it's also a former boj policy. but your thoughts on this, markets expecting a tweet -- hoping for a tweet and why cc but on the other hand we see the boj say, it is ready to add stimulus, how are you reading what's coming out of the boj today? >> the markets expect the tweet over why cc in the near future. a complete implemented in the full scope of this year because currently the timing could modify within increase. i think that japan depends on the difference of the u.s., not that it's the federal reserve, but it continues to increase. at this time you've got the boj modifying, i think that will increase a longtime yield. i think the u.s. economic stretch has changed changed in e additional rate hikes may decline. that could be good timing for the boj to modify the moveout of fluctuation. that will be the first quarter of this year, that's my speculation. cufflink: they did acknowledge that they have to watch foreign-exchange, financial market developments in the policy statements. people are wondering if we will

the boj in focus.ents coming through on the program of yield curve control, nor for an exit from negative rates, even though we have jp morgan saying we could see some tweaks to the policy settings. they are an outlier of that. we are seeing the japanese yen weakening. some strength, sitting around the 140 level we have been sitting at for most of the week. in terms of the direction for stocks we are a bit more wait-and-see. we can expect some thinner trading volumes, even though we had a strong lead from the wall street session, traders waiting to assess the applications. the yen recovering a bit from the seven month low. let's change on because we have korea opening and we also have geopolitics in focus, given we aw north -- we saw north korea firing more ballistic missiles. two of those we are watching defense stocks. in terms of direction of markets, from the wall street session, a six-day rally for the s&p 500. we have only see that around 30 times or so in the past decade. the longest win streak

but boj decisions.e are not expecting any tweak to the yield curve control program by the boj but we will watch for other signs of potential risk aversion there as well. china futures, off by just about .25%. the pboc also in focus. greg economics and bloomberg intelligence is split as to whether we will see the pboc cutting key rates as pressure mounts when it comes to expectations for further stimulus to give a bit more of a catalyst. we had a anemic cpi and falling ppi as well supporting the case for more measures to come through. take a look at the oil market, one of the biggest movers we have seen over the past week. flip-flop trading continues to the downside today. new york crude off about .4%. brent crude also a bit softer. goldman sachs really driving what we see when it comes to potentially the future catalyst for the oil market holding the losses as they have cut their outlook again. they see brent trading below $90 by the end of the year. really, this very interesting situation. broader macr

investors are watching closely for signs of when the boj will change course.e spoke with ichikawa masahiro at -- asset management about what to expect. he said one of the boj's key measures called yield curve control might be adjusted at the next meeting in july, but he also says the central bank will be careful not to spook investors and disrupt the current upward trend in the stock market. >> translator: i think the boj will widen the range for long-term rates to 1 percentage point from the current half a percentage point while emphasizing that it will continue its easing monetary policy. i believe the boj will say that the change is just a slight revision to maintain yield curve control. i think the bank of japan will take care to keep policy changes from having a strong impact on the market. >> ichikawa also believes the boj won't be able to make big changes to monetary policy with the u.s. facing rough economic waters. >> translator: the fed implied at the last meeting that it will hike rates two more times this year, so it's expected that the tightening

as for the boj -- go ahead. haslinda: you have to wonder how much the boj can do.r struck -- further hikes and a strong dollar. >> i did not quite catch that but in terms of what the boj might do going ahead i think the consensus from what we have heard in sintra and the remarks from policymakers is they are not going to do anything big for some time yet so this speculation of possible moves in july, one third of economists we surveyed earlier this month, are they still going to be so much speculation? i think less. the boj price forecasts are not high enough and they will have to raise them but there is still not enough power in this inflation trend to warrant change as soon as july so if the boj did something in july it would have to be something opportunistic, taking advantage of where the markets are but that would help the yen if they did that but that is the outlier scenario for july. rishaad: the nikkei and topix had a fantastic run. 26% up so far for the nikkei. what does it feel like in japan? is the economy humming along nicely and our equity prices being

that includes the boj.mer deputy governor says he does not expect any substantial policy changes. he also told us that he sees some revision of the inflation outlook in july. >> i think it is more sustainable and stable. the boj would say not yet. you know that is the data coming in. many people who would like to know the timing that the boj would take for next week. >> what about raising inflation? typically there is a change in economic outlook from the boj. every three meetings, that would mean july. can they raise the inflation outlook. and they acknowledge how high above it is and may be getting some progress made on getting sustainable 2% inflation. >> it is the outlook that will be due next july. i expect some sort. the question is still about the governor and the other members. they are saying that they haven't yet changed the prospect or the predictions of these dynamics. that is for the next half of the year or so. we will see some sort of decrease toward the end of the year. the governor said he

the boj outline jp morgan. the return to retail growth and the glimmer of hope for china's sluggish consumer sector. u.s. futures opening in the asian session pretty muted. this after the s&p 500 strengthened for six consecutive sessions. the nasdaq 100 also getting close to 40% already. microsoft, one of those names closing at record high, against 45%, adding $800 billion in market value. there is an ai push making investors very optimistic about that stock. we are seeing yields holding steady. we have a little bit of a lift when it came to oil prices given this expectation of more stimulus coming from china. we are seeing a little bit of pressure about that $70 a barrel level. we are watching the deli very closely. we have seen the ecb hiking, the fed pausing. that really sending the dollar into a tailspin. twice absolutely. putting a lot of downward pressure on the greenback. when you look at the deli moves versus the peers, there was one exception here. we saw some strength in the dollar against the japanes

