hays is at the boj with our next guest.a special joining us today outside on a lovely japan summer day. kathleen suey is the vice chair of goldman sachs japan and their chief equity strategists and we have a lot of questions. let's start with the boj. they are not expected to do anything immediate this week. something that will have enough of a surprise it could lose the market, even for a day? >> if you look at most of the surveys that most economists assume the boj will maintain the status quo, not doing much after the meeting today. although they say there are a lot of options, we think that the options are relatively it is ahead of the fed's decision so we do not want to make a bold move ahead of that and if they were to move dramatically to cut rates right now, there are negative repercussions that could be impacting japan's banking sector. so for all those reasons, we think they will stay put and the markets are discounted the scenario. to what could they do, one minor they couldeak contemplate is considering extendin

of course, it is the boj day. the bank of japan wrapping up its food a policy meeting in the hours.uple it is expected to hold policies steady ahead of the federal reserve's long-awaited decision tomorrow. david: kathleen hays is in tokyo outside the boj. bank either central deviate from this almost predetermined monetary policy script? like it: well, it seems would be a big market mover if they did, david. here i am in front of the bank of japan. the closer we get to 12:00 tokyo time, the more we know we are in the zone where we are going to hear what they are doing. we had that adjustment production data from japan. we know there is a trade war threatening japanese manufacturing. in -- and japan in their own trade war spat. but when the bank of japan comes out of the meeting and gives us an update, they might say basically domestic demand is pretty good, household spending picked up, we think we will see solid growth. as for the yen, everybody knows the ecb signaled they will do a lot more stimulus come septembe

a bitter memory for the boj.y came out continuing stimulus. boj had to hold an emergency meeting and that's kind of thing they want to avoid. it makes their decision-making a little more tricky today. shery: kathleen hays, thanks for that. now to bloomberg exclusive, john micklethwait has been speaking to the new mexican president in mexico city. he discussed his countries relationship with the u.s.. cripes he is an ally. we are not betting on politics or authoritarianism. we think the solution to problems should not be through coercion. we think of cooperation for development. that is our thought. it is indispensable to have a good understanding with our neighbor, with the united states , because of matters related to friendship, culture, trade, ,ommerce, the economy as well and geopolitical relations as well. we have 3180 kilometers of border with the united states. if we were in any european country or south american country, perhaps we could try to have a different type of relationship with the united states.

shery: what are you expecting from the boj?re we going to see some sort of insurance move against a jump in the yen as well? sian: at this stage, we do not think so. we could see that they extend their for guidance, maintaining that 0% on 10 year government bond yields, beyond a set of next year. there will also -- they will be revising the gdp inflation. we think they will revise their inflation outlook as well. no significant changes in terms of their policy. are we seeing a race to the bottom going on right now with central banks? we have a number of southeast banks alsocentral are we seeing looking at the next move being a cut. what are your expectations there? sian: the fact that we do have the u.s. cutting into straits and we have subdued inflation around the region does mean we are looking for further easing. we are looking for indonesian, philippines to cut interest rates one more time. we are looking banks also looking at the next move being a for singapore, the monetary authority appreciation buys. and malaysia to als

kathleen: usually seems the boj plans this carefully.cb signaled stimulus is coming september, etc., the fed probably going to cut but how dovish? they don't know. terrific interview by our tv team in asia. said in japan there does not seem to be the same kind of urgency. >> in interest -- it is interesting because it is more calm. people are looking at the exchange rate. if the yen were to step -- were to spike up, it will move. if it holds current levels, i don't think there is any sense of urgency for the boj to do something. if there were to be a change, what the boj might do is a polite -- is apply yield curve control keeping it to the 15 year note as well. even so bloomberg economics says they will not change policy framework until 2021. japan's economy is still growing. even though sports are weak and asia demand is waning, 947 economists surveyed see some kind of tweak, making it clear the stimulus will last maybe even longer than people thought but the bloomberg news team here also reporting last week people at the boj are sayin

nejra: i love how you tied together bayer and the boj. why hasn't the boj been more aggressive?hink this is something global observers have inerappreciated, the shift the thinking here in japan that really has focused more on the negative side effects of boj policy. you have the bond market telling the bank of japan specifically, you are buying too much interest rates are too low, and it is distorting pricing in the credit markets. they are specifically calling for the bank of japan to trim bond purchases. that institutional investors taking on increasingly risky investments overseas. regulators are concerned, and for bojthe backdrop policy makers. they understand any additional easing they take will face a lot of domestic opposition. nejra: thank you for joining us, chris anstey, our managing editor from tokyo. let's get to first word news. interest rates are too high for the economy, according to the president. the central bank has cap its key rate at a decade high of 8.25% making it one of the strongest currencies this year. the mexican economy may be in a mild recession. we

