governor kuroda emphasizing the boj's movement to ease until inflation is over 2%.lement ofn the time that 2% inflation target diluted this morning. governor kuroda indicating he would act to see -- the market questioning whether it will be his at all. let's get another take on all of this. we are seeing the market moving sharply. we have seen financials moving. moby -- jonow, john mawby. jon: i think it is another element in central banks trying to work their way out of the current malaise that the global economy is in. japan further down the monetary policy experiment than most of their other global competitors. it is another element throwing more at the problem. --oline: you say their notes the senior notes that the boj is the bellwether where people look to for sentiment in terms of how monetary policy is working, and indeed some of the experiments they are using. what can you tell us about central-bank policy going forward? jon: i think the whole monetary policy environment today is one big experiment. roadoj is further down the than most of the other central y

we are waiting for kuroda to speak. there is a whole variety of opinions out there on the yen market. we will hear from mr. yen a little bit later on. gradually, the yen will appreciate. japan's economy can cope with 9 5. it is the best performing her and see around the world. by the way, the currency devaluation, are they pushing the exports? not according to the bloomberg story. we have gold at the bottom there, anna. animatedpretty week last week. but the bets on gold are changing. anna: that is an interesting line on currency. mr. yen told bloomberg that he thought if the yen got to 90, and then to 80, that is when they would start conversations with the u.s. about combined action. now it's good to be bloomberg first word news. reporter: saudi arabia says they have stepped up efforts to support lenders as they grapple with the effects of lower oil prices. the monetary agency in saudi arabia says they will give banks $5.3 billion. seven-day introducing and 28 day repurchase agreements as part of its supportive policy

kuroda today.n the lgong-term, as we say in the uk, proof is in the pudding. >> we say that here as well. >> pudding is different here. we have pudding. >> but they mean different things. >>> as for that, as to whether it delivers performance in the economy, paul donovan for ubs writing that it does seem difficult to expect the japanese consumer to suddenly declare hurrah, the maturity level on the bank of japan bond holdings has been lifted, i will go out and buy that car i wanted. this is finessing things around the edges. will it lead to more than one day's gain? in the nikkei, maybe a week's gain, will it lead to big gains for the consumer performance for inflation and for the economy? >> will they be able to keep their zero percent target on the ten-year? >> that will require an already active bank of japan coming in, intervening, buying any bonds that go above that level for any yields. we'll see if it works. that's where the credibility question comes down to. it's just fascinating that eigh

this is bloomberg. ♪ a come on, come on, kuroda, twist and shout. japan commits original ban macro economics. chaird's turn -- will yellen waltz to a rate hike? and a vote for trump -- it is a vote against mrs. clinton. this is "bloomberg surveillance ." i am tom keene, in new york. in new york as well, francine lacqua. francine: it is fun. it is packed. ,heresa may is here in new york as prime minister. we are getting headlines talking about brexit. tom: what is the chancellor saying? francine: that he feels he has the tools necessary to support the economy, and the underlying strength in the uk will support growth this year. tom: everyone talking their book in new york. our first word news. here is taylor riggs. the bank of japan has shifted the focus of this monetary stimulus program. the central bank says it will move away from its target for expanding the monetary supply. it introduced a zero interest rate target to fight against inflation. it is another sign of how the presidential race has fractured traditional voting blocs. according to a po

there really is some question about even governor kuroda's leadership here.ore than halfway through nowhere close to where he said that the target would be. where does he go from here? well, he cancer certainly change the yield curve target that they now have in place, but what he did do was to put the boj on a much more sustainable by shifting away from the government bond purchases, which at some point they would have to shift away from because the rate at which they were going, they would run out of government bonds to buy within a few years, so by shifting away from that a moving towards the yield curve targeting approach, he set the central bank up for continual easing for the long-term. reflation usiehard aren't happy about not stepping on the stimulus trigger even further, and so it is a question as to whether he would be real point it at this point, something we will have to keep an eye on an report out over the coming year and a half. angie: if it is not him, any idea who might succeed him and what the policy might be? >> that is a good question. ult

kuroda. the dollar dive.e board because the market lacks the conviction from the dollar reserve. the yen is strengthening and the dollar is declining. the euro against the dollar, we saw nice data coming from europe , spain and france. advancing to the highest level with the best winning streak -- and the dollar mexican peso is strengthening. downdds of a fed hike went and back up to 32% probability. so it is all due to your perspective on that. that ties in nicely with edmund shing, still with us. a quick word on the fed. we pulled up this on the bloomberg. you can input the gdp and inflation data. where should we be now? current fed rates are only half of that. the fed is behind the curve -- what do you think? edmund: i think that is probably correct. a rate in september is more likely than not. we think that could strengthen the dollar. again, you look at that unbelief of at the payroll, it is one number and it can be revised. these numbers are revised consistently. there is a really good chance that we wi

