Transcripts For BLOOMBERG Bloomberg Markets Asia 20180123

Rishaad tariffs on washing machines, the reaction reverberating this morning. Lets take a look at whats happening. It definitely doesnt favor u. S. Solar firms, chiefly. Lets have a look at this chart on the bloomberg. Yellow line showing what has been happening first with solar for the last year, about 104 moved to the upside. One of the Biggest Solar Companies in china showing a a whole but appears as pretty much flat in the last 12 months. This is after concrete evidence to support trade agencies finding chinese imports harm the domestic market in the u. S. , according to the u. S. Court of appeals for the federal circuit. As a result, we are seeing reaction to all this playing out. And saying what they feel about, saying they will put some tariffs on u. S. Imports as well. Haidi we are hearing from the sayinginistry in seoul, they requested from the wto to put a stop to the trade concessions to the u. S. Solar is one part, and washing machines are the other. Samsung stocks falling, samsung responding think this is a great loss when it comes to u. S. Workers and consumers with a tariff on washing machines. Solar starting off at 30 , dropping to 15 . On washing machines is higher. Sayingseeing reaction, that consumers and everyone would have to pay more. We are watching this trade. David is looking at the markets. The number of analysts who have said trade tensions, a trade war continues to be a risk they are watching. It did not materialize last year. Could this happen . David it could. I will show you the chart in a moment, the synchronized pickup in exports. Let me start out with what rishaad was pointing out. This is the solar index. A lot of these are not listed in the asiapacific. They dont necessarily export to the u. S. I will give you two examples. New stocks opening now. This industry in taiwan. I have taken a look at some of these names and their exposure to the u. S. Is virtually none. That doesnt mean outside this group you wont have any. That being said, these are the big names to give you a sense of where to start looking. The broader picture looks like this. When you look at solar capacity around the world, a lot of the experts go to china from the likes of malaysia. You do have capacity in the u. S. , but china far and away has the most solar capacity. You are looking at the number of operational solar plants on the chinese mainland. This is one of our charts. You can zoom in and get a sense of how massive this operation is on the chinese mainland. You have japan as well. South korea also very much in the mix when you look at that. The other thing to point out, besides solar, washing machines. Lg electronics down as much as 5 . It has come out and said it is disappointed. South korea looking to reinstate some of its tariffs. Lg electronics, 30 of sales go to the u. S. 30 of overall revenues come from home appliances. We dont know what the exact breakdown is as far as washing machines for the u. S. , but that is something to watch. Initial reaction down, recovering somewhat. The synchronized recovery in exports, a lot of lines here, i know, but it essentially shows that japan, taiwan, south korea, synchronized and a pickup in exports from the start of last year or two years ago, and where we are today. Is this at risk . Not a lot of this goes to the u. S. Some of it goes to china as well. Rishaad these Solar Companies and washing machine companies, thats all part of the first word news as we go over to paul allen. Paul seth curry has responded swiftly after President Trump made his first big move on trade, targeting asia with new on imports of solar cells and washing machines. South korea has responded by it wanting to reinstate trade tariffs on u. S. Products. Fundnternational monetary is warning policymakers to be prepared for a new recession. Globalen, they predict growth to accelerate. The fund raised its forecast to 3. 9 , up 2 10 from the projection in october and the fastest pace since 2011. Managing director Christine Lagarde welcomed the report that says threats remain. Productivity, low the aging population, and on and on, and future potential growth, all of that will continue to weifggh on mediumterm prospect. Paul protests around in the air israeli erupt. Vice president mike pence says the state department has been told to begin preparations immediately unmoving the u. S. Embassy to jerusalem. Europe toasked replace the u. S. As the leading arbiter. A Restructuring Investment Bank says it wants to sell bonds and currencies. Ther 100 billion china led bank has expanded to 84 member nations from 57 when it opened two years ago, and wants to raise that figure to 90. The president says hes ready to go to market now, although the size and tenor of the offering is not yet complete. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. Im paul allen. This is bloomberg. The threeday federal shutdown is coming to an end with lawmakers passing a stopgap bill to fund the government for the next three weeks. Jodi schneider is with me with a look at the latest. Is this just another bandaid . Reporter thats exactly what it is. This will be the fourth shortterm spending bill that has been passed since the government restarted october 1, the start of the fiscal year. Lawmakers have already said they will probably end up with a fifth one in february, because they wont be able to settle larger terms spending issues like how to fund domestic programs and the military by then. The real question is also what happens with immigration . Rishaad how does immigration play into this . Reporter the democrats took a stand on this. They said they wanted to attach to a must pass bill, like a spending bill, restoring the undocumentedng immigrants who came to the u. S. As children. Rishaad the dreamers. Reporter right. To be able to stay. President trump had said he is getting rid of the law that allows them to stay, the obama era law. He said initially he would be open to Congress Picking this up. The democrats decided to push for this and attach it to a must pass bill, for which their votes were needed in the senate. They only have 51 republican votes, and they needed 60. But in the end they were getting blamed more for this. The white house did a good job of casting this as a fight between keeping the government open and immigration. The democrats were painted the schumer shutdown tag stuck. The democrats decided in this Election Year that they would be better off with a promise. Its a pretty weak promise from Mitch Mcconnell to take up the issue. He didnt say they would vote on it. They have no assurances from the white house or House Speaker paul ryan that they would go ahead with a vote on the immigration issue as well, so they settled for a lot less than they had initially bargained for. Haidi just before the president firedoff to davos, he this missive when it comes to trade. What do we know so far . Lots of reactions in asia. Reporter the president has made good for the first time in a major way on his Campaign Promise to take on what these as unfair foreign competition in trade. , as much as tariff 30 on imported solar products, and as much as 50 on foreignmade washing machines. These are the first moves in this regard, and of course, we have started to see some shares in asia dropping as a result. The question is, will the supply more broadly, and what will the reaction be to other World Leaders and davos when the president shows up after having made this move under a little used provision under the u. S. Trade law . Haidi rishaad we will be revisiting over the course of the morning. Thank you. Jodi schneider there. Coming up, how tarnished is trumps dealmaker brand . The u. S. Shutdown analysis continues. Haidi plus, decision day for the boj. Hisns former chief shares take on corrodes tough balancing act. This is bluebird. Haidi the bank of japan finished a twoday policy meeting. The governor is expected to dampen down expectations of policy changes. Our policy editor Kathleen Hays is covering this in tokyo for us. No actual changes, but perhaps we will watch for that change in language and expectation. Language, communication, particularly when it comes to the bojs communication to bond markets, which are so sensitive to any possible changes. The economy gets stronger and inflation does move a little closer to its target. President ned by the for the institute for affairs. Onal monetary importantly, he was japans currency chief when he was minister of finance, 2004 2 2007. Welcome back. Pleased to meet you again. Reporter it is lovely to see you on this sunny and snowy day. A special occasion. Reporter in so many ways. The bank of japan, this question of communicating to the bond market, does governor kuroda have to take more steps in terms of filling out his strategy, not just in big picture, but eventual steps towards less stimulus . Think he has a lot of time to think about bond issues. People think he will i think this is a good time to about thew he thinks policy situation, not only for the quantitative easing policy, but control over the issues. In this case, i think he should the some clear guideline to markets. Reporter its not only a good time . Is it a necessary is it important that governor kuroda do this now to provide more clarity . I believe so. The economy is getting right. They say the economy is on the right track. Expect Monetary Policy to be easing. We will see how he will take steps. That is very important. The bank of japan and governor kuroda are careful that if he says one way, the markets will react, he will cause volatility, and thats why hes reluctant. Is that a mistake . Should they go ahead and make these explanations now . He has his own thinking, in his own words. Sometimes the dialogue between the central bank and the pressuresometimes the affects it. The central bank should tell how they will move on in the coming days. I think it is the time to move on. Reporter how much more difficult is it going to be, since the Federal Reserve does keep raising Interest Rates . What will happen to the yen, and is that a risk . I dont think it will have an impact on the Foreign Exchange market. The ecb is going to follow, but chairman,n with a new the ecb says just as we will it should notear, be expected this year. We have to know how we are , and how the boj is thinking, it should be clear. Reporter you were the currency chief for japan. If you were at currency chief now, what would you do . The interesting differential between the u. S. And japan is in the last year, it has been a pretty stable period come. To 10 years period compared to 10 years before. The euro is coming back and the japanese currency is following. Is the yen going to be at the end of 2018 . There will be some negative. Also there will be some stability. Even though there is some confusion, the economy is good. I dont see any big changes happening in the middle east. Korea, i hopeth nothing will happen. Reporter there is a lot to watch when you are watching currency, thats for sure. Thank you so much for joining us. He is the former minister of finance, minister currency chief in japan. We will send it back to the studio. We will have coverage of the decision and the bank of Japan Press Conference later today. In tokyo. Athleen hays lets look at the business flash headlines. Australias numbers down at the moment. 4 10 of 1 in the sydney session. Pat reagan saying catastrophe claims and other charges contributed to a 1. 2 billion ins, coming from wildfires california and storms in australia, as well as Hurricane Maria in the caribbean. All of that could add about 130 million to net costs. Meni reports say will of Square Capital is looking to lower the public profile, trying to turnaround three years of public law since. Losses. Employees took another hit in december, agreeing to a 200 million settlement. Buying bacardi is tequila maker petrone patron. The sales of the drinks have been surging. Surging more than 700 between 2002 and 2016. Other brands owned by the same include grey goose and bombay sapphire. Haidi coming up, netflix shares are ahead after bringing in more than one million subscribers, despite a price hike. Their best carter ever, quarter ever, next. This is bloomberg. Haidi as we wait for earnings, no less than 80 earnings reports expected. Lets go over to the ones weve got in the u. S. Netflix is dominating headlines after accumulating more subscribers. Both good stories . Forrter absolutely investors. Netflix soaring almost 10 in extended trading after a very strong report, merely on the strength of growth in subscribers. They signed up 8. 