will the boj be willing to let that happen for a while? it looks like it will. that's a good thing. that's exactly what you want. >> meanwhile some specialists expressed some concerns over abe's massive fiscal spending. but krugman says it's too early to discuss fiscal austerity in japan. >> japan needs to over the long term be doing austerity, but not until you are in a situation where we know that monetary policy can offset the fiscal austerity. and you can't have that unless japan is safely off the zero lower bound on interest rates which really won't happen until people are definitively convinced that jan is going to have inflation, not deflation. and so the fiscal austerity, you'll ask me again in three or four years. abe's policies don't -- they don't solve all of japan's problems, but they're not supposed to. they hopefully will solve the problem of deflation and persistent, inadequate demand, the ble.other proble sti on >> g20 finance ministers and central governors will be meeting in moscow on friday. krugman said they could take up the topic of decline. >> they will tolera

the boj shrinks for a tlird quarter. >>> this year will be as challenging as 2012 after seeing sales growth less than expected in the fourth quarter. the ceo tells cnbc, europe remains a drag. >> europe is depressed. it's going to take time. to solve it in part of europe is hard hit as it's going to take longer. >> and a mega merger is cleared for takeoff. reports say the boards at amr and us airways sign off on their $11 billion deal to create the world's biggest airline. >> announcer: you're watching "worldwide exchange," bringing you business news from around the world. >> all right. you're wearing an appropriate valentine's day shirt. >> i am. i tried. there's a little bit of pink if we look at your tie very closely. if you want to know what's happening in the markets today, hold on, ubs, the valentine's day gdp's massacre. >> yes. >> because if you look at when it's japan shrinking at an annualized rate, germany coming in on quarter on quarter, france coming in -- well, we know they had a recession earlier in the year, as well. minus 0.9% on the quarter been minus 2.7 on the yea

the boj's chief term is scheduled to end april 8th. shirakawa will resign with two governors. >> translator: i conveyed my intention to resign to the prime minister. i told him i want to step down early because the two boj deputy governors are leaving office on march 19th. our simultaneous resignations will open the way for the central bank to start with a clean slate on the same day. >> shirakawa became governor in 2008. he's been working to defeat deflation with a string of monetary easing measures. in response to abe's demand, the boj issued a joint statement with the government last month, setting an inflation target of 2%. the yen's decline is proving to be a boom for toyota maker. they will post the first operating profit in five years due to the currency's weakness. they revised upward. they say they're expecting a profit of about $1.6 billion, that's quite a clafrpg frhange w months ago. november, they predicted a loss of more than $200 llion. managers say the weakening the yen since mid november will improve export margins and

the current boj chief will step down on march 19th. back to you, kelly. >> let's get a view on this from michael plasnik. so where does the yen go from here? >> i think it's important to take into context the comments made by abe and aso. you have to reverse engineer the situation. they're not going to be able to hit a 2% inflation without a significant yen weakness. so they need the yen to weaken about 40%, auto% in order to get 4% inflation over a two-year period. so if you reverse engineer from there, you say, what do you need to do to get the yen weakness? i think they're willing to do anything it takes. >> that's extraordinary. was that impressive? >> it's about a 50% depreciation in the yen. 15% pass through. that's 4% inflation. is it unprecedented? i mean, yes. yes and no, right? over a prolonged the period of time. we saw 160 a few years ago. >> interesting thing, michael. japanese bond yields hit record lows. clearly the bond market isn't saying they're going to be success in creating intlagz. what the yields are saying is th

now, the news of the boj governors' resignation has prompted investors to sell the yen. the markets are betting a new governor will take more easing measures that would accelerate the yen's decline. in fact, we're seeing quite a jump right now for the dollar. 0.6%, in fact, in london trading. right now at 92.95. the euro also gaining ground against the yen. we're seeing that at 125.90. now, earlier in the day the euro had slipped to the lower 124 yen level on investor worries about possible political shakeups in spain as well as italy. let's take a look at other urine yan stocks now. we're seeing trading is mostly higher at this hour despite concerns about the eurozone debt situation. the investors are hunting for bargains after the losses that were experienced on monday. we have the ftse 100 up by 0.5%. gains for the frankfurt market of just over 0.1%. and paris' cac 40 up 0.9%. the picture in asia today, almost a sea of red with the exception of shanghai there. japan's nicky snapping a five-day streak. they hope authorities will take steps to stimulate the economy. >>>

