the boj -- it is not the timing.he boj still sticks to the idea that the rates go down 2% in the coming years. there is no chance that the boj changes that. this kind of small change is seen as necessary. the boj is cosigning this. >> that will be the biggest concern in the bank of japan. >> are way underestimating the impact of global risk assets? it was a pretty painful session overnight. we saw the impact across the bond market. we saw the end surging. there was only on the report they could be talking about the suite to icc. >> i think that the increase could have an impact at the financial market. i think the boj could use the fixed rate operations to prevent the increase. i think the boj stars to use the fixed rate. that could minimize the risk that may increase. in a sense, i think the impact to grow the financial market >> we are deciding to see energy costs, and relational -- agricultural grants costs moving up again. that could give more of a boost for more sustainable inflation materializing sooner than bo

flexibility, the boj says. >> yes. basically the boj keeps the market policy as it is.e same time, boj adjusts their conduct because they are concerned about the possible interruption in the bond market going forward, but my sense is that the hidden motivation for the boj most importantly is the exchange rate. to stringent control could invite a weaker yen going forward. the boj does not want to repeat the same mistake just made last year, so i think the boj is much more flexible this year. it wants to mediate any possible problem areas to the currency market. >> are we a step toward normalization or not? >> this is not a step toward normalization. although we are observing higher inflation then appeared previously. at the same time, the boj reiterated that they have to be patient until they can be much more confident about the stability of the wage price spiral going forward. this is not a time for the boj to say this is the first step toward normalization. i think the press conference with governor ueda this afternoon will be very important, how he conveys the message

much more to come on this boj decision.is bloomberg. ♪ 76% of 23andme health customers surveyed reported taking healthier actions. because they know health isn't just a future state. health happens now. start your dna-powered health journey today with personalized insights from 23andme. haidi: moves when it comes to the 10 year jgb. the 10 year yield rising above the bank of japan for the first time since march. this, as we see the repricing across a number of different bond markets in australia, we have seen bonds slumping across the curve. the 10 year yield jumping 11 basis points, all on this report that the bank of japan may consider tweaking it sealed control curve. we are seeing a nine basis point move for the 10 year, and now the 10 year yield in japan rising above that boj cap, for the first time since march. following u.s. treasuries, the 10 year hitting 4%, as we see the bank of japan concerns, over a potential surprise announcement today creating that broad lift to the yen. kathleen: maybe they were trying to eng

she said she thought the boj would have waited until more data became available. >> because the boj emphasizedhe 2% target, they want to make sure achieving 2% in a stable manner, and they said inflation at this moment is very high, and already discussed inflation expected to come down. >> she points out the boj's decision as a step toward normalization of the monetary policy. >> so now the maximum yield is permitted, it's shifted from 0.5% to 1%. so it's clear they are all -- the increasing interest rate up to 1%. so this is due to the tightening of monetary policy. >> she says raising the rate from 0.5% to 1% is a big change. she says it will present a restrictive environment for businesses. >> for small and medium enterprises, which needs to borrow money from banks raising -- right now lots of enterprises increased food prices and high inflation and in addition to that a higher interest rate may be some burden to them. >> but the boj still chose to make the change. she says the bank is prioritizing fixing the market distortion. >> i think the next steps -- if they remove it the interest rat

the boj will make its policy call on friday. investors waiting for any dental policy tweaks to come with that higher inflation outlook. we will also get tokyo cpi prince on the same day. in chile, investors expecting monetary easing to kick off with a jumbo cut friday. policymakers hoping a strong move will reduce risks of recession. indonesia expected to resume its pause tuesday for the fifth consecutive month. let's discuss more on these divergent monetary policies and the broader economic implications with qian wang. great to have you with us. it seems we may be headed towards this picture where emerging-market central banks are again leading the pack in those reductions in weight hikes and the rate path forward for these economies. what are the broader implications for the global economy when you have advanced economies not going as fast as the yen? qian: i think when you are saying central banks, we think the fed is close to the end of the hiking cycle. so, i think many of the emerging-market is still waiting to confirm tha

it is the boj.kept its policy rate unchanged but it has adjusted its yield curve control program, not widening the band but giving more flexibility. let me get you up to speed on market moves. at first, the yen slumped against the dollar then traders realized this is a change in the band, now it is at a 138 handle. and then there is speculation on the boj taking yields another leg higher. both again and treasuries have been in a difficult place, but the fed had to stop as did the boj, having to start. s&p e-mini's have been all over the place this morning. currently they are pointing to a higher opening. these markets confused as we await the press conference at 7:30 a.m. london time. let's get back to the earnings story. joining us is i'm pleased to say the standard see ya, bill winters. you've had pretax profits beating for the second quarter, you have raised your full year income forecast and are starting a billion dollar share buyback imminently, can we assume no more job cuts to come? bill: we