3 million customers in the fourth quarter. Thats the high that beats the highest analyst estimates, around 6 million. Is in large part to this Stranger Things series, the gift that keeps on giving for netflix, which has really pioneered original programming. They now have 117. 6 Million Companies worldwide, growth in the u. S. , europe, and latin america. Sales grew by a third while earnings almost tripled from the prior year. A straight shot higher for the company. They did take a 39 million havingfor unused content to do with the firing of kevin spacey, an after caught up in a Sexual Misconduct scandal. Rishaad wynn resorts continue to play a winning hand in macau, announcing another hotel in vegas. Reporter what we had with wynn resorts was an incredible growth story. Macau is another gift that keeps and giving. They operated on almost 4 million a day. Far in january, they are running at end operating profit per day of more than 5 million. Wages are accelerating. Operated there are talking about positive activity going forward. In terms of anecdotal optimism about the chinese new year, in midfebruary, theres a lot of money coming into macau. Lets talk about the new hotel in las vegas. They will create a hotel for about 400 a night. Optimistic. S very if you look at the year to date for the company, 15 gain, half of that achieved in a monday session alone. Rishaad thank you. That was su keenan in new york. We are counting you down to the start of the session here in hong kong. We are looking at the free market and futures contractors. They moved to the upside with tailwinds from wall street. This is bloomberg. Retail. Under pressure like never before. And its connected technology thats moving companies forward fast. Ecommerce. Real time inventory. Virtual changing rooms. Thats why retailers rely on comcast business to deliver consistent Network Speed across multiple locations. Every corporate office, warehouse and store near or far covered. Leaving every competitor, threat and challenge outmaneuvered. Comcast business outmaneuver. In hong this hazy day kong, hazy but marvelous. On the way up, asian equities, looking as though we have that shutdown which has come to an end in the u. S. , not spooking markets. U. S. Equities up to record highs. Tariffs placed on solar panels and washing machines. Oil moving to the upside. The bank of japan, making policy decisions. We are in the midst of a very hectic earnings season and it is looking good buspar. Thus far. Haidi plenty more to come. The bank of japan, looking to the ecb later this week. Key u. S. Gdp numbers, as well. We have the shutdown not relieve not really leaving markets anything other than sanguine. Resumption of the Government Operations expected tuesday as voted the stopgap measure through. Markets shrugging their shoulders. Markets headed for record highs despite fresh concerns over the possibility of trade tensions. Shanghai and hong kong, a fairly tepid open. David lets wait for that to get underway. At the moment, we are at highs at the moment. You can brush this off. Whether or not it is serious, that is another thing. Wnyynn macau, the resorts may be planning a new investment. We may be getting more details. There we go. Have a look at the substantial volume coming through. Percent, and those are the new threads you may want to follow. Macaus gaming revenue, 25 . Afteresorts extends games topping estimates. Some other things happening now, have a look at the stock movers. On the back of the new trade, the tariffs from the u. S. , and of course, about any minute speck we heard from the south koreans looking to reinstate some of these tariffs on u. S. Goods. Ngjin energy, is down. Lg electronics, the washing machine story, and the broader picture tells you when you look at dollarwon, some strength coming through. Have a look at the shanghai composite. Here is the snapshot at the open. Overall gains for the index. The hood, whether we are getting any Movement Across the energy space, not at the moment. For thisird of 1 index. The broader picture, lots of things to consider. In 30 minutes, we get gdp numbers out of the philippines. Later, inflation out of singapore. In two hours, the boj comes out with its rate decision. A bit too early for them to move, that is the consensus so far. It is before breakfast, too early. Although have a look at this chart. At some point this year, this is what they might have to tweak given that we are seeing spreads widen. The economy in japan, doing, outperforming potential. This bit right here, when you have the spread of treasuries over jgb, and dollaryen going the other way, it might give the boj reason to perhaps allow yields to move up a little further from that. That decision could be out within the next two hours or so. Rishaad thanks for that. Lets get you back to sydney. Lets get to paul allen, who has the first word news headlines. The u. S. Air force has retained confidence in spacex despite the loss of a classified satellite launched launched by a nine rocket. Available data shows nothing to change their status. That bolsters spacex. They may increase scrutiny of the satellite builder. A white house official says President Trump became withed with commerce the commerce secretary over the pace of trade action with china. We are told they were at they have nowd reconciled their disagreements. Officially, the white house says trump loves wilbur and has full confidence in him. U. S. Stocks set another record as lawmakers grudgingly accepted a deal on ending the Government Shutdown. The move towards a shortterm spending bill that will fund federal agencies through february 8 set the stage for the government to reopen after three days. Mostly indifferent on capitol hill, playing on optimism over corporate earnings. Turkey stepped up its war of words with the United States as its military advances on kurdish fighters in syria. President erdogan says shipments of weapons to the kurds would be turkey. Inst washingtons backing of cursive of Kurdish Forces have sparked anger in turkey. Than 100 20 in more countries. Im paul allen. This is bloomberg. Headlines from korea, this is south korea, launching a Crypto Tradingnt system. The crackdown on Insider Trading of cryptocurrencies is formalizing what they are doing, implementing Money Laundering guidelines and doing it as the end of this month. Korea is going to ban Crypto Trading using virtual accounts. We will give you more beginning on january 30. Her is no hiding if that is the case. Something the alarm over Corporate Bonds in china, warning warning defaults are scheduled to pick up in 2018. Three companies have missed debt payments this year. A credit reporter is with me now. This is not something Goldman Sachs is predicting. Lots of others have done it, as well. Why do these guys, goldman, expect this to happen . Two reasons. Intensified the crackdown or drain of liquidity from chinas financial system, which is making funding difficult for some of the companies. Remember, we reported for the best quality companies, they are borrowing at more than 5 Interest Rates. That is high. They expect the Economic Growth to moderate in 2018. We have had a good year last year, but this year, the economistsconsensus was 6. 5 . That combined with a slower pti growth could also hurt the profitability of some of the companies. As you said, there are three companies that have defaulted. Based in a is province. The company couldnt pay the bonds because of cash shortage. Another one missed the payment because it couldnt issue new debts. The funding environment is challenging there. That one surprised me because it seemed like a company of statequite a bit backing. It is across the board. What are the latest regulations we see when it comes to the liquidity crunch . Good morning. There are quite a few regulations that came out since the beginning of the year, mainly aimed at the crackdown on shadow banking sectors as well activities. A few key ones that have the most impact include the crackdown on the interest of loans. As you have reported, interest loans are usually brokered by with between two parties the funding usually going to the real estate developers. Some banks are using their own funding to lend for that purpose, and package that as interest loans. Regulators are calling that practice calling for that practice to be stopped. Another one is the malpractice in lending. Regulators are asking banks to step up examination when it comes to lending to the real estate sector and the local government funding vehicles. Outaad how does this play for the investor . What is the readthrough for analysts and what investors should do . For the main voice i have heard talking to analysts is, stay cautious. This is a tough year for Bond Investors after an iraqi year last year. It is better to focus on Higher Quality bonds and stay away from the weaker ones because those ones might have higher default risks, naturally. Wellknownnager, a manager in china, say the highest risk sector is real estate and the local government funding vehicles, because for the real estate sector, not because banks arent lending to them less, the sector is going through a consolidation phase. The weaker ones might run into more challenging environments, business environment. For the l j the local government funding guarantee funding vehicles, the risk is heightened for those. Rishaad thank you so much for that. Having a look at that call by Goldman Sachs, as well. Chinas bond market may pick up. Joining me from sydney, i will hand it over to haidi. Haidi lets talk more about this. We felt a bit of a splash in the space where we had default in the corporate sector in china falling last year. I want to bring in tom. Is this a year where china gets serious about derisking . Tom it is. I would point out that the Property Developments are an obvious place where the chinese Central Government will allow defaults to occur. I would add that the banking industrys structured products sold to west wealthy investors are an easy target. Those products contain leverage. It is really leverage that the Central Committee is going after. Where we should expect the default. I dont see the defaults as necessarily a negative. There is they are a sign of an economy moving into the real world. It is a positive in some respects, because it is a free, open economy. In some respects. Haidi more open. It hasnt been in the past. This is an indication that the moves we saw 12, 14 years ago in banking, where healthy banks were rewarded by the government and poor banks were not rewarded or were hurt by the government, now we have gone the next step and we are entering into the shadow banking era. Haidi what is a best Case Assumption when it comes to china . You here in australia, heavily exposed to china, when a third of australian exports are headed for china. A huge codependence there. Is the assumption that steady as she goes, or gentle moderate ration moderation of growth . I would argue exports like wine feed into consumption, and the consumption theme is at the core of the plan we saw last year. On the opposite side, a moderation in growth, lets say we get 6. 