is this a consideration at all for the boj?'t think the boj will proceed with normalization. but at the margin it makes it easier to pursue with cautious normalization process. one thing that makes it apprehensive is that they don't want to make changes and see the economy slow down. the stronger sentiment is it makes it easier for the boj to take that. what i think is an acceptable risk of moving forward. >> what your base case scenario for where the japanese yen goes from here? we saw incredible appreciation when he was about to take the helm but that just went nowhere. >> is a house we>> is a house wa non-consensus on the yen. the overwhelming consensus is that the combination of a weaker u.s. economy and a more hawkish boj would result in yen appreciation. we kind of disagree despite the fact that we are hawkish on the outlook and expect the boj to adjust sooner than the consensus, we think the dollar yen still has upside, we are seeing third quarter, 140 three target, possible upside risks and the reason is because if you

the boj, that is a better situation overall for the boj.e are getting close to their intervention zone, to our it was. from a monetary policy perspective, japan is cornered, they are cornered by the weakness in the rmb. we're having a downward impact on the asia block, certainly currencies that are more free-floating than others. and of course, the g7/g10 where there are still firmly in tightening mode. dani: you cannot argue that the drivers of this do not necessarily make sense. so all boxes are not ticked off. can we pause for a second on what this means for japan specifically? how much of a headwind is it for japanese growth to have headwind around these levels? stephen: i'm not looking at it so much from a growth perspective right now. i don't think it is a headwind for growth, if we were sued -- if we were to see fossil fuel prices rebound in the end go down further, that becomes a potential risk and headwind to growth. i'm not really looking at it from the specter of growth, i'm looking at it from the perspective of risk that the boj

for the boj, it has not notched up hawkishness.is not quite the same extreme as pboc, but ultimately these can have different effects. in the case of china, because of the stress of -- assets, it could ignite outflow risks in the region. whereas the boj, counterintuitively because of the cheaper yen, may fuel cheaper trades. they actually support. we are not exactly clear on the effects of it, but certainly the divergence will become clearer and the reality is that when we come closer to hitting peak rates and hot lending risks, the argument is that divergence should be greater. shery: let's talk about china and's exuberance we have been hearing from investors about perhaps this china stimulus coming. given the uncertainty we have faced with the chinese economy interns of regulatory crackdowns , is this a little misguided? >> it is, for many reasons. our short memories tell us that china can get back to credit stimulus. we already have concerns about financial stability. [indiscernible] because of the regulatory uncertainty, and ce

what about the boj? the boj says yield curve control, maybe we will see cracks forming. >> that will be surprised because remember, when we were thinking, they will change with the changing of the leadership and maybe yield curve control will go away and they back off -- and then they backed off. that is what they expect. they could -- we could feel like we got through the fed and the ecb and the boj could surprise. it is not the consent since call but we cannot write it off. it will be a long week. guy: it will be a week where there so much going on that it goes past in a heartbeat. today feels like it is slow. great to see you both in the studio. thank you very much indeed. we will continue our question of the day, what is the biggest risk this week? gargi pal chaudhuri is joining us next. this is bloomberg. ♪ (upbeat music) ♪ ( ♪♪ ) woah. ( ♪♪ ) ( ♪♪ ) ( ♪♪ ) ( ♪♪ ) constant contact delivers the marketing tools your small business needs to keep up, excel, and grow. constant contact. helping the small

in many ways the boj governor is a fairly new and stay at the boj, only been around since april. looking around to figure out different options to stabilise the migratory without intervening, but intervention seems to be in the cards relatively soon.- seems to be in the cards relatively soon. indeed, in the ast it relatively soon. indeed, in the past it cost — relatively soon. indeed, in the past it cost a _ relatively soon. indeed, in the past it cost a lot _ relatively soon. indeed, in the past it cost a lot of _ relatively soon. indeed, in the past it cost a lot of money - relatively soon. indeed, in the past it cost a lot of money but j past it cost a lot of money but hasn't really worked. meanwhile in china the yuan level is set by the people's of china. do you expect further intervention by the authorities —— people's back. by the authorities -- people's back. ~ , ., . _ ., by the authorities -- people's back. ~ . _ ., , back. when you currency that is done about _ back. when you currency that is done about 596, _ back. when you currency that is done about 5%, half— back. w

i don't expect the bank of japan or the boj to modify the control. there are a number of reasons to postpone the modification. also there appears to be signs of modest improvement particularly market participants identify some recovery of market functions and both in terms of the shape of the yield curve. moreover the yield has slightly diverged from the target range. secondly, market pressures or modification has not gained momentum in comparison with previous occasions of policy meetings. >> he said the bank of japan should provide clearer guidelines on the process of monitoring its policy when it updates its inflation forecast at its next meeting in july. >> i have started to think, however, the viability of alternative approach concerning less pressures for modification of control and closing to stabilize achievement of the inflation target in every meaning of the word. for example, the boj would integrate the two courses in a coherent matter depending only on the inflation dynamics. overall the inflation outlook will be the more important factor