we have boj watchers not expecting a further policy shift after the start from the boj on tweaking onriday. the forecast is favoring april as the next likely timing for a policy change. watching the yen given that we have reverberations over the moves over the past few days on a lot of other currencies within the complex. g10 and beyond. shery: lots of tough decisions when it comes to central banks around the world. the reserve bank is facing one of their toughest yet. today inflation is decelerating but still twice the pace of the central bank target. global economics and policy editor kathleen hays is here. economists are pretty split. markets expect a hold. so it is all over the place. >> there are certainly two camps but traders tend to be looking for central banks who have high inflation that has peaked and is starting to come down after an aggressive series of rate hikes. you can say that about the reserve bank of australia, the fed, ecb as well. traders expect them to say they're done. economists look closer at where inflation is, not just where it has gotten to where where you

we saw strong gains with rumors of the boj's shift came out before the boj met.oday we have a continuation of those strong declines we saw breakout on the yen on friday to take it back to where it had been before the rumors came out. if you keep a lid on jgb yields that is bad for the yen because the trip back towards a world where japanese central bank policy is close to what the you -- close to what the world is doing, that is what the yen needs to recover from the weak levels on a historical basis. lizzy: we were talking about chinese pmi's. tonya said investors are looking at them with rose tinted spectacles. stocks are pretty relieved this morning. >> they are but they have become less relieved as the day has gone on. you always have to be cautious about reading too much into a bit of a bounce in china's stocks. you were talking before about the s&p being 5% short of regaining its record high which came in in 2020 two. the chinese stock market is 30% below its most recent peak and the peak came in early 2021. a market that is that far down and has been that

and we have this boj meeting next week.me speculation swimming around of possible change. why is that? mainly because the boj forecast for this fiscal year is totally out of whack with the numbers. they are saying it is going to be averaging something like 1.8% this fiscal year. people are familiar with the -- they have told us already that they are expecting officials to consider raising the forecast above 2%. the focus next week may be on what the boj forecast the price to be in the next fiscal year because for the moment they are saying 2%, if it is still above 2%, the forecast over two years, above 2% or at 2%, why continue with stimulus? that has been feeding speculation but his comments were interpreted by markets as fairly solid on continuing with easing but the consensus has always been that the big change is still a ways off. i am talking about changing negative interest rates and scrapping that. that is a ways off. we are talking about a tweak to why sisi. it is less than a fifth now who think they are going to ha

you have the fed, ecb and boj.ngh, apollo had -- apollo partner and head of multi-credit investment strategy, joins us. do you think we are going to get fireworks? which of those three central banks do you think could deliver them? jasjit: in the recent history, if there's a weak performance, it will be next week. so the fed, ecb and boj moves are pretty well priced in by now, but i feel that more than just the move of the federal reserve by another 25 basis points and shifting higher, it's more like how the entire yield curve will respond, and that might set off some kind of a reaction in the ugly markets. the equity markets have been on fire. they have been recovering the losses of the last year. some people call it a bear market rally, but, you know, it is well entrenched right now, but the impact, if there is any, it's going to be dependent on how the entire rate curve response and just, you know, what the fed does at the front end of the curve. kailey: is it not also about how the entire tightening cycle ultim

the boj will be important.uys have all these reports last week suggesting the boj is likely to stand pat. what will be important is they are going to release inflation numbers and they will be upgraded. the core reading remains are very inflated. if they show that they don't decline towards 2% this year, potentially next year, the boj will have to justify those numbers and that will leave the dollar open for the potential for ycc to potentially be tweaked maybe in september. so we should expect volatility on friday for the yen. shery: of course much of the movement in currencies has been rate differentials. when we are talking about the boj we cannot forget about the pboc either because they seem to be going in a completely different direction as the rest of the advanced western economies. i mentioned earlier how the aussie any kiwi dollar have been dragged by weight of the offshore yuan. what can we expect there? rodrigo: quite right. the aussie and the kiwi are very risky and broad currencies. at the moment e

haidi: the boj policy stunner also threatens a carry trade.rally in the brazilian royale. >> for sure. the trade here works when the yen is at an ultra low interest rate policy, and investors tend to borrow yen and then invest in higher yielding currencies. in this case, it is brazilian real and the mexican peso, because they have high interest rates in their countries. the fact that the boj is loosening its grip on policy rates and letting the yield to rise more freely, that may cause the yen to appreciate more. making the trade to be less profitable. we know that mexico and brazil have high interest rates and the boj will do things more carefully, which will let the yen appreciate more in gradual. that way, the trade may still be worth it. shery: bloomberg's emerging-market reporter zijia song, joining me here paired let's bring in the next guest whose preferred em exposure was -- is in latin. great to have you with us. evan all of these risks, could we see some profit taking in these trades, especially when valuations don't seem as compelli

yield curve control and focus for the boj. pedro sanchez and his right-wing opponent claim victory after elections of the aft them struggling to build a majority. we are live in madrid. as earning season kicks off, we will bring you results. plus, a twitter shakeup as elon musk says the blue bird may fly the nest. happy monday and welcome to the week. a big week for earnings and central banks. the stoxx 600, 200 companies reporting, and by both metrics the busiest week for earnings. last week came to a disappointing end for the nasdaq. we look get the index reshuffle later today. but goldman says it is not likely to solve the challenges posed by the high concentration of tech shares. other central banks, the main focus will be decisions from the fed and say and the ecb thursday, quarter-point hikes expected from both. we keep a firm i on clues ahead. as we reported last week, bloomberg understands the boj will not be making changes to its yield curve control program. as we look at the short end yields across europe and the u.s