4 this year. That probably means a lower call on iron ore exports from australia. I think the Australian Market is still wrongly assuming that high iron ore exports will continue through this year and next, and they are not. That is an area of equity market where we really have to be careful at the moment, because it is an opportunity for selling. Rishaad it surprises me a little, because it seems that the Global Economy is firing on all cylinders now. It is, but the utilization of iron ore exports from australia particularly is utilization by china. Iron ore exports to china are the main gain here, and that is where they are utilized most. The construction in china over the last decade has been roads, tunnels, airports and the like. The next decade will be a different type of growth in china and it will be along the lines of consumer, health care, and expansion of wealth throughout the middle class. That is a different type of growth, and a different type of export mix rostral you. Rishaad absolutely. For china itself, these are things people have been looking at for the last few years as places to make money effectively in equity markets. It is crowded. On top of that, some internet stocks. Crowded and the Technology Side is not the part where the Australian Market is particularly exposed. It is areas Like Health Care and agriculture, which are particularly sensitive to australia. Rishaad stick around if you would. We have lots to talk about, including the tariffs that have been put on solar panels and washing machines by president. This is bloomberg. This is Bloomberg Markets asia. Rishaad we look at the latest is nice flash headlines. Lg displaysfourthquarter operating profits plunged 95 from one year ago. The 42 million result compared ofh analysts expectations 245 million. The sales were ahead of estimates. The apple supplier blames the result on falling prices and a investment expected into led screen investment. Haidi Emmanuel Macron welcomed ina plants a plant northern france. The money will go to expanding the factory outside the city and create 800 new jobs by the end of the decade. Macron is seen to report business friendly policies. Easeincludes measures to stricter labels and tax changes to attract foreign investors. Rishaad chinas biggest electric car maker is to go public and announce its swap value. It will buy beijing electric, statell become the first backed new energy manufacturer to list on the mainland. It will compete with byd as another electric car company. In 2015. Sing the u. S. Made President Trump has his first big move on trade, targeting asia with new tariffs on imports of solar cells and washing machines. South korea has fired back, seeking to reinstate tariffs on u. S. Imports. The likes offrom samsung, saying nobody is a winner. Thomas murphy is a partner. Interesting, seeing what samsung says. It is as appointment for u. S. Workers and everyone pays more, including trumps base, consumers. It is a zerosum game. Trade retaliation like this is always the response to an increase in tariffs. We know that from history. And it is scary to think that the decision on u. S. Remaining and nafta has still not been made. Haidi they are meeting again this week. That could be a turning point. Thomas it is a good chance there will be. Worriesries the what me the most, the president has come through on so many promises, because the promise to pull out of nafta is borderline mad. But we may actually see that is something most voters in the u. S. Dont understand. They dont realize that toyota makes its cars in the United States, and in the south, where wage rates are low. It is attacking Foreign Companies almost for the sake of it, and it is a worrying trend because it is one of the greatest dangers to equity markets. It could cause severe disruption. Haidi everyone who comes on the show says the event this year would be a trade war happening, trade conflicts, and that plays into what potentially derails, a good news story we have had globally. Your assumption is we are late stage expansion cycle globally. Does this dampen your view . Is this a threat for this year . Yes, in the sense that our view on markets and the view i espouse to clients is that this is a good time to take the pointed investments out of the portfolio, like emergingmarket shares. It is the time to do it now. Atond that, we have to look what it would mean for the developed market exposure, the bigger parts of the portfolio. If one were to fear a trade war, one would also want to underweight the largecap exposure. Coming into that way of thinking now, it is a good chance to take cover because you could argue that if equities give you inflation plus for over the longterm, we have had our 2018 return already. This is an extraordinary month we have had in january. Im advocating cutting exposure. Here in largeoint case is it is is it a for donald trump being seen to do something by his core voters or does it run deeper, that we should be braced for greater economic nationalism and deeper protectionism . Thomas we should become a because we have had a clear message from him that that is his intention. I see no reason to believe that he is not going to come through with that. But i dont think there is much economic understanding here. Which leads to even greater fear on my part. We have a president who pretty inh spent most of his life new york and new jersey. He is not worldly, but that is the man we have so we have to work with that. Some economic policies like the tax change have been fantastic for markets, but lets not get caught up in the bullishness. We have had a gift with this rally. Lets not expected to continue, because what is on the horizon is not positive. Rishaad do we get a gut check soon . Thomas i couldnt understand you. Check, a big move down, a correction. To imagineis easy that happening, because we now have almost no volatility, which means that a small move in the direction, say, of trade restraints or anything like that could lead to a shopper fall in markets than what would otherwise occur if volatility were normal. And it is not normal. It is way below normal. Haidi thank you so much, tom. Thomas murphy, partner at a scallop partners, joining us in sydney. Coming up, is the worst over for Property Developers in singapore . Why analysts are up eight about the market. As is bloomberg. This is Bloomberg Markets asia. Im haidi lun in sydney. Rishaad im Rishaad Salamat in hong kong. The property slump. Analysts are calling an end to the downturn after a fouryear slide in private residential prices. Question is, why are property prices expected to turn around and increase . Years offour consecutive declines in property prices in singapore, analysts finally say we are on the start of a property up cycle. Singapores Economic Outlook is getting rosier, which means confidence is underway. Saw home last year, we fields reach their highest since 2013, and last year, we had aggressive developers. We saw a series of blockbuster deals, one of which was in may when a Chinese Consortium bid one billion singapore dollars for a residential plot in singapore. You are an investor looking at the property market. What are you worried about . Tal a couple things. The central bank has potential oversupply and singapores slowing population growth might undermine our recent property recovery, but when we spoke to analysts, they say if you look at unblocked deals were collected sales, although many of them have fueled concern that this might bring the potential of oversupply into the singapore property market, we wont see this redeveloped properties until 2020 at the earliest. Haidi in terms of expectations going forward, what does the market or Market Participants and analysts see . The top three developers in singapore release earnings next month. It will be interesting to see how they perform, because analysts say they think the thean go further if stoxx can go further and evaluations are further. Two developers were among the top five best performing stocks on singapores benchmark times index last year and lastly, it will be interesting to see whether they will be priced into singapore home prices this year. Us. Aad thanks for joining a turnaround taking place for house prices, residential prices, after a fouryear slump in singapore. Asian equity markets are on a bit of a tear up, heading for fresh records. Oil climbing at the moment, and this with a nice tailwind coming out of the street of dreams. Wall street setting new records, as well. The Government Shutdown is behind us. Respite for Something Like three weeks. Oil moving to the upside. A bank of japan decision on Monetary Policy. Nothing expected to change, perhaps in some loosening taking place, perhaps a loosening it in the amount of bonds they are buying. The star attraction, netflix, and absolute blowout number there. The prospects for japan and beyond, ed rogers is with us next. President trump sparking a trade spat with asia, putting tariffs on solar cells and washing machines. The battle seems to be over but the war is going on, u. S. Lawmakers agreed to end the shutdown, but the stopgap runs out in a mere three weeks. In the bank of japan, no policy change is expected, but investors are trying to read between the lines. Also coming up, no staff, no checkup, no cash. Of instorea future shopping. We have an update from seattle. This is Bloomberg Markets asia. Haidi we do have breaking news crossing the bloomberg, President Trump signing the stopgap funding bill to reopen the u. S. Government on tuesday. It has been a couple of days of chaos, and negotiations. We managed to come through with the vote pushing through the stopgap measure, a spending bill that runs out on february 8. It extends the negotiations when it comes to the dreamers discussion, questions of immigration for young, undocumented immigrants that will occur over the next few weeks. Markets, the the can is kicked down the road for another three weeks before the decision will have to happen again. We are getting further developments out of south korea, for the reaction to President Trump firing this trade misses when it comes to Solar Panel Tariffs and tariffs on washing machines made by foreign manufacturers. We are looking at this line from south korea, saying they will sign a petition with the wto. We are seeing these titfortat reactions. This is what a lot of economists have said would be one of the biggest risks. One of the biggest risks last year with the start of his presidency last year, and it looks like he is making good. Rishaad it does seem like an emboldened white house at the moment, hitting back with tariffs slapped on foreign washing machines and solar products. What is at the south Korean Administration going to be doing in response . They said they have filed the petition as was mentioned, but we will have to wait and see some of the specifics as they emerge. The trading day underway in jakarta, lets look at that. It is a day of positivity. Jakarta also on the way up. News here ate bad the moment. Just add to what you were saying, china coming up with their own line, dissatisfied with u. S. Tariffs and saying the u. S. Misuses the trade remedy measures. A developing story here, we will get more details here were also waiting for details on the gdp out of the philippines. When we have those numbers, we will get them to you. Across a lot of the benchmarks here. The main benchmark at a record high, south korea up 1 , jakarta coming on up 9 10 of 1 . You can see the asx 200 over in australia snapping a sixday decline. The dollar down yet again. Very much in focus fairly following a fairly sharp move. In and maybeme look to stem the strength in the taiwanese currency, we will be looking at that. Take a look across the benchmark year, broadbased, 6. 24 on the way up. Where also getting numbers out of the philippines, let me get them for you. For 6. 7 . Estimate was that would put the philippines, if i remember correctly, at about 6. 8. Ina is at the philippines is right about in the middle. Lets look at the solar story. One of the top stories right now. There are lots of nuances when you talk about the solar story. A lot of companies are not listed in asia, most of them listed in the u. S. They make a lot of products not just in china, but malaysia. A lot of them go to the United States, thats the point of the chart. There is some capacity there, but china is head and shoulders across the world in terms of the number of operational solar plants, the leader in the space. You consume in on this and have a look quickly across the east coast and the number of solar plants on the chinese mainland. You can also see japan and other areas. That is 1628. Thats a wrap up of the markets. Haidi lots of news, not all of it positive, that markets are being pretty resilient. Some lights from china, the reaction from the trade misses followed trade trump, from president they are saying that he is misusing the trade tariffs. Lets get you uptodate with the first word news. U. S. Stocks set another agree to aawmakers deal to end the Government Shutdown your shutdown. It funds Government Agencies through february 8. Investors appeared mostly indifferent to the drama on capitol hill, weighing it against optimism over growth and corporate earnings. The International Monetary fund is warning policymakers to prepare for a new recession, even as it predicts Global Growth will accelerate in the next two years. The fund raise the forecast to its for 2018, up 2 10 from production in october, the fastest pace since 2011. The managing director welcomed the report that says threats remain. This comes from the crisis, the aging population, low productivity and on and on. Future potential growth, all that will continue to weigh on mediumterm rustics. Mediumterm prospects. Turkeys president says american weapons shipped to the kurds would ultimately be used against turkey and questions why his country is still u. S. Ally. The Asian Infrastructure Investment Bank says it wants to sell dollar bonds and is open to considering securities and other currencies. The 100 billion china led bank has expanded to 84 member nations from 67 when it opened two years ago and wants to raise the figure to 90. The president says he is ready to go to market now, although the signs and tenor of the offering are not yet complete. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. Man, this is bloomberg. Rishaad lets head over to singapore and join mark. We are looking at these tariffs at the moment, and the thing is, the question i suppose it has to be asked is given the south korean and chinese responses we are getting on an ongoing basis at the moment, is this the first salvo in a global trade war . Is a serious it concern. It is very coincidental, china last night i was in china last night with traders and i was arguing about how the bull , basedlooks very sound on the three pillars that repeat of a Global Growth, earnings in liquidity all supporting the global bull market. But the risk we all agreed was genuine, was if there was a global trade war opted by some actions that came out of the u. S. This was about 12 hours ago i was having this conversation and suddenly we get these headlines this morning. Theyre very much tariffs targeted at asia. Risk, and it is only the opening salvo and you hope they could soothe tensions if trump makes it to oppose this week two davos this week. Be slow torobably respond to aggressively, but it is something that investors should be all over in terms of monitoring. Haidi i suppose the timing is interesting, on the eve of him going to davos, a forum for globalization and having to deal with World Leaders who are no doubt irate when you look at the response from south korea and china just today in reaction to this. Marx, every economist and strategist we have talked to has said trade tensions and a trade war is one of the against risks of this year that did not materialize last year and this fore. S it to the what does it mean for emerging markets . A lot of people are saying there is still plenty of way to go for it. Argumentsstructural behind emerging markets are very positive. The structural arguments for general bull market in equities are positive and emerging markets are a leverage play and that. Thats where we see the highest level of growth and some of the best valuations. Equities are particularly a good way to play the structural story. However, there are genuine risks in this trade war and it doesnt even have to escalate into a fullblown trade were between china and the u. S. , that would be cataclysmic to the Global Economy and Financial Markets. Itsnt have to be doesnt have to go that far to be a problem for emerging markets. After is imply that more seriously at risk again that nafta is more seriously at risk again . Even if trump just pulls out of nafta but doesnt raise more tensions with asia, that would still be a blow to Global Growth. To how lets move donald trump may have been emboldened by the tax reform measures he managed to get through and the shutdown, he signed that off as well. The shutdown is just a bandaid for the next three weeks or thereabouts. Looking at it,rs they seemed to shrug it off. Mark there was an expectation that would be a resolution. We have had many shutdowns before and we always seem to get a resolution. It was seen as a negotiating tactic. What is worrying as we have not kicked the can very far down the road and we have the debt ceiling coming up as well soon. That will be an issue that comes back onto the radar for investors. It has not gone away, it has just been delayed by a few weeks. I think what we have this kind of tension in the u. S. , it is a concern. The democrats need to see the Republican Party does really proper negotiation for immigration for this to be a proper event. We need to see some progress and bipartisan deals. If we get that, hopefully we can get past this of it this event that has been delayed to february. But when you combine this with the trade threats, it is a slightly worrying time. Rishaad mark joining us there from singapore. You can follow mark and more on the story and all of todays trading on our rocket live blog. Our markets live blog. You can get analysis from our expert editors and find out what is affecting your investments at the moment. This is bloomer markets. Bloomberg haidi enjoy the party while it last, that was the message in davos at the economics for. We have a record levels of optimism, but the ceo of the Canada Pension Plan Investment Board sounded a note of caution. Given were asset prices have run to now, it is unlikely we can expect very high asset priced risks in the next three years. I think they will be quite depressed. Rishaad looking at the bank of japan winding up its tuesday policy meeting in the next couple of hours or so. Is expected to attempt down expectations of policy changes. Maybe a slight tweak to the official announcement, but what could that be . Rodgers edd rogers. Ed my favorite topic, japan. What will happen . Probably not much. Rishaad that could be some nuance, everybody is looking to read between the lines. Ed everyone is reading the tea leaves, as it were. Will governor kuroda be reappointed . What about the rest of the team . From our point of view, it will be nothing seismic. Beexpect governor kuroda to reappointed and that policy wise, there will be no changes on the major parts, being we need to see 2 inflation. Rishaad are they going to run out of assets . Ed they actually are to cap, thats where the story gets more interesting. There are 18 trillion sitting japan, andlines in at least a good 20 or 30 its to get out of japan and Government Policies are intending to do that. There is no sane reason to be buying more gdbs appeared we have plans of dollars of gdbs. We have trillions of dollars there. The internal part of the story i think will be when we are watching how the Wage Negotiations go on, weve been having an incremental increase in wages i think you might be surprised on the upside. Its one of the first times that in a couple of years, maybe it is a 2 or 3 or 4 number. Rishaad doesnt move the needle for inflation . Before we came on, you said it would be like watching paint dry and to we get to the 2 target. Isnt that and overshoot target . Ed absolutely right. Rishaad lets be clear on that. Ed thats what we dont think any policy changes are in place, there arent even any major tweaks to the idea, the targeting of the tenure, the flat yield curve we see, we dont think that will change targeting of the 10 year, the flat yield curve we see, we dont think that will change. What are the important numbers behind this . Fortime high, 1. 55 jobs every applicant in japan. Unemployment at alltime lows. Certain industries have zero unemployment. Construction industry, they had problems building for the olympics. They have run out of construction workers. Have people who do manual labor jobs anymore. The population implosion is eventually going to lead it to wage inflation, eventually lead to more productivity. On the productivity side, the japanese have forced that from the top down, the last seven quarters of growth we have seen in japan and the earnings revolution, if you will, has been very much a productivityled increase for japanese companys beard theyre getting a more efficient and better, they have been forced to all of this with forced to. Boj saying with the we have to sit and wait. Aidi some of these demographic issues you are talking about can only be addressed with structural reforms. A lot of them are close to impossible to being affected, things like immigration policy. They just keep firing arrows. When will we see the third arrow . Ed i would argue that structural reform has taken place, in many respects, under the radar. The changes in focus on board of ships, the focus on creating worldclass infrastructure in terms of how you govern companies, the shame index. Think about the very strong focus, the leadership from the top on things like yesterday investing and on things like esg investing and stewardships of societies money. I would say those are major changes in japans internal dialogue and how it interacts with the rest of the world. Haidi i want to bring a chart, this is the outperformance we have seen for japanese banks compared to the Broader Market in november, when governor kuroda made the controversial comment that the markets ran with. Is this as good as it gets when it comes to the way the bank rally goes . You are saying these expectations are based on false hopes the boj will change their strategy in some way. Ed i would agree with that, i think it is a bit of a false hope if you think the boj is going to undergo a major change. That is unrealistic. Haidi plenty more to talk about, ed will continue the conversation with us. Fromg up, feeling the heat President Trumps trade move aimed at asia. This is bloomberg. President trump has sparked a potential trade spat with asia, raising tariffs as much as 50 on solar cells and washing machines. Peter joins us now with how beijing could react. Beijing highly displeased, as you could imagine. Right. Chinas ministry of commerce has already responded and said they are struggling to set aside they are strongly dissatisfied with these measures, but it is important to say that china has been expecting this since day one of the Trump Administration. What is surprising is that it has taken a year to get to this point. Expectinge should be counter punches, the question would be, what would they actually look like, what shape would they take . Peter chinas also been thinking about a gentle measures to take in response for more than a year now. To happenat is likely is china will take targeted measures that demonstrate to the Trump Administration there is a measuresaking these against china, but were not likely to see moves from china which significantly escalate the situation because after all, when china says it doesnt want a trade war, it means it, it is not in their interest. Continues,situation china is scoring easy points from the Trump Administration and terms of International Reputation as a globalize or as trump pushes America First, that is very much in chinas interest. Rishaad thank you very much, lets get back to ed. That is the question, isnt it . Is it a shock to his voters in an Election Year with some key states coming up congressionally , or is it ultimately him being true to his promises and indeed enforcing deeper protectionism . Certainly the Trump Administration has the 2018 elections well in mind, the Republican Party is very concerned about the next election cycle. So solar power and washing machines. I would say not only is this a message to china, but look at the states where there are significant manufacturers of washing Machine Parts in the u. S. And who the congressional representatives are where they stand in local races. Trump is learning to play the d. C. Game. This is not a trade war, it is a great argument. ,e needs to show his base camp i am fighting for you, and he needs votes and certain people to get reelected, and there are certain states that if he is warg to engage in a trade or argument, who is he picking to protect and why . Is it posturing and political strategy, is there not to haveeat in this impact on the synchronize Global Growth story . Well, how impactful are washing machines and the Global Growth story . If it is cars or solar panels, i will buy into your argument. Washing machines . Not sure it hangs in the balance as to who is to make the washer on a washing machine. I think you have to take that into consideration. It is not posturing, it is real. Trump is trying to find a way to run the government, to get republicans reelected in 2018 and keep his majority power. This will start to play out in his in this trade war, that is more of a trade argument, because the u. S. And china cannot afford to go to war and i dont think they want to. Rishaad we have to return to bank of japan. Looking ahead to the Monetary Policy decision, no real changes expected, but we are looking out if there is any change to the nuance . Investors are looking for any update in that language, that will be key. This is bloomberg. An yvonne man with the first word headlines. China and south korea responding to new u. S. Trade tariffs on solar panels and washing machines. They accuse washington of misusing trade measures. South korea has asked the wto to suspend concessions on u. S. Imports so it can reimpose tariffs of its own. This move was after the u. S. Solar market jumped after hours. Officials say President Trump became frustrated with wilbur ross last year over the pace of trade action against china. We are told they were at loggerheads as the president wanted quicker and stronger action that they have reconciled some of their disagreements. The white house says that trump loves wilbur. Radio sweden was told that a man was on a train with two sweetest up laments when two sweetest. Swedish people he disappeared in thailand two years ago. He turned up in custody in china. And embattled commodity trader was at a twoyear high. A private conglomerate is said say theen, but sources two are not yet in contact. Noble has been battered by losses. It is trying to reach a restructuring deal before a Coupon Payment due on january 29. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am yvonne man. This is bloomberg. Rishaad thank you. Looking at the boj at the moment, perhaps coming out with topping. Ion on rates looking at the background of tariffs being introduced and solar panels and washing machines by donald trump. We willrnment shutdown probably be talking about in three weeks, because it is a bandit. Around 80have earnings reports out this week. Secret aussie of global synchronicity of Global Growth. The tariff issues starting to play out, solar panels and washing machines, it is one of the president key Campaign Promises to get tough on trade. Also when it comes to the boj, not a decision to change as such, but expectations of growth inflation. Any backthere has been into the still papering the markets have been expecting. Governor kuroda is expected to dampen expectations when it comes to policy change. The could be a slight tweaks to the official announcement. Thats get it over to Kathleen Hays, in tokyo. We are counting down. When are we expecting what are we expecting . We will try to get to her in a moment. Anytime now we get the bank of japan decision. A lot to work a lot to watch out for this week. Talkad and nobody to about that in further detail than ed. How does the yen playing into their thinking . Ed i think they are reaching a level to be very concerned. We are bouncing around 110, 111, and there will be an impact if they start to taper bond purchases. The maneuvering they have to do at the tactical level to keep Interest Rates where they want them to be, to foster the 2 yenwth will impact dollarin and exacerbated by the political problems in the u. S. I think we are starting to revise our opinion that we might see the one of five, 110 range. In the shortterm. In the longterm we believe the yen will weaken. Thein the shortterm and political things going on, were back to the and being a safe haven currency and focus piling in. One of 5, 110 could be a new range for a short time. Haidi do you see this relentless negativity when it comes to the u. S. Dollar continuing . Ed could you repeat the question . Haidi do you see the week dollar environment continuing . Ed yes. Did a pieceu just earlier on u. S. Dollar value, it is much more emerging much more a moving target. When the u. S. Government shuts down, the markets do react. There is true impact on the value of the dollar and willingness to buy treasuries, hold u. S. Dollars as reserve currency, all of these things. The politics will be impacting the value of the dollar tremendously. These are the other major currencies such as the euro or the yen. Rishaad lets get back to your home. We have Kathleen Hays over there. You have a question for ed . Tohleen first, id like congratulate him because year ago, the first time i met him in tokyo, he said he really thought then this economy was starting to turn and things were becoming different and it was time to pop in japanese equities. It was a timely call. After a year, people are wondering where are we now . Is it time for governor kuroda to take that step, to start giving us a better sense of how these steps are going to be taken someday . He is not ready to do it right now. Ed first, thank you for that acknowledgment. I truly appreciate it. Where are we and where is governor kuroda in his thinking right now, these are great questions. Where are we in the japanese equity story . We think we are in the early innings of this game. The increases in productivity, the rising earnings, and the undervaluation generally and the undervaluation. Generally speaking, we are looking at 14, 16 p value where in developed markets, much higher valuation levels. The reason is that japanese productivity continues to increase. What does that mean for governor kuroda . He still feels a lot of comfort, that he still has time to really stand fast. The japanese economy will improve. From a Western Point of view it might seem to incremental, that seven, possibly eight straight quarters of positive growth is positive growth. Yet it is unprecedented in the last 20 years in japan. Thats why the stock market is at 20 year high. Lets not forget we are well off the alltime high and that is the major difference between japan and other developed markets. In the u. S. When we reach new highs, they are alltime highs. Japan is nowhere near back to getting to the 38,000, 39,000 level. We are at 23,000, a long way to go. We are still in the very early innings of this game. You have been doing business in tokyo now for nearly three decades. Wantingotiations, abes wage increases. What are you seeing in the labor market . That kindistic to hit of wage increase, will it feed through to growth or will people have to spend more money because inflation is higher eventually and that will camp it down will tamp it down . Ed while inflation is a problem, discussion is a year away, at a minimum. In japan. Be story is fascinating. Four months ago, he was assumed that in the water, he was going to be replaced. The changes in his political fortunes are astronomic, and you need to focus on that come investors need to think about that with regards to impact on the japanese economy in japanese policymaking. The terms he has laid out have been very clear, the goals, the western media and press and investors have been very frustrated with the pace of, where is your third arrow, your structural reform . A couple of years ago, when we to. 0,about his aversion this is a multiyear story. Neveraction in japan comes immediately, you have to be patient. We are telling investors, you have to keep that in mind. But we are going in the right direction, and abe have the confidence of the people and has been very clearly given the electoral mandate to continue on this path. Rishaad the question i want to get into, you are a denizen of tokyo. How has the atmosphere changed in the last two years . Does it feel richer . More dynamic . Is it getting back to the old way it was . Ed i would love to see a return to the 1980s but i dont think that is going to happen. Rishaad the music was quite good. Ed [laughter] the restaurants, food, social life are all fantastic. Having lived in japan for most of the last 30 years, one thing i can say is that the japanese never really felt poor. Everybody looking in from outside said you failed, but because there is so much money on the sidelines and such phenomenal favors, there was not a sense that it was a disaster. What has changed in the last two animals again, the spirits or green shoots or whatever analogy you want to use, there is much more positivity. Definitely in tokyo, and that is different from outside of tokyo. Where businesso, is done and the commercial and political leaders of japan merely reside japan primarily reside, there are people flying in from outside of japan to do deals all the time. There is a bustle, and a larger sense, not just going shopping and im going to buy my baguette and enjoy my meal. What are Japanese Companies doing, what aris the economy doing . Is not expressed yet and inflationary terms, which is what everybody wants to see, but there is no doubt that many in tokyo have turned the corner, getting rid of the deflationary mindset. Quietly, there is a growing confidence but japan is starting to get things right. Penultimateis the Monetary Policy decision for governor kuroda. He is a hot favorite for another term. Is it meaningful . A change of leader at the boj, or will they stay the course . Ed good question. Reason governor kuroda were not to be reappointed, the policy is not changing. Lets make that clear. The course is set, this is the way japan works. It took them years of debate to get to a conclusion expressed by the Prime Minister in a political sense that we have to have a goal, the goal is to percent inflation, we will do a we have to do, tweak where necessary, target 10 year bonds, lots of different fiddling to be done. You have to be clear, when the japanese have decided on a political goal such as this, that is the goal and all policies will eventually reflect the goal and whoever is sitting in the seat of power will reflect that policy, even if governor kuroda would leave. We not see any change in the policy. As an investor and someone who has been a resident of tokyo for so many years, what is the most important thing that governor kuroda has on his plate as he gets ready for his team to make the decisions as he goes into the press conference this afternoon . What will be the success of him and you and your investors . Ed if we are talking at the highest levels, the most important thing for japan is continuing to navigate the course between china and United States. You have significant clinical north korea and regional issues, and an economy t you wanted to do what you wanted to do what you wanted to do. The United States is japans most important political parter. Most 2004, it was also its important economic potter economic partner, but that has changed. That is the modernday challenge for japan, how to navigate between the two. Stay with us, lots more to come. Let kathleen go, Kathleen Hays in tokyo as we continue to wait for governor kuroda and the boj. Policymakers to be race for a new recession. We will be hearing from a chief economist, next. This is bloomberg. Haidi the International Monetary fund is warning policymakers to be prepared for a new recession, even as it predict scoble close predicts Global Growth will increase. Discussed theist implications. We look at the emerging and developing markets, we have seen them open up, we have seen them reform, we have seen them introduce monetary and fiscal frameworks that are consistent with stability, and we have also seen many of them, not all of converged of them toward advanced country income levels. Not always that close but it has gotten better. Reforms dot friendly differently work. And tax policy, you have to be careful on what you tax and what you dont, and you have to be careful about revenue, and what you spend it on. Just saying tax cuts alone, that is not a recipe for growth. It could be part of a recipe, but there is a Bigger Picture you cannot lose sight of. I to get back to the study today, which countries stuck out for you . What was the story of better Economic Growth . At some level, the eurozone ,as surprised us just because you know, recovery from the Global Crisis has been punctuated by a euro area crisis. Not that long ago, back in 2016, we were worrying about deflation. Now we see a very widelybased search upsurge in growth in europe. They have had structural headwinds growing quickly. France, germany goes from strength to strength. That has been a pleasant surprise. Japan, as well. I noticed that