the boj is largely in nonevent.y have failed to hit their inflation target for so long, they have pump so much liquidity into the market -- the 2% inflation target was an when economicst was based around populations growing around the world. it is not for a time when japan's demographics has changed. they are not going to get the new birth -- 2% inflation target. no one cares of boj is directly on the margin. yen has been strengthening recently because there is a little bit more of a deteriorating outlook for the global economy. matt: are you going to be saying the same thing in the next months and years about the ecb and europe? mark: it is a very good question. i'm not sure. i think there is a worry we get there. i will say the same thing that i think generally the whole framework of a 2% arbitrary inflation target needs to be completely revised. not only because demographics are in changing and the structural disinflationary influence of technology, not only because of the amazon effect, overall we have structura

the ecb and boj are pouring into the global economy right now. you take a look at what is happening with high yield trading 360 over treasuries, intotion -- money pouring the space of the market. there is a lot of talk about whether the fed is going to ignite some sort of asset bubbles, if we don't already have one. what about these other central banks? what is the next step for the boj? what effect will they have? >> i think you raise a good point. the options to really move the needle for the boj and the european central bank are limited. they can certainly do things but their ability to do big things, that seems like the fed's purview now. the fed can realistically lower rates quite a bit. what i think is fascinating is the central banks are pouring onto the market and the overall market is strong but it is strong in an odd way. it is not indiscriminate buying. if you look at the high-yield market, it is often the higher-rated double b's that are outperforming. >> money is going down. >> underneath that rally, i think there is signs of hesitat

it makes it harder for the boj to reduce inflation. for the boj, their dovish tilt may be slim.ve all five major tools. maybne that's another reason. he thinks the baton is passing . they will wait to see how dovis h the fed is. there are concerns about an economic slowdown. going to get a lot more details breakout from that income figure. keep in mind it is the biggest driver of profit and also one of the most vulnerable divisions to the sways in the economy. micron technology are the biggest rivals globally and the memory chip space. they will be cutting capacity capx.utting in a guidance we can get will be quite vital. 32ond quarter prices for gigabit server modules sell 19.3% quarter over quarter. we got 128 gigabit memory chips falling 5%. they are expected to fall even further in the third and fourth quarter. >> what is in the pipeline for samsung that could lift prospects or events? >> they have basically pulled the launch of the fold in april because of screen problems. the films were falling apart. we are hearing from the mail business that they are going to be launchin

the boj could downgrade its growth projections.day, we will get flash pmi data from japan. let's check in on the feeling in 0.2%. down samsung under pressure, keeping an eye on this after a cell -- a solid outlook from texas instruments. this remains murky. strategists forecast a 26% decline in earnings. opening in on sydney, 0.1% higher while the aussie slipped below 70 in the face of a firmer greenback. the kiwi dollar under pressure, slipping against the aussie dollar. , want to highlight the aussie one basis point this morning. paul: let's get the first word news. >> big tex faces more investigation with the u.s. justice department looking at whether companies are harming competition. the antitrust division will address concerns that consumers and businesses have expressed about search, social media and online retail. it is the latest sign of official scrutiny by washington area facebook, amazon and alphabet fell in extended trading. the imf has lowered its forecast for global close, suggesting policy missteps on trade talks an

boj not even a part of the conversation going into next week. should it be?ilyn: they have been on the sidelines. expectations were high, maybe a little bit too high in terms of what the ecb may do. the bank of japan still has this enormous problem. they could maybe change their forward guidance, could do more in terms of qe. i think it is very hard for them to do anything. perhaps hoping for more from the ecb, they didn't come through. the bank of japan has been easing, has been so loose for so long, it fades into the background because it is accepted. we expect not too much next week. certainly, at some stage, they will have to do more. jonathan: your thoughts going into next week, bob? bob: i think the fed will do 25 basis points. i do not think powell, williams, and clarida have the vote to do 50. i think they are uber dovish, that they send the message they are serious. jonathan: if it were up to those three, they would go 50? bob: absolutely. they are mostly market practitioners, they have been in our seats, they understand that once disinflationary exp

we have the banks, which dovetails into our point about what the boj does.ative rates, yields below zero. i looked at your average view loans interest rates in japan, 15 years ago at 1.5%. we are at .5% now. is there a case to behold holding japanese banks in your portfolio long-term, jesper:? -- jesper? jesper: i think the long-term cases starting to build precisely because the net interest margin compression is now basically beginning to bottom out. you mentioned the average loan rate has come down to barely half a percent, but that has been the case for the last three or four years. mark --increased interest margin compression is starting to bottom out at a the second thing, what people do not understand yet, is the fact that -- the-core business consumer finance business, the advisory business, the fee earning business off the megabanks, is actually rising quite nicely. over the next year, positive earnings surprises from the banks may be possible. rishaad: absolutely and with interest rates like that, you would expect people to be releasing animal spiri

