as the boj making policy mistakes?not taken any policy measures, it's just talk and talk can change. i have followed the governor for a long time and my understanding of his reaction function to underlying [indiscernible] wolf current circumstances in japan do not allow for hawkish statements you see what happens to the market but i think he would be keen to take the economy to a path of normalization that would help the financial sector and wage dynamic and to some degree of positive interest rate would be helpful. not for percent but not zero either. find middle ground. paul: i want to talk about research you have recently done on southeast asian markets. you see growth in southeast asia outpacing china in the next decade. what underpins your argument? >> we had a lot of fun writing this report. it took eight months in conjunction with others and we released the report last week and the message in it is notwithstanding the geoeconomics fragmentation and trade tensions around the world we think stars are aligning for

based on boj movement investors unwound.ple of other things, investors were positioned the wrong way and we saw a spike in the vix, largest one-day move created uncertainty and volatility. i would not call it extraordinary. in terms of your question economists have upped their chance to 25% and that is lower than consensus. my view is the best chance is economy will chug along but the possibility is never zero. tom: you can watch more on the david rubenstein show next week with the times shown on screen. other stories making news, u.k. police deployed extra officers to arrest hundreds more far-right activists. after plans to converge on immigration centers, the disorder has been fueled by false claims about an attack that killed three young girls in england. coming up, the maker of ozempic and europe's most valuable company reports earnings. we will bring you the details. that is novo nordisk, european futures higher, u.s. futures also up and s&p and nasdaq futures are up. stay with us. this is bloomberg. ♪ ryan t. writes, "

boj taking policy rates up to 0.5, with those policy rate forecasts for the fed and boj, we think currency will be ending at 1.46 by the year end and by the middle of next year it will be up to 140. paul: following on from the point about the fed's likely pace of easing, why do we have an underwhelming u.s. treasury sales? was that realistically priced considering what we expect from the fed in the next few months? mark: trying to sell a 10-year treasury yield below 4% would always be challenging when it is more than 150 basis points below the fed funds rate. the fed hasn't started to lower interest rates yet. when they do, it is possible they will aim the neutral rate close to 4% anyway. that makes the 10-year treasury yield with a 3% handle tough for people to digest. unless the fed sees something worse. if they see a hard landing coming, if they talk about a recession themselves, which they are not doing yet, then a 3% treasury makes more sense. at the moment, they are pushing back on people saying, they don't want to do 50 basis points in september, they just like to go over 25 if they

what does that tell us about where the boj, whose from here -- boj goes from here? we got a little bit of insight there. the divergence between these two central banks, you know, 50 basis point cuts, emergency at the fed, u.s. banks, then you have got the boj, saying we will hike, but it will be incrementally and there is no rush to do so, but at the same time, within the boj, if you look one component at a time if -- time, you know. but if they do, you will see you way -- see ueda will make arguments to not disrupt the market too much. he seen what can happen in the commentary around that. with the fed, when powell talked about putting september on the table, the markets have run with that immediately. they are talking 50 basis points. what the fed is worried about is not starting -- once they start, they cannot start and stop. they have to keep going. so they want to make sure, like mary nicola said earlier, the inflation genie is in the bottle. that comes next week. i think the guidance will be looked at a lot. once we get confirmation there, the 50 basis points

ueda since he became boj governor. -- the data has been mixed, to be honest, in japan. he is very concerned that inflation numbers would last for some time, and that is what he was looking for. he was looking for inflation to be embedded, and that would justify him getting out of unconventional policy and gradually lifting japanese rates. avril: when it comes to qt, as you say, it looks like a gradual reduction in bond purchases. between now and 2026, where do you think the absorption will come from in the markets for bonds, and how will japan market these bonds? >> it's a good question to ask because they are sending out a team overseas. we may have them in singapore soon. this is something that had tried before. the ministry of finance has a team of people who will go and show the world that japanese bonds are now the place to be, and of course, yields are much more interesting than they were just a few months ago. it may be that with more confidence in the stability of the yen, the fact there is a bit more openness

we are hearing the boj coming under fire.then a contract meeting with some of these financial officials. these signals where we may be see a re-tight put on ice. vote: let's get more on markets including that massive arena in japan. let's bring in aren't mliv strategist. mary, this rebound we are seeing in japan, does this look sustainable or is this just the -- of another leg down? mary: there is still a lot of nervousness and angst in the market. as long as the volatility lingers, it's going to be hard to see a sustainable turnaround. so we still need to see some fundamental drivers, some fundamental catalysts to really pull the market out of the -- and really reduce some of that volatility and angst that continues to permeate. paul: we heard there will be a meeting in tokyo between the boj and financial services agency. to discuss international markets. what were the specifics of that conversation? mary: as we know previously from lots of different officials is that officials hate volatility. what we have seen over the pas