where the other banks are raising rates, the boj is staying put.do see some extraordinary movement so far in the japanese yen this year. brazilian real has appreciated close to 30% so far this year, so better than the nasdaq stocks even. we started getting some noise from japan that they are watching the exchange rate quite closely. last year, the exchange rate market peaked at the dollar-yen exchange rate. haidi: the chinese yuan past 7.2. it seems is it's all about rate differentials at this point. >> indeed. the chinese policy is another divergent into monetary policy. so far, we have not seen too much pushback for the central bank. the pboc did say they are fixing a little bit stronger, but compared to last year, this is nothing. yesterday or the day before -- last year, we consistently had more than 500 pips stronger signal. it seems to me there is much more room to run in the chinese market. shery: we have been watching the euro as well, holding at that 1.09 level. the ecb vice president saying another interest rate increase in july is all bu

in many ways the boj governor is a fairly new entity at the boj, only been around since april.is looking around to figure out different options to stabilise the yen without intervening, but intervention seems to be in the cards relatively soon. indeed, in the past it cost a lot of money but hasn't really worked. meanwhile in china the yuan level is set by the people's bank of china. do you expect further intervention by the authorities? when you look at the chinese currency that is down about 5%, half of the japanese yen, forjapan and china, the idea that these currencies and exchange rates are weakening, is a help at the margin because the chinese economy is already spluttering, the japanese economy is underperforming, so anything that gives these economies a bit of support by the exchange rate is a good thing. the problem is the economic side effects of these kinds of things, inflation is rising, so weaker currency means more important information through basically energy markets and food markets. then there is geopolitics. if the yen and yuan grind lower, when does the us, w

it is well above the boj 's target.is, if it gets there, if it looks sustainable, surely the boj will have to start shifting years under its new governor. a former doj assistant governor spoke to us a few days ago. he thinks that the boj, at the next meeting, is going to have to shift its inflation forecast higher than though .8 percent it currently sees for 2023. >> inflation -- physical 2023. in my calculation, inflation for fiscal 2023 will be significantly above 3%. the boj -- kathleen: kathleen:a shift in the forecast to a higher level. something above 2%. if they look at the 2024 and 2025 forecast, that would be the first step towards the first policy.wards moving for changing markets do not see it that way. the dollar yen exchange rate are well down for the january highs. that suggests traders do not expect any big policy shifts. ever since he took office, he has had a very dovish message. he seems in no hurry to start tweaking policy, he wants to keep wide yield control in place. he called for an 18 month review

last year boj intervention came at 145 and then about 150. so we are certainly near a very dangerous level, in terms of the pace of the in depreciation. last year when it dropped 1.5% a week consecutively, now we are close to that pace of yen drop. certainly the market will be very alarmed. shery: there is more speculation with the chief being appointed for another year. good to have you with us, still ahead, we will hear from the first female foreign director of one of japan's biggest companies. we will look at the battle for gender balance on japanese boards with katrina lake. first, why the investment piece is scheduled around multinationals in china. we will get there top stop picks next. this is bloomberg. ♪ shery: we are counting down to the final trading day of the first half of the year. this chart showing the msci all country world index. this is showing the winning streak continuing. the cool thing about half the losses from the peak of the start of last year. the investor frenzy over ai related names contributing to that strong per

on the rhetoric of the boj you think it would be nothing. a lot of people looking for the july meeting because the outlook report comes out in july. is a bit more formal. they can say what they expect. if it revises upwards its target it does certainly opened the door for a tweak in the policy at that meeting or certainly in the september meeting. people are a bit more interested about the july meeting and how that plays out. particularly because the outlook report is there. you have a bit more information. does the boj continue to push back saying we expect inflation to fall in the second half of this year? it is been a bit more stubborn than they want. the increases are not as high as they want. when you put it all together do they go maybe the time to tweak policy is approaching shall we say? rishaad: talking about tweaking, that is what we have been seeing from the pboc this week. what you expect out of them as we get a yuan with a handle at 715? >> i think there is certainly a chance they do lower for this week by about .1%. certainly n

. >> recently depreciation was because of the divergence between boj and other central banks.nd then probably the ministry of finance and the boj may intervene in the market if the yen just continue to go higher about 145 and then try to reach into the 150. but i think the impact will be limited so value may come down again to the 141, 142, but it will rebound very shortly. >> sasaki says he expects the currency will hit the 150 level by year end. he says that's because the yen's drop is based on fundamentals that seem unlikely to change. >> recently be revised up our year end forecast from 142, 152. the boj maintained super accommodating monetary policy, easing japan's inflation rate is getting higher. now, japan's core inflation rate which excludes food and energy is reaching to 4%. at the same time policy rate remains 0.1%. the real rate in japan is so negative japanese households starts shifting their yen denominated cash to assets. and also yen's fundamental is continuing to deteriorate. japan's trade balance and service balance continue to be deaf deficit. >>> now the wo

