeting with the russian leader and what they will be discussing is perhaps an arms deal which could help russia with its invasion of ukraine. that is certainly a focus there. geopolitical tensions, not just the story between the u.s. and china. what else we are watching in the session today is going to be an ion currencies, we have seen the korean won strengthening somewhat against the greenback and it is that story again of what we saw it led by the chinese yuan in the prior session which helped broader emerging-market currencies.

there up the most in six months against the dollar. a couple different factors, we had some drop owning from officials coming through saying they would not tolerate further one-sided moves. there was also stronger or better than expected credit data coming in and that helps. it's change on because in australia today we are watching mining stocks closely. the energy sector in general given that we had that better than expected credit data coming through from china. perhaps that stabilization were starting to see in the property market, these are all supportive factors. oil of course still a watch for us we are seeing brent crude holding above the $90 level. technical suggesting there is a bit of a room for a pause but we are still around that year to date high and we are seeing gains this month and just in the last couple weeks of 10%. haidi: let's bring in our executive editor for asian markets paul dobson. a lot hinges on u.s. data. how big of a reaction could we

see given that we have seen markets trading very actively on the cpi print data and other key data days. paul: i think thursday morning could be an interesting one for us watching that reaction coming through from the u.s. markets into asia. if we do see a stronger-than-expected cpi number and that really jolts treasury yields that could have a knock on impacts back into the dollar narrative and then on into the yen and the chinese yuan for the same reasons. both have been under pressure recently. again in particular. we had the comments from the governor over the weekend which had the impact of driving the yen stronger. perhaps intentionally, to take it away from getting too close to that 150 round number level which seems psychologically important barrier for the market. if we have much higher treasury yields widening that spread with

the japanese interest rates than that could put the yen back under some pressure and cause discomfort among policymakers. if there was a shock or a strong move lower towards that zone then may be the boj would feel compelled, or the -- would feel more compelled to do something to protect the exchange rate or we might see it on the boj and the policy front for that. same thing for the yuan but same thing for bond yields overall. we are at key levels for u.s. treasuries and therefore the global bond market too so there could be quite a lot of fireworks. if that cpi number does turn out to be on the strong side. haidi: what do we see for chipmakers, is there potential for another leg higher? there is a lot of questioning over where the ai adjacent rally goes from here. paul: in the last 24 hours of trading it seems to be almost like future bets are back on

across a lot of the market. we had this morgan stanley recommendation valuing the dojo -- massive amounts and benefits of the company. we had the arm ipo looking like it's going to be taken down well by the market so that give some sense of promise as well. we have other things coming through the next 24 hours, the apple product launch is going to be very keenly watched. on the flip side of that we had some slightly dimmer news from asia. tech overrule with the qualcomm -- i beg your pardon oracle earnings outlook not looking so bright so that is weighing a little bit on software companies. i think the ai buzz has not completely gone away from markets yet. it has had a little bit of a breather or reset. still that kind of future trend and theme is very much alive

going into this final quarter of the year. shery: earlier in our show a guest was telling us how japanese banks were some of their top calls. are we going to continue to see this uptrend given the expectations of what the boj will do? paul: if the boj delivers than absolutely and even if it doesn't the speculation is only going to mount. we spoke to some of the best-performing fund managers and some of them are extremely bullish on the japanese banks seeing the prospects for them to even double in value or go further than that. i think the possibility of the banks being able to make more money from traditional banking businesses, lending out to consumers, charging interest rates and then getting repaid in an economy that can grow and have a little more of an inflationary environment that can see prices start to rise. it could be a really bright spot

in global finance. and propel the valuations of those banks again. just from a domestically focused audience. i think that is part of the reason people are super bullish on japanese equities overall. it they've been drawing and a lot of foreign cash but that's not the only thing. also this adjustment to the inflationary environment, the rediscovery of pricing power and moves on the governance side to pay more attention to the cash that's been shored up to make spending plans more transparent and to be thinking about future investments and putting money to work as well. there are a number of reasons that the street seems excited about japanese equities. not just the banks but particularly those banks. shery: executive editor for asian markets paul dobson there. we now take you live to the hong kong forum happening throughout this week. cs las chief economist sees china and a cyclical recession