the prime minister abe would become more serious about changing boj low. so nomination is kind of message from the cabinet to the boj people. >> the market has priced in a lot. the nikkei has gone to more than 11,600. the yen from 78 up to 95 against the dollar. we've moved a lot on asset prices. i'm just wondering whether, you know, even mr. kuroda can meet the expectations that have been priced in. >> well, i think, you know, under mr. kuroda's leadership, he would accelerate the spupdent as well as lengthening the maturities it would hold. it would have much more impact on the exchange rate. the yen could resume weakening to some extent. 10% exchange. >> exchange rate would lead to a 5% change in cpi. if mr. kuroda is able to sustain the japanese yen, it would affect the inflation from next year. >> and what prospect is there from the bank of japan to buy foreign assets here? >> direct involvement by the boj is very unlikely because it is very dangerous. regarding a kind of sobering wealth fund type of scheme, to fit boj with supply and fund, there is s

japan's nikkei with a rebound of .50% after the boj maintained monetary policy. in south korea the kospi was up .20% on hopes that south korean exporters can keep their competitive edge as the want was weaker compared with the weaker advancing trend. the shanghai market was closed still close due to the lunar holiday. we'll check in on currencies, the dollar gaining ground against the yen, we are seeing the pair right now at 93.34-39. the boj will deliver easing measures after keeping their monetary policy unchanged. the euro is lower against the yen as weak eurozone gdp data has been weighing on sentiment. that's at 124.46. >>> well, in corporate news today several u.s. media saying that american airlines and us airways will merge. that will create the world's largest airline. the wall street journal and other major media firms reporting wednesday that the two carriers had reached an agreement. american airlines operates about 3500 flights a day in 50 countries and ranks third in the u.s. in terms of the number of flights. us airways has 3,000 services a day whi

it approved by the diet, he will take over the boj post. the prime minister put forward the names of the two deputy governors. they are gakushuin university professor kikuo iwata and boj executive director hiroshi nakaso. it needs support from the opposition parties as the ruling coalition does not have the majority in the upper house. many members of the major opposition democratic party are of japan are set to support abe's nominees. they say there isn't much doubt about kuroda's ability, especially his negotiating and management skills. >>> asian development bank spokesperson announced kuroda is resigning from the top post of the manila-based institution on march 118th. >>> u.s. tech giant apple has won a patent lawsuit in tokyo over south korea's samsung electronics. the ruling is the second in a series of court cases in japan involving smartphones and tablet computers. the tokyo district court on thursday ruled that apple does not infringe on samsung's patents for mobile data transfer technologies. presiding judge ichiro ataka upheld c

the next boj governor was covered, but the first question, whether mr. aso thought the g-20 communique was an endorsement of japan's domestic stimulus plan. >> japan has repeatedly tried to explain that japanese policies are taken to overcome deflation and by all means, these are measures to overcome deflation as well as the recession. that's what is being said in the second paragraph of the communique. >> why do you feel, then, certainly from the g-7 communique that the off the record briefings continue to be critical of the japanese policy and its implications for the yen. >> first of all, just before the dissolution of the lower house in japan, as far as the japanese yen rate is concerned, at least, it was 78 yen to the dollar. however, one month after the election, we see that the -- has gone to 93 or 94 yen. so someone must have suspected that something could have happened. there were some who were suspicious of the situation in japan. the very fact that the yen had to be reassessed. >> regardless of the absolute direction of the yen and indeed the

they are waiting to see if the boj will ease monetary policy. the euro zone's gdp for the final three months of last year will come out on thursday also. we'll find out how manufacturers did in january when the production index is released. on friday central bank governors will get together in moscow. that's all the news have for w. i' lea you wh a recap of the market figures and a note on those figures some chinese and other asian markets are closed today for holidays. >>> many russians are skeptical about what they see on television, tight media controls and self-censorship mean that criticism of the government is rare. one station is trying to regain viewers trust by turning to the internet. nhk world has the view from moscow. >> reporter: his face is everywhere. a leader in control. advising a judo team or fly with cranes. on russian tv, president putin is center stage. putin took power in 2000. since then, he has steadily increased government control of the media. it started with intimidation. television stations were paid a visit by securi