why is the boj sticking with its current policy? paul: it is a head scratcher at first glance, but essentially the bank of japan thinks this inflation is not sustainable. it is sticking to the view that inflation will slow down, therefore there is a risk of it not achieving the 2% goal. against the backdrop of this is decades of weakness in prices and deflation, so that makes the situation in japan different from the rest of the world, where inflation is seen as more frightening, and you want to wipe it out with interest rate raises. that explains a little bit about the difference in policy direction. however, let's not assume the bank of japan will sustain this stimulus forever position. already economists have flagged the risks of tweaks to its yield cap control next month in july, when it should be updating its inflation forecast to show that inflation is actually proving to be stronger than it initially forecast. dani: the implication for this, and other more hawkish central banks, is a weaker currency. we saw the yen around 1.4

what happens if the boj does pivot?look likely so far from the commentary, but we know this is adding more pressure to the bank of japan. daniel: correct, that dollar-yen, we got the watch levels around 148 to 150. that's the key resistance zone for the dollar-yen. at that place, they may be forced to do something. intervention of some sort because it's just getting to weak in terms of the yen. if the yen were to strengthen because of this intervention, then, it is likely that we may see a correction in japanese equities because of the typical correlation between the dollar yen, also the japanese equities. stronger yen would hurt copper earnings. that's a major driver, but on the other hand, if you are like a dollar denominated in japanese equities, basically you would be gaining from that front. plus the fact that this time around, unlike the last 10 years or so, there's a new factor in japan. that's a structural factor. so we believe that if there were to be strengthening yen, which may hurt japanese equities, it woul

comments in the last few days from the ministry of finance officials and boj have been benign. no indication they are in comfortable yet with the weakness in the yen -- uncomfortable yet in the weakness in the yen. the pace of decline probably has not yet reached the level where they are really concerned about it. if it continues like last year we saw two months where the yen fell 4% back to back months. we have not seen it yet in this cycle although we are at a slightly higher level. haidi: mark cranfield in singapore. highlights coming up from the bloomberg technology summit in san francisco as business leaders talk about their plans to further leverage ai. and we will get a stock outlook next. this is bloomberg. ♪ >> it only makes common sense to move at a careful pace. we do not want to do more than we have to be think overwhelmingly people in the committee think more rate hikes are coming. but we want to make them at a pace that allows us to see incoming information so we see -- do we make the decisions. haidi: jerome powell speaking with the u.s. senate banking committee.

haidi: does this move the needle for the boj at all?est survey looking at boj watchers pushing back the forecast for any adjustment to why cc -- ycc? >> i'm not sure whether the bank of japan will take this into account when they are making their decision. we just had this news survey and of their meeting next week and the big take away from that is there are far fewer people expecting any change at this point, and those that give expected change are likely to expected next month in july or later in the year or next year. it is difficult to say what will happen, but in any case, nothing is expected for the time being by most economists. haidi: we do have the market opens in sydney, seoul, and tokyo next. this is bloomberg. ♪ the first time you connected your godaddy website and your store was also the first time you realized... well, we can do anything. cheesecake cookies? the chookie! manage all your sales from one place with a partner that always puts you first. (we did it) start today at godaddy.com when i was his age, we had to be i

we have another boj member saying that the bank should avoid any abrupt changes in rates.nst the greenback. really a key watch here cluster that one .42 percent level -- 1.42% level, we need to get closer to that level before receipt intervention from the government beyond jawboning and statements. we are coming online a little bit weaker for the nikkei 225, but a little bit unsurprising when you put it in the context, it was a weaker session on wall street overnight. let's take a look at the outlook for australia because we are focusing in on pure political tensions. good news at least because we have a new paul out saying that australians are viewing china more favorably as china forms ties between beijing and canberra. they are starting to see china as a economic partner. still questioning that health of the chinese economic recovery and feeding into that crisis at the start of the day, trading weaker on that level. >> let's get you need to digest some of these headlines south korea and japan and china with our next guest who says china needs to urgently announce a broa

we will get a boj decision tomorrow. not many changes expected.ew folks think there will be some ycc adjustments. the rest of the stock market is higher. why wouldn't they be higher after a hawkish jerome powell? i don't know. stocks continued to defy gravity. the nikkei gains. s&p 500 futures, little change. goldman sachs and citigroup are said to cut another 35 investment banking jobs across asia this week after revenue from stock sales and mergers slumped further into the latest quarter. joining us now is adam haigh. this has been a continuing story of job cuts and seeing more in asia. what do we know about this latest round of job cuts and the details? adam: at the moment, what we know is that goldman and citi are both going to be embarking this week on kind of a new round of reductions in their headcount. at goldman, there will be around 15 dealmakers that will be affected, about nine from equity capital markets. at citigroup, it is around 20 jobs that are mainly at more junior levels. of course, and a lot of this is to do with the fact that

