Haidi welcome to daybreak australia. In sydney margaret have just come online. Annabelle im annabelle droulers. We are counting down to asias Major Trading opens and the stop top stories this hour. A positive move as wall street heads its 15th record high of the year. Investors are awaiting jay powells report to congress for dates on the fed rate outlook. Haidi ahead opecplus extending its supply cutbacks until midyear amid soaring production from rivals and uncertainty over chinese demand. Stephen in beijing, one of chinas most important gatherings of the year is about to begin with leaders set to unveil their targets and strategies, perhaps policies, for road reviving the economy. Annabelle kicking of the week with breaking data out of korea this morning. We have industrial output numbers dropping but coming in better than expected over the course of january. Output of more than 12 or 13 on the year passing estimate were 10 . Also industrial output is falling, still and a contraction down 1. 3 . The estimate had been. 9 . The headline reading, the year on your number is certainly a lot better than what had been predicted by economists. It could be down to the drive for strong external demand for chips, for automobiles. One of the concerns with that is when you have a narrow cap, that small group of industries posing a risk to the recovery moving forward. Haidi we are setting up for a big week, and that is one of the data points we will get that will give us a better gauge of how regional and global economies very. Big events out of the u. S. In terms of politics and jobs numbers and whether it will continue to add to the drumbeat of expectations from the fed. This is the picture as we creep into the start of trading in the Asian Session seeing the asx 200 pretty flat at the moment, almost. 1 lower than we were expecting an early game may be flipping to the green in the next few minutes or so as a staggered session gets underway. We have stocks at record highs at the moment after reaching that threshold last week. We could see a little consolidated on debt consolidation. We saw some of the biggest gains in the previous session being led a real estate and grocery my discretionary were some of the leaders last week as well. We are watching for how u. S. Assets perform particularly when it comes to more direction for the aussie dollar and u. S. Dollar. That trade at the moment is sitting at 6529. Fund managers are shorting the aussie dollar position. That position is being held at a record high. Cba seeing the aussie following 264 falling 64 against the greenback potentially downplaying rba risks. Annabelle rba to the fed we will have jay powell speaking over the course of the week something to be tracking closely here. U. S. Stocks have futures just coming online. It was the 15th record in the friday session. The s p 500 topping 5100. The question for investors is, can the winning streak continue . We know march, historically, has been good for equities. In election years that calculus changes a little so the gains are not quite as good. Still, you can expect to be in positive territory. Fairly flat now. Tracking oil this morning. Brent crude a little higher. The outlook for wti. Opecplus extending the oil supply cutbacks until the middle of the year. Those curbs on paper worth roughly about 2 Million Barrels per day. They will remain in place until the end of june. Some are saying, perhaps, we could see the extension until the end of the year. You are seeing brent crude, wti, just a little higher this morning. Haidi of course, one of the big themes we are watching is the trajectory to be set for chinas economy going into 2024. The country is set to announce of the years growth target and outline strategies of supporting a slowing economy in the countrys top annual political gathering this week. Bloombergs shes north asia correspondent josh chief north asia correspondent Stephen Engle started economic priorities for this years sessions. Stephen early spring Stephen Early spring crosscurrents in beijing can be tough to read as china faces a host of economic headwinds ahead of the annual session of Parliament Annual peoples congress. With Property Market in turmoil, poor consumer confidence, persistent deflation, stabilized geopolitical ties, plummeting fbi, and iraqi stock market, simply put, it has not been a good first year is cents for president xi jinping since taking his third consecutive term must mud last month. So far, stave state directed funds mobilized to stabilize wobbly markets while beijing replaced the head of the Securities Regulator and cracked down on socalled malicious shortselling. Thanks eased alone prime rate tied to mortgages. Consumers came back and spent mightily during the Lunar New Year year holiday, the best festival numbers since precovid. Was it enough to turn winter resident a spring bulls . 2023 has been in fortunate in china with the conflation of inflation and he risking. I think is your policy makers want to go back to reflation and reform. In terms of the ability of measures to change market sentiment, we are slightly more cautious. What is really needed is a change in the inflation outlook for the country and the overall sentiment in the private sector. Sentiment is rockbottom. At the same time i think the issue is policy credibility in the market. The Growth Engine remains more of a government led, infrastructure led, manufacturing led, that might help to get to the growth target. But in terms of dynamism and the most sustainable growth, we think it still needs work. Attention now turns to the premiers work report on day one of the npc. Post holiday he called for problematic and pragmatic and forceful action to boost confidence start so far there has been no big policy move as leaders stressed derisking and it with fiscal strain and amid local governments. We want to say, can we actually go back to more like what china started with this reform in the early 1980s . A little of a lot of private enterprises. Wishful thinking, perhaps, for Global Investors that were burned by multiple stresses on chinas private sector including covid