parallel to what happened in japan decades ago. eric joins us now. thank you for your time today. what are some of the lessons that we could take from japan? eric: i think the first lesson is you can't just prop up demand. you have to wait for households and companies in china to rebuild their balance sheets. we saw a very rapid credit growth for the pandemic, that has left the economy highly geared and we need to see some savings accrued and some balance sheets improved. until you get to that point stimulus measures are not going to get any traction. shery: we saw china's credit demand improving inflationary depression -- pressures also easing. does that mean this could prove to be temporary? eric: i think the inflation numbers are interesting. of course the negative print a month ago was largely food

prices and it was food prices that took the inflation rate back positive. so i would be a little bit wary about interpreting that figure as positive. the credit data is more mixed. we were expecting an increase in government bond issuance because of the instruction to local authorities to use a quota up by the end of september and that has come through and that is definitely a positive. the bank lending figures, yes the overall lending numbers were great but the long term loan story, the households or corporate's were quite small so that still fits with my framework that both companies and households are more interested in improving their balance sheets than taking on new credit. haidi: the japan affectation risk is interesting to me because you talk about this need to wait for balance sheets and households to be rebuilt. is it possible to do that when property is so closely tied to household wealth, as in this

prolonged structural slump. is there any policy response that could accelerate that? eric: i think you have hit the nail right on the head. we want to keep the preferred store of wealth that was the preferred investment asset for most of the 10 years up until 2020 affordable. so how do you do that without creating a negative wealth effect? i think you can do it but probably allowing a small price adjustment, which is what we're doing at the moment in order to keep developers profitable, is working against that rather than for it. i think we probably need to see real estate cheaper because what we absolutely need to see his households have confidence that it will start to go up in price again. haidi: the other similarities, we talked a little about access saving levels that are sitting idle but also the demographics.

at the aging population. the issues that they had even with abandoning the one child policy. does this mean we are settling in for a structural slowdown that is going to be structurally lower growth for longer in china , this is going to be the new normal? can they do that without a prolonged period of stagnation? eric: i think there are two questions. there is where are we on a credit cycle or business cycle that we have talked about and there is what the sustainable rate of growth is. i think beijing accepts that the sustainable rate of growth is getting slower because it is happen to every other country as its population ages and it gets richer. and i think it is reflected in how beijing has set growth targets so 15 years ago a growth target would be 8%. today the growth percent -- target is 5%. i don't necessarily associate that long-term slowdown with either stagnation or economic weakness.

it is just a reality of the fact that there are now fewer consumers joining the labor force every year and those workers that you do have tend to be more elderly which means that they save more. it is inevitable. it is not an economic problem either for beijing or for financial markets. unless there is an attempt to achieve a growth rate that is simply not unachievable. shery: what does that new reality mean for other asian economies that are much more trade dependent on what happens in china? eric: for the next year or two i think it is the cyclical process that matters most. pretty much all asian exporters for the last 12 months have seen china one of the weakest markets, rather than one of the strongest and i am afraid i think that continues probably through the end of 2020 or. and what practically that means is that the rest of asia, asian manufacturing is waiting for a

recovery in demand from u.s. and europe. it so china at the moment is not able to act in the way in which it typically has acted in the last two decades. which is the strongest source of inter-asian trade growth in that process until i think china's recovery starts which in my view, will be the end of 2024 or more likely 2025. haidi: we understand that india's growth is exuberant and it can't -- but that can't make up for any deficit left by china. but can it go some way toward making up that demand side? eric: amongst asian emerging economies india is in a unique place. firstly it is young, that means it has a high trend growth rate. we in fact don't have a particularly aggressive indian forecast but we are still looking at growth of 6% so it is

higher than pretty much any other asian country have forecast and that's because it's demographics are very favorable. of course it does have scale. you are right to say does not yet have scale to match china or one-for-one compensate for week chinese growth. but it is the largest youngest population emerging economy in asia and i think it is going to play an increasing role in intra-asian trade. it is maybe a 10 year story maybe then -- rather than a one or two your story. haidi: great to have you with us, we appreciate your time a chief economist ses l.a.. we have more conversations coming up from the sea sla investor or them. in a few minutes time will speak exclusively with the microsoft asia president and ask how they are positioning best to take advantage of the ai wave. this is bloomberg. ♪