it is not just a boj. it is with the governor of the boj said too.eople think there is a bank of japan rate hike. we have right afterwards the federal reserve and a couple days later we had the u.s. jobs data. i think it is a twofold development here. the boj and the u.s. what happens i think is because -- japan is the world's largest net international investor creditor company. japan owns a lot of foreign assets. people think when the yen strengthens, interest rates rise in japan. japanese investors and we are talking about life insurance, trust banks. we're talking about large capital. they will sell foreign assets and bring it back into japan. it is not just japanese. people in the u.s. , the world really, the leverage ctas. they have done the same thing. they borrow the yen, sold the yen and bought something else. foreigners are unwinding too. one way to see this would be in the currency futures which has unwound. that is the short position. speculators have covered almost $7 billion of shoring yen positions in the last three weeks. tomorrow the

if you think about it, ueda is not more hawkish than he was in late july after that boj hike. chinese getting a sentiment boost from the vice minister of housing. they will quicken the pace of buying unsold homes. they want to turn this into affordable housing. a bit of a left temporarily at least. on the hang seng i wanted to highlight in terms of earnings, they are the drags. no to the revenue misses. we are seeing a bright spot for alibaba. hong kong listed to primary stages. a key step for the cock connect participation bringing in some of the inflows to the stock. it seems like ueda is really sticking to his guns. we're seeing the japanese currency gaining ground against all of his g10 peers. the dollar-yen has moved off what we saw earlier on the session. it is not just about the boj but also about the fed and what we get from powell. >> let's talk about that. during -- jerome powell could shed light o on a cut from the fed. it is a highly anticipated speech. is the central bank going to cut at its september meeting and how big will that cut be? mike mckee has this previ

>> our view is that the boj would have space to continue its hiking cycle. possibly it would be in december. having said that, it would only take the peak rate to around 75 basis points, which is still below what the boj estimates as their neutral rate of 1%. avril: we also have the boj coming under a lot of fire after being blamed for the stock market route, right? and the unwind of carry that we saw because of the communication. speaking of communication, who would -- ueda set to appear before politicians next week. do you think that prompts a more dovish tone in order to appease politicians? >> it is difficult to remain dovish on japan right now because clearly, the momentum is picking up. you have inflationary pressures still around the target, so it's difficult to say that you need to keep easing. as it is, even if you are tightening at the margin, the boj still controls a very big part of the bond market, and that cannot be sustained. >> as you say, even if they tighten, it is still early loose, right? >> our base case is dollar-he and would go down to

wall street painfully has stopped boj hikes.ts. real rates for small businesses are too high. big cuts needed to avert a hard landing. strangled by 5% yields that breathe more easily with yields at 3% to 4%. the call from b of a. dani: he goes on to talk about the idea that maybe we are not fully done with this thing yet. maybe there's more pain to come. talking about the market pulling the fed, i come back to the interlink between u.s. stocks and the bank of japan. even what we are seeing today. i can't help but wonder if we have this backwards. the idea that it was the yen appreciation that set off u.s. stocks. the carry trade is just a low volatility trade. what if we were in this new environment where every time you see volatility in the stock market it scares people out of the carry trade. every time you see the vix spike up you see a problem with the yen. annmarie: j.p. morgan sessa stocks remain more at risk for severe declines because the fed is not showing urgency. stocks don't just go up with a say equities are no long

i think everyone is expecting the boj to hide, but i think it was the hawkish comments, so from that perspective, i think the market took that as a surprise, and then we had weaker data, so i think this combination disrupted markets, but going forward, i expect the yen to stabilize. i understand the volatility. paul: you had some weak data out of the u.s. earlier in the week and pretty reasonable data in the past 24 hours. i wonder if you think markets may have overreacted, but also if you think there is any reason for the fed not to cut in september. >> as of now, if you look at all the recent data, it has been weakening. maybe not what the market has been expecting, but definitely, i think for me, only if inflation really surprised on the upside, but i expect the fed to cut 25 basis points, and if data continues to we, there is a chance they will cut 15 basis points. i'm here, our expectation was for the fed to cut 25 basis points in september. given the recent bounce of data, it continues to weaken. yesterday, the jobless claim, i think people are focusing too much on this. you ha

the very next day the boj changed their mind.ook data for the most part is a calming factor for the markets. the question, what's next? what are the clues we should be looking for? what should you be paying attention to. quadratic, etf, portfolio manager, nancy davis. nancy come in here for a second. talk about first the inflation data. wall street talks about inflation than wall street. wall street says inflation is down. main street says no, prices are up. they're up about 20%. they keep hurting us. whenever you hear both the corresponding things, you say how does this apply to markets and the economy overall? >> well prices are up. the change which is what wall street's focusing on is going down but they're still higher. so people are still feeling inflation in their daily portfolio. charles: in their daily lives, right? >> in their daily lives. charles: that brings me to rate cuts. the drum roll. phil blancato on. only guy saying zero cuts in september. for next few months, wall street building 200 basis points in rate cuts.