we will be joined by the former boj monetary policy board member. ♪ plenty more still ahead. the state street global strategist joins us and tells us why he is betting on emerging markets as central bank easing takes hold. paul: that is it from "bloomberg daybreak: australia." daybreak asia coming next. this is bloomberg. ♪ hey! i'm bill slowsky jr., i live on my own now! i've got xfinity, because i like to live life in the fast lane. unlike my parents. you rambling about xfinity again? you're so cute when you get excited... anyways... i've got their app right here, i can troubleshoot. i can schedule a time for them to call me back, it's great! you have our number programmed in? ya i don't even know your phone anymore... excuse me?! what? i don't know your phone number. aw well. he doesn't know our phone number! you have our fax number, obviously... today's xfinity service. simple. easy. awesome. i'll pass. paul: good morning. i am saikawa in sydney. we are under one hour away from the australian market open. shery: i am shery ahn. sophie: i am soph

you don't need to keep your powder dry probably talking about the ecb, bank of england, boj >> it's one thing to have more room to cut rates relative to other central banks, it's at to use that ammunition at this point when you have stock markets at all-time highs, the labor market remaining strong. do they need to be using this dry powder now >> there is one word in your introduction, when you said williams said we don't need to wait for disaster. it's not a disaster at the moment in the u.s. growth is reasonable the labor market is strong unemployment is below the fed's mid point of the long-term estimate there's not a sense of imminent disaster, and there's not a great deal of urgency to cut rates. prevention is better than cure, and it looks like they're heading down that track. my sense is they'll start slowly, probably continue -- i think maybe one cut now, probably another one the back end of the year or early next year, which is less than the market is pricing in i think it's a question of how far and how fast the direction is -- the direction is the same for everyone lower is d

-china trade talks, everything boris has boj, theerway, the fed.tephen: the global backdrop, whether from a trade angle, overall growth perspective, or certainly from the issue of structural problems. the euro zone is one giant structural problem. china and many emerging market economies that heavily trade with china have structural issues that have yet to be addressed. in this america first era we are 2020, thoughntil structural problems aren't going to go away quickly. overall, the backdrop for the dollar still remains quite favorable. i think what we are seeing now ys some federal banks merel asking to slow the appreciation of the u.s. dollar. they will not be able to subvert the dollar rally entirely. matt: all right, we will keep you with us. stephen gallo, our guest host for the hour. ryanair, a drop in earnings amid a slump in fares. ofning us now is the cfo ryanair. i see that revenue is up. are you gaining market share? seeing oure pass-through numbers increase by 7%. we are targeting a full-year increase, 2 million customers. we continue

the boj knows and knowe around the world the yen hasn't had a big spike.aybe you don't have to worry about it. some people think with the ecb already signaling more stimulus boj might be well served to have its own dovish signal. maybe tweaking the forward guidance to say they will keep the stimulus going for longer than spring of next year. the bloomberg economics team saying they won't change 2021ing until at least because the japanese economy is still growing. even though exports are getting weaker as it drags on. industrialchina's progress. 947 economists surveyed in tokyo do think there will be some small tweak. that means three quarters don't see anything at all. they had a story a few days ago oft they found out members the boj's policy board are reluctant to do that. they don't think it will change the economy or inflation picture . the boj probably doesn't do anything but i think people are holding out the chance that maybe you get some dovish signal to keep up with the ecb and fed. >> thank you so much. kathleen hays out of tokyo. .ust an update

sayuri shirai, university professor of economics and former boj board member.urse, we are half an hour away from the open in tokyo. let's turn to sophie to see what she is watching. sophie: with nikkei futures hinting at gains, we are going to be looking at signs of a rebound in tokyo markets. one indicator could be signaling a turning point. that is key shortselling ratio on the tokyo stock exchange, which hit a record high on thursday, rising to 51.2% at the topix is on course for its worst week since may. checking in on the yen, not giving into the revival this morning in the u.s. dollar that was sparked by the remarks by john williams. the yen could test the years low. shifting attention to korean assets, ing opines that the worst may be over for the korean won this year. markets are pricing in rate cuts with the easing cycle just do to tradeted concerns. it last month and 5% to be the biggest laggard in emerging in cheyenne -- in emerging asia. bond yields are sliding further on easing that's. bets. it is well below the key rate, falling from a high of 1.8