zero and a takedown of big tech. We started to get nervous about china in 2020. A very long time ago. For the past year and a half or two we have had no exposure to china, none whatsoever. The world watches for beijings next policy move, perhaps, at the ndc, with great interest. Annabelle lets bring in our chief north Asian Correspondent steve engle joining live from beijing. We will get the strategy for supporting chinas economy through the end of the year. You have been in beijing over the weekend. You are here for these two sessions. What is the mood music over there . Stephen the mood music, if you will, is sort of a lack of confidence especially in the private sector right now. Yes, there was a press conference yesterday from the advisory body that kicks off today in beijing. The advisory body to the National Peoples congress. He said the economy is fairly good and will continue to see a trajectory of growth Going Forward. So, there was a positive tone. That is something that these leaders here in beijing, the 3000 or so delegates of the National Peoples congress, as they gather, they will try to find a right narrative, if you will, to try to put a floor on the sinking confidence i just outlined in that report. The weather is good. It is one of those blue sunny days in beijing. Blue skies. But very cold temperatures. It is well below freezing right now as i stand in front of the Northeast Corner of the forbidden city. The actual great hall of the people where the npc and the cpp pc will be held as on the other of the forbidden city in lockdown now. It will open up midday today as all of the delegates will start flooding into tiananmen square. We will be there this afternoon. Right now we are just waiting for things and festivities to kick off. Tomorrow is the big work report. It is his first stroke work report. One year ago he took over as the new premier. The former premier opened up the npc last year with his final work report. It will be interesting to see if there are similar terminologies, similar verbiage is coming from the fairly new premier li qiangs as he tries to outline the priorities of xi jinping, who has continually, over 2023, talked about high quality development. That is a term he has used 128 times in 2023. A bit vague, but essentially, it means, we can allow a lower pace of gdp growth as long as the growth Going Forward is sustainable. And that is something we will be watching very closely. In that lengthy earth work report from him tomorrow. Haidi on the one hand, this gdp target is a symbol to try and instill confidence. On the other hand, is there a risk that if they said it too high, they could miss the target . Stephen there have been calls over the last few years to scrap the target altogether. Why do it . Essentially, the work report is marching orders from the premier to the provinces and around the country that this is what you need to deliver. In years past, we have had some leaders even kind of out of the side of their mouths say, it might be sort of manmade numbers. Because, if you get the target, they have to deliver, right . Last year, they set a target around 5 gdp growth. As i am a betting man in macau i will put my money on the provinces in the nation hitting that target and if that is likely according to all the economists we surveyed. The majority expect a similar target to be set this year for 2024, around 5 . There are challenges obviously. That is where we will be listening and reading that he leaves to see whether the policy will match the level of rhetoric and a confidence that the leadership has in this economy, despite the struggles i outlined. Haidi bloomberg Stephen Engle in beijing. Lets bring in for analysis the chief asia pacific economist at vanguard group. Always great to have you with us. If we get around 5 does get does that give you confidence more forceful fiscal stimulus might be in the cards . What do you think is the risk of setting the target too high or too low . Good morning. I think that the five percent risk target for this year will be more challenging compared to what we experienced last year because last year you had some pentup demand after the reopening. This year, pretty much the hope is what the government can do with the policy stimulus, especially on the fiscal side. I think that regardless of the growth target the market for this will be very much what specific measures could come up to support the economy. At this moment, i think the focus will be, what is the official fiscal deficit and how much will be the special local Government Bond quota . And what other measures, especially on the consumer side, to sustain recovery in domestic demand . Regardless of the first target, the focus is still very much on the policy measure. I think the biggest risk to that honestly is major complacency. Annabelle that haidi . That is interesting. In terms of complacency do you mean not setting more forceful policy guidance . As steve mentioned, the work report is really kind of the playbook for the provinces, right . Are you concerned about how this will be interpreted . Qian i think that the growth target is one thing and i think when you look at the rhetoric from the government officials, they are emphasizing that we should get this down to tightening. Then, they are comfortable with the growth. They are arguing that the reflation will come back this year. So, i think that is where we are getting concerned. Because, one thing you do see that the economy is actually still acting up again. Even if they achieve 5 growth this year, there will be continued deflationary pressure in the economy. If they do not deal with that in a timely manner, i think there is a real risk for self or imposing deflation mediumterm. Annabelle Structural Reforms, structural policy measures. Are you expecting a bit more big picture thinking particularly in light of demographic challenges for china . Qian i think they need to both the cyclical support into the economy and also some kind of longterm measure to boost up the confidence and win back the trust from the private sector. So, you know, they need to deal with a lot of structural