the boj. what is the in the sand for a japanese 10 year government bond yield? >> if you look at the slide the boj announced, there is this hazy part between .5 and 1%. i think that is the boj top telling you there is no line in the sand. the strategic ambiguity, there is some comparative to that. if it is tightening financial conditions you are trying to achieve, generating volatility in fx markets and fixed income markets, job done. every boj meeting is going to be live ahead. jonathan: you believe maybe this opens the door to taking a step towards raising interest rates next year? geoff: everything is on the table. the governor admitted april outlook and perhaps a bit too much on the benign side. there is a 70 basis point increase in this year's inflation outlook. you cannot phrase or characterize such a tweak in response to a higher inflation print, inflation forecast, as and easing step. i think the market can see that. it is about the next step we know the trajectory is towards tightenin

if the boj raises the cap in this environment japan's long-term interest rates could follow u.s.nterest rates higher. that would have negative impacts especially on the japanese institutions that have core funds at lower rates. >> he says it's important as the boj wants to limit impact on the financial market. he thinks when it happened largely depends on how the u.s. economy fares. >> translator: i think the bojng will review yield curve control after the fed rate hikes end after the u.s. economy slows, but before it slows down too much and the u.s. has to implement full-scale easing. so it depends on the u.s. given the current economic climate october could be when we see the cap raised. >> he says the boj may give a signal before any decisions are made as governor ueda has emphasized he would aim to communicate more with market participants. i'm yanaka marie, and that was this week's biz picks. >>> the value of shares traded by overseas investors on japan stock exchanges hit a record high in june following a recovery in the tokyo equity market. the tokyo stock exchange says sh

if you look at the boj for the last few years, whatever they have said boj helps the fed in that they do walk the walk. hilarious incidents over the last few years where they split the markets but it turns out nothing is changed. they carry on yield curve control. so to me, this is just creating a buying opportunity in jgb but also helping to drive down the price of treasuries. so the long end of the treasury curve which is a referendum on what long-term growth is going to be in the states, long-term treasury's will look like a phenomenal buying opportunity at these levels. we have seen monetary and fiscal policy in japan and the states this year, sort of gradually sort of moving toward slightly more accommodative position or closer to the end of the contract should area position. and yet risk assets have flown off the back of that and bond yields, long-term, or where they were at the start of the year. if so this is a much better buying opportunity in treasuries than equities. rishaad: we've got europe here, you say do not trust the fed and trust the pboc but you've always had someth

the boj is in a different position. if the fed and ecb signal they are not done, rates will keep going higher. if the boj does move, what kind of impact will this have on the other two central banks. the sequence could be important. the fed, then the ecb, then the bank of japan on friday. kailey: that brings us back to what moves the markets most next week? the fed, the ecb or the boj? during us is sophia. pick your poison. what could be the biggest catalyst? sophia: i was telling guy before the show that i wanted to make this an exciting and controversial conversation but i will say the fed. what i look at is, as you say, where is the surprise factor? where is the market position. you are not even talking about what kind of scale or interest right -- interest rate hike we are getting. in order to set expectations, more tightening is needed. we will see this also with the ecb. christine lagarde means the markets to not expect interest rate cuts. right now, the market mentality is very much the inflation story is not as

the released a of boj's policy.were expecting that, considering the higher base effect come of price gains will decelerate from 3.2% at the core to the latter half of 2%. that will suit for the boj to stay hold in its stimulus policy. david: ok. i assume that's your base case. they could do something possibly next week. the base case in your view is that they stay put on all policy settings. >> yeah. we see that they will stay hold. some speculation in the market is that there's a probability that there could be a surprise. they will trick the yield curve control policy in order to fix the negative side effects of the market. given the experience of the last december when corroded did it, markets clearly took it as a sign of turning hawkish. therefore, with a clear communicator who wants to keep stimulus, he won't do that. he won't risk such a communication risk. yvonne: what do you think will be the driver for the boj to finally pivot on yield curve control? is there any message on this? >> yeah. recently, signals

valerie: they always leave us on our toes at the boj meetings. i look at what happened in the core inflation number and the poor number and core core number camry on consensus. we think it will fade a bit. the bond market maybe more so and less and options market. this means yield curve control is off the table for next friday. that could mean that the bond really will continue but i was wrong on that call yesterday with the hot jobless claims. dani: biden is creating a debt limit team that has lael brainard and white house counsel and janet and merrick garland. the idea is avoid the standoff in the future. no clue how they will do that. what we talk about if we don't the debt ceiling limit debate? are you going to miss that? valerie: i don't think the markets will miss that. what a nightmare to deal with. the conclusions i draw immediately from that is does that mean there is more government spending on the way? government spending over the last year is up 15% year on year. a lot of that may be driving into this better than expected performing u