the boj may downgrade its inflation forecast and next week's meeting. paul. for a check of our first jessica summers in new -- new york. jessica: lower interest rates and renewed asset purchases on the agenda. eurozone inflation remains far goal.he bank's the governor of the bank of turkey delivered the country's biggest rate cut in 17 years, shing borrowing cuts. mike pompeo says he would be willing to fly to tehran to explain how the iranian leadership has harmed its own country. the trump administration withdrew from the nuclear deal. the president said he is open to direct talks for a new deal that would strengthen curbs on iran's ability to make nuclear weapons. >> i talked about this before. around in the most wonderful city in america and he speaks to the media. he talks to the american public and gets to put iranian propaganda out into the american airwaves. i would like a chance to speak the truth to the iranian people about what it is their leadership has done and how it has harmed iran. jessica: japan is weighing a new trade weapon against south ko

the biggest frustration here will be for the boj because trade tensions bring the yen higher. there's little more they can do to eke out further yen weakness with monetary policy. yvonne: we enjoy you sticking your neck out. >> always. yvonne: head of economic and strategy, staying with us. facebook's crypto plans are trolled by senators from both parties who discuss whether star isar -- libre'a's fading. david: we will put that question to our guest tuesdays with us. this is bloomberg. -- guest who stays with us. this is bloomberg. ♪ ♪ yvonne: jay powell says policymakers are always monitoring any threats to growth, adding that he will act is appropriate to sustain expansion. here he is in paris last night. around thisty outlook has increased regarding trade development and global growth. issues such as the u.s. federal debt ceiling and brexit remain unresolved. fomc participants have also raised concerns about a more prolonged shortfall in inflation below are 2% target. -- our 2% target. yvonne: sounds like a broken record a little bit. to support the case for lower rates. d

remedies that will help the boj -- the doj approved the deal.hey are selling three prepaid brands as there will be -- spectrum as well. they are talking about how dish gets customers across to their network and there will be arrangement where they share the network and spectrum. caroline: this is what revlimid -- what regulators have been grappling with. this alleviates that element. not just the department of issuee that is having with this. not just regulators, it is the states themselves. some of them have filed -- reporter: 13 states and the district of colombia are against this. they are worried he will be bad for consumers and raise prices, taking away on of the players from the market at face value, never a good thing for consumers. but if the doj approves this, it makes the case weaker because they have to argue to the court why they are not going along with the governing bodies whose job it is to assess competition and protection. caroline: we waited with -- we wait with bated breath. anotherlk about bloomberg scoop. on wednesday shares

had bit of different -- disappointing inflation numbers out of japan, reaching the limits of what the bojw shinzo abe has a big mandate, is there something he can do on the economic policy front? kuroda hasgovernor been saying there are plenty of tools that he can use if needed. i think he is thinking how to stimulate lending more to the private sectors. there are things. not limits het is is facing. kathleen: you helped put together a very impressive conference last week, the international public affairs, and you moderated a panel on social -- banking independence. i want to play something that, part of what he said when you asked him about critics of boj policy, monetizing the debt, let's listen to how governor kuroda answered you. >> i think the central bank independence is well-established in japan. [indiscernible] mmt is now fashionable even in japan. disagreeally [indiscernible] kathleen: mmt, monetary. can buytheory idea, you these and hold on -- did the governor answer your question to your satisfaction? what is the important question? mmt means central bank doesn't have independe

ed: great question because it ties into interest rates and boj policy. not expect boj policy to be changing anytime soon, to be clear on that. what is the federal reserve going to do? i think there are going to be things impacting the u.s. dollar-yen exchange rate that will be outside of the control of the japanese government, the japanese central bank and emily: -- i think in general, central bank cooperation is declining. it is probably more publicized how poorly governments are cooperating. the u.s. government and a variety of treaties and international organizations have been challenged in their decision-making processes recently. the banks were fairly good and coordinate it and maybe did a better job in the national but we are entering a. bank where it is more every man for himself so you will see detergents of policy goals and more potentially nationalistic, leading to a greater choppiness in the foreign exchange market. david: quickly, your top investment calls. top traits for japan right now. for japan, the hospitality space, tourism industry. ev

he added a phrase to the statement saying that the boj were not hesitate to do more if needed.oj is watching to see if the fed cuts interest rates tomorrow for the first time since 2000. the foreign ministry of china says that the hong kong unrest is "the creation of the u.s." a spokesperson says that some of the demonstrators look american and waved u.s. like. the education department reportedly is looking into a controversial financial aid tactic. oakland to "the wall street journal, -- according to "the wall street journal," some parents have transfer guardianship to relatives and friends. only the child's earnings would be considered in that case. global news 24 hours a day, on air and at tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i am kailey leinz. this is bloomberg. taylor? taylor: thanks, kailey. democratic presidential hopefuls are squaring off against. 20 candidates will take the stage on cnn. with cirilli is there more. what is the tone on the ground? kevin: year in the motor city, all eyes will be on senator bern