we will hear from kuroda shortly.rom what you saw with the think, doesn't really give them more control? the yield targets, i mean. been manus, you and i have looking at the markets for quite a few years now. since 1999, we have had about 26 to 27 different big policy initiatives from the bank of japan. they last on average, about a year and a half. i am sure this one will be like the others and in 18 months time, we will be sitting around, talking about the latest initiative. i think this one will be as effective as all the anothe othr initiatives have been. when we look at the japanese economy, the issue is not inflation at citation anymore. japanese consumers have the highest inflation excavations in the developed -- inflation expectations in the developed world. in that they are wrong, but that is what they are expecting. the bank of japan does not need to raise inflation expectations. it actually needs to lower them. what it needs to do is to get the wages up, and that is not a job the bank of japan can do easily

going back to the comments coming from governor kuroda. he's trying to set expectations for the policy meeting later this month. a policy review would not lead to a withdrawal of easing. he said that the bank of japan has yet to reach its limits. there's plenty of room to -- he said he would not rule out further rate cut to negative territory. this coming despite kuroda for the first time admitting that a further rate cut could hurt bank profits and pension investments. look at what that did to the jgb yields here. paired losses on government bonds after speculation of tightening led to a selloff last week. remember, it reached a five-month high. you can see where it is today, minus .014. the larger economy kuroda saying japan was no longer in deflation and that global markets have regained some calmness. looking elsewhere here in asia. at hang seng, reaching a one-month high as well: the focus in hong kong, of course, the legislative elections that saw record turnouts in the city. the first election since the umbrella revolution two years

francine: you look at the boj and governor kuroda scuttling -- governor kuroda struggling. we are at 108. a rowthe fifth time in that the boj announced something in the day after yen is stronger. tom: what is the blue up top? francine: the one we are watching his 100. the problem is yesterday, we were talking about the tweaks and the markets are interpreting for hours afterwards that the --aks means that he is whatever he has done, the markets feel like yeah, you cannot do it. tom: the trend is your yen. francine: the yen is your trend. chief for ubs w -- the deputy chief for ubs. didgeridoo -- did through -- did drew yesterday? statement they said they should've gone and yet they did not and she had to figure out a reason to justify it. it was the first time we saw her having to justify a decision that clearly did not match everything else that was going on. francine: why is she doing this? her: i think she has it in mind that if they make a mistake, they cannot recover. i think she is the missing the thoughts that williams and rosen brand have put out there that there is

confounded to what governor kuroda can do next.illes: on the target we think that the boj will stand firm on the need to bring inflation. there is a debate on this. on the technicalities, it seems the boj seems to be nervous -- fell intot that negative territory in july. essentially something around the way you could deliver this is shifting a little bit the focus of the purchases, currently the target. target five and 12. they could create uncertainty on where the boj could focus good from an economist point of view, i fail to see what would be the point in delivering this. francine: is this an inflection point because kuroda could say hold on, negative rates have not worked as well as i have wanted them to. this could backfire, right echo gilles: -- right? gilles: we don't know what type of negative rate he has in mind. it is unclear what it means for the long end of the curve. having negative yields at the long end of the curve creates issues for long-term investors. from the economy point of view, if you stick the curve, why is

take a listen to governor kuroda.ntin framework, there is ample room for further monetary easing in either of three dimensions. quantity, quality, and the interest rate. other new ideas should not be up the table. we should bear in mind when conducting monetary policy is not its limit but a comparison between its benefits and cost as is the case with any public policy. there is no free lunch for any policy. >> kid, what are the limits? are we at, approaching, when it comes to the boj? kit: apparently not. a psychological and game is -- governmentd spending. >> he says it is against the law. but he has said that and many things before. a spot betweenis that and the hard line. we are learning the imagination of the central bankers, you don't want to guess what precise little things. i can buy more assets, a wider range of assets, or i can put in an 48 negative. -- for a negative. the more they virtue have from negative rates or from more negative rates. more negative rates, compensation to the banks, increased lending t