the boj with the details coming through after them a recent hike. didn't see july hike as policy tightening in terms of what we got from some of the members. that was before these markets and the view from one member that may be 1% is the neutral rate for the boj. european gas features jump on reports that ukraine has ceased a gas transit point just inside russia. we will look at how prepared the region is for potential supply shocks. that snack. plus, we will be speaking excessively with the cfo about their latest earnings report. stay with us. this is bloomberg. ♪ why do couples choose a sleep number smart bed? i need help with her snoring. sleep number does that. thank you. during our biggest sale of the year, save 50% on the sleep number® limited edition smart bed. shop now at a sleep number store near you. tom: happy thursday. european gas prices have surged to the highest level this year following a report that ukrainian troops seized a key gas transit point near the border in russia. russia's state-controlled gas from declined to comment as d

the strong data point will point to further tightening from the boj.esponding to the data, the japanese economy minister said the government will work closely with the boj to carry out the flexible policy following the market route lin ling has more. >> reporter: growing by 3.1% isy contracted in q1 the big reason for the recovery is private consumption which had until the latest period being falling in every quarter for a year the rise in that component which includes consumer spending suggesting as analysts have been telling me that the cycle we know is beginning to emerge. capital spending for demand led growth rose by .9% in the second quarter meeting expectations these data points would be welcome news and analysts say would boost the boj case for the further rate hikes although the timing is unclear given the market volatility last week and the upcoming leadership contest next month there are some caveats to the good news. june consumption may reflect the impact of the one-time tax reduction and it is unclear if real wages which turn positive in

we are heading for gains on -- of 8% on the nikkei which is follow-through from last week as though boj smooth concerns. next week might not be so straightforward especially how at the end of the week we are due for data out of japan on an asian and that the boj's governor will speak before parliament. we are seeing the strong gains. this follows on from managing gains from a day ago despite poor july activity indicating a lackluster economy. hang seng following through what we see in the rest of the region. but also given the week data out of china or a mixed bag, we had a pboc rapport and an interview and he talked about how they are pledging support for boosting of growth but these measures will not be drastic. take a look at where we are on dollar-yen here we are seeing some traders dipping their toes back into the carry trade. the weakness returning. i want to flag what we saw and the date overnight. a reminder of how the dollar-yen and the fed moves are important. take a look at this chart which will show you how the nikkei is looking at its best week since the early days of the p

charles: it worked with the boj. the next day the boj blinked.e'll not hike anymore, please, we can't take the pain. >> what has the boj done for almost 40 years though? our fed is totally different animal. i don't have a lot of respect. i would be speechless and perplexed if they cut-rates last monday only down 10%. charles: you want people to reduce risk but these are areas you say are looking healthy for the moment right now. financials, health care, real estate investment trusts, staples, utilities. these are traditional safe havens. >> you talked about what stocks are above their -- charles: 50-day. >> jim iurio and i line up very closely together. i think he's right. finance i'm a little less bullish. i think the steepening curve will help financials but the canary in the coal mine, credit default swaps that is wonky word for, that is warning for financials. to me they're rent, don't own. for me, the market is ahead of the economy. the market is ahead of everybody else. there is a reason why utilities reits, staples health care are doing we

we have moved seven or 8% before the boj hike. a lot of the move happened prior to the boj hike.t in the sense that we had this kind of cross market correlation. everyone was in the same trades. that is really what characterizes this market as best as it can be. the extent we have seen the unwind in long japanese equity positions, the unwind in dollar-yen, may the boj hike has exacerbated that move. i would not agree with that characterization. dani: the unwind happens. what, if anything, could take the place of the yen as a carry trade? who's to say people do not carry back -- piled back into this thing given that yield differentials are still pretty high with the move? eric: part of the question or concern here is is this to an environment you want to be putting on carry trade over the next few months. we had a level shift in the volatility environment across markets. growth, there was a lot of complacency around growth. that may start to change in the next few months. i don't know that this is the environment where you will see people rush back into carry trades. people are lo

what is he expected to say in terms of the move from the boj in terms of particularly the rhetoric? >> a very exciting day for us in asia, we can't wait for friday. we get a cpi report and we get prime minister a way to end suzuki. if you look at japanese bonds, they are already beginning to assume that ueda is not going to dial back even though we had his colleague a few days ago saying japan will not do consecutive rate hikes. i don't think anyone was expecting that anyway. having done one in july, most likely they will not get anything until the fourth quarter. he will be speaking to politicians and to some extent they will try to blame him for a mistimed rate hike. but if you look at his track record, he's very clear. he doesn't like unconventional policy and he's gradually getting out of that situation. he's moved rates away from negative. that does not suggest it's too low particularly wouldn't real rates in japan are still negative and the bank of japan holds an enormous amount of jgb's. there are still a lot of work to be done in that direction. he will probably reinforce th

