where does this leave the boj? raise their forecast for inflation. it is not 1.6%. if inflation goes up, you cannot forecast that. a rising cpi is urgently necessary for the new governor of the boj to start that shift. these are important numbers for the boj. if this continues, we will have a meeting in june and certainly july. haidi: that's get you back for a look at the markets. annabelle: picking up on what kathleen was saying come up even though we are seeing that inflation data coming through, expectations that the boj could rethink its policy settings is not something hurting the equity picture at all. the expectations we see is a further dovishness from the boj. we are seeing the nikkei trading above its highest levels since august, 1990. it is broadly risk on in the session. all major markets are moving to the upside. we are half-hour into the session for japan, korea and australia. further strength across the board but focusing on the japanese, it is strengthening. perhaps that is a reflection of the bet b

arthur moore downside risks the boj might be looking -- are there more downside risk the boj might be looking at? paul: i think that we have to play through the crisis taking place over the coming months and there is a bit of a lag in terms of how it affects energy prices and japan, so the boj has saying they expect the inflation rate to fall below 2% in the second half of this fiscal year, fiscal year starting april, so that is towards the end of this year, of the question is they are not so sure about how much it will accelerate afterwards. uh, still, if inflation does not cope below to prevent -- 2%, that is about look for a bank that is not changing its stimulus. shery: paul jackson with the latest on the bank of japan. let's get you to su keenan with the first word headlines. su: default worries have intensified in the u.s. as the treasury's cash balance drops to the lowest since 2021. the data shows it fell below $50 billion wednesday as the debt ceiling standoff continues. the treasury's bank account has been under downward pressure recently as government implements measures to

the boj is in a decent position.he other angle, what happens domestically, some of these unwind. from offshore, and when you look at foreign investors, and they're looking at japan, you start thinking about if the yen is going to be weaker and the economy is doing fairly well. as an alternative to other large markets that are priced in for a good outcome, japan does not seem too bad in those circumstances. haslinda: what are the best crosses if you consider what investors have been saying about it being a tale of two halves, and the second half will be better? >> there is still a bit of hope in china. the expectations of easinga nd a better -- easing and a better outcome, that is that story of the second half. whereas in the u.s., we are expecting the opposite, feeling somewhat ok labor markets and housing markets holding, to some extent. what we think is in the second half, it will switch places from here. rishaad: thank you very much. howe chung wan, the head of asian fixed income at principal asset management. we

what do you think we need to look for for that switch from the boj to become a reality. ?k we need to see non-energy stuff, inflation picking up. the governor has been repeating on tv and -- that we have not seen the battle of inflation yet. he is very cautious, because back in 98, back when he was the board member, he really -- when the boj hiked rate, he was against it. i think he has the mindset that japan might fall into deflation when the trend is not strong and long enough. kailey: what does this mean then for japanese assets? what are the implication toward the curve but also japanese equities? have they gotten too far ahead of themselves in the near-term? shoki: for rates, yes. i think there is real demand in the belly. these japanese investors -- from the u.s. market into japanese jgb's are going to be supported. as for equities, i think -- i am a little bit dovish on the equities side, because we have seen flows shifting from u.s. or european equities into japanese equities. that is the risk that i see. guy: do you see that trade accelerating as we go through thi

dollar-yen unsurprisingly silver trading at 140 given the conversations on what the boj is not doing and will rates on welfare when it comes to the u.s. dollar. rishaad: he is playing the mystery man. it seems like we are approaching some time of agreement -- type of agreement. in line with joe biden's budget request. yields really short insecurities, which will be maturing in june really having a move down and terms of the yield. we are seeing this. conflicting data coming out of the u.s., on the one hand we have gdi and gdp moving in opposite directions as it were. david: we are at that point where every single data point matters including some of the things that are out of our radar. that goes into mixed data, so initial jobless claims coming in as well. perhaps if that is part of what is fueling his further melting in yields and some of the pricing around not so much june july. 90%, hundred percent as far as a rate hike. the fact that we are talking about the fed may be needing to raise interest rates again, are we supposed to be positioned for a second wave of tightening? rishaa

we will be hearing from the boj governor later on.licymakers in japan saying if the yen continues to weaken, the government may need to do something about it. the s&p futures right now looking flat. that is it for daybreak australia. daybreak asia is next. stay with us, this is bloomberg. ♪ hhh business license guidance? ahhhhhh -cross-border sales? -ahhhhhh ♪