haruhiko kuroda is 50 years behind. i'm sure he wears flared trousers.ie: he looks pretty stylish. whether or not his style of monetary policy is modern, that is to be argued, and certainly you have made that argument. i do want to know if you don't think that those ideas aren't working, so what ideas are working? get you on the positive side and 20 minutes for the rest of the discussion. coming up next, yahoo japan tried to merge with yahoo! before the deal, but why was the proposal rebuffed? more on that coming up next. this is bloomberg. ♪ angie: a quick check of the latest business flash headlines. betting onated copiers as it looks for new areas of revenue. it is planning to announce new machines for corporate customers on monday. xerox and canon dominate the market, but hp is hoping the move will take more of the $55 billion business. the company may make a greater push into 3-d printing as users switch to digital mobile devices. bmw planning a major restructuring of its executive board. the company will also combine marketing and sales operations

we heard some remarks from corona. -- kuroda. highest4 day, rsi, level since the insane rally in the spring of 2015. you have a lot of these risk assets on the way up. most commodities are also getting bid up. for equities, we are very close to one year highs. you look at financials and then you look at the resources. as far as the breakdown, we are looking at 70%, 72% maybe of stocks on the way up. 20% down, 10% unchanged. volumes are decent, not the best. have a look at how currencies are trading at the moment. a very weak u.s. dollar story. dovish, although he basically said as well that monetizing debt and financing deficits is off the table. 9/10 of 1%.own -- down 4/10 of 1%. japan, youout in look at the yields on the 10 year come all the way up until the 40 year, we are basically all the way back to the level of last month. -- of last march. the largeston losing streak in 30 years. the 10 year close to turning positive for the first time since february. anna: the leaders of china and japan refused to meet today on the sidel

boj governor haruhiko kuroda emphasized the new mseasures ar necessary to strengthen the current framework of monetary easing. >> translator: the framework will enable the bank to respond more flexibly than the one now that sets targets on the monetary base and bond buying base. new one allows them to respond, economic prices and the. situation sp. >> kuroda added another aim is to prevent lower interest rates from adversae rly afeblfecting consumer sentiment. it plans to continue its massive easing policy until the annual rate of increase in the consumer price index exceeds 2% and stays above the target in a stable manner. >>> a group of international journalists has published documents of more than 175,000 companies registered in the bahamas. a well-known tax haven. the documents are similar to the panama papers given to german newspapers. through the international consortium of investigative journalists, media outlets around the world including nhk world have analyzed the papers. the documents list directors and owners of business entities. among them, a dutch politician was listed as d

governor kuroda said the bank will not consider scaling back easing measures. he rebuffeded critics to say monetary easing has a limit. >> translator: our policy assessment will be conducted with the a aim of achieviving 2 inflation target at the earliest possible time. some markeket participants are expecting we will talk about monetary easing but we will not have that discussion. >> kuroda indicated there's ample room for quantity, quality of interest rates and he said other new ideas should not be off the table. the governor indicated boj will fully consider side effects of interest rate. should consider kbkt on will role of banks as financial intermediaries as well as possibilities it could affect consumer confidence and volatility. >>> stocks rose on the backs of stronger dollar following u.s. jobs data. nikkei average climbed to a level we haven't seen in three months. phoebe amaroso reports from the tokyo stock exchange. >> reporter: m many investors h been e expecting a rate hike as early as this month. with lackluster nonfarm payroll data now betting o

tokyo share prices finished lower after kuroda's speech. the financial sector fell. as investors are worried that the further negative interest rates he suggested would reduce their profits. cheaper oil and a stronger yen also weighed on sentiment. we report from the tokyo stock exchange. >> yen remained strong against the dollar during trading hours, weighing on sentntent. it surged last week after the federal reserve kept key interest rate unchanged. while analysts say traders are holding back ahead of the u.s. presidential debate. let's look at the closing levels for this monday, september 26th. the nikkei ended down, 1.25% at 16,544. the broader topix fell 1%. looking at individual stocks, the relatively lower oil prices saw the energy sector weighing heavily on the benchmark. impex dropped 2.3% and refiner showa shell was down 2.8%. the strong yen hit export-related shares, electronics manufacturers were trading lower. tdk down 6%, alps electric fell 4%. these apple suppliers are lower after a report said sales of the iphone 7 are weaker than previous model. the

what is going on in japan at the talkingharuhiko kuroda achieved lending rate at the expense of bankthis speech as we speak here this is what we have at the moment with the yen on the move and trading above the 104 level. we are at 103.82. more on what has been happening in japan in the comments from the central bank governor of the bank of japan. some other stories we are following, woodside set to buy half of bhp's scarborough gas fields. the company will pay $400 million, deal that will take stakes into other gas fields. thefield will remain operator. nickel from the philippines may shrink 30% this year. it is cracking down on errant miners, saying an audit initiated by the president means that more than 100,000 metric tons of production have been lost. with everything. businessman -- a philippine businessman in talks ofh banks to sell his shares philweb. shares did tumble on those comments. russia and saudi arabia agreed to work together as the two biggest oil producers. outliningshot of details. vladimir putin told bloomberg that everyone should be on the same page. was that ift