the yen hitting highs after the boj tweet. about thisen talking today, rightly so.0 year yield falling below 2%. not only is it below 2%, the u.s. 10 year yields u.s. and consumer inflation so that is the spread i had, falling below the red line. when you buy a u.s. 10 year yield, you are not even getting paid inflation, so it is hard to see how that could be attractive to a lot of investors, especially foreign investors, which is weighing on the dollar. we continue to see yields sinks lower. nejra: dani burger in london. for us in mumbai. to follow off from what she was saying, we are asking the question on mliv -- why don't stocks care about slumping pmi? you can join the debate. tv on your bloomberg. we have a chart showing contractionary territory for pmi's. stocks move higher in higher. why don't equities care? >> i have heard many arguments because it is a question i thought about a lot. the most plausible argument is that market smiles think that central banks will be able to turn things around. what i would say is if you look evidence, it is really hard

boj board says many members do not see an -- an immediate need to boost stimulus.ours a air and at tictoc, powered by 2700 journalists and analysts in more than 120 countries. this is bloomberg. shery: south korea's economy returned to growth, dodging technical recessions and rebounding from the worst since 2008. dark clouds still hang over the country. our north asia correspondent is watching. how worrisome is it that it economict every expansion that we get out of south korea seems to come from government spending? ofthere has been a tsunami news out of the korean peninsula today that highlights the challenges we are facing. gdp numbers were better than expected, but some of the export prospects are dim. we also have the hynek's numbers coming out, which were disappointing. that reflects the trade tension with japan. north korea firing a couple of projectiles, rattling sabers geopolitically as john bolton has just left. gdp in the second quarter was better than expected quarter over quarter, 1.1% expansion. we were expecting .9% expansion. , we were-year, 2.1% ex

bottom line -- here is what the boj governor kuroda said today, they will be watching and debating. >l carefully examine risk factors, in addition to development in economic activity and prices, as well as financial conditions. the benefits and costs of the policy effects. kathleen: given where the japanese economy is now, the global economy, the bank of japan is not excited to do anything more on rates. there were talks a couple of month ago about possibly cutting the key rate which was a little negative, making it more negative. at this point unless something drastic happens, i think the boj -- some people say it will have it in october after the consumption tax hike. shery: another halloween treat like last year, remember? obviously, everyone else is watching with the fed will do. it seems to be a question of will that be 25, 50 basis points? kathleen: at this point, great story by our bloomberg news team in washington today, looking at the fed laid by jay powell, will probably do 25 basis point cut. when i was at the university meeting on friday, jim bullard, we spoke to him after

you have the boj next week as well talk about a race to the bottom, these guys have arguably fightingince late 1980s, but certainly it has been a failure. but it is a function of the u.s. fed, let's be clear. the fact that greece trades five bips over u.s. treasuries is absurd you know, i think you have a case where, yes, equities continue to be the best plays. we have seen the stock market rally at a time when really didn't have a growth dynamic the rally that's taken place in the last two weeks, tyler, is one of significant breadth relative to what we have that's a place where pull-backs are shallow. >> in the minute or so we have left here, we have a very busy week ahead there's the fed obviously. we have been talking about there's the china talks over in shanghai we have been talking a little bit about that and there are -- there's an unemployment report that will come out on friday, and i believe it is next friday, apple's earnings there's a lot to chew over there. what do we think about apple >> well, i think if you -- again, the issues where apple could get thrown into trade wa

a big week for the global economy with rates decisions from the boj, federal reserve and bank of england as well as economic data from the u.s., germany and china. let's get to someone who can help us size up investor sentiment. he comes to us from boston. let's begin with the federal reserve, do we see basis points decrease and is it warranted? >> it is the wood versus the should and will. the fed has to 25 basis points because they finally had a test -- twowe are going to 25 do 25. should they? if they could travel back in time they would have gotten there stories straighter -- andr stories straighter keep policy unchanged. to risks they were pointing in june haven't materialized. but the fact is market participants have considerable easing priced in over the course of the year. what i think they should do is cut, say this balances the risk, let's just get on with our lives. vonnie: is the economy in so much danger that we need a 50 basis point cut, would that make the president correct? he will be unsatisfied with the extent of ease. i'm not sure the economy needs 50 basis points but