at the boj, ueda did enough. report came out that the boj is not under urgency to do anything on yield curve control. as the market raking up for any surprises? maybe. certainly you will have these volatilities spreads leading up to these boj meetings for every meeting now. equities are liking the fact this dovish tone the boj continues on for another day. 1.2% up on the nikkei. the dollar-yen is back above that 141 level. rishaad: and overall, we have a bit of a mixed bag down here. we have chinese equity markets feeling it once again and elsewhere, perhaps a bit of rest. there are the general macro movers. the nikkei is up 1% heading into the lunch break. we have currencies and a tightening oil market, and indeed the fed in play for oil after the stellar gain we saw last week, trading a bit of ground. let's get on to what is related to the property side of things, looking at dalian wanda group, setting aside its payments for $314 million. that faces a deadline to repay a maturing dollar bond. bloomberg's kevin

back in the june survey, you had around one in three participants saying the boj would change tact int has changed dramatically. 80% of people now say it is unlikely to happen. the timeline for this has been pushed to october instead. investors continuing to push out there xpeng patients. -- their expectations. in the session today, not just the boj in focus, the rba will be watching the jobs numbers and a couple of hours. the expectation around 15,000 jobs be added over the month. that will keep the unemployment rate steady. are continuing to see the later market trading tight. we are starting to see more pessimism coming into households. perhaps telling us that enough of the job has been done for the rba and it cannot afford to keep steady as we end the term at the central bank. haidi: want to do bring you an update on and developing story, new zealand police said a gunman and to other people are dead after a shooting incident in downtown auckland. it comes hours before they are set to host the opening ceremony of the fifa women's world cup. it appears there is no national security

a very important survey for the boj.o continue -- something they will continue to look at. >> atop beneficial says he is watching incoming data before deciding what they should do at the july meeting. there is plenty of incoming data this week. >> that service. there is one we cannot be sure of and that is that the number one is jobs. payrolls on friday. remember how we had this year inflation problem? two or three years ago, the bigger point was i was the jobs report because it shows us how strong the economy is. not to hundred 25,000 is nowhere near as strong as 339,000 except in perspective, that is a good, solid number. a healthy economy is still good for keeping unemployment low. the fed would like to see final demand getting a little bit weaker and the job market with it. unemployment is supposed to fall to 3.6% to 3.7. not getting looser there. average hourly earnings expected come down a little bit. 4.2% is still not quaint double with the average hourly earnings were averaging before the pandemic started but sti

the boj is not going to back away from yield curve control anytime soon. the boj meeting next week. the silliness of barbie. guess what? there are serious themes ahead and they are by definition complex. joining us out of brown brothers harriman & co. is dr. win thin. i need a clinic right now. we go to robbie feldman at morgan stanley or you about what they have wrought in japan. was it a cultural decision to rip up the textbooks you studied at columbia? was it a cultural decision to compute inflation into the system? win: thank you for having me. i do not know if it was culture as much as pragmatism. japan has been fighting deflation for decades. i think they are quite gun shy. markets got ahead of themselves about a tweak in yield curve controls or lift off. it is clear from the bank of japan comments they are very concerned. the numbers are starting to turn over not only domestically but globally. they are really reluctant. i think that is the signal. they could surprise us next week . this is not a time for surprises. there is so much more. it is a really crucial quarter for gl

it is all about concerns around the boj.t in the last of global anger of global yields unnerving global markets. as you said, heidi, it will really be about the rba policy decision tuesday. though, that case to stay on the path for australia has been bolstered by the inflation rate slowing more than expected. i did the next hour we speak to moody's analytics about why they think inflation in asia is past its peak. also, gree joining us. this is bloomberg. i don't want you to move. i'm gonna miss you so much. you realize we'll have internet waiting for us at the new place, right? oh, we know. we just like making a scene. transferring your services has never been easier. get connected on the day of your move with the xfinity app. can i sleep over at your new place? can katie sleep over tonight? sure, honey! this generation is so dramatic! move with the xfinity 10g network. every business that's why comcast business de is launching theal. mobile made free event. with our business internet, new and existing customers can get one

keep a watch on the yen as we await the boj decision tomorrow. that is it.ddle east is next. this is bloomberg. ♪ a second opinion. [coughs] good to go. yeah, i think i'll get a second opinion. all these walls gotta go! ah ah ah! i'd love a second opinion. no. i'm going to get a second opinion. with innovation refunds, there's no upfront cost to find out. so why not check like i did for my small business? take the first step to see if your small business qualifies for the erc. ♪♪ at morgan stanley, old school hard work meets bold new thinking. ♪♪ partnering to unlock new ideas, to create new legacies, to transform a company, industry, economy, generation. because grit and vision working in lockstep puts you on the path to your full potential. old school grit. new world ideas. morgan stanley. 76% of 23andme health customers surveyed reported taking healthier actions. new world ideas. because they know health isn't just a future state. health happens now. start your dna-powered health journey today with personalized insights from 23andme. did you know you can