ongoing monetary easing at the boj.d 21 18 to be at the 33 year high and in addition companies have been announcing solid earnings in japan and long-term investors are -- we will watch how they come online but essentially we saw the highest profit in years but a cautious outlook held them back from returning capital to shareholders. japanese yen is trading study. -- steady. markets in the u.s. session were stuck in a tight range. investors are waiting for clarity with the u.s. debt negotiations and if lawmakers in washington that will be able to reach a deal to subvert default. because back is slightly outpacing the gains. future is now trading flat. we are watching the korean won. some of the world's biggest investors now betting on an em rally including fidelity and others but when it comes to the emfx rally -- let's look at how australia has come online because the rba may meeting minutes are due and clarity in terms of what we can expect from the governor and his peers but also in the session today we will focus on

is there really a need to build a case, is the boj preaching to the choir?rime minister took over in april and announced his review, he will take up to a year and a half. economist have been trying to think, does this mean there will be no change for a long time? not all economists are convinced of that. someone else is saying no, they will build a case very, very slowly. they will use this review to back up major change. that major change won't happen until the second half of 2024. what are they going to do in terms of major change? they will scrap negative interest rates, they will go back to an overnight call rate set at zero. they would scrap the y cc, the yield cap. they would still be buying bonds, but without targets. they would have maximum flexibility to kind of control those bond yields but without a specific target that speculators could attack. this would make the stimulus framework more sustainable, keep it going for longer, and less vulnerable to speculative attack. that is the view of newburgh economic. -- bloomberg economics. yvonne: interest

boj conferences are only so open and he is giving introductory remarks.the bank of japan's annual international policy conference. and there's all kinds of central bankers probably from around the world. we've seen some names. we don't know everyone there but the yen is at the lowest level since november and we had a big meeting yesterday of the ministry of finance, financial services agency and bank of japan. the chief currency official in japan in his role noted that this is the first time they are meeting since governor ueda took over the boj. he is putting the focus on ueda, has first policy meeting was in april. they will take appropriate responses if necessary and again as you know, it is rate hikes from the fed that are expected. another thing putting pressure on the yen. we know that ueda said he's not ready to do anything on monetary policies. he says inflation is sustainably at 2%. he may not give anything but opening remarks. not everything is open to the press so you may not here. if he does he will not answer the markets by talking about twea

it's the yield differential between the fed and the boj in focus. shery: the longest winning streak since october for the greenback. here to discuss our top stories is our bloomberg policy editor, kathleen hays. let me start with you, with eco-data we had today. i mentioned how the first quarter gdp numbers were revised higher. there seems to be contradiction within the numbers. there is gdp versus gdi, gross domestic income. what do we know? tom: you put it nicely. there is a contradiction in the numbers. the first course gdp numbers were revised up, pointing to continued growth in the u.s. economy. the u.s. gross domestic income numbers, which conceptually should match with the gdp, pointed to a contraction. what's the signal we should take? frankly, it is hard to take to clear her signals from numbers pointing in different directions. if anything, my feeling is that it indicates this is a movement of heightened uncertainty for the u.s. economy, perhaps, there is more weakness than the headline gdp growth numbers indicating. bloomberg economics is

after being put on the boj's outlook as stocks hit new multi-decade highs.is bloomberg. ♪ you know doug, ever since switching to workday you've been a real rock star. rock star? what do you know about rock stars? billy idol? i mean where's the skin-tight leather? my shoes are leather. where's the unnecessary zippers? that thing! billy, rock star is just how doug feels when he uses workday. thanks, rory. i'll show you rock star! be a finance and hr rock star. workday. for a changing world. billy idol just stole your golf cart! >> japan is what i referred to as a supply chain of a supply chain. there are 19 companies that operate 40 to 75 to 80% of the market share worldwide in their space. you cannot use a semi conductor without a japanese company involved in it if not multiple companies. manus: u.s. investor to japan speaking to bloomberg earlier. -- ambassador to japan. the yen rose slightly after japan's inflation accelerated in april. likely supporting the view that the bank of japan may revise its price outlook. does that mean for monetary policy? let's