for all the talk of the federal reserve it is a boj -- boj that blinks first. the deputy governor said "i believe that the bank needs to maintain monetary easing with the current policy interest the time being. the bank will not raise its policy interest rate when financial aid and capital markets are unstable." the dollar-yen a move of more than 2% against the japanese yen. and then once you have seen that you know what is happening on the equities. rallying for the s&p 500 up another 1%. on the nasdaq 100 up 1.3. other small caps up 1.8%. have we put a cork in the story? annmarie: paul donovan says hawk to dove under a week and the bank of japan governor indicated that they would be positive hikes and central banks are not supposed to create disorderly markets and this is not necessarily surprising. the last rate hike will not be reversed. the political pressure for the boj to raise rates and there is a lesson there for all central banks. he means the fed. jonathan: mohammed is joining us about an hour from now and he has views on central banks placating mark

eli: for the boj i think they are on a hiking path but extra cautious.hat is he is the last hike was very well flat. consensus move they would hike but what caught the market was the hawkish tone which set off unwinding so i think that there are no clear signs that the market has calmed down. boj will be careful about the timing. paul: how are you approaching investing in japan? do you take profit and get out? >> we were overweight japan but we have downgraded equities position to neutral in june, two months ago and right now we think it is bottom up. we are quite cautious unwinding is not done. avril: couple of weeks ago we were having conversation about pboc using in the wake of uninspiring. we have more rate decisions this week. do you see more easing to the rest of the yeah? >> we think they will continue to cut. june and july were surprises and short-term there were some heavyweights for the economy. they continue to be easing path. it is encouraging that the pressure, weakness have been taken off with the recalibration in asian currency strength an

as an extension to that, what does this mean for the boj?e know this is a significant issue on the currency side. what does it mean for policy moving forward? >> yeah, so i think all exporters might become a bit of a challenge. i think exporters were enjoying the fact that the dollar/yen was trading at 160. if you look at the forecast, whether it is toyota or other exporters in japan, they set 140 to 145 and for those conservative slightly below 140. i think from the earnings perspective, that doesn't change from the forecast side. from the boj perspective, i think they were maybe a little bit too -- they sounded a little bit too hawkish than the market had expected. so i think they will likely turn down the language, but i think with dollar/yen trading at 145, it is actually quite comfortable for japanese companies overall because we are exporting, but for the people that live in japan, the cheaper yen doesn't always benefit from -- japanese people don't benefit from the cheaper yen. >> we have to leave it there. thank you for sharing your

it also seems to be returning this was the investor reaction to the boj research that suggested the boj pressure persisting potentially those still on the table. of course the chinese currency is in focus after the u.n. fix today, the gap between the fix and estimates narrowing. we also saw a weaker fix versus estimates. this is for the first time in a year. if you flip the chart, it will show you how this suggests -- given how we haven't seen this in a long time, given that may be chinese authorities are thinking about the chinese currency strength and what this would mean for exports, potential risks. let's get more on the markets for asia's fixed income. also joining us from singapore is bloomberg mliv executive editor mark cudmore. let's start with you first. let's talk about jackson hole. there's all this anticipation building. we also have it in the works with the laborers stats. maybe there will be a downward revision on employment. do you think the fed is ready for all of this, what kind of signal is then? >> we get excited about jackson hole. there is one year were outperformed

rate cuts are doing boj's job for boj in the path to normalization. it may not just be a tech rally, it may not be a u.s. rally. we have been overweight on technology, that's worked very well for us. cyclicals will come through. i think investors are more preemptive now than reactive to what happens in the market. we will see interest in the small-cap sector. my worry over there is that as we see the rotation into these sectors, we are still in a high interest-rate environment. and it will take some time for the interest rate cuts to flow-through into the financials of these companies. what we saw with tech stocks, expectations are skyhigh, that's exactly what could happen in these small or even cyclicals. the markets will expect returns to come through much faster than it does. come next earnings cycle, once small caps do not give extraordinary returns. remember, there was actually a rating downwards in the russell index. if that does not happen, we will probably see another bout of volatility in these stocks. >> divergent views. i love it, a bit of

this came from the boj governor earlier.m a rising certainty that the economy and prices will stay in line with forecast, there is no change to our stance that we will continue to adjust and degree of easing. sounded like a guy willing to hike interest rates again over at the boj, shrugging off any contribution to things earlier this month. stuart: basically saying if things follow the forecast, we will keep tightening financial conditions. jonathan: no problems for stocks here? stuart: we have seen global central bankers are very sensitive if stocks selloff. jonathan: if they are sensitive to the story -- stuart: probably more sensitive to the yen than the nikkei i would guess. jonathan: dollar-yen, negative on the session by 0.1%. both saying in jackson that it's appropriate to begin lowering interest rates soon, adding the pace of cutting should be gradual and methodical. their comments coming ahead of chairman powell's speech at 10:00 eastern time. if you reflect on what we heard, there is no urgency whatsoever. when i h