we have a couple hours until the boj meeting. we're going to see ongoing yen strength and we could actually see a move by the bank of japan that leads to a more significant rise in the currency >> so, what are the ripple effects you're going to be looking for when we get headlines about the decision, i don't know, midnight or so, our time >> so, what's important is that this is not an isolated issue for japan. because, you know, you talked about this in the top of the hour, which is, it has a direct impact on the u.s. bond market back in december, when they last surprised, we basically saw a global selloff in bonds. and the ten-year bond yield, that, you know, kwinls dentally or not, marked the bottom in ten-year yields. now, of course, you know, boj cannot be attributed to all of the move, but perhaps it kicked off part of it so, because the market is not completely correctly positioned for a boj policy tweak, if we do have a change, i think we'll see another selloff in bonds and a rise in yields we're seeing a little bit of tha

you were alluding to the comments from the boj governor overnight.peaking to a lot of clients, about 30% felt there was still a risk that the doj could go in july. the fact that they surprise the markets late last year suggests we cannot be complacent about what they do. the one argument would be with the market combing and the pressure off dollar-yen, this may be the opportunity. we think looking at the data, they can sustain the ycc for a few more months. we still think that don mcgahn could go to 147 -- dollar-yen could go to 147 in the third quarter. david: the scenarios seem to be very different from one another. assuming they do something, positioning right now when you look at that again -- the yen come out what looks more extremes? >> in case they do something, i think we could get some dollar-yen downside if they were to jump ahead because i think the overall yield differential that has been driving the dollar strength has been there. the real surprise would be if they moved, that we would pull back and the dollar-yen moving lower on a short

campaigns and here we have the opposite at the boj. >> yeah.s the rest of the world was getting too far away from them. it's a little confusing what they've done they're kind of using the old numbers, 50 basis point cap on the 10-year, as a reference point now. i've heard of caps i've heard of ceilings i haven't heard of reference points it's up to 55. before japan can declare victory, most of the inflation it's had imported. none of it seems to be dom domestically generated that was the reason why the prior central banker didn't do anything about it. now it seems there is enough pressure they need to do something about it on the data, it was good but not good enough for the fed to say it's all clear i want to show you one chart fed chair powell's preferred inflation gauge. three things i want to show you about in this chart. the first one is that the number came down. 4.13% so it's headed in the right direction. if you look at the actual bar chart, what you can see by eyeballing it, one of the things the fed was concerned about was the pace of

the next move for the boj could be a tweaking of yield curve control or movement on currency trends. right here on "bloomberg daybreak: europe." this is bloomberg. ♪ manus: the yen is on a ripper. a seven-day winning streak. it is on course to have its best performance since 2018 driving the speculation that the boj will adjust its ycc program. the central bank does not tweak, it would not make any sense according to a former official. let's get to our mliv team. the momentum in the yen is being driven how much by dollar weakness and how much by the presumption that there will be something of substance shifting in the yield curve? is the inflation narrative enough in japan to warn to a discussion about changes and -- in yield curve? >> we had a report just before the markets opened that got everyone excited because it said the boj would change their inflation forecast to above 2% when they meet again. this is the threshold they have been talking about for some time. they wanted to see 2% sustained inflation before they would be ready to make any policy changes. the market is going in

but the boj seems not ready to do that.hese kind of decisions, doesn't make a difference whether it is one meeting or the next meeting. it is the single they want to send. that is why when the boj is thinking about this, it is not so much that inflation is not high enough yet to get rid of yield curve control, it is more whether they are ready to send a signal to investors or not. kailey: we will find out by the financial of this week. dean maki of -- we will find out by the end of this week. dean maki of point72, thank you very much. next we have to talk about china. top leaders come short of announcing major stingless for that slowing economy. more on how they are addressing the soft post-covid recovery, coming up. this is bloomberg. ♪ the first time your sales reached 100k with godaddy was also the first time your profits left you speechless. at the counter or on the go, save 20% with the lowest transaction fees and keep more of what you make. start saving today at godaddy.com helping generate and move the energy that ou

isn't preparing for what may be a live boj -- is it preparing for what may be a live boj session?do you make of the yen strength now? >> we've got over two weeks to go and the speculation is reaching fever pitch already so it's going to be a fun time over the next few days. people were already getting a little bit excited when we saw a couple of pieces of data, i think we were talking about it this week on the show already. we've had the wages moving in the right direction. yesterday the tipping point seems to be the latest jgb option. traders have been talking for a while suggesting that if the bank of japan is going to change yield curve control, they will not dispense with a completely. they will just change the pivot point. they may shifted to the five years sector. they allow the longer end of the yield curve to float around freely, but they fix the shorter and around five your point. what happened yesterday? we had a blowout five-year auction. why would a five-year auction be the strongest for three years when the yield is only 0.13%? that has just added fuel to the fire, be