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belle: you are watching daybreak asia, with a check on the moves this morning we are about 15 minutes into the session for tokyo, seoul and sydney but taking a look at some of the sectors moving here. japanese banks, we sell the topics banks index yesterday up nearly 5%. today it seems like investors perhaps taking a bit of a pause assessing the outlook here but it was that out -- reaction we had to the boj governor's interview with local media indicating that perhaps by the end of the year he would have enough data around jobs and wages to tell him whether it is time to exit away from negative rates. whether there needs to be any sort of changes to the curve control program. it is also what investors are starting to bet on ahead of the meeting next week so certainly a sector that tells us perhaps

there could be further room to run given that financials like that rising rates environment. today it was trading fairly steady. when we take a look at what is moving across the session today, material stocks are among the big gains today we are seeing these mostly climbing here as we get underway. particularly those aussie names on the asx 200 but what is driving that, firstly a weaker dollar coming through given that upward momentum in the yuan and yen but also moving onto that is chinese economic data which came in from the credit side better than expected in the prior sessions are telling us perhaps at the mortgage market is starting to stabilize so another group of stocks that are watching ahead of the open in the next hour. haidi: of course always watching property developers with a deadline. -- gardens request to extend a group of local bonds they want to stretch principal payments of onto notes by three years. kevin kingsbury joining us now,

we know this extended strategy that is being pursued is unusual. that the deadline has passed. what do we know? >> the voting ended at 10 p.m. beijing time last night. these bonds, the company is not required to make public filings with what happened, it might take time to find out what happened with how these extension votes fared and how the bondholders took these requests from the company. there is the equivalent of $1.5 billion of bonds involved in this extension request. earlier this month a separate set of bondholders approved a request to expand -- expand a bond by three years. after that the company then decided to try it again with eight others. shery: what is at stake if some bonds are not extended? kevin: likely default. two weeks ago country garden barely made it as far as paying interest on two dollar bonds. there is a bond that is potable

which means it's early demands could be made by investors that require repayment of it. roughly $200 million on that bond. the data on that is thursday so the vote -- if that does not go country gardens way it would have to come up with that money by thursday in order to avoid default on that. shery: kevin with the latest on country garden. we will continue to watch the property sector in china but we are also watching apple suppliers because we saw qualcomm today rallying after apple extended an agreement to get modem semi conductors from the chipmaker for three more years. a sort of signal, perhaps their own in-house chipmaking is not necessarily ready. see those suppliers of apple like a sk hynix and samsung losing ground while these other stocks are gaining. a little bit of a mixed picture but perhaps a reflection of what is happening in the broader

market because we are seeing the kospi holding steady. there is a lot of pressure in the south korea market right now although japanese stocks broadly are gaining ground with the topix gaining about 4/10 of 1% of 1% all the nikkei is trading at that 32,600 level. we continue to watch what apple will do in terms of in-house chip production and perhaps that ambitious effort to design their own ships taking longer than expected which is why we have qualcomm rallying in the new york session. staying with apple, haman capital management founder and cio kyle bass saying the company will face a long period of distress in china. he told us how geopolitical tensions are becoming a key risk for apple's future performance. >> apple from what i can see he expects to sell 45 million iphones in china this year. with the band at the national

level and maybe even the state owned provincial levels in china, i think the difference between the u.s. government banning something for government employees and the chinese government banning something for government employees, the people of china will focus more on the state than the market based economy or the so-called market-based economy. whether it is the renewal cycle of four or 5 million iphones this year or is the actual 45 million they expect to sell, i think apple is in for a much longer period of distress in china. i think you have seen apple tried to move india on the projections -- production side and they have been successful in moving a large portion of their production and a short period of time. >> to that point you just saw president biden in vietnam and a lot of jvs being formed there with u.s. companies. it begs the question for me, if you look at a stock, is it as

simple as you get x amount of percentage of revenue from china therefore i have to short you are not invest in you? >> no, it is really simple. where does apple trade on a forward sales basis and what percentage of their assemblies are done today by foxconn in china? that number is coming down but it is still a big number, north of 60%. i think apple is one of the companies, the most widely held stock in america, it is one that unfortunately could fall in the crosshairs. of president xi's ambitions with taiwan. i think it is worth talking about. warren buffett did not sell his taiwan semi conductor position because he thought it got too expensive or it was not a good investment i think the geopolitical atmosphere came into play in their decisions with taiwan semi. i think the last 20 years of the

world has been driven by economics and economic interests and we are at a hinge of history now where the next 20 years are going to be driven more by geopolitics than they are about economics. if you own apple i think you consider what a belligerent xi jinping could do to your portfolio. shery: kyle bass speaking with us, we have more to come on daybreak this is bloomberg. ♪