shery: of those differentials in rates and where the boj is headed compared to the rest of the world? the fed is doing 25 basis points more and then stopping and then that will give some relief on the rate differential basis and that the u.s. 10 year bond will start to decline in the fourth quarter of this year. there are quite a few things. the amount of money floating into the japanese stock market these days is quite tremendous and so that will help the yen as well. shery: -- haidi: when it comes to sectors, where will you see more longevity in this rally? >> with the yen strengthening, i should have mentioned before that we do see why cc bumping up 25 basis points by the end of the year. we have penciled that in. that would also help the yen. on sectors it would not be the yen sensitive sectors that do particularly well in this environment, it would be more the domestic plays and probably less of the commodity plays because we see commodity prices tailing off the rest of the year. value plays, of which there are quite a few in japan. haidi: when it comes to the risk from the bank

boj. it just isn't paying investors to own japanese yen. that means that this momentum we are seeing starting to build probably will continue. haslinda: kathleen, i am wondering where we will see a tipping point. kathleen: for the boj? haslinda: mhmm. kathleen: one of the subtle things in the answers that governor ueda gave today is he did say that we are not sure inflation will stay above 2%. it will come down for a while in the second half. and then how much it will go back up, we are not sure. he did indicate a little more confidence in wages. he said there are companies that are actually starting to raise wages because they see other companies doing it so they will have to do so to remain competitive. and he said he thinks inflation expectations are starting to pick up. . and we have to watch and see what happens in 2024 -- paraphrasing a little bit now -- to see when we'll even consider a shift. he did not say that we exactly have to wait until 2024. he said we have to wait until we h

francine: we have ecb today and the he boj -- pboc 12.ad reporting last week we are not going to abandon the yield curve. the boj is going to stay in line with what they have done. the new central bank governors still adjusting to his new post. japan has been talking about becoming more accommodative in terms of the budget and supporting the government but to be honest we are not pricing for that in the market. there is room for upside surprise. i don't know if we will see that and i think the yen can definitely show that. trading at 1.39 we will potentially continue in that market. if there is a surprise, we are not prepared for that from the markets perspective. francine: all bets are off. thank you so much. nour al ali. a lot of traders are preparing for the boj tomorrow. coming up, plenty more on the markets. that is it the european market open. surveillance early edition is up next. stocks retreating and sentiment subdued by the federal reserve's hawkish tone. we had week and i'm from china weighing on resource companies. more on the

it is only every other meeting that the boj moves.the main reason you don't expect any announcement of a higher outlook to match reality at this meeting. takatoshi: right. this meeting officially their forecast of inflation was the end of this year will stay the same as april, which means 1.8% for the fiscal year 2023. so right now it is above 2%. it is 3%-something. but it's expected to go down. so looking at that, they have no need to move. kathleen: so you expect them to raise their inflation outlook in july? and if they do, what is the significance of this? does it open the door then to another step, more normalization of policy? takatoshi: that is a good question. depends on how much they will increase the forecast. the forecast has been increasing for the 2023, from 1.1% to 1.4%, 1.6%, and now 1.8% as of april. suppose in july goes above 2%. people will say, a-ha, you have achieved the stable inflation target of 2%. then you have two choices. one is, yes, we've achieved, and this is a good time to gradually raise the ycc ceiling

finally on friday, we get the boj's decision.nian government says its troops have liberated at least two villages in the eastern part of the country as part of the first wave of the long-awaited offensive to take back territory. ukraine's gains have not been verified. fighting in the east of the country rages on. bloomberg has also learned the european union is considering links to the gas storage facility in ukraine to prepare for the winter. this would help block the panic driven price hikes of last year. joining us now is our reporter who leads coverage for ukraine and western energy. tell us more about this gas storage facility. >> the gas storage facility is similar to the one we have in europe and because prices have dropped so much this year, europe's gas storage levels are much higher than they usually are. traders are anticipating that those will be full before the end of the summer. at that point, prices could drop further and we are hearing people talk about possibly taking gas from europe and putting it in storage in

on thursday, the ecb turned and freddie brings the boj policy -- and friday brings the boj policy.k about what the expectations are with cpi. it expected to be a continued disinflation but it's cap it's been opening up between headline and core that i'm excited to see. the estimate in may is that gap annually should be over one full percentage point. we will keep an eye on it but from new york, that does it for us. same time, same place next week. this is bloomberg real yield and this is bloomberg. ♪ when i was his age, we had to be inside to watch live sports. but with xfinity, we get the fastest mobile service and can stream down the street or around the block. hey, can you be less sister, more car? all right, let's get this over with. switch to xfinity mobile and get the best price for 2 lines of unlimited. just $30 a line per month. i should get paid more for this. you get paid when you win. - ooh, babe, puerto rico roundtrip for $124 on going. - we could do so many exciting activities. - you're right. this should be a girls' trip. - where are you going? sign up for free at goi