again, it is really that differential between the boj in the fed.l minute meetings telling us that boj officials think that 2% target is in sight for inflation, but still there is that need for further easing. commodities likewise trading a little lower in bond yields just shacking the news that we had an treasuries overnight because investors are really still leaning in and the debt space to the expectation that the fed could posit soon as next month. but let's change now because when you look at the debt space, what's really interesting and the moves we are seeing in chinese government bonds, we have seen the 10 year yield now on track for a ten-year side. this is a couple of different factors playing into it. chinese inflation data is doing the next hour. that will set the tone for further monetary policy support from the pboc. on top of that we have a report from reuters essentially saying that china has asked for a state owned bank to cut deposit rates on some products is that something that's playing out into the yields. haidi: a lot of things

also, for the boj they say that an exit from negative rates and -.1% is possible.o shifting were scrapping the policy of yield curve control entirely. that could be changed depending on the how -- depending on the health of the u.s. economy. as a result, if you change now, they are making changes to its bond portfolio. essentially de-risking it to some sort of sets and shortening the duration of its bond holding. that's number one. they're looking to off hold any liquid assets they are getting into positions that they can deploy cash over the coming 12 months if these policy changes to take -- do take affects. muzuho is bullish on japanese equities. in particular, what they say is they are attractive given the low valuations. paul: stick with us for japanese stocks. bank of america is also bullish there, right? annabelle: that's right. they put out a new know, looking out what's next, given we saw the topics, the nikkei, both hitting multi-decade highs. the big question that investors have is whether these gains can be sustained. muzuho around the bank of america s

shery: on the others we have the japanese yen and enormous pressure given what the boj has not signaledanything. lows of 13791 at this point. where does the yen go from here when you are expecting the boj to not move for the next couple of months? julia: i think when you have policies like yield curve control, it's hard to suddenly move away from them. market implications can be quite big. i think they are taking the prudent approach to say we need a little longer to study how to adjust from these policies. while that happens, the slow exit in the backdrop, i think the dollar is key. the fed meeting in the next couple of days and how the market reacts to the fed tone. do we get a little bit of a hawkish surprise? so many rate cuts are being priced and so soon and maybe that doesn't happen in the near term. we could have a little bit of a correction and the dollar could strengthen. that becomes another opportunity , that we've seen two times this year, an opening maybe to play the dollar tactically from the weak side. if the dollar rebounds a little bit next couple of days, we can have a

the boj will be sticking with its easy policy.the dollar-yen rising and the japanese yen weakening. this is on the we can help with some of the bigger exporters. >> lots of things on the table to discuss with our next guest. saying if the u.s. debt deal is reached before the x date, there is still scope or short-term dollar appreciation. what is your reaction to this? it looks like it could come to a vote in the house by wednesday. but will that mean for the dollar? >> i think we have already been seeing rally in the dollar. i get optimism around this debt ceiling. it has driven the dollar higher. we saw the dollar buys around 8% in 2011. we saw a debt ceiling reset. it was difficult to draw parallels. this time it is different. we have interest rates going higher. tighter liquidity environments from restocking the cj on the back of a reset of some sort. that would push the dollar a little higher. >> give us a little bit more detail on the tga and what is going on. we know liquidity has been a big issue and raise have been through

so, certainly one set of data that the boj will be watching closely.eds to shift its policy settings sooner rather than changing. if it's something that will put downward pressure on japanese bonds, and also we do see the yen looking fairly flat here, but still something according to fluctuations in the currency. this expectation of whether the boj will be forced to pivoted settings. in terms of what it means for stocks but when you do see weakness in the japanese currency, it is something that can build into the gains for the topics, we are seeing it move hi extending the outperformance at levels we haven't seen since 1990, certainly more strength to come based on what we are hearing so far corporate guidance. a lot of gains coming through, share buybacks and focus. the topix is outpacing the msci asia-pacific index, which is sitting fairly flat. haidi: tencent is one to watch, especially the biggest rise in quarterly revenue since 2021 thanks to the gradual recovery in spending on advertising. let's bring in our markets reporters joining us out of ho