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high atlas mountains shaking the city, rescue efforts continue with the who putting the number of people affected at some 300,000. north korean leader kim jong own is heading to russia for talks with president vladimir putin, north korea's news agency says his train left sunday afternoon. south korea media reported he was expected to cross the northeast order early tuesday. the u.s. says kim jong-un and putin are set to discussed arms as russia seeks support for its war in ukraine. coming up we speak exclusively to microsoft asia president, hear his outlook for the region h(jennifer)tlook for the region the reason why golo customers have such long term success is because we focus on real foods in the right balance so you get the results you want. when i tell people how easy it was for me to lose weight on golo, they don't believe me. they don't believe i can eat real food and lose this much weight. the release supplement makes losing weight easy.

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haidi: we have consumer

confidence numbers crossing when it comes to australia, was faxed consumer confidence easily adjusted month-to-month number for september coming in at a contraction of 1.5%. that really extending the contraction of 4/10 of 1% we saw on the previous month of august. on a september year on your number, actually the gauge itself coming in at 79.7. so dipping below 80, falling from 81 in the previous month of august. it is a pretty rocky inflation picture despite the fact that we have seen the rba extending the rate pause for a third consecutive meeting. still maintaining that tightening bias which with the cash rate at 4.1% has really been a significant hurdle when it comes to household wealth, when it comes to the broader property market as well as consumer confidence. we are seeing the cost of living crisis continue to play out even with the rba near at the end of its tightening cycle.

that consumer confidence number flipping to 79.7 for the month of september from 81. let's get to belfry look at markets. belle: we just picking up on that consumer theme because even though we are seeing a decline in australia one of the big stories developing in the session so our's are continuing to see a little bit of optimism starting to build around china's economic recovery because yesterday it was that better than expected credit data that came through telling us perhaps there signs of stabilization in the property sector. when you take a look at what is leading the gains so far it is the consumer discretionary one that is very much in focus and the material sector as well because we have seen metals rallying off those credit numbers. a stronger yuan coming through, a weaker dollar playing into it. some of the consumer discretionary materials, to have the sectors in focus helping to lift the broader msci asia-pacific index into positive territory.

and focusing in on those japan financials because we are continuing to watch them. today a little weaker in the session but investors taking stock of the rally we have seen so far. nearly five percent yesterday given this expectation that is starting to build in markets that the boj could be nearing the end of its negative rates policy. also perhaps some changes coming through to its program of yield curve control at the boj meeting. at the end of next week a lot of investor attention, we do have the financial stocks under pressure as they get trading underway. haidi: let's return to the investor form in hong kong. joining us live is president at microsoft asia. it to have you with us. microsoft has found itself at the center of the ai frenzy. give us your outlook and how some of your customers are

embracing it and finding it to be beneficial now from actually a cost perspective. >> thank you for having me, great to be here. what an exciting time to be part of technology. we are seeing ai as big of a revolution as the internet. two great examples that come to my mind, we have collaborated with eight universities with researchers, teachers, students, faculty to help them choose better courses. help them integrate into the university system. to help them pick the right responses to some of the content that they are training on. it is a very high intense collaboration. the second one i'd probably lean in and fly a few miles towards india. which has 22 official languages. this is an example -- where a

farmer speaks on whatsapp in a vernacular language about a subsidy request. that then gets translated using ai and our llm's into finding from the ministry of finance and agriculture what is appropriate for them. it turns back from text to speech and then back into the language which is great for consumption. it is driving massive productivity and an opportunity to engage and be inclusive. those are probably two very interesting examples of progress i thought i would share. haidi: the competition, we have to ask you about that particularly in china were ai and the development has been deemed a political imperative. we have seen the likes of baidu, one of the first firms to win approval in that market. is that in impediment? how do you see the competition across asia?

>> we are seeing a lot of engagement in the ai front from both academic institutions, technology companies, and corporations. all intending to use the benefit of ai for progress thing technology and creating economic and societal progress. the opportunity for us to collaborate on ai is pretty intense -- immense and what we're doing in this process is trying to enable companies to use our technology. there are a handful of chinese companies that are actually using ai for driving productivity and great customer experience across the global operations and we are very excited about what we can do with that. shery: asia has some of the most tech savvy and connected societies in the entire world. are you seeing any differences in ai consumption across asia?