i mentioned the boj staying with its policies.here are ramifications across the currency space because the yen is weakening against its peers. this morning, looking at the pound versus the yen, trading past the 180 80 mark. the -- 180 mark. >> given all the optimism over the japanese markets, we will be talking about venture capital and the start up ecosystem, coming up. we have more. this is bloomberg. ♪ ♪ ♪ the biggest ideas inspire new ones. 30 years ago, state street created an etf that inspired the world to invest differently. it still does. what can you do with spy? ♪ ♪ haidi: it is time for japan ahead. leaders from japan, south korea and of the u.s. are planning a summit in washington by the end of august. it will mark the first meeting held independently of international conferences. support for the prime minister in japan has dropped to 33% in a recent poll. the disapproval rating also rose to 58%. the nikkei is reporting that huawei is requesting licensing fees from companies for the use of -- technology. we are fixated

the boj did not comment on the yen.ritish pound at 127.87 the pound has had a lift we have strong wage data and drop in the jobless rate the pound is doing well. u.s. dollar is sitting flat right now against the swiss. as for the u.s. futures, let's look at how they are opening up for trade later today. julianna, when you look at the sentiment going on and there is always a recent bias people should become bullish when the market is terrible. as warren buffett says, be greedy when others are fearful investor bulls are highest since 2021 the cnbc survey is in the greed category it will be a stronger start to the trading day. >> i don't envy the investors who decide to chase the rally or fade it. >>> we have a big grocer in focus today. that is tesco. reaffirming guidance after the 9% jump in sale notics in the ft quarter. it posted $2.5 billion profit last year. shares are down .80% emily montgomery at fidelity is joining us now emily, thank you for being with us if you can give us your view on the tesco earnings this mo

there is the ecb, boj, pboc. kriti and edward, good to get you on this. does fed talk pack a punch? kriti: yes, but mostly for the fx market. the dollar will have ripple effects from the equity market, the commodity market. i think the trade gets a lot easier for the fx space. at some point policy divergence between the federal reserve, the boe, that the ecb, the differentials get easier to predict and trade. the risk with that is that you could potentially see some crowded trades. some hypotheticals. if you start to see the federal reserve slow down their pace or cup before the ecb or boe does, which was the expectation two weeks ago, that could quickly create a big bear case for the dollar. a big bull case for the euro. a bigger bull case for the pound as well. i think that is worth things get easier. dani: edward, let me take the question to you. for the data is surprising everyone, including central banks, does the fed talk and central talk back or -- matter for this market? edward: very good question. kriti, is spot on. -- she is spot on with everything she said. the data matte

it is economists who see the boj starting to tweak its policy settings as soon as july.st survey about two thirds of them seeing that happening by that point in time. in terms of what else we are watching, we do have the open of korea. we are watching tech stocks given that we continue to see those gains coming through for the nasdaq on friday. a second straight session of moves to the upside, we had broad call amount with those numbers sing a lot of their sales would be driven by ai themes over the next few months. we see futures now trading a little weaker for the nasdaq but the cause deck also gaining as is the broader kospi. watching what is happening with the korean won in particular. it is a little weaker this morning against the greenback but it is more a story of dollar strength coming through. very close to that 1300 level, a key psychological level to watch . in terms of what else we are watching, sk security saying we can expect someone normalization after what they say haves and and excessive depreciation. dollar strength, it is weighing in on other currencie

the lines in blue are the levels at which the boj acted at the end of last year.that brings us to what would be the point at which officials would step in more strongly? so far, it has been the jawboning that we had. yesterday, japan's top currency chief said he was uncomfortable with the move in the yen. but a lot of traitors including t. rowe price, say that we have to get to 150 per dollar. that still seems to be the line in the sand. haidi: all right, belle. let's look at the other currency pairs we are watching. of course we had a choppy session more broadly when it comes to the bloomberg dollar index. choppy trading and ultimately a bit softer, although just pretty much flat at the moment. we saw the dollar trading lower against all but two of its g10 peers. the kiwi dollar was one of the outperformer's, along with the norwegian currency. the aussie dollar is holding up at 67 u.s. cents. watching dollar-china, it is falling after the 4-day weekend. that lack of economic stimulus, regional peers are trading more mixed. dbs bank says asia currencies more broad

would you be confident in saying the achievement of the boj's 2% price target could be insight? or would that be too bold? christian: we do think it is in sight. for the first time in decades. it seems they could be getting there. the latest wage data was a little disappointing. overall, look at the performance of the economy, we will get more in july, we believe this is also a government that wants to step away from some of the policies implemented earlier. we believe if you look forward, the boj and the government wants to get out of why cc and rethink what happened. there is a chance for july but if that does not take place it will happen later. but they want to get out of this ycc policy. francine: thank you, christian keller from barclays. coming up, recession fears and the challenges ahead. we will hear from big news at the bloomberg invest summit. we will have that next. this is bloomberg. ♪ >> this is the best predicted recession that has not happened yet and may not happen. >> when capital prices this aggressively, things do break. >> i think we will get a recession but

the focus was the yield differential between the boj and fed.irmed up slightly after comments in the last hour. essentially they said the government will respond to any sort of excessive moves in fx markets and the yen moving further off that and the boj governor will speak at the central forum taking place in portugal on wednesday. the nikkei 225 moving to the upside following what happened in the u.s. session tuesday and that move again back into the eye -- vais stocks and big jumps in the ai names. looking at the open for korea is what happened after hours because a wall street journal report in the last few hours essentially said the biden administration could be weighing more restrictions on ship exports for ai to china and that would have big ramifications for nvidia, and we are tracking chipmakers in this part of the world even though we see the cause stack at the start of trade outpacing the border gains we had for the kospi in both indexes looking higher and also the korean won sitting at the key psychological 1300 level. we had been wh