we will be getting the speech at 2:30overnor kuroda p.m. local time.are still close to a one-month low. i want to check out gold. have a look at where we are. 1338. we will talk about oil in a moment. dollar weakness broadly speaking helping to lift the overall price. you look at copper, on the way out. we will talk about oil in a moment. citibank coming out with their latest commodity report, basically saying that the chances of donald trump winning the presidential election are 40%. it donald trump does win, expect this to be very volatile. ounce is the three-month outlook. opec ministers meeting for talks this week amid claims there could be action on stabilizing the oil price. algeria's energy minister says saudi arabia is prepared to cut production by 500,000 barrels a day. >> saudi is a very important member of the organization, so saudi is ready to do the maximum for the success of this event. it is ready for any eventuality. it is ready for a freeze, to lower production, to make it a success. haidi: let's dig deeper. good morning. what does a p

kuroda. monetary policy in the past has been quite effective. it led to the depreciation of currency and increase in equity prices. but now that effect is less appealing. this is a difficult time for mr. kuroda. recent sort of action he has taken is not necessarily sort of -- does not necessarily satisfy the market expectation. market was expecting another aggressive easing of the monetary policy. he didn't respond to that. >> we certainly did see some big moves in the bond market. we saw yields on the ten-year reach positive territory for the first time since march. looking at how the currency moved. we did see the yen weaken to the 102 level. the question will be whether that level and the weakening of the yen can be sustained. we're looking at 101.69. now looking to the fed. the big question will be how long can this be sustained? is this just an immediate reaction? will we see it go back down tomorrow? we'll continue to watch. back to you. >> thank you very much. akiko fujita joining us l

you callchristopher, kamikazei kuroda -- kuroda. why is that the case?nder his regime about the precise opposite effect of what was intended. in my view, qe and negative rates are deflationary, not reflation harry. to give you an example, negative rates in the banking system, reducing margins, they encourage the sabres to save more and encourage people to take -- out of the banking system, as evidenced by the rise in sales in japan this year. they have caused the decline further. so, if these policies continue, they will end up blowing up the whole system. the irony is though actually be situation is not as bad as many people think. inflation, in my view, was in the process of ending before he started adopting his monetary policies. the labor market in japan continues to tighten. the aggregate concentration for people in the economy has grown and given the rising labor force purchase of patient rates that go into the labor force. there is also an interesting boj summerh paper over the that has a lot of data that suggests the japanese economy is bigger th

kuroda has said that bond purchases might fluctuate. we already know that particular of the ability to do a little bit more or a little bit less, but they are targeting 0% on the 10 year bond market. anna: more bad news for kuroda and his boj team in the shape of inflation data around japan. here is juliette saly with the ground up. reporter: a there are different picture from what we saw yesterday, with the exception of the shanghai composite in a positive finish in new zealand. we do see equities under pressure today. of course, as you mentioned, we can see the european banking woes started filter through into the asian region as well, particularly a lot of weakness coming through from those banking stocks. and of course, you have that oil fielueled rally coming through as well. the nikkei is pretty much the underperformer, down by 1.4%. about this,peaking but we have seen more upside coming into the yen. japanese equities giving back what they gained yesterday. we did have some economic doubt as well with japanese consumer prices fal

verbal indications, if they do work from draghi and kuroda, well, talk is cheap.he ecb be resources to engineer something that is already taking place? i do believe however, that in the current environment, central banks might want to call the central bank's bluff. that renewed steepening might not be sustained. so, the ecb will have to take some action in december. the bigger picture here however, if anything, they might have reached a limit, in terms of how much further the long-term yields could fall from here. from that point of here, the risk, three to six months out, longer-termher yield and tighter global conditions. caroline: therefore, can you cut through some of the mist that is building at the moment? are you on the side that draghi did not go because he did not need to and he is waiting for more volatility coming later? or, is there just nothing more he can do? is there too much turmoil within the ecb that they cannot agree which way to pull? >> the ecb is still able to deliver and indeed, the measures we expect in december could have an impact and pro