market has more upside but i think the gains will be constrained and i keep a close eye on what the bojoes. paul: back to something you mentioned a couple of times, the ai inspired rally. there is no doubt that's an exciting technology with a bright future. do you see shades of.com level excitement around it on the shane: i certainly do. i must admit that all the technologies that come along like bitcoin on a crypto, everybody got excited about that and that proved to be a bit of a false start. ai is a lot more fundamental and it offers a lot more hope in terms of productivity. the service sector for high labor companies. that's a positive thing. the problem is, like we saw with.com, it had a great long-term future, in the late 1990's, and we reap the benefits of that but it took time for that to show up and the market got ahead of themselves. if there are echoes of .com there i think investors need to tread carefully in terms of not getting care -- carried array. the unfortunate reality as john maynard keynes says is the market can keep going for longer than you can hang on. but, i thi

we have been watching the boj lag others. it is still in a position where it is stimulating the japanese economy. how close are we to the end of that process? >> on paper, it looks like it's in a better space. inflation in japan, certainly deflation for so many years and now the debate is trying to get inflation back to bank of japan's target of 2%. like you said, the fact the central bank is afraid to put away -- pull away from the massive support into the economy speaks to the fragility around japan's economy. export data came out but there is still broad softness and weakness on japan's economy. that is why for example the government does not buying the inflation story. it is not based on spirits per se, it is based on trade or inflation. alix: this is what i find interesting, if you look at some of the other companies in the u.s. like let's onshore stuff or nearshore stuff and that was the height during covid and all of a sudden it was like we don't want to spend that money doing that, never mind. i'm wondering how firm a

that week result adds to a boj governor -- the boj governors resolve to keep up policy for now. the nikkei coming up to the upside, just a fraction higher. we have the likes of nintendo and mitsubishi due to report dated tuesday. do -- due tuesday. so far the kospi is looking weaker, we will be watching the moves that we have seen in tech stocks given that we saw the nasdaq peaking out a small game. -- having out a small gain. a small game related to the s&p 500, according to goldman sachs. we also are taking a look at the korean index this morning, under pressure. but the dollar is likely past its peak in the -- dollar-won do for remediation in the that half of this year. in australia the indexes are coming online and we are on the countdown to the budget due later. we expect to see the first surplus since 2008, targeted spending measures coming through through -- four disadvantage -- disadvantaged groups. we want to watch when it starts trading in a few moments from now. it reported a cash profit of 1.8 million -- million dollars up 10% from a year earlier. but the bank ceo re

ueda also indicated the boj may scale back monetary easing even if the inflation level is back towards 0.7%. and says if the crease is stable rather than focusing on the number to the first decimal place. >>> japan's latest white paper on agriculture for the first time features a special focus on how to improve the country's food security and calls for a reduction in the nation's reliance on imported farm products. the annual report was approve by the cabinet on friday. concerns about a global food crisis are growing due to russia's invasion of ukraine and other challenges. the white paper says that international wheat prices reached an all-time high in march 2022 due to growing demand in china and the war in ukraine. it says they remain at high levels. japan is heavily reliant on food products and fertilizers from a few countries. the notion -- the nation, rather, imports over 99% of its wheat from the united states, canada, and australia. the paper says that import prices of a key fertilizer ingredient, urea rose to record highs and fluctuating widely. 90% of the needs comes from abr

congressional leaders are working hard to avert a crisis, but he says if the worst comes to pass the bojill take rapid action based on economic factors, commodity prices, and financial situation. u.s. president joe biden is in japan for the g7 summit, but he's planning to head home sunday for a last ditch effort to negotiate an end to the standoff. >>> and south korea's samsung electronics says it is consider building a semiconductor research and development facility in japan. samsung's executives revealed the plan on thursday in a meeting with japanese prime minister kishida fumio. samsung officials told him if the project goes ahead the japan rnd facility would be used to develop advanced semiconductor chips. they also said they're discussing the feasibility of joint research with japanese equipment makers. sources say the rnd center will likely be built in yokohama near tokyo. samsung already has a research facility in yokohama for a home electronic appliances. reuters reports samsung is expected to spend up to $3 billion to build the chip rnd center in japan. a report says samsung ma

