going for growth. central banks are easing their grip on money supply. profits are slipping, so spending like never before. too expensive to eat. the japanese fish making a splash with overseas collectors. hello. you're watching "asia biz forecast." i'm yuko fukushima. the list of central banks easing monetary policy is growing steadily longer. this week policymakers in

australia, india and china took steps to get more money flowing through the economies. they want to stimulate growth they say and some are wondering if the real agenda is currency devaluation. well, we start the program by looking at what's motivating the big easing. >> reserve bank of australia cut the key rate a quarter of a percentage rate to 2.25%. a record low and the first reduction in almost a year and a half. glenn stevens said domestic demand remains quite weak and that it's running below the expected growth path. stevens suggested the rva is trying to nudge down the australian dollar. he said australian currency had declined against the u.s. dollar in recent months but at a slower pace than against other currencies. he said the economy will likely need a lower exchange rate to achieve balanced growth.

the reserve bank of india has refrained from a rate cut, but took other easing measures this week. policymakers gathered on tuesday, just three weeks after lowering the regal rate. they decided to hold the rate steady at 7.75%. >> and given there has been no significant new inflation since then, we have maintained status quo on interest rates. >> the rva governor wants to see the draft budget for the next fiscal year before he trends the key rate again. the government plans to work out the budget at the end of this month. ministers will be focused on tackling the growing fiscal deficit. despite holding steady on rates they're working to free up money. they cut the government bonds that commercial banks are required to set aside. ragan hoped it would encourage

banks to increase lending. many analysts expect the central bank to lower the key rate another notch this year to spur economic growth. they cite the latest consumer price index. it stands at 5%. well below the 6% inflation target. authorities in beijing have joined the rush to ease monetary policy. the people's bank of china requires commercial listeneders to keep part of their deposits at the central bank. it decided to slash that ratio to half a point to 19.5%. the bank cut the key rate last november, but it seems to believe that economic growth needs more support. the latest move is aimed at boosting bank lending especially to small and mid sized companies. joining me now from singapore is song seng wun from cimb research. he's offered to help us get into

the mind of the central bankers. so we saw australia and china and indian central banks decide this week. this follows singapore and switzerland and japan and e.u. central banks taking a monetary easing approach. what should we make of it? why are global central bankers pumping more money into its economies? >> well, i think after three years of mediocre growth and signs that the underlying global growth momentum continues to be soft, and even, and with the sharp fall in commodity prices, energy prices in particular, basically it's made i think inflation worries upside even further and inflation's expectation has dipped somewhat as well. so i think this basically gives room to central bank for countries where inflation is

less of a concern to give, you know, the economy a helping hand through a more accommodative monetary policy itself. it's really an expectation of much milder inflation expectation. that gives them the room to ease policy further. >> now, some people see this as a competition among central bankers to devalue a -- the country's currencies. and raise expert competitiveness. do you think this is the case? >> well, if it's not a case of competitive devaluation to help boost exports. i think it's more of a case of the central bank in europe embarking on very aggressive quantitative easing. which in turn mean that investors are looking for a yield so they find that they

have looked elsewhere to seek yields and return. and in essence, what we have seen as a result is it goes through those countries with currency that looks to have some upside appreciation, or better returns as well. so if that country has fundamentals which suggest that perhaps their currency could indeed be stronger or weaker depending on which side of the coin you're looking at, it certainly makes room for hot money flows or outflows as well, which inevitably create headaches for central banks. i think they really look at it from the stand point of using monetary policy to ensure that the hot money flows is contained and in the meantime, i suppose it does help the exports when you look at the translation gains that will be made from that front. >> okay.

please stand by, i want to get your views on the next subject which is indonesia. the most populous country has released the latest growth data. the numbers are decent but, they can't hide the fact that the economy has lost some of its vigor. government officials released the final gdp numbers on thursday. they show indonesia's economy grew 5.01% in the final quarter of last year. that brought the pace of growth for the whole year to 5.02%, the slowest pace since 2009. exports were sluggish due to weak commodity prices and rising gasoline prices are weighing on the economy. the price at the pump is going up because the president joko widodo is trying to reduce the budget deficit. so last year's 5.02%. it was the slowest in five years

so how do you look at the figures? >> yeah. indeed. i suppose for indonesia now, they have to i think deal with some of the external imbalances as well as inflation. your fiscal deficit on the government part, as well. so i think in addressing that i think we have to see -- we're likely to see growth slow around the 5% in the coming years. so fortunately, we're still seeing growth from private consumption while there's a little bit of a slowdown on the private consumption side. with investment picking up some of the slack. i think going forward that still probably will be what can drive indonesia going forward. investment still strong because of restructuring effort itself. but consumption can only perhaps pick up when inflation and interest rate come upp perhaps from the second half of the year. >> how do you think the declining oil prices will affect indonesia this year? although they're a net importer

of oil, it's also a big exporter of oil and other commodity -- commodities. >> yeah. indeed. indeed, it will have some impact. we suddenly have seen the impact of the lower energy prices being a drag in terms of the export side. that has fallen off quite a bit itself. the other impact of that obviously is that while it may a net importer, domestic production of oil is also an important revenue for the government as well. so that's going to be another drag for the government. i said the revenue cut side is concern, and that may constrain to improve the infrastructure itself. so it does have some impact and drag on the government as it tried to meet i suppose the target of 5.7% growth for this year. >> okay. thank you so much for your insights. >> my pleasure.