is waiting for general kuroda -- governor kuroda. wait and see what the boj is going to do in the review coming up. if they start changing the way that they do things, maybe we will follow suit. michael: it was interesting that mario draghi of adopted the same will dos the boj -- we a review and come back to you. and the bank of japan does the same thing though they are one step ahead in the process. you also have to remember that in contrast with the fed, the ecb and the boj have made it part of their policy to get the right market impact as a price the market. both central banks have done that and perhaps that will change. with the ecbsaw that mario draghi does not think that his policy will have much impact on the banks. guy: caroline? technical issues. we will fix that and come back. it has been one of those days where technical factors upset us. michael, let us turn our attention to china. this is the interbank lending rates. it is starting to get more elevated. do you think that this green line, 6.7 is sick never prevent -- is

meantime, the boj may be preparing for life post governor haruhiko kuroda. cornerstones may mean it is ready to wave goodbye when his term ends. good to see you. i think we are the just thing the boj's decision to target that you'll curve. is it going to work? to say thatis fair most economists don't think it will work in terms of bringing 2% inflation, in terms of getting the japanese economy out of this pattern that it has been in for a long time of going between expansion and contraction from quarter to quarter. the bottom line is that most economists don't think the central bank can do the job on its own, regardless of what the framework is. you have demographics that are very challenging for japan. the population is shrinking, and there is a reduced appetite among japanese companies and households to take on new debt. we just had some numbers this morning in japan showing that corporate cash remains near a record at $2.4 trillion worth. what just a question of can policymakers do outside the central bank to persuade japanese companies and households to

governor kuroda speaking yesterday, saying they are dedicated to that 2% target.s also saying to sentiment risk. the only thing they did in that july decision was to essentially double down etf from ¥3.3 trillion to ¥6 trillion, a vote of 7-2. this was a meeting before they changed the entire picture. yvonne. not a huge reaction of the yen. we are seeing it slightly weakening now. it sure has big ambitions for this years singles day shopping extravaganza in china. this year's november 11 event should surpass last year's records. is taking a closer look. you were there last year. how big is it becoming now? >> they can carry much more than their actual body weight, ants. it is just one shopping day of the year, but it has become so big, partly because of the alibaba units really pumping up on november 11. $14.3 billion in sales last year , and the head of the international operations for ant financial, likely to surpass that. operatinglready, ant alipay. there are many more products that are going to be offered this year, many more merchants, and they are already i

kuroda, speaking earlier this morning. onilyn wilson still with me said.ould the market reacted further negative rate cuts from the boj? >> i the market was expecting more of this last weekend did not get it. so, i think actually, the market will take a very positively. it has been very confused by last week, when the deposit rate was unchanged. the make of japan was going to target around a 0% yield for the 10 year, and try to maintain the yield curve at current levels. guy: what is going on here? >> i take it they were trying to appease, in a way, the pension funds, who have been suffering from the very flat yield curve. but then, it really hasn't impacted the market. thei think, even with announcement that they are going to target inflation above the 2% target to try to get inflation expectations higher, because that has been the main issue, of course. i think last week was quite underwhelming. i think last week people had been expecting more, in terms of a rate cut, or guidance that way. now, kuroda is delivering on what was expected previously, so we

-- what did we get from kuroda earlier on? has later, symptoms higher, sometimes lower. at this point, we are going to see any massive changes. guy: robin ganguly joining us out of hong kong. thank you. opec came to an agreement in algiers as it tried to limit output. more, will kennedy joins us. i tickets the price and this chart here. -- i take you to the price and this chart here. we are down on the quarter. will: i think that reflects skepticism about whether they can make these output cuts stick. i think it is a significant move because what we saw this week was a reversal from saudi arabia. the two years, they let this policy producing and will. they said we cannot take the economic pain anymore. how long it takes them to get there? it is going to be crucial. the opec negotiations is about who takes the cuts. guy: there are many different views in the market. we are in a situation where opec is losing credibility it opec has failed -- credibility. opec has failed. opec has failed and therefore the credibility of the orga

francine: mario draghi's move towards qe mirrors a recent decision by the bank of japan's kuroda. has monetary policy hit its limit? joining us now is holger schmieding. great to have you on the program as always. you are one of our most important guests who for a while has said central banks have been doing too much, the ecb needs to scale back. our markets finally realizing and does that explain the turn in bonds we're seeing this morning? holger: markets should be realizing that the economic situation in the eurozone is not bad enough to really warrant significant more ecb action. we just need to get used to the fact that central banks cannot lift trend growth. i think mario draghi is absolutely right. keeping the options open but with the eurozone economy growing somewhat, there is no need for more central-bank action at the moment. markets better get used to the notion that central banks are not in the business of pushing growth above trend. francine: the mandate of the ecb is to push inflation up. can they at least do that? do they need to do more to it that 2% target? holge

banks rally as kuroda -- subzero cuts. yellen in the wings is an odds of a september hike fades.omberg surveillance in new york for the week with tom keene. there is the little matter with the boj and reports from the oecd. we will be speaking -- we will be speaking to catherine mann. they are downgrading their forecast be -- for gdp locally.