looking ahead kanda expects higher growth from april based on consumer spending and tourism as well as boj's continued monetary easing. however, he warns this assessment could change if economies elsewhere slow. i'm yanaka marie and that was this week's biz picks. >>> a trade show in tokyo this week featured some of the latest systems and equipment using the artificial intelligence technologies like chatgpt. about 120 companies and research organizations from japan and abroad took part in next tech week 2023 that ended on friday. an i.t. firm in tokyo called e hp 9 technologies has developed a way for shoppers to use chat gpt. recommending products and services through a tablet screen. the company hopes the system will be adopted by retailers. another has developed a system to help keep an eye on elderly people. the system analyzes the user's voice for cognitive changes and emotional swings. >> translator: we're currently providing services mainly for the elderly, but children may talk bad words at school so we think there's a need for interactive ai for all generations. >> the e-expo's orga

yield differentials are very much in focus, the fed versus the boj. haidi: we will be watching that. plenty more to come on daybreak asia, this is bloomberg. ♪ ♪ shery: japan's southbank group is selling a majority of its stake in fortress. the transaction is expected to close in the fourth quarter of next year. subject to approvals. for more on this let's bring in peter elstrom from tokyo. what is prompting this sale? >> softbank bought fortress back in 2017. the idea was for them to be able to use the investment expertise as it deployed capital from the fund, the 100 billion dollar fund softbank had set up to invest in private companies. during u.s. regulatory review, they were not able to take full control over fortress, so they had to see day-to-day operations. they could not integrate the two sides of the business so they never accomplished what the bank had intended from the beginning. they ended up looking at the sale in part because that did not happen. >> so what does this tell us about the scenario in the credit at the moment? where do we go

and new information from the boj.ore concentrated in some of our financials holdings, we didn't broadly buy but we became selective. it is worth highlighting that there are opportunities across sectors. they are across market caps up and down the market cap curve. this is not a very concentrated opportunity set in japan, it is quite broad. yvonne: what about for india? is that brought as well, the opportunities you are seeing? you have made half a dozen trips in the past year? what have you seen. vikas: what i have seen is the reason for being constructive on the market is real. we have seen a market that is now broader and deeper than it had been a decade ago. it continues to broaden and deepen. we are excited about opportunities in automotive's, not just four-wheeler's but two-wheeler's and -- we are excited about opportunities in financial services -- and certain areas of the consumer space. even adjusting for what are optically high multiples, in many cases the multiples are high, not necessarily expensive. that i

you have growth and inflation pointing in the right direction and such that the boj policy abandonings monetary policy is likely so there is a tailwind for the yen. at the same time the corporate governance reforms are lifting, returns and equity and buybacks and earnings are still getting revised. so that is a very solid story. and i think in southeast asia and india it is a similar situation where you have the broader regional recovery in place and there are also beneficiaries of these geopolitical tensions such that there may be more investment. i think for these markets, they don't have the direct impact from geopolitics but they are also enjoying the recovery as well as potential benefits. >> can a sector that does have a direct impact when it comes to geopolitics, of course chipmakers intact and we are seeing the move when it comes to asian names like hide eggs, apple up 7%, samsung is also gaining and on that blowout forecast from nvidia, how much are you participating in this ai binge we are seeing it from investors and how do you get exposure to that if you are wanting that?

we see the japanese yen trading at a two-month low on speculation the boj made make some policy tweakidyear. the dollar is flat with perhaps weakness ahead. the vast majority of economists saying policymakers for the bank are going to keep rates on hold for a second month. broadly, we are looking weaker on the session. the kiwi already trading to the downside. shery: the transaction makes the biggest u.s. bank even larger. sources tell us j.p. morgan was the only bidder that offered to take the entire bank off of regulators' hands in the cleanest way. it acquires about 170 $3 billion of first republic loans, $30 billion from securities, and $92 billion in deposits. the ftse looking to overhaul deposit insurance. regulators have laid out three options including switching to a targeted coverage approach. sources tell us morgan stanley is preparing for a fresh round of job cuts. senior managers are said to be looking to eliminate about 3000 jobs by the end of this quarter. now to beverly hills to join romaine bostick covering the conference who joins us with a special guest. romaine: i a

there are so many factors contributing to it, it boj that refuses to actually normalize policy, earnings valuation, corporate governance, what key factors need to stick for the bull market to continue? >> i think to your point, the more factors the more sticky. if the country is buying its own stocks more it makes the rates more sticky. when you look at the number of participants in the u.s. market, there are three times as much as japan in the japanese market. that is going to change. corporate governance, the way they are changing to create value, how investors want to unlock relative value over time, these are different catalysts alongside the more easing or the more supportive measures from the boj compared to other markets. i think for it to be sustainable you need tailwinds. and it has those at the moment. >> question is, if you look overall, what are you looking at in terms of how you allocate in your various portfolios and what are you talking about, because it doesn't seem as if we could be reaching some kind of inflection point -- it doesn't seem as if we could be reaching some