now, i want to return to a subject we touched on earlier. growth in china. we have seen policymakers in beijing have strong concerns. that's one reason they're loosening their grip on money supply. last year, gdp expanded 7.4%, the slowest pace in 24 years. so far, the new year has failed to bring any cheer. factory managers have just reported orders are shrinking. on monday, china's national bureau of statistics released the purchasing manager's index or pmi for january. it showed manufacturing activities shrank for the first time in two years. a pmi reading of 50 separates expansion from contraction and in january it stood at 49.8. down 0.3 percentage points since december. meanwhile, new orders which indicate where the economy is going also slipped from the

previous month. new export orders alone went down to 48.4. the sub index for employment dropped to 47.9. economists at a government think tank say most indices are heading south, indicating the economy remains on a down trend. while the government tracks data from large state owned companies, the hsbc's pmi gauges the small and mid sized firms and it grew but stayed below the line of 50 for two straight months. now, bosses in auto industry are negotiating some fast moving trends. none more so than in japan and south korea. foreign exchange rates having major impact in both countries, positive and negative. we start with japan where two

major players released earnings results, honda motor at the end of january, and toyota motor on wednesday. another earnings report in yet another milestone past. toyota executives announced results for nine month period ending in december. net revenues rose 5% to $170 million with operating profit up 14%. in yen terms that's an all time high. the company has now reported record profits for three consecutive quarters. strong sales in the united states are one reason. cheaper oil prices are driving demand for toyota suvs. and then there's the weaker yen. toyota exports a lot more cars from japan than its main rivals do. meaning bigger profits when it converts those earnings to yen. >> translator: we believe the better than expected results are the fruits of our initiatives to strengthen profit structure and cut production costs. >> toyota officials say they're on a roll.

they have revised upwards the full year forecast for the year ending in march. they're estimating net revenue of $230 million and record profits yet again. honda officials had a rather different story to tell investors. they say the cost of massive recalls has forced them to downgrade their full year earnings forecast. they now expect operating profit of $6 billion, falling short of the previous estimate by $400 million. honda is recalling cars around the world to replace faulty air bags made by takata corporation. honda has recalled around 7 million vehicles, it's cost the company some $100 million so far. managers say they're continuing to investigate the problem meaning the cost can rise further. >> translator: we want to improve the rate of repairs on recalls. and to repair them quickly.

>> another global automaker hyundai motor announced the full year financial results last month. the south korean company is taking a hit from the foreign exchange market. in this case a strong wan, but they're responding in bold style. >> reporter: there's a reason that hyundai is especially vulnerable to a strong won, international sales account for 80% of the total revenue. so exports are critical to the automaker's bottom line. worldwide, hyundai says it's sold 5 million cars in 2014, up 5% from the year before. the new genesis and the sedans made a strong contribution. sales in china grew nearly 9%. one in four hyundai cars are now sold in china.

competition from japanese rivals hurt business in the u.s., however, it was almost flat last year. the real problem for hyundai comes when it brings the earnings home. the strong one takes a strong bite. last year operating profit fell 9% to $6.9 billion, the lowest level since 2011. company executive say that's largely due to unfavorable currency rates. one solution will be to shift to factories off shore. but hyundai's labor union is one of the strongest in south koreal investment, job placement and crucially how many cars are made in korea. industry analysts

developments at hyundai. he says the strong wan is a challenge but they're in control. >> hyundai motors global operations are working at full capacity. with demand exceeding supply in all countries. i think that shows that the company's management is doing a good job. the exchange rate has caused problems for operating profit. but the overall situation seems to be good. >> reporter: hyundai's response to falling profits is to go to the floor. the chairman last month unveiled a $74 billion investment plan. he says the four year spending spree will make the company more competitive. >> translator: now you can see how much improvement we need to make in our ability to develop innovative technology and products. >> reporter: the production target of 9 million cars being made in 2018. that includes affiliate kia group.

hyundai will spend much of the money at home. three-quarters of the budget will be used to expand factories, improve i.t. infrastructure and boost r&d activity, all in south korea. the plan also includes the building of a brand new company headquarters. hyundai has already chosen a side in downtown seoul, owned by korea electric power corporation. in a fierce bidding war last september, they agreed to pay almost $10 billion for the land. in addition to the group's head office, the new complex will feature auto themed park, hotel and a shopping center. some are asking why hyundai has chosen the best to -- where production costs are relatively high. it's a long-term strategy to stay competitive.