the boj's theures, had -- pointing to government losing confidence in the boj's measures, how does kuroda clear to us? what are the implications? brendan: i think you would see that from intimations from politicians and rivalries within .he ldp ultimately central-bank policies do not change because of officials changing their mind. it comes because of wider lyrical forces and coming back to the federal reserve, i do not expect anything to come out of this meeting because essentially it is a pre-election meeting of an obama said. -- said. -- fed. mark: are you in the trump camp? it is a fed that has for rate loan -- rates low obama's purposes so if they do not hike tomorrow it could be under further criticism from the likes of donald trump. are you in that camp? brendan: in terms of interpreting what the fed is doing tomorrow i would be in that camp but the big question beyond that, if we do get to a trump presidency is how much of this is actually going to translate into new federal reserve asked and new -- acts and new officials running the fed. mark: what sort of monitoring of the fed m

governor kuroda giving that press conference at the boj. you can watch that.gging into that. let's get to bloomberg first word news with tom mackenzie. ♪ iran is building a consensus on stabilizing the oil market. that is according to the mohammed bahr khiem do, he spoke to bloomberg in rome at the future of energy conference in collaboration with any. >> i met with the minister as well as the president. both of them have a short me that iran will do everything possible joining hands with group, within the opec as well as outside opec to build a consensus. i am satisfied with the insurance. -- with the us assurance. tom: theresa may has insisted that britain's decision to leave the european union was not a decision to walk away from allies. this came during her first speech to the united nations. >> whether these people voted to leave the eu, they did not turn -- they did not vote to turn inwards. facing challenges like migration , a desire for greater control of their country and a mounting sense of globalization is leaving working people behind. they demande

kuroda says he has ample room for additional raising when he addressed central bankers at jackson holewhat clue does is give us to this meeting next month? >> governor kuroda, as you mentioned, is signaling with again, as he has before, that increase to foreign policy is possible. we know negative interest rates could be cut further. it also could mean an increase in asset purchases. he is certainly pushing back on the view from some that he is running out of ammunition -- .ro a limit on the bond purchases, that negative rates have to much damage, but we do have some other analysts starting to question the idea about whether the bank of japan could move in to learn -- local government bonds or corporations, and we can see the effects on the infrastructure project. a look attake i home prices, up 5%, personal income up more than 2% cured how much housing appreciation can we see without income rising just as much? ofthere has been a lot momentum in home prices. there are different from the stock market. they have been going up since 2012, but at a slower pace. it was more like 10%. now i

we saw a little bit of movement in the yen on the back of what governor kuroda said. now let's get straight to the first word news with nejra cehic. nejra: oil has stabilized after opec agreed to reduce production for the first time in eight years, surprising traders who had expected lenders to maintain output. crude surged yesterday after opec agreed to cut production to a range of 32.5 million barrels per day. the committee will recommend limits in november with their ran exempt. stocks in india and the rupee have fallen after the army said it had attacked terrorists in pakistan. the director general of military operation says heavy casualties .ere inflicted he says the operations have now ended and no more are planned. california, america's largest issuer of municipal bonds, is preventing wells fargo from underwriting state debt. that is after the company admitted to opening potentially millions of bogus customer accounts. will testify ceo before the u.s. house financial services committee about the scandal. he has already given up millions of dollars in stock to q

there are three banks -- yellen, me,hi, kuroda -- and to this is a tangent or first derivative chart. the rate of changes of these balance sheets. europe is running out of paper to buy, right? steven: they are running out of government paper to buy. tom: so what are they going to buy, citigroup shares? i am trying to get you in trouble with --we are going to bring that chart back. thank you, michael mckee, for shoving that a front of my face this morning. steven englander is with us. resetting international relations with us the september. elections hormats on and on the dash to september 26 and the first debate. this is bloomberg. it is gorgeous. ♪ francine: this is "bloomberg surveillance." to theet straight "bloomberg business flash" with taylor riggs. is $.5 airbus has won -- ion in it systemsways says are back online after computer problems caused widespread delays. passengers in the u.s. said it took two hours to check in to flights. in some cases, employees were writing out boarding passes. the latest in the series of data signaling that momentum in the european largest economy