real pop and lift. Japan has benefited, there is a temporary budgetary support, but also from the Global Environment and recovery of world trade. Asia in general, you know, is growing strongly. Imfs chieft is speaking in davos at the economic forum. We are live all day in doubles, joined by some big names including bloomberg ubers ceo. To stay tuned for that. Lets get back to ed. Global economy, imf raising its forecast . We have had good growth. What is japans role in all of this . They have been making hay, no doubt. Ed they have been. Rishaad you can see that from normal gdp figures. Ed absolutely. The Global Economic recovery continues, for all of the political dysfunctionality we have observed in the United States and europe over the last two years, things are getting better. You have to look at the evidence, which is the data, and the data speaks. It speaks fairly loudly, and that is part of the japan story. If the Global Economy is recovering, that export base, the chinese growth of the middle class consumer, the indian middle class consumer, these play into japans traditional strengths as a next one of highquality, middleclass goods. The story continues to be a good one, that is why the japanese i think one of the big problems was four years ago, they thought this would be happening and it did not. For a number of years, the economy, the post 2008 fallout, it has been far longer and deeper impact than anyone ever predicted, quite friendly. They thought, we will throw tons of money at this, do quantitative easing, we will have a one or twoyear slump and be back on track. Thats not the way it happened. Time forxtended recovery is in our view what led to this political dysfunctionality, where you have to throw all of the bums out because the man on the street in those developed economies has felt mistreated, abused and not spoken for in this political process. The reality is, we have the recovery, the global developed Market Recovery that everybody thought was coming for five years ago, and that is great for japan. Haidi at what point in the cycle are we when it comes to the Global Expansion . We are no more than midway through it, to be perfectly honest. Why do i say that . Because companies countries like japan and the stock market dont reflect a full recovery yet. 38,000,get back to 39,000 on the index, we will talk about getting back to where we once were 30 years ago and that will make sense as far as Economic Growth reflected in stock market prices. Will we see a return to ipos . I think this year, if we see the chinese cell phone manufacturer, where are the bigname ipos . Weve been missing this globally for a number of years. Why has Venture Capital and private equity replaced the normal banking function of moving risk capital from savers into Public Companies . That is a question, i dont know if they are talking about it in davos, but they should be. Thats why the men on the street feels left out. Rishaad banks are evolving, i guess you could say. Ed well, if they can survive. Regular she has been devastating. I can take you as an International Business person who has Bank Accounts and businesses in different countries, the environment who was created the environment that was traded for anyone to succeed in the financial industry turned from bad to worse. Some of these socalled productions put in place are an excuse to have your Complaints Department grow 20 times and stop making topline profits. Rishaad great to have you here in hong kong, have a safe trip back to tokyo. Coming up, years and no cahsiers and checkout line. A look behind amazons go store. This is bloomberg. Cashiers, no registers, no money changing hands. That is how amazon sees the future of instore shopping, launching an outlet seattle with no staff or checkout points. We went to see how it all works. We are here in front of amazon go, retailers new Convenience Store concept that lets you enter the store, get what you want and leave without having to stand in line or pay a cashier. Customers have to download a smart phone app, and they get a code to enter the turnstiles in the store. Inside, they can pick from sandwiches, salads, wraps, drinks, typical fare like milk, all of those sorts of conveniences. You what you want and walk out without paying anyone. The phone has another feature, if you felt you were charged for seven mistakenly or not happy with something, there is a refund button to the charge eliminated form your from your account. They opened on monday in downtown seattle. There was a line around the block at lunchtime. People waiting to get in. Theon here is taking on 550 billion Convenience Store industry. This is just one store, there are 150,000 around the country. We will see where this goes and if they bring the concept to other markets as well. Go stores. Ose were our reporter in seattle. We are looking for the bank of japan to come out with its statement on Monetary Policy, no change expected. Investors looking at any nuance in the language. Saying governor kuroda is likely to be reappointed and there is a feeling out there that any delay beyond noon tokyo time could see the yen strengthening. The next hour should tell us that. Boj, coming up. This is bloomberg. Will and you anchor and 11 00 in hong kong. Baker welcome to Bloomberg Markets asia. Anchor President Trumps beig tariffs, and beijing says so. Anchor and counting down to the boj, no policy change is expected, but investors will be reading between the lines. Congress within the stopgap funding bill that is out in just three weeks. Anchor and going to davos, hoping to convince others that reforms are on track. Today, checking the boj, not out yet, just expected later. The more speculation we might. Et that they might be changing we are not expecting any kind of change here when it comes to the boj. Lets have a look at what we are doing across the board. A lot of bad news this morning. No problem. There we go. Stocks, a record high, gdp 6. 6 and inflation coming out of singapore. Speaking of inflation, have a look at oil prices closing in on 70. No big losers in the bond markets just yet, and a bit of a pickup in hong kong. This is on the back, perhaps, of some of these import tariffs that might become a problem at some point, not so much just yet. Thailand has already opened to the upside, strengthening in the currency. There you go, futures 11,000. Tom yes, inflation is obviously such a keep part of the conversation with the boj decision out, which we are waiting for. Lets take a look as the nikkei futures, they are up, pretty much close to 1 for the first half of the trading day in japan so far, and the yen, we have been watching that. We have some diversions. It is just a smidgen so far in the trade. The question is, of course, if we were going to get any guidance at all with the boj and a and the bond purchases. Yes, even in the best of times, as we have noted. As we wait for the boj, lets get an update. Tom, china has followed korea in responding to new tariffs on solar panels and washing machines. They are accusing washington of misusing trade measures. South korea has asked the wto to concessions, seeking to reimpose tariffs of its on. Jumped. Solar market after hours, while there was a mixed reaction in asian stocks. Set another record as lawmakers begrudgingly accepted a deal on ending the Government Shutdown. The move towards a shortterm funding bill that would Fund Agencies through february 8 set the stage for the government to reopen after three days. Investors had appeared mostly indifferent to the drama on capital hill, against optimism of growth and corporate earnings. The International Monetary fund is warning policymakers to be prepared for a new recession, even as it predicts Global Growth will accelerate in the next two years, raising the twocast to 3. 9 , up attempts from october, the fastest pace since 2011. Christine lagarde welcomed the report but says threats remain. De the aging population and on and on and ofure population growth, all that will continue to weigh on mediumterm prospects. Protests corrupted in the Israeli Parliament about jerusalem. Lawmakersi arab protested as Vice President mike pence said the state department has been told to begin preparations immediately. Palestinian president Mahmoud Abbas called for europe to step forward and replace the u. S. As the leading middle east arbiter. Global news 24 hours a day powered by our 2,700 journalists and analysts in more than 120 countries. I am debra mao. This is bloomberg. Under scrutiny after a policy meeting, needing to show the usual confidence that inflation is going in the right direction while also calling on policy normalization. Anchor lets get more details from the ground with policy editor Kathleen Hays. It is fairly cold. A fairly tricky balancing act, i would think, for kuroda. Kathleen again, david, as you are, in tokyo, snowfalls either. Cted nine inches overnight. A sunny, beautiful day, an interesting curtain raiser. And there was a story that since september 2016 one governor introduced yield curve control, the decisions have been announced right around 12 00 21 theon december latest was when a member join the board for the first time. Expected the justthing though, as tom laid it out, yes, governor to see that the boj is moving in the right direction. Is doing to move it forward. The finish line has not been reached, so speculation in the market, the recent cut back in long bond purchases a cutback a signal that it might be happening. Is expected from this meeting. If he were to signal something, i think because it is not in the markets, that could immediately have an Immediate Impact on the yen. Kathleen, so much of this will be around the forecast. What are we expecting . Kathleen well, two things, of course. Meetings every year, the bank of japan puts out a Monetary Policy report, to provide the Growth Outlook and the inflation outlook. At this point, because there have been some surprises and then more broadly Industrial Production looking good, Consumer Spending holding up, the labor market getting tighter, and the labor market is certainly in good shape in japan, there could be an uptick. It inflation, probably no change in the forecast. The boj will be a lot closer to 2 than it is now. It iseep glancing down, because i have the bloomberg terminal on my laptop. Again, that boj decision could come at any minute. Average, the bank of japan has been releasing its policy around noon. Come out of the boj. Kathleen will be on the ground for us there in tokyo. Chief will be joined by a economist from nomura, who will be joining us with what to expect and not to expect and what the key implications are for the boj. That is next. This is bloomberg. One of the issues, if Economic Growth is very high also last year. It is time for the boj to do more normalization, more qe, and , like next year or two years after. I think they need to convince the market that the boj yen could bee strengthened. That is counterproductive. Time. Is pressure. Pressure. How they are going to move in the coming days, i think mr. Kuroda has the capacity to make the guidelines. Think any policy changes are in play, not even tweaks. R we flat yield curve that we are seeing, we do not think that is going to change. I dont think they want to see a move until that 2 is reached. Anchor those were some of the comments from our guests this morning on the boj rate decision. Not out just yet, but lets get you back outside the haysof tokyo, and kathleen joins us, and we have a guest to talk about what we need to know when it comes to this particular meeting. Kathleen, all yours. Kathleen thank you so much, david. Of course, we are all watching the bloomberg for headlines for the boj announcement, and lets get to an economist, arguing japan tos too soon for start normalizing policy. Welcome. Lets get right to this, because the boj could interrupt us at any moment. Is theber one reason why obvious one, that the boj is too far away from their target. 0. 9 is closer but a long way to go. Inflation in november last year is still far was still far below the inflation target, so i think before the changes,ything, policy they have to go after more. It is premature for the boj to move at the moment. There are many economists that say japan will never hit 2 inflation. One point 5 , is that possible, and if so, when . 1. 