paul: the boj, like the rest of the world, is expecting the fed to cut their key rates. going to be 25 or 50 basis points? kathleen: 25 basis points is the bet, because jay powell, the fed chair, seems to be leaning in that direction. 25 basis points. the move to lower rates. jim bullard, when i spoke to him at an event on friday, he was with a bunch of reporters. we asked him -- 25 basis points, 50, what do you make of this? when we look at the bloomberg terminal, i will show you, i think, what jim is depicting. there was a big spike again towards the odds of a 50 basis points. you have to be aggressive. he seems to be saying something about the present. looking for a 25 basis point cut. who trade in eurodollar futures because of speculators positioning us in the way they think the fed is going to be doing the aggressive 50 basis point cut. , he is noted voter favor of any rate cut at all. you can understand why investors are so uncertain. it is a big deal for other central banks, not just what the fed does next week, but how much more they do afterwards. decides thisb

the report has many boj board members don't see an immediate need to boost stimulus as robust domestic demand is making up for weak exports. there is exactly one year to go until the tokyo olympics. organizers mark the day by unveiling the medals that will symbol ways -- symbolize the games. the gold, silver, and bronze are made from recycled electronics. them -- they are meant to resemble "rough stones that have been published and now shine with brilliance." global news 24 hours a day on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120 countries. i'm selina wang and this is bloomberg. david: thank you so much. ground zero today, south korea gdp numbers out, returning to growth pickup in the second quarter, dodging a technical recession. also rebounding from the worst detraction since 2008. still dark cloud hanging over the outlook for the economy. rishaad: let's find out about those dark clouds. stephen engle is our north asia correspondent. abouter: who knows better dark clouds then i? [laughter] rishaad: i'm not saying that. why are you

we just got the news about the boj cutting purchases of bonds and a 3-5-year range. it's the first time since 2018 that they have done so. they were trying to address the flattening yield curve. yields are taking one basis point. we are watching iron or after the rally. speeding at 116 when it comes to iron ore futures. we are back up just a little after the worst reaction we have opec meeting in four years. a fund -- a punter 4%. we saw one indicator of where dash oil prices go. we saw that drop by half overnight. that is despite the fact that opec agreed they will send in the outward curves for another nine months. russia is on board here as well. again, it just shows the concerns are overshadowing what we are seeing when it comes to supply. you have brent, you have iron ore, similar story there. essentially they need to cut back. once get a sense of whether or not markets have overshot the targets. eleanor is with us. very nice to see you. we are done with g20. that lost it -- that lasted -- i will be generous, two days. .e are back here again would you be buying

deutsche telecom, which owns t-mobile, met yesterday to discuss the package that is being discussed at the boj as these other remedies that will help the doj approved the deal. caroline: remind us who they are. nabila: they are selling three prepaid brands as there will be -- spectrum as well. they are talking about how dish gets customers across to their network and there will be arrangement where they share the network and spectrum. caroline: this is what regulators have been grappling with, worrying about. but this alleviates that element. it is perhaps not just the department of justice that is having issue with this. not just regulators, it is the states themselves. some of them have filed lawsuits. nabila: 13 states and the district of colombia are against this deal. they are worried he will be bad for consumers and raise prices, taking away one of the players from the market at face value, never a good thing for consumers. but if the doj and the fcc both approve this, it makes the case weaker because they have to argue to the court why they are not going along with the governing bodies

boj. they are weighing in on the need for more easing. got a special guest. >> i have a very special guest, i am back here again with eisuke sakakibara, professor at the university in tokyo and former vice minister of finance for international affairs, not to the road as mr. yen. glad to have you back here. and in the midst of a very interesting time. we just had the bank of japan meeting, concerned with the yen meeting isis a sad followed with cutting of race. especially after the ecb says it will cut rates. what is the dovish tilt by the other two big bucks in the world, what does it mean for japanese policy? >> it will be a difficult time for government -- for governor kuroda. he has stated that he is ready to move when he becomes necessary. wanted to easean policy before the fed and the ecb. dust furtherast easing we become too much for governor kuroda. even with excellent generic stimulus, the yen is pretty strong from that if anything, people are concerned with it strengthening further rather than weakening . eisuke: let's write, th

one reason for the boj to be now,ed, this whole thing testing the latest from japan. plans to potentially move south korea from japan's white list, it's most favored export destinations. damagingd be another blow to those exports that are already weak and therefore to their export dependent economy. so many challenges for shipments from south korea. does this mean the be ok -- the bok will have to continue cutting? kathleen: the governor was speaking a few days ago and said if the economic situation worsens, if uncertainty facing is economy grows, the bok ready to do more. very important, he noted when speaking to parliament, that 2014 doesorecast for not reflect the potential impact changing forecast. let me get gdp up on my screen. can see that the blue line is the economic forecast. bank ofe line is the korea's key rate. you can see how in the last several months since donald trump amped up the trade war and all these things have been increased, look how their gdp forecast has come down so steadily. they finally cut their key rate after hiking, but it seems to me e