this, there was always going to be a tricky set up for a 10 year auction today, the first after the bojn last week, and indeed, given the lower yields we are seeing in terms of demand, it was the weakest according to one measure since 2003, so a really interesting picture in japan assets as we see stocks elsewhere in the region also rebounding today. tom: ok. avril hong with their rebound in asian markets. we will see to what extent they can be sustained. japanese stocks specifically because it's fascinating in terms of what its unveiling. japanese stocks rebounding strongly just a day after their lunch into bear market territory. let's get the details and bring in whitney sue out of tokyo in terms of how the story is unfolding. are we likely to see buyers continue to buy the dip in japan? is this just a temporary breather? what is the sense from traders on the ground in japan as to what was unveiled and has come to pass in the last 48 hours out of japan? >> sure. even after today's powerful rebound, investors are actually still quite cautious in the near term in terms of when we look a

consumption giving a boost, and assigns that the virtual cycle that wg would like to say is taking -- boj would like to say is taking hold. turning the corner on the chinese economy, chinese stocks are also doing pretty well. take a closer look at the data as the retail sales number was better-than-expected. property investment contracted continuously, but we also saw the home price data and their declines, so adding to size that may be consumer spending and some of the sentiment is picking up there. paul: thank you. let's get a little bit more on the data out of china with david qu. encouraging signs on retail but not so much everything else. how are we interpreting the numbers? david q.: yeah, i think the market is focusing on the rate cut they have because it was better-than-expected. to be honest, we are not held up on the datasets because we have seen a slowdown of the industrial sector and the investments, as well. and for the rate themselves, we think it was somehow boosted by the summer holiday. and also it was still week growth, -- weak growth, 7.26, it is much below the producti

hence, i think maybe boj will be a bit more cautious with their hike. like i said earlier, i don't think the it will cut as much as the markets have priced in, so my narrative and belief is the dollar could be stronger predominantly because less than expected rate cuts and geopolitical risks. paul: kaia parv, thank you for joining us. still to come on bloomberg markets, asia, are interview with gregory, the ceo of air new zealand. that is coming up later. this is bloomberg. ♪ ♪♪ ♪♪ sandals jamaica sale is now on, visit sandals.com or call 1-800-sandals paul: nvidia has been stealing the spotlight after earnings. investors are awaiting results from major chinese tech and auto firms. annabelle joins us for more. talk about shares going on today, what's going on? annabelle: we are seeing the biggest gain in about six months for the company. this firm stands out because one of the big concerns for the tech companies and also consumer facing companies in china has been between threat, not only with economic issues and consumers reluctant to spend right now a

let's start with the boj governor. what was your take away from what he had to say today?> thanks. i think as you mentioned, it was almost a feeling of interest and i think he is doing the right thing. i think it is perfectly sensible for him to lay out the fact that there is more tightening to come, but i think, obviously, he is unable to ignore the fact that the market did not actually take it very well. that he surprised the market on the hawkish side, so as much as he lays the path forward that normalization is part of the way forward, i do think they are cautious by nature. the fact that they are likely to hike by 35 basis points may be at the end of this year followed by another one next year, i don't think that is a big deal to the extent that it is but expected by the markets right now. apple: he himself is underscoring the fact that they are below the neutral rate, so it gives you the sense that they can tolerate whatever tightening we see going forward. what will this mean for the japanese currency? when we see much further appreciation, keeping in mind what we g

we have seen the boj raise rates. that unwound the carry trade. i know you know this.borrow the yen. you have to make sure everybody is on the same page. tim, has that unwound or could it completely respark? >> let's keep it simple and break it down. the data is not fully available or transparent. we have to play detective over here. the key points is there is clear evidence in the markets or that some portion has unwound. i think a fair portion of it given with the liquidity with the japanese yen. the currency markets, which include stop-loss provisions. any manager would force to hold it. if you want to look at the objective data, the short positions that the cb chicago board of trade, publishes every tuesday. that went from record lows in july to normalized positions as of last tuesday with the current tuesday data shortly. i think we put clues together to see the offshore speculators were borrowing in yen or inn ve investing in other assets. i think a good position of that is clear. last data point is if you look at the net foreign investment into japan this year,

will a new leader allow the boj to pick up the pace when it comes to hiking rates?ay. cpi day in the usa but also cpi day here in the u.k. as well. we get data out of the united kingdom very shortly. around this, the earnings story that continues. ubs is the big story of the morning. we've got plenty of other ceos we will be talking to throughout the morning to get a handle on what's happening with the global economy. you bf over delivering. guy: the analyst -- tom: the analysts pointed to the wealth analyst business and returning capital to shareholders. they are expected to see higher capital requirements. it seems that ubs is more than meeting expectations. they will return to -- caster show -- shareholders. $27 billion in net new assets in the second quarter in terms of wealth management. guy: the numbers are outstanding. feels like softness creeping into the second half of the year. we will see exactly what's happening there. we need to hear from the man himself. the person who has delivered all of this. francine spoke to him. what was the most proud of in thes