>> we are definitely seeing courage and the desire to leapfrog pretty significant in this part of the world. there are many interesting examples that point towards that and they actually try and solve real problems. i was in indonesia last week and we met with an ai provider that is trying to solve for sustainability using the agricultural land and selling a plot arm and putting up a platform for carbon credit. indonesia has 120 million acres of agricultural land in the potential to create 20 billion metric tons of carbon credit. this is great progress that is being made in sustainability. i probably could take you to an example of learning mandarin. if there is a university we are collaborating with where we are using ai to hold courses were

mandarin speaking students can learn english and vice versa in environments where they feel comfortable and have the courage to change. the third is an health care. we believe health care is going to have the most massive transformation using digital and ai transformation and it is particularly true in asia because 60% of the world population lives there but more importantly 70% of the economic growth will happen in this part of the world shortly. shery: are you making the right investments in terms of proportion given the market opportunities in the future. you mentioned indonesia as one of those markets, what regions or what countries excite you the most right now? >> that is a hard question because it's like asking me to pick my favorite child. the markets in south east asia across asia are pretty fascinating for that matter. what we're excited about is the

opportunity to unlock cap progress from an economic standpoint. the kinsey report suggests that 4.4 5 trillion of economic unlock it happen through ai. that number for indonesia is about 260 million. and that is pretty significant. we are also investing in indonesia since you asked about indonesia. a data center which will likely create 60,000 jobs and deliver about 6 billion in direct economic progress in a very short timeframe. haidi: what do you make of some of the downside risks. there are a lot of corporate's that have stayed away from using the service as a result of concerns over privacy for example. there are also concerns over what the regulatory landscape looks like. >> that is a great question, perhaps if i responded to parts. the regulatory side, microsoft

has been very forthright and intentional. going back to 2018 we laid out are six principles for responsible ai. at the core it is safety, security and trust. it we are working with governments and especially with platforms like the g7, to create progress in regulations. we believe regulations create the right safe, guardrails that help create progress. on the other hand, just last week we announced we will indemnify our clients for the use of copilot and the confidence that we want to provide clients is based on our design principles of ai. how we drive responsible ai, and the effort we put in certification and controls. shery: so who is making the most progress across asia when it comes to building that regulatory framework? >> i think we are at various stages in asia.

there is the hiroshima ai platform that is also creating energy. i have been close to looking at the developments in india, there was a very interesting discussion we had with the governments in asean about a potential digital court order. i think this is the start of a long race but the most optimism i get is that there is enthusiasm and early desire to help progress this technology to create the progress we all want in the world. haidi: really good to have you with us thank you for joining us, the president of microsoft asia. coming up next arms ipo is at least 10 times oversubscribed and bankers are ready to stop taking orders. it will get an update next on the biggest new share offering of the year, this is bloomberg. ♪

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haidi: we are seeing asian equities edging slightly higher after a brief session led by tech overnight in the u.s.. we are focused on a key u.s. data, the inflation print expected to show just how closely after the fed at the end of its tightening cycle.

the nikkei 225 posting the strongest gains across the region of about half a percent we are also sing jgb futures pushing a little lower as well. extending that lower dynamic with the surgeon volumes as well. of course we are seeing japanese assets more broadly still recovering from the big price action we saw in the wake of governors -- the boj governor's comments about the end of this year being a sufficient time to gather evidence for any kind of policy twists. elsewhere around the region it is a pretty lackluster session with a little bit of downside pressure coming through for australia and new zealand. shery: bloomberg has also learned that arms ipo is now 10 times oversubscribed and bankers are planning to stop taking orders by tuesday afternoon. shares are still expected to be priced on wednesday. our tech reporter joining us now on the phone from taupe go. we know that closing the order book early is not necessarily that -- what are the

implications broadly for arm and softbank? >> it shows how popular the ipo is so far and as a possibility that the price range for the ipo could be revised higher which we also reported earlier this week. the ipo -- started at $41 for -- a share but if it goes beyond that price range let's say $55 hypothetically speaking, that could bring the valuation closer to 60 billion which would mean a bigger payday for softbank naturally. but of course we will have to see what it actually gets priced at. haidi: it is a tiny float though 9%. is that unusual?