, talking about the outlook for the boj.e says, unless the boj rethinks how it stably achieves the inflation goal, honesty settings are expected to stay in place for now. what does that mean for the dollar-yen? we could start recouping the recent weakness we have seen in the dollar trading versus the yen, heading back to the 139 level. what will traders be watching? it is the japan inflation data you on friday. essentially when you look at the core reading, we are expecting the still be hovering around a four-decade high. speaking of inflation, the other big data set to this hour is inflation data from new zealand. the expectation is we will be seeing a sharp acceleration, under the 6 level. that would be near the rbnz target as well. they have been the front in the tightening cycle, so they will be to closely-watched. we are looking a little bit mixed in futures. still watching the chinese market. we will have more details from our exclusive interview later this hour, the imf essentially saying that china problem could be c

boj policy meeting is tomorrow the dow is down 250.day the 10-year is back above 4% the relationship between the two and how sensitive equities are in yields. >> i still think that the u.s. monetary policy and the drivers of u.s. monetary policy, especially via inflation and economic overheating, that is an important driver of the equity market the boj obviously very important for some markets u.s. equities probably a little bit less so. >> last question, the consumer one of the reasons, if not the principal reason why your probabilities have come down the way they have and many have been surprised at the resiliency of this economy the consumer, 2/3 of it, has held more than it wants. how long does that last? >> the consumer is holding better because real disposable income is growing pretty strongly up almost 4% year on year. that's a big shift from where we were 2022 where you have real disposable income declining. consumers having to dip into the excess data but, no, it's actually income growth that is supporting the consumer. and i

there is the question of the day with the boj. is it a week or a tight change? he thought it was a tied change. let's bring in our experts from bloomberg red from the mliv team. let me start with you. -- tweaked or tied change? >> this is the tide turning. this is the day we come here for markets. you see the move, the momentous move that shifts and japanese bonds. it is definitely going to mark a steepening that we see globally across bonds, and this is just the start of something incredibly exciting onto the next half of the year. >> ok. is that the same for you, eddie? oh yeah in a brave new world? i think the bank of japan pulled off something momentous. what we did was they convince the market they haven't done very much. when in fact, they were starting to exit yield curve controls. looking for a world where they are not having to, you know, absolutely dictate where yields are going to be. i think it is quite a big step that they've taken. i think they are talking it down. i think the bank of japan is trying to say hang on, we are not doing all that much,

haidi: the top stories this hour, asian stocks set for a positive start with investors shaken off the boj surprise policy tweak and embracing the signs of the latest u.s. economic strength. money markets and economists split on the rba move tomorrow as its policy tightening campaign enters the final stages. and we look at how the metaverse is influencing the business outlook for japanese internet media company gree. shery: locale u.s. futures trading are that early in the asia monday session. we are seeing a little bit of support extending gains from the previous session with the s&p 500 rallying for three consecutive weeks. we were watching some key economic data on the friday session providing a rosier outlook. key gauges of inflation easing. not to mention americans are growing more optimistic about the outlook for the economy. we are waiting for more on. -- earnings. 160 nine s&p 500 companies reporting earnings this week, $11 trillion of market cap including the likes of amazon and apple. the nasdaq 100 getting about 2% on the friday session. we are seeing futures continuing to rally

but now, 82% looking at the july meeting, think the boj is going to stand pat. growing on the october meeting. if you look closely, you can see that 28% see the bank of japan shifting, making some kind of policy shift, probably a curve control at the october meeting, if you add everybody that's looking at -- a handful see a meeting move in july, some people see it and i -- september, more than half are betting on the october meeting. they are also expected to raise their cpi forecast today from 2.3% in this fiscal year from 1.8%. that will be a big focus for investors as well. shery: what's driving this shift for investors question mark catherine: the governor. and he was taking over and people were talking about what would be the biggest challenge for the next boj governor, everyone said, communication. communicating what they intend, are they going to make a shift, what do they think about 2% inflation being sustainable. what he has said is he's not convinced the inflation rate is sustainably and stably at 2%. recently, he said that the 2% cpi target is still

dani: any change from the boj will have huge consequences for all of these markets.his is something steve englander at standard chartered flagged, you had u.s. breakevens one-year fall pretty dramatically back below 1.5%. at the same time that oil has moved higher, a lot of idiosyncratic factors there, too but this is a break from the trend we usually see and lends itself perhaps to energy prices not playing as big of a part. but if we see a resurgence in oil prices, do you start to get worried that inflation can't ramp up based on energy costs? david: oil has been edging up this month. but it is still well off its highs. just a few months ago people were looking for $100 a barrel and it is very far from that level. whether it be supply cuts or pickup in demand hypothetically, all of a sudden we're going towards 80-90 dollars a barrel , the question of inflation emerges again. time will tell. we will get choppy trade one way or another in the coming months. dani: at least for the time being, the patience from the em bulls certainly paying off. bloomberg's david finne

the other top story we are tracking is central banks and the boj. lizzy: we had a second day of weakening for the unpaired covenant -- governor ueda is going to stick with monetary easing unless there is a shift on the price goal view. dani: they want to get about 2% but japanese inflation is higher than the u.s. right now. that feels unsustainably above 2%. valerie: still speculation about what the boj will do next week they are not going to tell us if they are aiming to do a ycc break. this has to be done in a surprise but the dovish comments from governor ueda are keeping the bond rally alive. it was sparked by the ecb, dovish comments in the most hawkish ecb member did not want to talk about a hike after july. i don't see the bond rally ending. retail sales yesterday coming in stronger than the core component did not do much to dent the rally. we got u.k. cpi today and we will see if that extends on a soft print. dani: i love the bloomberg's group that the ecb see biggest issue is not inflation but words. they really don't want to broadcast what