growing expectations the boj will need to increase stimulus.ez obrador is calling on the central bank to he spoke tost rate, bloomberg editor-in-chief john micklethwait in his first interview with international media since taking office. cautious aboute inflation. this is not a bad thing. this is not the wrong thing to do. i am not saying that. but it is important to lower the rate, to encourage growth. >> andrÉs manuel lÓpez obrador says president trump has toned down his rhetoric against mexicans. the nextnson was then few weeks pressing the european union to agree to a better brexit deal. the alternative, a kayak -- a kayak no deal divorce which is sent the pound to the lowest level against the dollar in more than two years. citigroup preparing to cut hundreds of jobs in this trading group, new evidence an industrywide slump in revenue this year may be permanent. will/jobs acrostics income and stop trading operation. global news 24 hours a day, on air and @tictoc on twitter, powered by more than 2700 journalists and analysts in more than 120

what do you think about the boj? so exciting but it doesn't seem to be making much of a difference. will it be different tomorrow? >> the focus on the market is expected guidance. -- expecting guidance. room to had very little ease policy further. we are forecasting on the dollar-yen backed to buy outflows coming out of japan. pricing and a slow story. this leads you to that performance. it should outperform if we do have insulation of u.s. china tariffs. matt: what is the timeline for dollar-yen? it has been a long time since we have seen this level. >> we are forecasting that mid-2020, we see a trajectory slow grind downwards on the basis of the outflow coming out. since 2016s been that we touch that level. haven trades around that level you think are going to go there. you mentioned the swiss franc. what about gold and bitcoin? do you look at that? >> we don't look at bitcoin. gold is interesting in this environment but it is not really our area. don't focus on gold? it seems like it could be an alternative take t

that is a week or so before boj meets. for the fed, a place perfectly into their new mantra.estic economy in the u.s. looks solid, jobs are growing. things are not too bad. it is the slowdown overseas. the global growth picture has the fed worried and has them stressing that they have to cut rates. and they have to do it soon. the: ok, kathleen, i guess question then is what will it mean for the global bond market? are we getting lower with yields? kathleen: that appears to be the consensus among bond bulls. we know global quantitative tightening, reducing those balance sheets, stop buying bonds -- that is coming to an end because central banks around the world are all getting in that global march towards lower rates. the head of the reserve is excited to jump on as well. europe is getting ready to see its first negative yield on 10 year corporate bonds ever. this is one more sign that with the central banks moving in, concerned about growth, that seems to be the direction for bonds. although, shery, if we do get some progress on trade, all of a sudden -- that start looking u

program has served some purpose to quell volatility in the corporate bond market, but the ecb, the boj, they are kind of out of ammo. at least the fed, in an enviable situation, has some room to cut. i'm sure if i was at the fed, i would be worried about not spending too much of my ammo because i don't want to end up where the ecb is now. a word youjapan is hear a lot in europe these days. jurrien, thank you very much. jurrien timmer, fidelity investments director of global macro. vonnie: let's check in on the louvered first word news. here's ritter cook -- bloomberg first word news. here's reddit cook up to -- here's ritika gupta. ritika: iranian forces seized a british tanker in the strait of hormuz. atsident trump is taking aim the federal reserve again. on twitter today, the president called the fed misguided and said it should move now to cut interest rates. the fed is expected to cut rates at the policy makers meeting next week. in puerto rico, hundreds of thousands of people will take to the streets again to protest the governor, refusing to quit, but says he won't seek reelecti

boj, for example, 2%ch sure enough has a target, but has not been able to achieve it. vonnie: we saw this massive rally in yields in greece, spain, and italy, all of the problem countries. investors seemed to be breathing a sigh of relief, as if this means suddenly the ecb will make sure every thing is ok. erik: you're seeingerik: --erik: you are seeing a lot of speculation of restarting qe. if you look at household inflation expectations or the expectations of professional forecasters, they've held up a lot better. actual inflation is pretty steady around 1%. it is low, but i don't think it is weak enough. vonnie: let's look at the currencies on the move today, and that includes sterling. we are seeing a little bit of a rally. it's been in a range, and we are waiting for some kind of material difference on brexit. it does look like there has been at least a move on the part of parliament to say no deal is not happening. this puts it up to boris johnson to figure out how he's going to exit. erik: it is going to be a messy couple of months for sterling. we like to trade