they are expecting the next boj governor will take further steps for monetary easing. the dollar is lower against the yen. se sellers are trading to lock in profit. the dollar against the yen trading at 93.36 to 40. the euro is also lower against the yen. market players are waiting for the policy decision. the euro against the yen is quoted at 126.15 to 20. let's take a look at other markets in the asia pacific. seoul's kospi up at 1,945. australia, the benchmark index is trading higher, 4,923. paneseports have been watching the foreign exchange market every day and they like what they see. the yen's value against the dollar has been sliding since november. staples of japan's economy have benefitting from automaker, so are businesses that produce the basis of what we wear every day. nhk world's lauren lee explains. >> reporter: the yen's decline has opened way for growing the united states.e fabrics into we're at a fashion show in new york city. the show we're about to see is using a lot of japanese fabrics. the fashion show was held by a high end man's brand in new yo

that's why market participants are so keen to find out who the next boj governor will be, and as catherine said, it looks like it will be chief haruhiko kuroda. ramin is at the tokyo stock exchange. ramin, how are the governors responding to the news so far? >> we've already seen a bit of reaction in the currency markets, so why don't we go to that first and then i'll bring you the opening levels for the nikkei and the topix. you can see the dollar/yen clearly in the 94 levels, 94.22 to 24. traders are really betting japan's central bank will deliver further monetary easing under this new governor. now, the dollar has kept above those 94-yen levels. let's look at the euro/yen. 124.21 to 26. it's also higher but trading likely to be a little bit restrained until the full repercussions of the italian elections play out in the markets. they think italy may not pursue current policies. we shall see. that sentiment may be borne out by the weaker yen today. let's have a look at opening levels for this monday, february 25. 11,569, up 1.61% for the nikkei, the topix up 1.44%. we're also getting fr

abe wants the new boj leader to share the same monetary policy with him but he needs approval from both diet chambers. last minute negotiations are under way within the government. the candidates include several leading professors and former finance ministry officials. for years, sustainable growth has eluded japan's economy. the abe administration has pitched its big economic policy saying it can fix this problem, but that will depend on a delicate balancing act between fiscal, monetary and growth strategies. abe's cabinet members must show now that they can deliver on three policy pillars. nhk world, tokyo. >>> a string of japanese earnings reports are out and the results are disappointing for major electric machinery makers. hitachi and mitsubishi posted profit and sales declines in the quarter. the companies traced it to poor performance. hitachi's operating profit fell 28% to about $735 million. sales came to nearly $23 billion, that's down 7% year on year when calculated in yen. the company officials say sales fell in china and europe. they cut the profit outlook for the full fisc

. >> translator: the boj does not intend to manipulate exchange rates or influence the market. our monetary policy focuses on stabilizing the nation's economy. the aim is to pull japan out of deflation and sustain economic growth. >> he said he will make the policy clear at this weekend's g-20 meeting in moscow. he also talked about what he believes as general qualifications for a successor. shirakawa will step down on february 19th. he said the governor should be modest enough to heed different opinions and have a global perspective. here are the market figures. >> oscar pistorius, the olympic athlete is charged with murder after his girlfriend died in his home. investigators say the 30-year-old was found dead early thursday after being shot in the head and arm. police arrested a 26-year-old man. they did not identify the -- democratic reforms created a more open attitude and now an effort has begun to search for the remains of japanese soldiers, many of whom died during a fierce battle with british forces. nhk world has more. >> reporter: the former japanese army invaded indi

the yen is weakening further and this is due to investors hopes for further measures under the next boj governor. the dollar topped 94 yen first time that's happened since may 2010. it has since lot of a bit at 93.67. some traders taking profits. in terms of euro yen it's at 126.84. turning to other asian stocks now most parkts did trade higher today. we had services data from europe and the u.s. that came out above market expectations today. that did support sentiment a bit. shanghai managed to gain its gaining streak. seoul was the exception. kospi down today, concerns about the south korean currency. european stocks largely mixed at this hour. we're seeing gains in london of about .4%. frankfurt dax is down a quarter of a pennsylvania and paris cac lower. a senior official of the international monetary fund has expressed a report for japan's economic policies but expressed a need for the country to take steps to rein in fiscal health. the finance minister met visiting imf managing director david lipton here in tokyo. he briefed him on the government's policies. he explained about the