it cements what the boj has told us that perhaps inflation is not quite accurate -- anchored as strongly as sentiment. rishaad: and it did kind of beget a few bits of yen strength , a little bit, so that will be key to watch in the second half of the year. can you walk me through what is happening with the yuan and also the top of the leadership at the pboc? it is all about party and party leaders within it. yvonne: he's going to be the new party chief. reports from the journal say maybe he will be the next pboc governor but i guess it is something that is a big surprise. rishaad: continuity. yvonne: you had -- that have reached retirement age. this was a logical step i think but a lot of questions on what this means. in terms of policy, does that mean continuity? he was or just recently the safe regulator. how is his view on fx? david: the background is interesting because pan gongsheng has been deputy for 11 years. he is the forex, that's a big conversation and not just in moves, they're looking to internationalize the currency or eight years. the policy continued as far as that is con

this is my way to talk about the boj.f you have the boj exiting or expanding, tamping down the yield rise that we have seen. you could see the echoed in other asset classes. the dollar, up by 6/10 of 1%. it begs the question, are we really going to see the unwind -- money come out of the assets and back into japan. are we really going to get there is the question for those assets. guy: absolutely. what happens next, in terms of the inflation will be key in all of this. today, you get data out of the euro zone. they crossover. the question we are asking is are we going to see a gentle growing apart, can we price in a soft landing? we have leveled off and plateaued a bit. what happens next is critical. how is the market thinking about what it needs to price next? i think we are at a point of real difficulty for markets. and it is august, we are going into august. there is that issue as well. the market is increasingly believing that we can deliver this soft landing. the question is is it priced? alix: also, can we paint tha

cpi print and the boj decision.ple are probably trading on the side of caution and i can't blame them. if it is going to be a hot print that is going to come in from these levels after we have corrected like we have, you can see the dollar put on a couple runs may be back up to that 143 area. but if we happen to come in soft, or the market is still a little top-heavy, there could be a further shakeout. -- a head and shoulders formation on the chart coming up very quickly and we are already nearing the right hand shoulder of that support so if we go through that 140 level on a week print that could probably elicit further correction lower than about the 138. >> bloomberg's fx reporter michael wilson, let us stick with the outlook when it comes to u.s. inflation. annabelle is here for a check on markets. as we get closer to that print how are traders positioning? >> as michael was saying, something that is being very closely tracked in the markets and it is really also how traders are starting to position for moves in

jgb yields because it's been nearing that half a percent boj tolerance limit. to see treasury yields climbing and you can see the 10 year yield around the 387 level. we saw yields climbing across the curve. take a look at how the kospi is coming online after gaining ground, extending those gains on the asia tuesday session. the one was for lecturing against the u.s. dollar given the policy decisions that we have by many central banks around the world. we are seeing it at that 1280 level after we had the second-quarter gdp numbers out of south korea expand to the .6% quarter on quarter, which was slightly more than economists had expected. haidi: take a look at the first few minutes of trading. in the staggered open here in sydney, we are seeing quite a bit of upside about a quarter of a percent higher. they are watching the aussie dollars 67 33 expected to get more of a boost when it comes to any further china stimulus measures, but certainly the slowdown in the chinese economy and slowdown in external demands for the economy are two forces that could cap any f

might seem like a long time ago too many of us -- at the same time there are a lot of people at the boj who lived through that and they don't want to make that mistake again. he was part of that crew. . that is one of the reason people say he is reluctant, and he will wait until he is absolutely 100% sure that inflation will stay at 2% and move higher. haidi: our global economics and policy editor kathleen hays there. let's get you to belle in haakon. what are you watching, and how are things looking? [laughter] annabelle: essentially we are focusing in on inflation. we just had new zealand numbers coming out for the second quarter, coming in for more than expected at 6%. still quite a big reduction from the reading prior. what we're seeing in markets is a bit of firmness coming into the kiwi dollar. bond yields had been trading lower. now they are fairly flat, but just off those levels. it tells us perhaps traders are bracing that we will need to see that rbnz staying more hawkish. how long this lasts? probably will start to see it disappear throughout the morning session given the rbn

last month saw core consumer prices, excluding food, rise higher than the boj's inflation target. and this could put pressure on the central bank to tweak its ultra easy monetary policy. i spoke to naeem aslam, chief investment officer at london—based zaye capital markets, for more. i think the federal reserve is not under immense pressure, as they were, let's say, before they were, let's say, before the inflationary attack, as you rightly pointed out. because inflation is speaking at —— sitting at 3%, headline inflation. not too far from the target. especially when you compare where this number was, it is not too long ago we saw this number in double figures and now falling all the way to 3%. so where we sit and what we see in the market, from the money market, from the fixed income market, and equity market, we do see another interest rate hike, so going to wednesday the general expectations are, number one, the federal reserve will increase interest rates by 25 basis points and number two, the hawkish tilt will continue to remain in the federal reserve�*s monetary policy. what