said the bank of japan will m mull easing swiftly if momentum for hitting the price goal is lost the bojrd will debate policy this month based on vie that japan economy is growing moderately global economy is growing moderately but various risks exist. he is talking about libra, too >> wow joining the chorus of central bankers weighing in. >> so he said that g7 are likely to engage in a wide ranging debate on libra including on whether it is indeed a stable coin steps versus libra will go beyond financial regulations many central bankers are focused on libra the announcement from facebook we'll have to see how that pans out. >>> president trump says there is still a long way to go on trade talks with china trump reiterated he could still hit beijing with tariffs on an additional 3$325 billion worth o goods which would essentially cover all remaining chinese exports to the u.s that as beijing hits back at trump's previous tweet that claims slows gdp growth shows why china needed a quick deal. a spokesperson said that was totally misleading >>> the trade dispute between japan and south kor

it highlights the limited scope in which the boj can take part.creativeeen and ahead of the other central banks in terms of levels of creativity. we are at the stage where they are half of the market and it is not a functioning market anymore curtailing their ability to escalate on that front. that is why we think the japanese yen is one of the best currencies in terms of potential performers going forward from here. >> excellent. we welcome the up that discussion shortly. let us get a little more on the china data. i am joined by bloomberg's chief asia correspondent. we have these yuan numbers on imports and exports but bring us up to speed on your first thoughts at seeing these numbers. >> we are getting some of the data coming as you mentioned. the first halfn of the year in yuan terms. indicating it is somewhat positive but we do have to wait for a monthly reading and for the dollar figures. there is a delay on the beijing side in getting the numbers out. sometimes, the government trickles out these numbers and other times a release them all a

the boj has an inflation target of 2%. sign of the financial toll growing on boeing from the. the company is expected to announce an accounting charge with second-quarter results. that covers potential concessions for airlines that have had to cancel flights. it is entering its fifth month in the grounding. global news on air and on twitter powered by more than 2700 journalists and analysts in 27 countries. this is bloomberg. tom: thank you so much. it is a redux of what we have seen. chancellor merkel redoing the german line of a balanced budget policy. the budget was 4% of gdp deficit, it is now 1.70% of deficit. a far more austere budget, a balanced budget, but certainly what we see in the united states. no real surprise, but nevertheless reaffirming the dramatic belief. germanicic beliefs -- beliefs. futures of 10. dow futures up 1.01 off the williams-claritin derby yesterday. in the afternoon, oil gets weaker. let's move on to the second board. the vix showing the equity left. there is the dow on the friday close. we

find it quite difficult to see how if the treasury were to intervene unilaterally, by which i mean bojecb is not involved or other governments are not involved, and if they were to interview, i don't know how sustainable any losses in the dollar are going to be. ,ypically, joint interventions think about 1999, everybody propped up the euro, those are interventions which are sustainable and successful. i think going unilaterally, i suspect may actually be bullish, foolishm -- full-ish -- , even from a weaker dollar perspective. you will torpedo the global financial system and global trade system. that is going to meet that -- mean that risks increase massively, the global economy weakens. when the global economy weakens, the dollar is strong. you might lose out eventually by going for a weaker dollar. six months later, you might find that the dollar is stronger than your starting point. that might be a losing proposition. i'm not sure that the treasury has thought that through, which i think it is unlikely and certainly likely to be successful. in the bottom 30 percentile, the dollar is

when the fed turns more dovish after the last rate hike, remember that's the fed, the boj, and ecb i'm not sure you can buy bitcoin that much, so gold seems like a good bet. >> that does it for us thank you both check out our website. "halftime report" is back with your final trades after this this is my headquarters. this is where i trade and manage my portfolio. since i added futures, i have access to the oil markets and gold markets. okay. i'm plugged into equities - trade confirmed - and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit learnfuturestoday.com to see what adding futures can do for you. is it to carry cargo...he or to carry on a legacy?? its show of strength... or its sign of intelligence? in crossing harsh terrain... or breaking new ground? this is the time to get an exceptional offer on the mercedes of your midsummer dreams at the mercedes-benz summer event, going on now. lease the gla 250 suv for just $329 a month at the mercedes-benz summer event. mercedes-benz. the best or nothing. >>> all right. let's ans

also at the same time, the boj is so much more interesting.e trying to steepen the yield curve. , the treasury,d jgb spreads, that should narrow inside of 200 basis points. steepen that yield curve for the japanese. what is the risk to that? we have a sale tax possibly coming down the pipe. what are the risks in the japanese story? >> if they are successful in steeping the yield curve, perhaps dollar-yen falls too quickly. given the intense focus on currency manipulation, the bank of japan cannot go near in terms of back in the 1990's or 2000, they would be buying hundreds of billions of dollars to hold dollar-yen above 100. they just cannot do that today. nejra: let me ask you about the pound. one of the guests i spoke to said you need to be trading the pound or at least looking at it like an emerging-market currency. levels are you watching toward the end of the year on the pound in terms of entry point or where you would want to sell? 92 tobably we could see 93 for the end of the year. cable can go down to below 120. the reason we have not