>> it is actually a smaller flow than many people anticipated initially but i would not say the float itself is very unusual. if it is actually oversubscribed as it is an this kind of demand holds into the ipo, we could get a better than expected results at the listing. of course what happens after it actually lists, we will have to see. because it is not unusual these days to see a company priced at a very high valuation and fall sharply on the day of the listing in the following days. i think there are still a lot of factors that play out there so we will have to see what happens. haidi: joining us from tokyo with the latest on that arm ipo.

shery: a 13 month old chipmaking startup backed by the japanese government is aiming to build the countries own version of tsmc from scratch. the ceo spoke to us exclusively about the company's ambitions, including turning a remote japanese region into a center for chip innovation. >> samsung is a great company. we always respect their model and manufacturing technology so well. and also for us, we don't want to compete in the same market. we will manufacture not so much large-volume but also new additional chips, or high-speed

chips with new technology. also, we're trying to create with the customer, we can create new values. so we need a close relationship and work together. also the financial point will be speed. our company, we are estimating two times faster than other companies. that will be the key point for us. >> you started this company from scratch. you have 200 employees. as you go forward, how many do you think you're going to have an what is the ideal ratio of say japanese to foreign employees in your company?

>> of course we don't want to be just only japanese. we try to work with a worldwide kind of people, i don't have an actual number yet. we have a big challenge, or new ideas, we are eager to work with worldwide talented people. >> so if you go from 200 what is the limit. how many employees do expect to have? in the next six or seven years? >> it will be a great place but not so many people yet. i am very much afraid to compete with other industry people so we are very eager to work with

people from the u.s. or you or india. -- we welcome them to join our company. >> the japanese government has promised to support what you are doing. how long and how much support do you think you may need from the government? >> we are very much honored the japanese government supports us very well and also for groundbreaking the prime minister mentioned, it will be a great for us and also -- minister not only this year but continuously support our company.

according to -- we cannot say how many years but the key is once we show every year key progress at the time the japanese government will continuously support us. haidi: how is the ceo at speaking exclusively with us and matt winkler. be sure to tune into bloomberg rate ou can hear more from the days big news you can get in-depth analysis from the daybreak team there we are broadcasting live from her studio in hong kong. you can listen via the app that is bloomberg plus or bloomberg.com. morehead this is bloomberg. ♪

haidi: ahead of the market open in china, we are watching the results of a vote by country gardens creditors on the distress developers request to extend a group of bonds. that deadline passed late last night beijing time. it's bring in our asian equities reporter. the deadline has come and gone. is this unusual because there are huge implications when it

comes to country gardens stock, the property sector and how fragile sentiment is right now. >> this is definitely the key invest -- event investors are watching right now. right now we don't have, we have not gotten public information about the voting results. investors have paid a lot of attention to this because country garden was one of the country's largest developers and if creditors have voted through this this could help relieve some sentiment but also we have to be reminded that country garden is now trading around a penny stock level in hong kong. this very cheap price level subjects the stock to wild volatile moves, so while investors are assessing any information they can get regarding the voting, we could see some pretty wild moves in the space today if we hear more from the voting's. shery: we are also seeing wild

moving's in hong kong, property stocks taking a plunge. what is going on? >> another piece to watch today is the hong kong local developers. yesterday we saw a pretty ugly selloff among the hong kong local developers and the key triggers were the local leader, they reported a sharp decline in earnings for the four-year profit and it really shows you the cost on the local marketing and the high interest rate environment. we also have a report saying that hsbc is thinking, planning to increase mortgage rates further which could be a headwind for developers and hurting demand even more in less they cut prices which will be bad for the revenue growth as well as margins. today we will be watching whether the sector stabilizes after yesterday's selloff or if investor sentiment will take a further hit. shery: bloomberg's asia equity reporter there, take a look at how the broader markets across asia are trading at the moment. we're seeing some upside for the nikkei which is being led higher

by communication services. cereals and utility stocks. although financials are also being a drag to the broader equity index. the kospi is down about a quarter percent. we saw the korean won also falling in the previous session against the u.s. dollar, given those disappointing trade numbers for the first 10 days of the month. although the korean won is appreciating slightly against the u.s. dollar given that we have seen a little retreat for the dollar after that record streak. we are watching the asx 200 also down 3/10 of 1% kiwi stocks also under pressure. both currencies from the two countries have really rallied in the previous session. we have the market opens in china next. this is bloomberg. ♪ hey david. connect with an advisor to create your personalized plan. let's find the right investments for your goals okay, great. j.p. morgan wealth management.

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