5 , is that possible, and if so, when . It is help perhaps by overseas demand and others, and if consumption growth robustly, and there are rising wages and consumption again, it would therethe cpi, so i think is a possibility for the boj, but at the moment, it is still premature. Ethylene what about longterm Interest Rates . Vulnerabley are so to what a central bank does and does not do. Inflation starts rising. You can boost bond yields. The yield curve controlling the question. Curvei think the yield controlling ethylene we have breaking news. As he said, they could announce point, and the boj forecast for 2018 is a cpi core forecast at 1. 4 percent. Unchanged in their Monetary Policy outlook, as we expected, all of our viewers out there, we see no changes yet. Live if, i recommend you want to follow on your bloomberg, but so far, we are getting what was pretty much expected. Are in thed and tom studio, but headlines on the bloomberg, the boj maintains. Olicy rates and the target so i guess the question is now, and we are talking to the chief market economist at Nomura Securities outside the bank of inoshita. Mo k early to say a little bit more about how and when the boj will . Too early to it is say. Many hope to see a rise in the longterm Interest Rates, because it does not help them. The cpi inflation is still much below the 2 target. Do it. Nlikely to also, another factor here is once the boj or mr. Kuroda mentioned something about the tightening policy, that may yen quite significant trigger quite significant yen appreciation, not something they want now. Kathleen the boj and ecb are nervous about having any volatility in markets. That theyke mentioned might be purchasing your bonds, and two things happened. Bonds sold, and the yield came back down. At some point, doesnt governor kuroda have to start developing that language to shrug off a little bit of market vulnerability . In the formula, the boj thinks that the monetary accommodation comes the difference between the Interest Rate and the targeted interest i thinkd if it shrinks, that provides opportunity for , a boj to adjust, fine tune bit upward the Government Bond yield, but that may signal wouldning, and that probably be very risky for the boj. It is possible. Everybody in the market believes the boj will do it. I believe that the boj may be able to do it, maybe sometime next year or the year next. Reasons people are expecting we were talking about inflation. The other reason they are saying maybe normalization will come at some point, maybe some talk it isit comes is because not a Sustainable Program to keep buying bonds. Distortion to cause and that it has to have an endpoint. That is some of the biggest criticism of the boj. What do you think . I do not think that criticism is very valid because they have already moved. Yield,e 10year bond they are going to probably by less and less, and that is think theyugh, so i have a very robust policy framework, and that is going to continue over the next few years. Kathleen what do you expect from the press conference . Any is the question that reporter sitting around that table at the boj behind us could ask governor kuroda today . I think any signs of a policy change, policy tightening, any little thing or the side effects of the qe policy. That would be big news today. Kathleen in terms of the other big question, with governor there is the appointment governoreputy kuroda, he is reappointed . he is likely to be reappointed. Actually, the parliament convened yesterday, and probably within a month the government is going to announce the person, and i think mr. Kuroda is likely to be the significant candidates for that. Kathleen ok, and part two of the question, deputy governor. Other be somebody people are saying that will the other seat be filled by someone who is in the camp that says we need to think about stimulus, if anything more stimulus to help with inflation . How is that dynamic going to play out . Well, that is very important, because as you know, this is a ninemember board, and this is made on a majority basis. If the government appoints inflationary guys, i think that will provide pressure for mr. , but i think at the moment, probably that will not change. And theinflationary guy boj or the government. Kathleen negotiations. How important are they . Tomo it is important for japan. Raise toies decide to 3 or beyond, that means consumption is likely to robust and keep the japanese economy going, and so i think for mr. Kuroda, this is significant. Continuesif the fed with the path of its three rate hikes this year, if the ecb announces steps, what does that mean for the boj . Does that make governor kurodas job more complicated . it is complicated, but it will provide depreciation pressure. Will callmaybe he them up and say, hey, guys, get on with it. For joining us from Nomura Securities. I will be back. Conference toss listen as governor kuroda it gets drilled for an hour, so a lot more coming up as we cover the boj decision. That to you guys. Thank you very much, kathleen. Just to recap, no japan, the rank of maintaining their yield target at about 0 . After meeting on tuesday, it is keeping its balance rate at 0. 1 . That was in line with all of the economists surveyed by bloomberg, so no big surprises. Anchor yes, and there is a little bit of movement we are seeing right now, and a lot of this could come down to the yen strength. If you are just tuning in, a drop there. We are also seeing futures on the nikkei trade in singapore, coming off their highs of the day. We are down about 50 points or off 50 points from levels right before the decision came out. This might have to do with the fact that they are raising or they changed a little bit there inflation expectation. Be accurate here, the boj Inflation Expectations have been more or less in changed, a statement that the Inflation Expectations were weakening. Boj more to talk about the ahead on the program. Stay with us. Anchor a quick check of the latest business flash headlines, earnings top estimates in the fourth quarter, expanders in macau helped the expectations. Saw bookings in las vegas, the city still recuperating from the shooting that killed 58 people and wounded many more. Anchor one carmaker to go and they will buy the beijing electric vehicle and become the First New Energy , and, ofrer to list course, a lot of their electric cars there. China is the leading market for new energy cars, passing the United States back in 2015. Anchor and a tequila maker is putting them, under the same banner. Sales are surging with superpremium he let growing more than 700 between 2002 and 2016 growingpremium tequila more than 700 . Anchor lets have a look at the chinese markets. On the mainland, it has been a good session so far. It has been very good. When you look at these levels right now, the shanghai composite, back at 2. 5year highs. And this is coming in in the small caps. Lots more to look forward to. This comes up next. This is bloomberg. It is tom it is almost 12 30 in tokyo. Lets have a quick look at the 0. 93 percent, a positive trading day in japan. We have a boj decision coming out unchanged, maintaining its yield target, keeping the main policy balance rate at 0. 10 , and we are looking head to the statement from governor kuroda and the presser later today. Bob markets and yen in focus. Followinge clarity, massive snowfall in tokyo. Clear, itthis is not is feared yesterday was horrendous for air pollution, but have a look at that. Its like switzerland, if you ask me. Lunch heading into the break here in hong kong, lots more to discuss. A very heavy newsday peered the boj in the mix. Tom youre watching Bloomberg Markets asia. Lets get a quick check of the first word headlines. Booksellerong based secretly detained by china may have been seized again. His daughter told radio sweden that her father was on a train with diplomats when Police Arrested him. Ands a Swedish National rent a Publishing Company focusing on gossip on chinese gossip. Custody inrned up in china. The u. S. Air force says it retains confidence in spacex ane a satellite unsuccessful launch of a satellite. Spacexs position that they did everything correctly and may increase scrutiny of more from government northrop grumman. There is news of a potential , a conglomerate is said to be keen to purchase noble. Noble has been battered by losses, writedown and controversial accounting as china reaches a restructuring deal do on a coupon the 29th. And President Trump reportedly rossfrustrated with wilbur last year. We are told they were at loggerheads when the resident wanted quicker and more aggressive trade action. They have since reconciled some of their agreements. The white house says that the anddent loves wilbur has full confidence in him. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am debra mao. This is bloomberg. David thank you. Lets get more on what deborah was mentioning, one of her top stories, the new tariffs from asia on imports. One was washing machines and the other was solar. Have a look at our church, 1268 our chart, 1268. We are showing you the number of operational solar plants around the world. A lot of these things are made all over the world, some companies are listed not just in asia but in the u. S. As well, theyre made in places like malaysia. Where did exports go . The u. S. Is a big player, china as far as the number of operational solar plants are concerned just to give you a sense. China is the biggest player. Gethorrendous pollution we here in hong kong, as you saw. Tom the Chinese Government setting out a plan about a decade ago to be a leader when it comes to green technology, particularly solar panels, and about 80 of the solar panels that head to the u. S. Come from abroad. That is a big factor. Winds from the Chinese Government saying they are dissatisfied with his house,n by the white lets bring in jodi schneider. She is our head of asiapacific for new energy finance. Lets start with you, in terms of the timing, why now and why this decision . Jodi a masher sure we know why now. President trump campaigned on America First and the fact that he was going to do something about what he called unfair Foreign Trade practices, he has been talking about it since he was a candidate. This is the first time he has really jumped into this in a meaningful way with the tariffs. He is going to dollars this week, it would seem an odd time to do it, but this is his decision. They had to go through some procedural things, it is called section 201 under u. S. Trade law. It would have a large effect, as much as 30 , as you noted, on all solar equipment. Much of the u. S. Solar clement is imported, it could have a very big effect, as much as 50 tariffs on foreign made washing machines and a lot of the market, the machines go to the u. S. From foreign countries. Makes someestingly of its a quick, a u. S. Ally, and they have also expressed displeasure. Interesting, it will hit china but also u. S. Allies. Japan may be to some extent as well. David i was going to ask, as you mentioned, he is heading to buts, and china is a rival south korea is an ally. How does this affect the relationship . Jodi it would seem that the relationship that the stock took a tumble. The president has made a decision i think that it is time for him to deliver on some of the trade talk. Obviously early in his presidency, he decided not to join the tpp, and now perhaps he is getting pressure from his base to do something more meaningful. He already passed on labeling china a currency manipulator, he said on the campaign trail he would do that and he did not. It looks like he has decided to do something more and the opportunity arose and he has under this section of the trade law, he has broad discretion and is clearly taking it. Tom this could be the first of many steps, which is a great concern for many. Lets bring you in on this, what is the chinese reaction going to be . We heard from the government in terms of Solar Panel Makers domestically in china, how will they react . This is not the first time the u. S. Is put tariffs on solar products from china, the key issue is that china was not targeted at the only country. China happens to make most of the solar panels in the world, but right now the tariffs are on all imports of solar panels, that is a key difference. A lot of the chinese