what about the boj? the boj does something friday, where does that sit?that have. esther: this would have a huge impact because it's not something anyone is expecting right now. speculation that the bank of japan will have to do something is ongoing. we've seen in the past from the bank of japan it tends to surprise. as an analyst we have to work with something. the bank of japan indicated they are currently in a wait and see mode. there are indications of inflationary dynamics picking up in japan. this means speculation coming to end its policy. everyone is waiting a little bit. will there be snap elections. will inflation dynamics continue. will the bank of japan actually wait for its review of monetary policy that it's indicated. as we are looking at the bond market there does not seem to be the pressure. it could be good timing. alix: as we head into this week, what is the best conviction call you have. esther: my best conviction call is the uncertainty will continue. were not going to see this big directional impetus on euro-dollar but it will remain

ecb, boj, pboc all meeting. kathleen: it is the bank of japan's second meeting.he first meeting in april there was speculation zero would do a tweak. inflation was higher than forecast. now, our reporting team in tokyo finding out that the boj does not think there is much needed, if any, to tweak yield curve control now. that is the policy that keeps the japanese government bond anchored around 0%. so, throwing cold water on any big policy change, even a minor one. they will probably have to recognize inflation is stronger. they know that as well. so, could they rates their inflation outlook? that's important because they could be taking a step towards a step to eventually doing a tweak. the european central bank. christine lagarde, the president, has been signaling more rate hikes are needed. that is pretty much a done deal. at this meeting, people are saying gardens on further rate hikes is what they are watching. that's important. the people's bank of china. the economy and the recovery seems to have slowed down, not as strong as expected. so yi gang is expect

we may see the boj bite the bullet. sonali: i am glad you brought up the yen because there are lots of questions about relative moves in the market, not just absolute you -- moves. when you take a look at the market, what looks crowded and what looks offsides heading into the second half of the? >> at the start of the year, we had a pretty good management which was that inflation would collapse to 2%, bring down inflation, and the fed would start cutting rates. right now, inflation is sticky. the economy and the jobs market in the u.s. is proving to be read yet. he fed is still on a hiking mode. the same goes for the ecb, and to an greater extent -- a greater extent, the boe. for the spreads that we are looking at, i think they are pretty expensive. i think they will narrow as well. that is how you want to position your portfolio. guy: let's talk about timing. you can get the call right but if you get the timing wrong, you are off. the first half has felt like we got the timing wrong. like maybe the recession comes in t

the boj is always going to stick out like a sore thumb in the g10 space, that is a given.in terms of china dumping liquidity into the markets, that is a different kettle of fish because the china economy has not benefited to the extent that their savings have not revived their economy after the reopening of the economy. so it remains to be seen. emerging markets, they danced to a different rhythm, and we cannot kind of compare what happens in china to the rest of the emerging-market. alix: fairpoint. we could go on a lot with this. we appreciate your analysis. great to see you both. coming up, more insight into the banks and if they are on the same page. we have a chief investment officer with this, next. -- with us, next. this is bloomberg. ♪ oh booking.com, ♪ i'm going to somewhere, anywhere. ♪ ♪ a beach house, a treehouse, ♪ ♪ honestly i don't care ♪ find the perfect vacation rental for you booking.com, booking. yeah. this is ge aerospace, advancing flight for future generations. ♪ welcome to a new era of flight. >> we still have ground to cover. >> although policy is r

there are great expectations right now that we will see intervention in the days ahead —— boj.f the reasons why we have not seen intervention is because i think the bank ofjapan is worried that it will fail and if it does fail and the yen does not stabilise that might actually be a signal to markets to push the yen even lower. and i think in many ways the b0] governor is a fairly new entity at b0] and has only been around since april. i think he is looking right to try and figure out different options to stabilise yen without intervening. but certainly intervention does seem to be in the cards relatively soon. indeed. in the past across a lot of money but it has not really worked. meanwhile in china the yuan level is set by the people's bank of china. do you expect a further intervention, if you like, by the authorities?— intervention, if you like, by the authorities? certainly when ou look the authorities? certainly when you look at _ the authorities? certainly when you look at the _ the authorities? certainly when you look at the chinese - you look at the chinese currency it

let's talk about the boj, we have spoken about the fed and the pboc, is the boj predictable? have been hearing from the new governor is that he will be taking his time and studying the impact of inflation, of wage hikes. we don't see a drastic change in policy, but further down the line, maybe next year we do expect normalization of monetary policy. >> is that what the market is moving on, is that by we see 25% -- why we see between 5% or more gains, how much of a bull market could be safe? -- we see? >> the bull market has returned to japan, it's a big positive, it's not like other areas where it is heating up, it is about normalization. we do see domestic recovering, we see -- domestic capx recovering, and the stars seem aligned and the market is reacting to the positive news. >> does what we are seeing in terms of stimulus offerings from china and the pboc potentially change your view when it comes to constructive opportunities that you see in china? >> with china, i think we all agreed that we cannot expect the kind of stimulus we have seen in the past. i.e. the property