clearly that is happening is the boj wanted. they probably would like to see a little bit more evidence in the cpi in japan, which has been there, but maybe we need to see it continue. in the meantime they're fending off criticism in all areas. they need to get through that time where they need to see stability. once that is out of the way, people will probably reflect on the fact that 0.2 five is still way too low for japanese yields. avril: what does that mean in terms of the monetary policy? will it be seen as normalization are tightening? because it has come back and tried to push back against the sense that it's tightening. >> the way traders are pricing it is not even normalization, really. we probably need to see 10 year japanese yields even closer to 2% before people even thought it was something like an normalization timeframe. a long history of where japanese yields have been. not a been a 1% at the moment. we are way off from anything that the historical contest -- context would suggest japan is near a neutral rate or

this was just a catalyst happening with the boj being, given this unexpected rate hike.what happened on monday was overdone, especially that 12% drawdown in japan that bounced back very quickly. and that was all tied to the yen's action. >> you point to the debate over mid versus late cycle. i don't know if you heard the conversation we had at the top of our program with one of our guests making the argument that all cycles come to an end. and this one's probably getting close to the point that it is. certainly implying we're more late cycle than some would like to believe. >> that's the big question, and there's no conclusive data at this point. very mixed data. if you believe that we're in the mid cycle, meaning several more years of expansion, every pullback is to be bought. in that context earnings will continue to grow. you're still in the middle of a bull market. if you're more cautious that we're perhaps close to the beginning of that late cycle or in the late cycle, then we may be, the pullback may be part of a topping process in which case you want to get increm

the boj, bank of japan deputy governor said no interest rate hikes are coming when financial marketstaken place on monday with a huge selloff and a move in the yen as a result of predictions that they were going to continue raising interest rates, they raised rates on july 31st so what's your take on this global market selloff and whether or not there's more to come? >> i think there's a lot of leverage to unwind on the carry trade and the boj is probably nervous to keep raising interest rates because you don't know what financial leverage is in system right now. this is probably a one and done. you saw a lot of assets sell off because a lot of leverage was used to borrow in yen and buy other assets, probably a lot of tech stocks, that's why they sold off the most. i think that trade has been unwound. with the smoke clearing you have to get to fundamentals. you talked about earnings. earnings look good this year, double digit earnings next year. i look at growth rates and everyone's talking about how dismal they are. the atlanta fed ha has 2 and-a-half percent growth this quarter. wa

there is another central bank, the boj with a prospect of further rate hikes, not cuts at the boj furtherng in at the moment at 146.30. a little more strength. the story continues with dollar weakness over the last four weeks. we could have a fifth week of weakness. lisa: this is a perfect recipe for the bank of japan officials. you have data that confirms rate cuts in the united states along with ongoing global strength at the same time they did give that hike just recently as well as research suggesting that they are still seeing inflationary pressures under the surface, particularly with wages. this is not written by bank of japan officials. they have disclaimers. nonetheless, the trajectory seems to be higher and they are not moving away from that. jonathan: some top stories for you. alaska air and hawaii are close to finalizing the 1.9 merger. the doj is deciding not to challenge the deal but they still need approval from the department of transportation. the proposed takeover of u.s. steel is backing bipartisan crosshairs. donald trump and josh shapiro reiterated their position to t

how surprised are you quickly the boj blinked? >> not really.they now regret and that's a big part of the theme seems to be persistent. the fed they're kind of consistently behind the curve. this is not something new. they have a history of being so data dependent they wait until the data comes to fruition, it lops them over the head, they wake up and say, oh, we need to react to this. the way a lot of us traders and market participants think we try to be proactive and the fed is sort of inherently reactive. >> you thought they should have cut, they didn't but right now you don't see a need for emergency cut. in september should they go 50 basis point? >> yeah, i don't think they need to overreact here. things are soft. as you noted, everything is sort the trending in the wrong direction. so that's, that's not great but statement you know, last week's labor report wasn't as weak i think the market maybe initially took it but at the same time everything sort of trending in the wrong direction but i think if they cut in september, november, decemb

there is a little bit of calm of course after the boj sent that message. now the market is getting a little bit aptcy again -- antsy again here. it underscores, the vix, i want to talk about what the vix has showed us. so we talked about this, the vix, the fear index. you want to see how important the japan market is? these are spikes in the vix in recent years. ukraine invasions big spike. u.s. banking crisis, big spike. hamas attack, big spike. boj changing the way they do business, rocket spike, unheard of, record-breaking spike. japan, that is why, one of the reasons because japan is a, is a what they call a net international investor, right? they own positions all around the world. the largest happens to be in the u.s. out of three trillion yen, one trillion here in the united states. listen if they start to take money out of our economy, out of their investments here, it is going to hurt us. that is why the unraveling of the so-called carry trade hit our markets really, really hard. i want to bring in a guy who kind of knows this stuff here. daniel l