manufacturers are heaving a sigh theelief because originally tariffs were expected to be as high as 75 , but now it is a 35 on imported modules to the u. S. , so it is on the lower end im a lower from the previous tariffs the u. S. Had imposed on chinese copies. Maybe not as bad as people think, at least for chinese solar companys. David if look at the other side of the coin, does this benefit the u. S. Renewable industry . Thats the first thing you think of when we hear these things, to protect local industry. Justin the u. S. Is the second largest solar market in the world. It is second i a long shot in the sense that it is six times smaller than the largest, which is china. It will probably hurt certain segments of the u. S. Solar industry more, projects often rely on a from china and have narrow margins. Theres also a question about chinese manufacturers building factories in the u. S. They are now saying that it might not be Worth Building factories in the u. S. , they can still export to the us and to the u. S. And will be fined. The what are, in terms of other political machinations, how much is the focus on undermining the push toward the Renewable Economy . Of his plan for this . Jodi i think he wants to paint the democrats in a large sense, he did with the shutdown, the threeday shutdown, as favoring things like illegal immigration sure where they want to go on the environment, that kind of thing. I think it is symbolic perhaps. I also think from a political standpoint, he wants to look tough. One would presume he is getting advice that it is time to deliver on promises, and if there are some you have not delivered on, its do that now. Early on in an Election Year, if you want to maintain republican majorities in house and senate. I think that is probably part of it, its probably more politically driven than economically driven. Its unclear how much this will actually benefit u. S. Manufacturers. In long run, he wants to paint the America First picture in to do it on the world stage, and he picked an interesting week to do it. He will be in davos very soon and it will be interesting to see how will the leaders react to him. David i was expecting him to come out with something on aluminum. We were talking about that before. Lets take it back to you, just in. You know the nuance of this industry, is it a big deal . Justin probably not as big a blow over and away. In some way that things will have an impact on the the u. S. Solar installations this year. People might just wait, because the tariffs go down in 2019 and onwards. Delays until 2019 and people will wait it out and see what happens after the midterm elections. David thank you so much, justin and jodi. And washing tariffs machines as well. A big day when it comes to trades i would call it wars, maybe trade tensions. We will be talking more about that from of donald trump implications for Southeast Asian countries. Tom we will be joined by a senior emerging asia economist next. This is bloomberg. Welcome back, lots more to talk about with the news out of washington and the response we are getting out of south korea and china. Disappointed are some of these new tariffs on washing machines and solar products. Joining us to talk more about this and the big stories of the economist on asia. Your initial reaction . Is it a big deal . Will affect growth momentum . Obviously is not new. The newest thing is that versus targeting one country, its more unilateral. And its not new in that for example, there was a case against samsung that resulted in duties, and as a result we saw imports rising from china as korea offshore production to china and as a result, for more duties on china and now we end up with more unilateral duty. What does that mean . David i was going to ask you, it was aimed at them doing something. Some of these countries are looking to circumvent this. Trinh lets look at washing machines, household appliances. If you look across asia, for most of these countries, total share of exports is a zero, china is 3 and next the south korea. If you look at it as a share of export and gdp, youre looking at 0. 1 at maximum. If you think a washing machine except a larger portion of household appliances. The Economic Impact is not material but it has a more i mpact on areas focused on this more. But the focus really is on whether this is a trend of more itcome and whether or not escalated trade tensions in the region. Overall, its not a new phenomenon, more of a signaling. If you look at the u. S. Perspective, as a share of the cpi wait, urban cpi, it is essentially close to zero. If youre going to buy a washing machine, it has a huge impact on your christ increase, but your price increase, but not a material one. Tom in terms of a broader trend, because i am concerned that investors are overly sanguine, because you have donald trump finally imposing tariffs, strong words from the chinese, we dont know what theyre going to do in terms of gentle retaliation. Is there a risk for investors underpricing what could be an escalation in trade tensions in asia and the impacts on the msci emerging markets . Trinh nursing a very strong global trade recovery. If you look at, as i mentioned, items eating targeted, they make up a very small share of total imports to the u. S. And also exports of these countries. Tom this is just the first step. Trinh right, its a question of whether this will result in further, i dont think that is the case. But clearly it is a more hawkish bent. If you look at the upcoming midterm elections. Overall, global trade on the shortterm, cyclical basis, we are seeing a strong recovery of global trade in trade. Was in thegrowth double digits. If you look at the philippines gdp, even though it is slow, it has the strongest growth rate in Southeast Asia in 2017. David is the best behind us . At some point, lets bring this up, this chart. Arguably when you look at the sweet spot when it comes to Financial Markets for example, we were expecting this to happen anyway. Are these early signs that momentum might be, i dont know, rolling over . Trinh i think it is more bark than bite, if you look at the underlying key issue and the specific items they chose to this. For asian trading global trade in general, 2017 was an 2016tional year, because was a terrible year. , and we have bump the recovery thinks reduction of inventories and improvement of Economic Activity for 2017, it was an exceptional year from that point of view. In 2018, even if we see global recover,ntinuing to the exceptional performance of trade is not expected to continue. In other words, we still have deceleration expected. Trade ine looking at asia, growth rates have decelerated. Double digits to very high single digits. Still a great performance, but h . t expect the 20is tom how much pressure will be on the central bank to start to consider potentially raising rates in the philippines . Trinh we think they will raise rates by 50 basis points. They are on a cyclical and structural upturn. Cyclically, we have a strong return of the growth rate of exports, and an upturn of the the mystic critic domestic credit cycle. If you look at credit growth, even though it decelerate it of late, 18 . There is tightening of liquidity even though it is still flush. On a structural basis, we have demographics, right . It very robust, expect expected to continue. All of these factors are very positive. Plus they have extra savings, which allow filipinos and the government to continue to push for this growth story. Overall, a very strong growth story that we continue to think will happen. But it will have a major impact on the peso. David it is horrible what is happening with the peso. Central bank of the philippines, what other banks twoseat raising rates . What other Central Banks do you see raising rates . Trinh malaysia. They will raise rates because there is a recovery of gdp, a pickup of inflation, and higher oil prices. Oil,sia not only exports as you saw in the solar pie chart, it is a huge exporter of solar and electronics. Malaysia is having a cyclical pickup, and as a result, the central bank will need to tighten monetary conditions this year and raise Interest Rates by 50 basis points. Tom thank you very much for joining us this morning. Davos debut. Up, we will look at the World Economic forum. That is next. This is bloomberg. We are about 10 minutes into the mumbai trading session, lets look at how markets are doing. Markets are home to. Prkets are calmed for umped for modis debut at davos. Yesterday, the Energy Players really fueled the rally. Using the same thing come through today some of the Energy Sector is up by 1. 4 . Eventually, every sector is moving stronger, just a little bit of a dip out of the material players. Early the earnings momentum is fueling the rally you see in india and across emerging markets in general, which are on their longest winning streak since july. Lets look at some of the stocks. It is big earnings season. Yesterday we had asian paints coming through with its thirdquarter income at five at half a billion rupees. That was below estimates for 5. 6 billion. We had an upgrade today, but its coming under pressure. Rbl bank is coming to with earnings later today. Its looking at it is looking analysts are respecting earnings of about 1. 7 3 billion rupees. A look at cap attorney turu power. At kalpa nearly 140 million new orders, thats what it will do to your share price. David not bad at all. What are we seeing across the region . A nice rally, huh . You, certainly are, thank wall street, for that. Looks like the Government Shutdown has been averted, giving a good post a good boost. Nothing is rattling the markets. Gains in00 is leading material players, up by 18 someone percent in late trade. Hong kong also looking good, they are about to head to lunch break. Index is on aet tear at the moment. Fornding its record rally 18 consecutive days, really do to a lot of movement coming through in financial players. A little bit of us tory of a dollar coming back, some of the currencies coming out of pressure, all the off about 131 . About onesie off third of 1 . I want to show you some of the casino players in hong kong. That. Lifting on thenics is falling news of the tariffs from the Trump Administration. Tom thank you. Modi will be the first indian Prime Minister in two decades to attend davos. He will give the opening address later today. Ourd lets bring in expert. Give us a preview on what to expect. He will give a speech at the opening session of the opening of the World Economic forum. Speech will be that indias open for business and means business. Country can contribute to Global Growth, he is likely to say according to officials who have briefed us. Hes also likely to say that indias vision is more for a global open economy. All this means that he is likely to push for a much Stronger Economic position on the global stage, she hopes will eventually lead to indias more long cherished seat on the un security council. All in all, he is likely to push for a bigger global stage for india in this speech. India, will selling india be difficult given the growth that has been hit by the gst and the cash ban and demonetization in india . How difficult will that make his job . Not really. If you look at what the International Monetary fund is protecting, theyre looking at a pickup and expansion in the coming four years, they are expected to overtake germany to become the fourthlargest economy in the world. That was the huge opportunity for Global Investors looking to invest in india. Dont forget, there is a big middle class that is growing all the time. There is a huge delegation that has gone to davos to market these things to Global Investors and say, you know what, ease of business has improved, india has jumped and the consumption tax has been reformed. Thank you so much. You can tune in to all of our coverage, we will be live all host in davos. That is about it from us. Tom what a fantastic lineup. Yousef the u. S. Government reopens as democrats except a shortterm funding deal, but how does this kick the immigration issue three weeks down the line . President duties on imported solar panels and washing machines in his first major protectionist move. China has slammed the decision. The bank of japan stays firm on rates. But one policymaker votes against keeping the yield curve target