yvonne: how about the boj, russell? are banks expecting any benefits from normalization and policy?ll: yeah, unfortunately not. there was optimism late last year. of course when the previous governor kuroda widened the band on the yield curve control there was speculation that this might herald some move towards policy normalization, but the new governor kudzu ou eta has really made it quite obvious that he is going to take a very cautious approach on policy normalization even if he does why the yield curve control or scrap it altogether, there is still the negative interest rate policy down the road that is not going to budge anytime soon. really, japanese banks are still struggling with their many margins at home and relying on higher rate abroad. they have been expanding abroad aggressively in recent years. at least one third of their lending is done abroad these days. they are getting more loan spread overseas it does not at home. yvonne: russell, thank you. russel ward are asia finance editor joining us from tokyo. turkey is going to hold a runoff presidential vote in two weeks

we are likely to hear from the japanese finance minister as well as the boj governor, among others. a long litany of issues. we were in the risk if you want to collect out of having the debt ceiling impasse in the u.s. kind of overshadowing joe biden talking about how the world will be in trouble if the u.s. defaults. janet yellen has talked at length about the economic and financial catastrophe, if the u.s. defaults. that could be central in many people's minds today. those other issues about global financial security, given the u.s. bank failures from silicon valley bank and others. but again supply chain resilience will be a key issue as well. we are having the finance chiefs of some of the developing nations, non-g-7 nations coming, invited by japan to attend here the so-called global south. we will get finance ministers from brazil, india, indonesia, singapore, as well as south korea, of course on the heels of kishida's visit to south korea. what janet yellen has talked about is the issue of friends shoring. there could be a greater coalition trying to gather here beyond just t

the boj will continue easing with yield curve control.y inflation and slowing back to below 2% towards the middle of the full year of 2023. but they are saying that uncertainty surrounding the price outlook is externally high. briefly checking the yen are you. 138, a bit of strength for the japanese currency. .5% is the gain so far in the session. coming up, the pharmaceutical industry is betting on ai to help drive down the time and money it takes to develop a new drug. we will speak to james field, ceo and founder of labgenius, a fascinating company. that is coming up. this is bloomberg. ♪ >> i think it's an important conversation. there is always need for regulation in technology like there is in any industry. we work very closely with regulators all over the world to make sure that we are sharing the views of where the technology is going. we are working with them on it but it is a challenge. i think it is a challenge. francine: that is global business group had on regulation technology. she spoke to us at a bloomberg voices event gea

a still dovish boj coming in on the corporate side, strong numbers coming through, good and share buybacksso a lot standing out for japan against global stocks. let's change that and see what we can expect across the asian trading day. we are pointing to a weaker open for other markets, including aussie stocks. looking to drop at the opening. new zealand is waiting online. and we are seeing the dollar space, the strength in the u.s. dollar. the other side of this was that disappointment in the session yesterday in asia, the china numbers, another signal to us that the chinese economy is still looking quite rocky, that pace of recovery there. shery: yeah, that was quite surprising, showing that patchy recovery. that's good to vonnie quinn in new york with the first word headlines. vonnie: tagger brokers will remove your trading platforms from app stores in mainland china this week. the two leading cross-border online brokerages have been allowing millions of local investors to evade capital controls to trade shares in markets like hong kong and new york. futu's app will be removed friday an

think of japan's governor azalea way that says the boj's balance sheet is not necessarily in a normal given the bank's large holdings in government bonds and etf. uhf has also played down -- you eta has played down the economic data such as a trigger for change. this suggests that his desire to hold onto policy flexibility leading speculators guessing about the timing of a policy shift. >> wages might lead to policy change. we are not targeting wage growth itself. if we have sustainable and stable inflation of 2%, it is natural that we -- wages should also arise. the key point for our policy decision is whether inflation will rise in a stable and sustainable manner at 2%. global news powered by more than 2700 journalists and analysts in more than 120 countries. i'm alex morgan, and this is bloomberg. tom: nobel prize-winning economist paul played down concerns about the u.s. governments debts ahead of a potential default next week. he told bloomberg's david westin that current economic policies risk undermining the countries future prosperity. >> the thing that concerns me most, we ar