the dollar gap much higher in asia on the news that he may get the nod for the boj governor.in the european session. the other big story of course is the following up on the uk downgrade by moody's before the weekend. sterling also was hit early and also has come back nearly retracing most of its losses earlier in asia. and the third thing is the italian elections. we'll get the results around 9:00 new york time this morning as the polls end. and the fourth thing i'd point out is bernanke testifies before congress tomorrow, and i think we're going to see a correction to the hawkish read that many had on these fomc minutes. i think this is keeping the dollar sort of more volatile than we've seen in recent weeks. >> is your guess that you would not be taking a position in front of the yen with all of this news about the bank of japan, and who the next governor is going to be. >> i think that the boj governor has been already tilted in the sense that we already know that the abe government of japan wants to have a dovish boj governor. i think this is largely a formality now. i t

investors remain cautious ahead of the decision on the next boj chief. construction equipmentmakers were down after caterpillar reported slowing sales for the quarter ending january. but batterymaker gsyuasa reported a fix over long-term battery problems. the shanghai composite tumbled to 3% today. commodity place were under a lot of pressure today after the u.s. fomc minutes raised the possibility of a qe asset. development and cementmakers rose. financials said their losing streak on fears of monetary easing. shares in the hang seng fell 1.7%. belle international fell 15% after learning the profits would be at the lower end of its forecast. the kospi ended lower by 0.5%. steelmakers took the worst hit. the asx 200 lose 2.3%. the fed minutes took a toll on aussie miners ending well in the red. index action on the sensex now shedding 1.5%. back to you, kelly. >> there wasn't a lot of green behind her on the board there and there isn't much green on the board behind me here. maybe about a dozen stocks across europe this morning in the green. what's intere

. >> the boj liquidity will help the fed. think it's already helped the fed by stopping deflation. let me just ask you, go back to abigail. abigail, if you and pending home sales. new and pending home sales and for that matter housing starts have done pretty darn well. consumer confidence is up substantially and today for core capital goods business investment very strong number. i mean is this economy, if washington doesn't screw it up, actually in better shape than folks think? that may be why all these cyclicals, the growers are growing. it would be bold to say the economy is in better shape than most think. gdp is scuffling along the bottom, the employment situation remains mediocre, velocity of money, all this liquidity pumped into the system isn't moving through. so i think we actually have an economy that's closer to potentially moving into a recession. let's not forget japan that you were just talking about has been in a recession for three quarters now. the eurozone has been in a recession -- >> you sound like dick m

we have the boj governor announcement next week, two very good candidates. one is interesting, this guy iwata, if we were to get through, the market would love him. he's the guy that was authoring the bond portfolio announcement. if he can get through that, we know that prime minister abe favors him. but either way, they're both doves. and lastly, as we approach march 31, we're going to be seeing the japanese getting ready to put a lot more money offshore. that's going to be bearish to the yen as well. i think the yen is readying for another leg. >> if that in fact happens, give us the levels of the trade you'd like to make. >> i think you get long dollar/yen before market around 92.80, stop/loss at 91.50 and target is 96.50. >> paul, enjoy the weekend. >> you, too. >> for more currency trades, watch "money in motion" tonight and every friday night, 5:30 p.m. eastern only on cnbc. >>> time for the "pops & drops," the biggest movers in midday trading. zynga, pete? >> social gaming when you look at nevada passing the fact that they can be doing online at least

boe, ecb is now anticipated and of course boj. another big factor and we have financials leading tape right now, is that we get the c car review from fed. this is comprehensive capital analysis and review. this will allow banks to start raising dividends. cycle more money. all this yield money will chase into financials. there is a lot of factors lining up right now for us to go. but the guest is right. we've got major pmi data coming out overnight and to a degree we need goldy locks numbers to complete this go-in. but next week is looking good for bulls. >> real quick, global rebalancing today. usa was among some of the net cells. any warning signs there for you? >> you know what, usa is definitely getting paired back it a degree. i think we could see some overall weakness, a touch on to the bell as far as that's concerned. but one of the main markets, the buyer, one of the main sectors globally, the buy are u.s. financials. u.s. financials are breaking out on that today and probably starting to get legs. so what is happening nex