and it started to happen the day that the boj raised interest rates. because while many thought they would hike, it was still 50/50 in terms of market pricing. >> so, ultimately -- first of all, have we worked through that whole carry trade stuff? unwind? >> that's the big question. >> guy's going to be up late watching the testimony -- >> no question. >> before the lawmakers at the boj. >> so, for -- it was very difficult to figure out how big the trade was to begin with. so, those that are forecasting how much is left, i don't know whether it's true or not. 50%, 75% is what people have said, but just to have that sort of leverage that can -- get such a violent move, particularly in the nikkei, was rather astonishing, but that trade is either going back on, because he says, i'm not going to hike again, or, the governmental pressure, as you mentioned, is so intense that he tells the market, hey, i know you had your hissy fit, but i need to contain inflation and a weak yen is not good for us. and do expect another hike by the end of the year. >> all rig

you have to watch the boj. you do also have to watch the fed. . there has been a lot of chatter about maybe the fed needs to cut interim meeting. . maybe we need an emergency cut. i think that would exacerbate the existing weaknesses because of the divergence we are experiencing in policies. you do want to watch the fed as well secondarily. and watch the bond market. the bond market is saying we are going to get 100% chance of a cut in september. if the bond market does start to ease back off the assumption i think that would be a healthy condition for equity markets which have moved into some kind of panic mode. first sparked by the central bank tightening in japan. then exacerbated by some weak economic data which only created a bigger policy divergence between the banks. scarlet: what counts as a reliable safety play given where we stand? we have had the big three day selloff. . now we are in a turnaround mode. where do you go for the safety? gina: the only safe asset is cash. if you're talking about where we go for safety inside the equity mar

data point, or a boj catalyst?bank of japan in this case, because, they actually got intervention. we were trading 161 on the yen and there was a lot of fluter in the market, a lot of speculation, when they will come in and do something about that. now they've got their intervention, and so, the bank of japan surprising with that hike last wednesday, i think was obviously a trigger for people covering shorts, and you can tell from asset manager data that was clearly happening. on the other hand, it is also about the bank of japan now having to hike rates, because inflation continues to be high. so, i think the next bank of japan meeting will be the key meeting, not too far off from jackson hole, you know, what that could be, i think, if they signal that they're going to be on hold, and it comes back to the japanese yen. >> ben, tim. maybe a comment, a review on my comment, and maybe a question. should we be surprised that the bank of japan has stepped in here? if you are in the carry trade, you are a sophisticated

this depends on the boj tightening, the fed, but it really hasn't had much impact.ed reaction, markets are so one-sided and complacent about loading up on risk. i think it still has quite a bit to go. one thing i'm confident about is it will remain high regardless of where it falls year-end. jonathan: quite a bit to go where? let's say dollar-yen, when you see quite a bit to go, what do you mean? win: we don't really have a handle of how the u.s. economy is going or how the global economy is going in there is a lot of fear right now. next week we get inflation, but even then, i'm guessing that the markets have really jumped on the bandwagon of u.s. recession, devastated. it will take -- u.s. recession, dovish fed. it will take a little while. i think they are wrong on the easing cycle. we are looking at something like 200 basis points the next 12 months. that is a deep recession. i just don't see it. the u.s. economy is still holding up. so it will remain high as markets wrestled with the data and narrative, but at least for 2024, they will avoid recession. dani: yo

margaret thatcher and ronald reagan wrapped together we saw very little change, large military easing, the bojvation, empowering women, and the next leader is going to have to figure out how to reinvigorate that process at a moment when china is slowing, when the us labour market is showing signs of strains. it is not clear if the market he has an appetite

what that's what we're waiting to see i was sparked by the boj moves last week.

jobs report and the recalibrated expectations of what the boj and fed will do. not just the yen rallying but also the chinese renminbi. amidst all of this the levels we are watching on dollar-yen because it has broken through the 100 week moving average. this is close to erasing the declines the yen for this year. let's talk about cross assets. the extreme selling and buying we have been seeing today depending on which asset you're looking at. the topix seeing it's worth day since 2011. we are also seeing indiscriminate selling hitting the bags. we also see a rapid coming down of yields raising the concerns about what we will see four bangs. seeing the worst day since the 1980's. nikkei futures, jgb futures and also interesting to see that on a day like this, a china equities not fearing as badly. a bit of a safe haven. sentiment towards the chinese equities. the steep selling also being seen on the taiex losing the most. we have not seen declines like this ever. the worst decline ever on record. tech stocks taking a beating on the msci asia pacific index. berks