.% gain since the start of the year new leader at the top of the boj, tim >> yeah, it's a combinationnamics and what's going on internationally and someone that spent most of his career on the interview national side of things, i think some of this is very sustainable. not just some of the trend in fact, you've seen the underperformance of the euro stocks 50 against the s&p. so, they're dow 50 basically, the biggest and the most bulletproof companies in europe finally after a decade of underperformance, as the dollar was topping out, started to outperform, so, i think companies that are paying, you know, a growing cash yield and dividend yield in the interview national arena and i work on an etf that just does that, where else would you want to be to have some part of your money as the world is looking for value and also cash flow >> yeah, i think a lot of people don't realize how well europe has been doing specifically france is your best developed market year to date. about 19%. a lot of that is benefits, they have a lot of luxury goods and china reopening is benefits from that euro

it seems the market is mark -- person out the possibility that the boj can normalize.st preferred status goes beyond the view that the bank of japan is very behind in the policy normalization, but also we want to have a defensive posture in global assets and i think it is a non-negligible risk. i think own in the japanese yen makes a lot of sense. rishaad: looking at figure one -- looking at the yuan, would you say it is undervalued? >> i would say in terms of valuation, i think the focus is after it broke the key level of seven, where would be the right time to pick up some cheap currency? i think the current dynamic is a good opportunity. valuation is cheap but in the near term, we have to see stronger evidence that the second half growth rebound is clearer before the markets decide to put more capital. what we are targeting is a recovery back to 6.6 or 6.7. in terms of valuation in the near term, there could be more pressure until we see chinese data turning the corner. rishaad: thank you for joining us, teck leng tan from ubs ag wealth management. washington dc is

something that the boj does not think is sustainable. this is bloomberg.a quick check of the latest business flash headlines. global management considers hundreds of million dollars worth of private companies into the secondary market. the financial times said it has hired an advisor to explore options to sell a portion of that. they are turning to the secondary market to find an exit as pure companies go public. two companies in the empire are seeking to raise as much as $2.6 billion. they will raise money through a qualified institutional placement. more than $100 billion of market players after it was accused of corporate fraud by hindenburg research. this deal is worth about $19.2 billion. the transaction is the biggest ever m&a deal for a gold binder. -- gold miner. giving them 31% ownership of the group. gold miners are facing stagnating production, parts of my deposits as well as rising costs. all of the market opens in sydney, seoul and tokyo are upon us. this is bloomberg. ♪ >> this is daybreak: asia. we are counting down to major market opens as

but it's more positive for the yen but i think it will take a while for this to reflect because the bojs still sounding very patient. our economists think a change is likely in the third quarter, maybe the september meeting. if we look at the actual wage increases in japan still less than 2%. how do we know this will likely rise, because of wage negotiations concluded earlier but we need to see it reflected in the monthly data. rishaad: given what you just said, licensee does not want to rock the boat. is it past its shelf life? >> you could say to an extent they own a large share of the jgb market and there is -- there is a need to rethink the sustainability of the policy. yvonne: with the growth concerns are on china, i guess were not talking as much about the session concerns in the u.s. but there is risk in the market. we are not seeing a bid for the yen like we used to as a haven currency. why are we seeing the flight to safety now? >> we did see a little in march when risk aversion was related to banking sector issues but this shows the yen is still a credible safe haven when not

it is this fiscal year when the boj probably does something.hat happens to the earnings outlook with the prospect in the next 12 months. >> we are going to focus on how specific companies can continue to maneuver when this happens. it is not about investing in every single company within japan but focusing on the management, the execution with regards to the rising interest rate environment. how do they operate? those are going to be some of the key focuses we have. we think overall the earnings yield is going to be attractive in a market like japan for the next few years. rishaad: always a pleasure. please come on again soon. asia portfolio specialist. some headlines coming out of japan with the prime minister talking about the meeting they have been having in seoul with the two leaders. saying they want to ensure continuing sanctions on russia. the g7 meeting taking place this week in japan itself. the prime minister of japan talking about how they want to confirm cooperation on a free and open indo pacific. plenty more on its way. this is bl