>> translator: looking at the plan to boost the ratio of r&d spending rather than capital investment, i think it shows hyundai motor is finally trying to transform the quality of its car production rather than focusing on quantity. from the quantity perspective, increasing annual vehicle production from 8 million to 9 million is not such a big deal. the company seems to be focusing on qualitative growth and this is why the group's investment plan is facing greater emphasis on r&d. >> reporter: quality growth is welcome, but some investors are concerned about excessive investment. the annual spending will now match that of toyota motor a company that earns twice as much in revenue. kim chan-ju, nhk world, seoul.

now, if you have ever strolled through a traditional japanese garden, you'll know what these creatures are. they're ornamental carp or koi. they're called swimming jewels and it's not just because of their dazzling colors. these fish sometimes cost as much as a finely cut diamond. now growing interest from overseas buyers is giving the business new glitter. ♪ making a splash at the world's most prestigious koi show, the owner of this year's winning fish is from china. chin's entry won high praise for shape and color. koi come in a variety of brilliant colors. prices range from a couple dollars to well over $100,000.

chin has won many prizes in china, but he says nothing beats winning the world's championship in japan. >> translator: chinese contests are not as competitive as japanese ones. >> sharing in the glory is plan who raised the champion fish. this is the fifth time he has the stood on the winner's podium. he's head of the largest koi distributor in japan and foreign collectors are big customers. >> i hope that this first place will encourage more customers to buy from us. or ask us to farm koi for them. resulting in higher sales. >> about 40% of the fish at this year's show were entered by foreign owners. many of them are from southeast asia where keeping koi has become a popular pastime among the wealthy.

an indonesian business man was crowned grand champion in 2013. back home another indonesia, he pursues his hobby with a passion. he's built an extravagant breeding facility spending over $650,000 in the past six years. he's not a koi trader, but he says owning the exotic pets can be good for business. >> it's easier to get business when we are meeting a hiring officer from the government, they represent you are here, buying 5,000 -- 500,000 yen and becoming world champion. it's very interesting. >> this group from thailand are in the koi business. the competition is over and now they're on a buying mission.

they're heading to niigata prefecture. the fish are raised in natural ponds between spring and autumn and then shipped to customers. when a group arrives though, niigata is knee deep in snow. and this time of year, koi are kept in glass tanks and heated shelters. they need protection from the cold. the visitors are shopping for a small koi that hatched last spring. this man and his brother run one of the many koi farms in the area. like many around here, they were hit hard by an earthquake ten years ago. but now sales are growing 10% a year. thanks in large part to overseas demand.

tony has been a koi dealer for three years. he's earned a reputation in thailand for choosing prize winning fish. >> translator: it's kind of scary how often he selects good ones. >> tony has spotted a promising youngster and the negotiating begins. >> expensive. [ laughter ] >> how much? >> they finally settle on a price. $600. tony plans to enter his new recruit in a japanese show this spring. he's also purchased another 40 or so fish to sell in thailand. >> translator: there are more people keeping koi in thailand

now. and the market has expanded to people of all classes. sales rose by about 20% from 2013 to 2014. >> they head for home leaving him to work on another shipment. he's sending the koi to indonesia. the swimming jewels of niigata are glittering again and business is picking up. leaving the 2004 earthquake a distant memory. >> translator: i would say about 80 to 90% of the market is based overseas. since koi are loved by people around the world, i want to spread the love even further. >> and now let's take a look at other stories making headlines around the region. we start with the japanese electronics maker, toshiba's move to pull out of the tv market.

>> toshiba is reportedly negotiating to sell a tv manufacturing plant in indonesia. the factory is one of only two productive centers left in the world where toshiba is making flat tvs. executives say they want to shift their focus to more profitable divisions. such as flash memory and power generation equipment. japanese tv makers are facing tough competition from south korean and chinese rivals. panasonic announced a plan to close a plant in china and halt production in the country. officials sat south korea's central bank have released a current account numbers for last year. bank of korea says the country posted a surplus of $89.4 billion. up more than 10% from 2013, an all time high. despite the record surplus, some think the latest data points to the worsening economy. exports are the key driver of economic growth and outbound

shipments rose at the slowest pace in five years while imports fell even faster. due to weak domestic demand. shoppers in thailand are paying less thanks to lower global oil prices. officials said on monday that consumer prices fell in january for the first time in more than five years. officials at the country's ministry of commerce said the consumer price index slid 0.4% from a year earlier and 0.6% from the previous month. prices of oil products like gasoline as well as electricity charges fell. crude and vegetables plus some high demand meat products showed declines. negotiators from japan and the u.s. met in washington this week trying yet again to get the transpacific partnership up and running. they did make some progress on the free trade deal, but failed to narrow gaps on key issues. that includes tariffs on farm products and auto parts.

japan's minister in charge of the tpp talks said he wants to speed up the negotiations. he said the talks among all 12 participating countries can't move ahead until japan and the u.s. bury their differences. he is hoping the multilateral negotiations will be wrapped up by early spring. before we go a quick look at what's happening in the week ahead. on sunday the chinese government releases trade figures and on monday, the october to december quarter. the officials have revised their calculation methods and investors wait to see how data affects the third largest economy. the central bankers are holding two days of talks in istanbul, turkey. on thursday, malaysian officials come out with their gdp figures. and the philippine central bank call a monetary board meeting.

that's all for this week on "asia biz forecast." thanks for watching and have a great weekend.

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