we now have a governor named as governor of the boj, we think there's a real opportunity for investors to diversify nationally in japan and a real opportunity for that in 2013 for that stock market. >> what do you want to do? how do you do that, bite exporters in japan? >> exactly. yeah. you can play it through an etf to get broad diversification. one exporter we like is koboda. some people would know them, the orange tractors. heavy equipment manufacturers. they export half of their revenue from exports. half of that to the u.s., and the exporters in japan with the devaluation of the yen, there's just a tremendous opportunity there. >> all right. we'll leave it there. gentlemen, thank you so much. great conversation. appreciate your time tonight. we will see you soon, gentlemen, thank you. >> the biggest closing chain in the united states out with results. courtney reagan with results. >> that's right. if we can take a look at the chart after hours. you'll see the gap shares are moving higher and this is because we're seeing a beat on both the top and bottom line for gap, gap reportin

. >> i noticed the boj governor is leaving earlier than he normally would have left.rds, before the end of his term. do you think the government in japan, the new government under abe pushed him out to get someone more aggressive? >> he's leaving three weeks early, timing it with the leaving of his deputy governors. i think what's important is the government appoints the next head and we're likely to see somebody dovish. most likely we're likely to see someone who supports the bond buying from japan from the bank of japan and that would be very negative for the yen. and i think that's what markets are pricing in right now. when we look at the list of candidates and we look at who the top spots seem to be, the government is likely to appoint two governors who are very dovish and likely to follow the new politics in japan. that is likely to put pressure on the yen. the big meeting will be -- i think it's april 3rd, right at the beginning of april there where we'll have the first meeting where we'll have the boj and the new governor in place. that's where the real excite

that's thanks to the youngest and oldest nominees. 9-year-old qaa boj naz wallis. >>> hollywood goes >> reporter: i wanted to do something different this year and bruce weber, i thought bruce would bring a look and feel to the issue. >> bruce weber is considered one of the probably top five fashion photographers in the world. he does ad campaigns for ralph lauren for calvin klein, for abercrombie & fitch. >> it was really a lot to live up to. i thought, i'm not going to think about living up to it. i'm going to think about what i all do and make something of my own. >> this kind of shoot is certainly not typical for ""vanity fair."" we've done other very large productions but never with so much -- so much pumps. >> we did the even tire thing over a ten-day period in los angeles. >> we have hundreds of racks of clothes. >> we did shoot 120 actors and actresses. >> for the veterans it kind of reaffirms them and keeps them relevant. for the up-and-coming, it's like the stamp of approval. >> "vanity fair" is the hollywood magazine. >> it's the folks who have hung around long enough to be

the sell offintensified following reports that prime minister shinzo abe is close to nominating the boj chief. analysts say mutto is unlikely to roll out radical policymakers to unflagz the japan economy. toyota shares lost nearly 2% today after they reached a $29 million multi state settlement in the u.s. over the safety recalls back in 2009. the hang seng managed a fall in hong kong property stocks. volumes remained thin waiting for direction from mainland china markets. but popewell holdings gained 2% after yesterday's rally. note that the stock has already soared about 70% since the end of may thanks to a hong kong housing boom. elsewhere, south korea's kospi managed to hold around a three-week high ending higher by just a touch. meanwhile, australia's asx 200 closed flat. india's sensex just ended lower by 0.3%. back to you, ross. >> okay. thanks very much, indeed, for that, sixuan. let's see what's on the data stateside today. january industrial numbers are out at 9:55. we'll get the first report of february consumer sentiment. analysts looking for a reading up since last month. a