that is a reflection of the yield differential between at the boj and the fed.aul: for more on today's top stories including the fed let's bring in kathleen hays. bloomberg's eagan and paul dobson. you been reading it deep into the glossary. officials calling for a pause or a skip? >> we have to think what that means. a pause means you pause. a skip means you are not sure what you're going to do over time but for now you want to sit back, see what is going on and make up your mind about the next hike. let's listen to what top fed officials said today and that's the philadelphia fed bank president patrick and the fed board of, philip jefferson. >> we are getting close to the point where we can sit in terms of policy. i do not know if we are there yet but i think increasingly we have been coming into this meeting thinking that we really should skip, not pause. i don't like the word pause. but skip and increase. >> are policy rate constant, a coming meeting should not be interpreted to mean we have reached the peak rate. skipping a rate hike at a coming meeting wou

the policy divergence, how sustainable is that for a rally given of course we are not expecting the bojrse anytime soon? >> that's right. it's benefited the last few months from a little stability. monetary stability in the sense of the policy is the same. it does not deviate. meanwhile the u.s. is the riskiest bit in the global market and people have been trying to avoid that. . they have been reallocating their money to safer places like japan and europe and away from the debt ceiling situation in the u.s. away from political instability, from the lack of visibility as to where the economy is going. this is now not just the most anticipated global recession but the most prolonged one -- the most postponed one. the earnings season for the u.s. shows will the economy is resilient, the earnings are defiant almost. >> i find it interesting you see that reversal once we see a u.s. debt ceiling resolution for japan. does that mean you don't believe so much in the fundamentals of governance and reform that so many people are seeing drive the long-term rally in this market? is this less of an

bank of japan governor says the boj's balance sheet is not necessarily in a normal state, given the bank'sge holdings of government bonds and etf's. he played down the importance of wages or any single economic data set. as atrigger for economic change this suggests his desire to hold onto policy flux ability leaving speculators guessing about the timing of policy shift. global news powered by more than 2,700 journalists and analysts in over 120 countries. i am madison mills and this is bloomberg. ♪ >> speaker mccarthy and i have several conversations. the american people deserve to know if social security payments will be there. veterans hospital will remain upland -- open and we will continue to make progress. a default puts that risk. congressional leaders understand that and have all agreed there will be no default. jonathan: the president of the united states with a touch of happy talk into the weekend there will be no default. the latest news,.follow the numbers this from the treasury cash balance going into the weekend dropping below 50 billion dollars according to the latest data,

on the japan side, gdp, inflation, and a governor of the boj who wants nothing to do with tom:tom: -- waste time on this but i promise to read up on japan. 7% nominal gdp. 4% inflation back to 1982. with deflation they have had. they have a fictitious real growth based on fictitious monetary policy of massive accommodations. what anybody would say is not if it ain't broke, fix it. it is broke and it is going to get fixed. huge risk to the global system. jonathan: similarly displaying little interest in making a move anytime soon. lisa: every note seem to concern they believe they would not make any move even though it does seem inflation has ticked up but they say they come out with a long-term study of how to move away from this. no risk at the june meeting table banding yield curve control but six months from now, perhaps it is a different story. jonathan: let's talk about fed speak. chairman powell later on. here is the quote from priya misra. we see another 25 basis point hike, then pause, didn't rate cut. we expect the fed to cut by year end and then cut a more as economy enters

cbd, we have just upgraded the flavors of our gummies the most delicious flavors you have ever, ever, boj upped the content. it is now 35 milligrams. >> and what does that mean it means i'm going to be more relaxed? >> you don't have to eat three you eat one. >> what has to happen for you to get into the targets of the world and the -- >> government, we're lobbying all the time to get the vote to allow the -- cbd, people are selling marijuana on the streets legally and we can't get cbd into the big box stores. >> we talk about social media all the time of the various platforms and i assume that some people in the back taking images of you and pictures that will show up on your social media. what is working? what do you think has long-term -- >> with the swimsuit thing, everything is working. but instagram tells a really good story the tiktok is a really good video. a lot of how to videos on tiktok and built a very nice audience there. so it works. it works and i went on tiktok because my brand wasn't on tiktok they asked me to do tiktoks and it really does draw in an audience. >> you're s