kuroda says he has ample room for additional raising when he addressed central bankers at jackson holelue does this give us to this meeting next month? >> it means we have a tense wait until the next meeting. governor kuroda, as you mentioned, is signaling with again, as he has before, that increase to foreign policy is possible. we know negative interest rates could be cut further. it also could mean an increase in asset purchases. he is certainly pushing back on the view from some that he is running out of ammunition. on the one hand we have analysts indicating that he is up against a limit on bond purchases -- that negative rates have too much damage, but we do have some other analysts starting to question the idea about whether the bank of japan could move in to local government bonds or government corporations, and we can see the effects on the funding infrastructure projects. alix: if you take a look at home prices, up 5%, personal income up over 2%. how much housing appreciation can we see without income rising just as much? dr. shiller: there has been a lot of momentum in home

what is the killer question you would ask governor kuroda to try to put some clarity in what they areieve? robert: the question to governor kuroda would be, how would you adjust your 10 year interest-rate target as economic conditions evolve? if the interest rate goes up, what we do with that zero target? do you raise it half? i want more clarity in the formula they are using to set the yields target. backine: ok, so let's go to the yield curve. are the markets saying that provides little benefit? or are they questioning how the control it? robert: i think the markets are confused. they are not sure whether this is a quantity or a price. they are not sure whether this is an increase or decrease in quantity. among financial markets, among investors, immediately took the statement that they could raise or lower the amount of quantity to hit the yield chart -- i put that as a potential tapering, and therefore revalued in response to it. i think the markets are quite confused. they are confused. rightly so or wrongly so? what i want to get a sense of it is, who is wrong? it is boj versus

we saw kuroda say these actual rates are having an impact shorter term on japanese bank earnings and that was also a signal that, hairks maybe they're starting to get it. also mark carney really kind of helped the uk market when he said, look, we get it, we're not going to go to negative rates unless we really have to. >> what about the e.m.? is it a bubble? is it something that could potentially blow up? we're seeing all these inflows into emerging market bonds again. once the fed finally hikes again, september through december of next year, it's bound to blow up, no? >> the fed situation, think we can both agree, is very important. and certainly if the fed hikes too much and the dollar was to really appreciate, that would be negative for e.m. but there's a lot of other factors. first of all, e.m. in the past few years has been taken out of shot. the second thing is it's very dependent on commodity price which has also been taken out of shot. we think oil will be higher in 12 month, maybe the same level in six months, and that's going to help e.m. and e.m. earnings start to recover.

. >> kuroda alleged another aim is to prevent lower interest rates to effect consumer sentiment. >>> for the latest on the boj decision we have a special guest in our studio. a bank of japan executive director until may and currently an executive at miso research. boj trying to win back confidence among investors, traders, market players who have been questioning the boj central policy decisions of late. what's your take on the policy changes made today? >> yeah. i think this was generally productive and constructive and also that the market will come to this decision. >> but we're hearing some new terms here about yields. >> yes. the problem was people considered too much flattening of yield curve means long term interest rate was too low. this could actually have a detriment on the bank's profitability and mediation and also people who have a funding the insurance company may also suffer from long term yield it's very, very low. actually this green line was very low. after ten years minus 0.2. now the current yield curve is around here and boj decided today to generally maintain to

monday's comments from central bank haruhiko kuroda who tried to soothe markets by talking the benefits rather than the consequences of recent easing measures. >> in regard to the g20 meeting, where are some of the key currency pairs trading this morning because we did see another jump in the british pound? >> exactly. let's start with the dollar/yen. the key pair there. 103.45 to 48. it has fallen back just a touch before trading to 104. following the pop higher after the sell-off that we saw the u.s. jobs on friday. now, a lot of focus also on the yuan after the g20 meeting as investors remain concerned over its recent fall and any measures by china to address its weakness. and as you mentioned, the british pound, ai, the pmi services data for the uk showed further robust activity for the uk economy, actually sending the pound to a seven-week high against the dollar. it also jumped against the euro and the yen. however based on a media report, an interesting bump in the road ahead. maybe a japanese publication of a memo at the g20 summit meeting saying that its banks may leave britain