market jumped 3.4% to a 4 1/2 year high on talk about adp president kuroda will be named as the next boj governor. kuroda is seen as an advocate for aggressive easing, someone who will take radical steps to beat deflation. sharp shares tumbled over 5% after discussions of a tie up are expected to end without an agreement. in china, the manufacturing sector showed signs of a retreat after hsbc slipped to a two-year high. the shanghai composite slipped today. brokerages rebounded on reports about a move to expand a pilot short selling scheme. hong kong shares finished marginally in the green up 0.2%. but realistic plays were under pressure today after the city government imposed higher property stamp duties and home loan curves. elsewhere, south korean banking stops stocks jumped on hopes that the new president will take steps to boost the local economy. but that is not enough to let the kospi, which closed higher up, closed down by 0.5% as automakers were in reverse gear. this lifted by gains in ree tail and financial stocks. india's sensex just ended flat. back to you. >> thanks for that

investors are still awaiting the decision for the next boj chief. toyota shares gained 1.7% after thenique reports. the carmaker will ramp up production in april by 10% on expectations of higher domestic sales and more profitability due to a weaker yen. japan tobacco lost 1% an reuters reports the japanese government will begin selling its shares of the company in the next few days. >>> the mainland china markets rebounded from losses over the past two sessions. investors are looking for policy cue s in the upcoming sessions f the national people's congress and the chinese people's political conference in march. >>> environmental stocks surged on hopes of more government supported. local meadad say china will invest over $56 billion to control air pollution by 015. >>> -- 2015. >>> shares in hong kong also finished in positive territory. gaming stocks fell after reports say gambling revenue will be weak in february. >>> elsewhere, south korean automakers' technology shares and n brokerages led the rally on kospi ending higher by 2%. and the esx 200

the prospect of a new boj governor and aggressive monetary easing has weakened the yen to near the 94 handle against the greenback and sent exporter stocks higher. avian shares soared at 22% after posting a 29% jump in net profit for the last three quarters. >>> the world's largest carmaker, toyota, rallied 6% after raising annual profit guidance on the weaker yen and stronger u.s. sales. elsewhere in china, the shanghai managed to end in the green for the eighth straight session. property developers saw profit-taking on fears of new curbs, but brokerages staged a strong rebound after losing over the past two days. >>> the hang seng rebounded from its one-month low, ending higher by about .5%. many blue-chip name gained ground. but gaming stocks tumbled after the "times" in the u.k. reported beijing is set to crack down on junket operators bringing in high rollers to the mainland. the move continues the fight against corruption and money laundering. >>> elsewhere, south korea's kospi bucked the upward trend, ending lower by about .1%. australia's asx 200 climbed to a 21-month high, en

you know, we've had big bets in japan, as well, so that's been the bigger focus -- >> the boj. >> what? considering what's going on in italy and all the worries over there? >> i think the italian thing was worrisome. it created a decent sell-off, and it's probably being bought into, in that you're going to have no real change in government now for six to nine months. so no positive progress, but no real negative progress, right? italy's got a self-regulating mechanism on the deficit. their real problem wasn't fiscal. it was reform. so the reform agenda has gotten put off for at least a year. so that's not a positive. but it's not a huge negative. >> all right. >> so, again, there's so much liquidity in the world. people are stretching for yield. we continue to hear this idea of the great rotation. add a fixed income and into equities. we haven't seen any indication people are leaving the bond funds. you know, when i started -- >> does that mean there's no equity bubble? >> i think the equity bubble is going to go. but it, you know, when i think about this, when we -- >> you're calling

and i think that when we get the boj nomination, which can come tonight, tomorrow, that we're going tostronger move once the new governor comes out and reaffirms that he's going to take aggressive action. >> the italian elections. we got a 5% move on euro yen on monday. that's a huge move. >> and -- >> what happens if you're -- we do get trouble in europe, does that kill the yen trade? if it gets worse? >> i think that in terms of additional trouble in europe, take a look at the euro now, it is not falling as much as you would think. because we had a sharp decline in italian bonds and then the yields spiked yesterday, we still didn't see the euro crack ben low 130. there is stability there. the safe haven bid trade will play a role in dollar yen, but i think that the longer term story is still going to be a weaker yen here. i think there is opportunity for more qe. so i think around 9125 is the area you want to come in. we got orders in for our firm to buy dollar yen as well. 9125 wouldn't be such a bad idea to come in below current levels with the stop at 90 and a target right below t