the boj will move, but slowly and cautiously.it comes to the rally we have seen over the past few months, so much of it has been driven by a couple of things, one is u.s. influence -- inflows as a result of the warren buffett effect and reallocation away from china. do you expect these two the medics were inflows to be able to continue? -- thematic's for inflows to be able to continue? >> the flows from china, we can rely on that. i think china has a lot of structural problems. i used to be a banking sector analyst over chinese banks during a banking crisis and japanese banks over their banking crisis, and i think china is in a similar situation. i think it will take years if not a decade or two to fix its own problems, so i think those flows away from china is something you can rely on. flows coming in from the u.s. and other foreign investors, it will depend a bit on how well the japanese economy performs, given the sluggish global economy and also the pace of corporate governance reform, which is definitely happening, but not

what we follow now is what happens with the ecb next and who comes next, the boj.t could happen to take a look at the japanese yen, moving at the 140 level as well. let's turn to the biggest stop, samsung, higher by .4%. because dac is down. samsung electronics has started trading up .1 percent, this of course as we had expected that net income to drop significantly. we are, of course, coming off the back of those earnings results, which we were watching very closely with sk beating expectations, but still be stock actually fell. we are learning to talk a little bit about this, but also australia is also open, haidi. haidi: yeah. and we see the fed also taking in that than expected deceleration, ahead of the leak. we see some of the bets being moved, that we will see the hike next week. shery, pretty flat started trading today here in sydney. of course that staggered open not moving too much to either direction, but of course oil prices is something when it comes to a central big headache. back to samsung, though, take a look at those numbers. sherri: yeah, consoli

the boj i think it is now a little bit flexible and might have to start fighting inflation soon.re looking at the us now where there may be a soft landing after all of this but what can you tell us about the global economy? the global economy is a little bit divergent now. yes, the us is strong and keeps beating estimates every time so we might have a no—landing scenario there. europe is a little vulnerable because of the energy crisis which is still — oil prices are still at $83 or $84, so it could still flare up, europe is still a bit fragile. and asia is a little bit all over the place, so you've had the region that opened up to last after the covid lockdown, so it is already delayed, and you have a lot of debt, us dollar denominated debt mostly from chinese property companies that is also keeping the mood down and interest rates being so high, that is a big financing cost for them. it will be tough for asia. they really need the global economy, trade and growth to go back up and that's not happening. millions of people in northern china including the capital beijing are under

the boj's -- as saying a balance approach is needed.es in japan have doubled from a year ago suggesting perhaps the boj may move on its policy earlier than anticipated. the yen 143. 92. now to the india focus. we are looking ahead to stories that investors are watching. shares of a drugmaker will start trading in mumbai after its ipo will hold auctions for reverse repo and government bonds. it is also set to release weekly foreign exchange data. keep an eye on latest monsoon rainfall data. currently 5% below normal levels. the adani group spring noble energy plans to raise $1.5 billion to fund the conglomerates green transition. let's bring in senior editor menaka doshi and pr sanjai in mumbai. what do we know? menaka: we know that it seems that since the turbulence of january, the adani group is slowly trying to put together the pieces of its empires growth and sin that, also seeking to deleverage as -- at the founder lever level. three adani group companies have resolved to raise large amounts of money for the course of this year thro

chinese authorities to ease policy expectations, it is far more prominent than for the bejeweled j -- bojolicies that there is a risks of that again adds on to the pressure on the chinese yuan as well but of course chinese authorities ought to be on alert given the fixing measures we have seen over the last few weeks and they will continue to tolerate it as long as this depreciation of the yuan and, te intervention risks only arise if the pace is quick enough.on theo much risk has already been priced in for the chinese markets as such, and if we see a turnaround in the sentiment with these stimulus measures that are coming in, if we see an improvement coming through in the economic indicators, i would say it is a very very early indication that things are starting to look a little bit up for the chinese economy, and if that plays out, the pressure on the yuan could come off as well. rishaad: thank you. if you want a round out that these -- roundup of these stories you need to get your day going, have a look at today's version of daybreak. television subscribers can go to -- on the termina

omar slim, not expecting much from the boj on the 28th. still to come, big changes are underway in india's financial services landscape. we discuss the applications later this hour. more analysis on the leadership shakeup at australia's central bank. we dive into what it may mean for rba monetary policy. this is bloomberg. ♪ 5-hour energy. think of it as 5-second coffee. for when you wake up too late to make it. or you don't have time to wait in line for it. or you're just too busy for a coffee break. 5-hour energy. the 5-second coffee. >> i think it was the right decision from the government. bullock is probably more dovish compared to philip lowe. but overall i think the messaging around the need to get inflation down and the risk to high interest rates is still intact from here. >> we are in store for someone who is courageous, someone who will be well trained and is going to provide the stability needed to move the reserve bank to its next stage. haslinda: some of our guests on changes at the rba. let's bring an our bloomberg economist