something to consider as we keep and for the boj and jackson hole this week. lizzie: avril hong, thank you. let's continue their preview of the jackson hole meeting. traders looking for fresh clues on the federal bank thinking. tirone powell expected to confirm that a cut is on for september. -- jerome powell expected to confirm that a cut is on for september. mark: not in use a job for the chairman. yes to thread the needle and satisfy the immediate demands, make a clear there will be a rate cut in september probably of 25 basis points and yet somehow he doesn't want to encourage them too much about the number of rate cuts priced into the market for the next year and a half or so. if you look at the derivative curve traders are pricing integrate cuts at every meeting -- are pricing in rate cuts at every meeting. that is not a comfortable position at all. they certainly don't want to endorse raise cut -- rate cuts for too long but they don't want to cause a stir in the market. so much money has been priced into the treasury curve and derivative curves. the ris

ronald reagan wrapped together, and we saw very little structural change, large military easing, the bojnvigorate that process at a moment when china is slowing, when the us labour market is showing signs of strains. and it is not clear if the market he has an appetite for a big risk. two women have thrown their hats in the ring

shares in japan in focus, rallying here at the boj deputy governor came out and said the central bank will not raise interest rates if markets are unstable. it was basically a cold tow toll the face and a moment of relief for the eqequities. japanese markets have been on a roller coaster, seeing their worst selloff since the 1987 black market crash as well as the best day since october 2008. other major markets there in positive territory. >>> okay. let's move on. softbank has posted a net profit of 10.4 billion yen in its first quarter. that's well below its expectations. the japanese investment giant announcing plans for a share buyback plan as well worth as much as 500 billion yen. meanwhile sony posting a profit in its fiscal first quarter, up 10% on the year and narrowly ahead of estimates on strong sales of its image senses and games units. it sold units after cutting its outlook for the console in the prior period. i'm very pleased to say arjun joins us around the desk with more on these stories. walk us through what we're seeing on the japanese earnings front. the yen's been v

it took the boj two years later just to get them out of the negative interest rates. >> you think this should have gone sooner? >> yes. by waiting every month that went by, more borrowing was taking place in yen. it was the last place in the world to sort of get free money. that free money we couldn't necessarily quantify, but we're seeing the result of the unwind now to say, wow, that was massive. we didn't see it while it was going on, to the extent it's revealed itself to be, but it was obviously massive. >> here's the overnight rate, which we can see was negative for so long. they had 2%, but they didn't move to raise rates until very recently. then they finally hiked up last week, but it was this period you think allowed all these carry trades to build up? >> exactly. the other federal banks, all of the world central banks were raising rates except the japanese. if you're a carry trade person who borrows yen, well, you're borrowing cheap, you're getting a weaker yen, and you're speculating all these different things, whether it's bitcoin, gold or tech stocks. you're making money o

there had been speculation that the boj was experiencing political pressure, and maybe that was one of the things that weighed into its rate hike last month. do you think we could see further tightening within the year from the bank of japan? >> i would say there were reasons for the bank japan to raise rates when they did rather than political pressure, and i think it will be affected by what ultimately happens to growth in inflation rather than trying to link that to politics. of course there is always a few politicians everywhere, but can we see more rate hikes? i would say probably, but at this point in time, i would say that a lot of it really will depend on if inflation does cause them to raise rates, and inflation has not really been -- [indiscernible] it has softened recently, so reduces the reason for them to hike. paul: it has been a day of surprises. we also had the rate cut from the rbnz. it was not completely unexpected, but we are getting this line from the governors saying they considered cutting 50 basis points today, but the consensus was for 25 percent. we have new ze

the fed is likely to move to ease and the boj to tighten. let's take a look at the yen. it has strengthened impressively. where do we have it by year end? >> let's take two items here. if the fed cuts in september, the yen will continue to appreciate because the differentials are widening in favor of the yen, narrowing against the dollar. if the bank of japan, and we are going to have some numbers coming soon, clears its throat and says, well, perhaps inflation is not going away we want so we are going to wait and we are not cutting, the end will appreciate. so if you want an overall trend, it looks to be the yen will not weaken. avril: how are you allocating them? andrew: i'm telling my clients to keep away from equities and bonds because too much is at stake in terms of pure expectations and not in terms of numbers. in other words if september comes and the fed does not cut, god help us. we are going to be all over the same thing we have been doing in the last three years. it is time the fed took or did not take action. the markets got jumpy and unappreciative and unce

and it seems to give an indication how bond traders see a delay and the potential rate hike from the boj for this year. tomorrow we have the tokyo cpi print i could put a rate hike on the table. in terms of the japanese currency headed for a second straight month of gains. joumanna: thank you for the comprehensive overview. keeping a close eye on the ramifications of nvidia earnings on asian chipmakers. let's talk more about nvidia in detail. it fell pose market after it delivered an underwhelming forecast and news of production snags. the outlook threatens to cool an ai frenzy that has power to global tech stocks this year. speaking exclusively to us the chief executive reassured it investors by saying the firm is ramping up production. >> we are expecting q3 to have more supply than you to and you want to have more supply than q4. our smaller condition going into next year will be a large improvement over this last year. joumanna: let's get outdoor tech reporter annabelle droulers. i look at these figures and see $30 billion revenue for the quarter up more than 20% year on year, and th