boj governor kuroda said earlier this month there's still ample scope to push the interest rate further into negative territory. policymakers are also expected to discuss whether they should set a new time frame for achieving their 2% inflation target. their current goal is in about two years. >>> now along with the boj the federal reserve will also announce its decision later on wednesday. so jittery movements are expected in the global markets ahead of these policy meetings. on monday, u.s. markets ended flat. both the dow jones industrial average and the tech-heavy nasdaq closing just a touch lower. now let's see how tokyo markets are opening. we're going to go to ramin mellegard for that at the tokyo stock exchange. good morning, ramin. tell us what you're seeing over there. >> good morning to you, ai. markets playing catch-up after the public holiday on monday. as you mentioned it's all about the central bank meetings this week. the federal reserve, and of course the bank of japan. and maybe more focus on the bank of japan as very few are actually expecting any move by the federal

kuroda said back in japan. here is what he had to say. >> even within the current framework, there is ample room for further monetary easing in quantity, quality, and the interest rate. other new ideas should not be off the table. but we should bear in mind when conducting monetary policy is not its limit, but a comparison between its benefits and costs, as is the case with any public policy. there is no free lunch for any policy. threeuroda, the dimensions of monetary policy. but we have seen over the last few days has been a significant backing up of yields at the back end of the bond market in japan. let me show you a chart you can find on your bloomberg. the yield is absolutely collapsing in japan, but it is this move here over the last few sessions as the market prices out the possibility that we will be further size in terms of the bond purchases being generated by the boj. maybe we will not see much theessive buying in future. >> we have a tale of two central banks. the bank of japan are expected to do t

last week, not only governor deputy, kuroda, but his highlighting the cost and benefits of boj policiessing similar language, providing analysis on the negative rate tool, not to mention recognition of the danger of excessively low yields. j.p. morgan saying the boj communication strategy has changed in the past several weeks. what is the reaction we are seeing? yield curve. the they warned the central bank may not like excessively low yields on that part of the curve. we are seeing some reaction. take a look at this chart. official signals, a steeper yield curve. yields see the 20 year back above 0.4%. have economic numbers out of japan today, machinery orders as well as inflation numbers. >> exactly. we are expecting to see more capital spending data out today, wholesale prices as well as machine orders. we are seeing machine orders month on month expected to fall 2.9%. that would be after growing 8.3% the previous month, so take a look at this. it has been so exacting a little bit, up-and-down throughout the last six months. different story for wholesale seeing pp ie we are ceilin at

to yellen and kuroda as the fed gives the latest decision. david: stocks rise around the world in the dollar weakens before central-bank policy meetings this week. alix: the bank for international settlements is once again sounding the alarm bell in china after a review shows the credit to gdp gap as well above financial risk levels. jonathan: a warm welcome to "bloomberg ." , live fromn ferro new york city. the overwhelming consensus is the boj is the bigger one, but no consensus as to what they are going to do. david: also, they have more options open. a lot of variables in this thing. they committed or interest in to see what's going to happen. alix: the super bowl of financial markets is wednesday. i don't watch football, but morgan stanley is out with a note today saying the yield curve in japan met stephen anymore. we've seen a 50% retracement from january levels. they don't want that much of a steeper euro. big question for the fx trade is if they come to -20 basis points to you by resell the end -- the yen? alix: a great show, wit

let's move on to the bank of japan pay we heard from governor kuroda earlier.ut new initiatives to stoke inflation. conducting a conference of review of monetary policy. of crossbridge capital is still with us in the studio. what you expect from september 21? manish: the bank of japan still believes negative rates works. englandand the bank of does not believe it, but they believe it. i believe they will probably do more negative, down to -20. it is likely they will increase their qe target. nejra: and you seeing this announced in september? manish: yes. so.ink the reason is simple. look at the japanese yen. if you have a strong yen, import prices are cheaper. it will not let you meet your inflation target. in japan, the strength of the theency is the preserve of finance ministry. not the bank. the finance ministers he said they will be happy with whatever the bank of japan will decide. the bank of japan has not done anything. abeeard from prime minister that new fiscal measures are being announced. so we have this coordination. at this point, the bank of japan

one of the things that governor kuroda has been talking about is this sort of corman. the japanese -- sort of core measure. the japanese look at inflation different from us. the measure that kuroda has been looking at as the core measure, that does not look nearly as weak as the inflation number you showed on your screen, but it has been softening. given that the have a target of 2%, they are falling short. tom: it is almost like a cocktail, not that i would know how to do this. like a cocktail of monetary tools trying to reflate. it is not working. francine: can i show you my chart? this is the money chart in japan. tom: this is your delay at the midtown tunnel. and the: unemployment white line is basically the boj balance sheet. it is a structural problem. tom: within the structural problem, what have we learned about reflation within these experiments whether it is the fed, the bank of japan, or ecb? neil: i think what we have learned, going to the unemployment rate it is the phillips curve across a number of economies is really flat as a pancake. that basically mea