this is driving home the deeper policy divergence between the fed and the boj. >> yeah. absolutely. it is the key driver of the and direction over the past few months the yield gap between the boj and fed and what is interesting was the direction of the dollar following the statement before congress and actually retreating against most of its g-peers but the yen stood out as the exception when we passed that 142 level. the question is when the yen yen is we could not only against the greenback but we are also talking on the trade-weighted basis against the euro, the british pound, is there need for intervention? we had jawboning from japanese government officials but to see something more concrete where the government actually steps in to defend the weakness in the japanese yen a lot of strategists markets traders are saying you have to get beyond 145 the level to watch before we see something a little bit more formal. rate the question is what happens to other central banks -- shery: the question is what happens with that the central bank given the policy diversions. you were talki

there speculation this might get to a level now where the government and boj feel comfortable.here might be verbiage to try to support the currency. they'll be interesting to look at because we are still thinking the boj will have to change policy later on this year or early next year and that is an opportunity. i also think there is room to go with a view to thursday. we are already at high levels given the fundamental pictures that might be interesting to look at the downside here. yousef: this has been very valuable. thank you very much for sharing latest takeaways from the research that you and your team have done. that is sonja marten, chief fx strategist at dz bank. prime minister benjamin netanyahu pushes ahead with a contentious plot to reshape the judicial system. we will discuss the latest in israel next. this is his -- this is bloomberg. ♪ yousef: this is "bloomberg daybreak: europe." i want to switch to emerging markets talk about turkeys -- turkeys treasury and finance minister was indicated he will steer towards more conventional policies as the country looks to r

they all kind of lean hawkish, except for boj boj and china are in a league of their own over there,ut the other three are focused on fighting inflation, which is coming down too slowly for them, but they're going in different speeds like, bank of england surprisin with a double. ecb being more hawkish than powell, and powell sort of soft promising or at least saying it's a good guess that we're going to have two more rate hikes on the dot a lot of the strategists are writing about it this morning, this conversation and what they're looking for. for some flavor, guys, powell speaks on wednesday with the heads of ecb, boe and boj with a policy that is likely to outline the progress made globally in re-establishing price stability and the need to continue such efforts. that's the whole game. dave lutz writes, "we want to see how much more they're looking to squeeze borrowers." and the other interesting element to this conversation is going to be russia, because the geopolitics are back on the front burner, and that's what happened over the weekend. we've got our eye on the oil market b

the boj has a longer track record of surprising. do we get a surprise?gs to think about, but you never talk to us about the golf. >> i'm the one who has to break this every time. according to the wall street journal, the dso j has to investigate the pga tour, and it's backed by saudi arabia public investment fund. so the doj is investigating that. to some extent, the u.s. senate are as a democrat has the senate permanent subcommittee on investigations also opening an inquiry into the merger as well. clearly, the government is looking into this, and this is the pga tour and golf coming together in a merger that was settled i the civil war that was undertaken in the golf community. that was pretty good. guy is laughing at me. >> you are getting into the swing of it. >> o. >> coming up, are we going to see some interesting commentary from some of the leading golfers over the weekend? >> that was a dead on rid we will give you an update on the headlines as they cross. let's get back to the question of the day. central banks sound hawkish. do you believe them

it again, it is that rate differential we monitor between the boj and the fed. shery: let's delve into wet fed chair jerome powell said because we are not necessarily done. we did day one of the testimony to congress, he said policymakers expect interest rates will need to move higher to contain price pressures despite last week's decision to hold, and that's when he was facing questions from the house financial services committee. he was flagging a moderate pace of hikes ahead. take a listen. >> the level to which we raise rates as a separate cash -- question of the speed to which we move. speed was important and it's not important now. this -- this summary of economic decisions is really that given how far we've come, it may make sense to move rates higher but to do so at a more moderate pace. shery: chair powell saying the timing of additional hikes will be based on incoming data with perhaps two more increases looking likely. >> we agreed to maintain the rate at that meeting, almost every single of the 16 of the 18 participants on the fomc wrote down they do

divergent with the ecb and the doe implementing rate hikes, the fed pausing on raising rates, and the boj maintaining its ultra-loose policy. on thursday japan and south korea resume financial dialogue in tokyo for the first time in about seven years. and on friday chinese officials are set to release their gauge for manufacturing and nonmanufacturing activities, which have deteriorated in recent months. so our featured biz pick this week is the outlook for china's economy. an increasing amount of data points to china's sluggish recovery from the pandemic. in a sign that officials are ill at ease with the economy, the nation's central bank on tuesday cut its key policy rate for the first time in ten months. saito naoto at diwa institute says consumption is equally worrisome for china. >> translator: with the country making a u-turn for a zero-covid policy, hopes were high for spending but this has fallen short of expectations. even the restaurant sector which was doing well in april is running out of steam with a recent wave of coronavirus cases. >> saito notes that young people are cut b