elements. Housing, demographics. I think this is where other than the cyclical support of measure the government also needs to focus on Structural Reforms to boost productivity growth for the economy in the medium to long term. Annabelle what do you expect on the Property Fund . Of course, there this is a problem that risks becoming multiyear with no clear solution either . Qian yeah. When you look at the Property Market easing right now, a lot of hope in the possibility has been in the demand side, cutting mortgage range, easing mortgage rates, easing restrictions, lowering the down payment. That has not been very effective because confidence in the Housing Market is very low. If people dont see housing poised to rise in the future they arent eager to get to the market to buy property. This year the hope is probably on the supply side. Public housing, urban village renovation. Focusing on the supply side actually could help to narrow the property downturn a little bit. Last year was like less than 10 contraction. This year we can get 3 5 , still of contraction, but a smaller contraction. That would actually help the headline growth a bit. Annabelle some of the solutions appear to be a little bit out of the box thinking. Something else out of the box is beijing supporting socalled new Growth Drivers that we have heard talk of in local or state media. What are we expecting on that front do you think . Qian i think some of the potential surprise, right, i think one of the focuses, or what they will do, is the consumer. Consumer demand. I think so far a lot of the stimulus focus has been on the Production Capacity side. Investment, infrastructure. That actually created supply and demand imbalances. Adding more inflationary pressure. I think one of the focuses will be, how can they help the consumer to make the economy more consumption oriented . Trading programs, consumption subsidies, a saving incentive is one part. On the other hand, as many people highlighted, a contended continued industry outreach. Energy, investment. A bunch of things that can probably bring some new Growth Drivers. But some of that, i will say, will not happen overnight. Haidi qian wang thank you for your time. Watch for bloombergs First Edition of the china show. News and analysis on asias largest economy. We will have indepth discussions with the newsmakers that matter. Try to show premieres monday at 9 00 a. M. In hong kong, shanghai, and singapore. This is bloomberg. Haidi u. S. Democratic senators are calling on President Biden to press israel for a ceasefire in gaza as must pop and israel are to hold talks in cairo that could lead to a temporary halt in fighting. President biden said last week that monday commitment commencement he was hopeful about might not happen and we heard from Vice President harris as well. She reiterated the call for the ceasefire. You mentioned must pop hamas is heading to cairo. On saturday the u. S. That it understands israel is prepared to go ahead with the ceasefire as long as it can get details on the hostages, their status. Its goal is to get a commitment from hamas that it will release hostages that are unwell, injured, or old. At this stage they have not heard back from hamas. That is the tricky side of it. It is one thing for the u. S. To pressure israel, which it has started to do outright, but it needs hamas agreement to get this happening as well. I think that u. S. Frustration is seen in this airdrop that took place along the coast of gaza, 30 8000 meals, just to try to flood the place with age. After we saw the attack on an aid truck, violence around an aid truck. Annabelle perhaps it also underscores how much this has turned into a Political Risk for biden as well. Michael right. The pressure from Democratic Senators and lawmakers, from progressives, americans, is that this cannot go on. More than 30,000 people have been killed according to the Health Ministry in gaza that is run by hamas. But still, the devastation, the destruction, people find it unacceptable. Hamas was betting on this to some extent. That would have International Pressure on israel. That would get very very intense and it would be forced to do something. What we have coming up is ramadan. This is what the u. S. And world wants to see. A ceasefire perform ramadan before ramadan, around march 10. Haidi we have more to come on daybreak asia joya. This is bloomberg. doorbell rings come on little mama, i know you want some what you gonna do got a brand new swagger for you looking good. Nailed that fit. Got a brand new swagger for you step in, step out, show what youre bout got a brand new swagger for you, you, you, you stitch fix, style you can feel. Annabelle corporate stories this morning. Spains largest bank is said to have cut roughly 320 jobs in the u. S. About 2. 7 of employees at Retail Operations across u. S. Branches were let go in the recent days. Santander told bloomberg it updated its staffing model to adopt digital capabilities to adapt to customer needs. Boeing is in Parliament Area talks to buyer spirit aerosystems. The supplier at the center of the max 737 crisis. A deal would reunite assets that once sat under one roof allowing the playmaker to tie in oversight over its most important parts provider. The takeover would be boeings biggest acquisition since at least 2018. Scifi epic dune part two open to taking almost 82 million in the Biggest Weekend Box Office debut so far this year. Ticket sales across the u. S. And canada came in ahead of trade expectations of just under 81 million. Some fans packed cinemas for 3 00 a. M. Imax screenings. It was the biggest open since the Taylor Swift Air rez tour in october. We will have more head on daybreak australia as we count on the market open. Looking at how the iss is dragging so far this certain, fairly flat. Japan nikkei 225 within a waste was in a whisk of the market now has to realize the data is not throughout slowing down and the ped event has given and the said pivot will likely to continue through supporting growth in consumer spending, capex spending, in hiring i am most likely the better part of this year. Annabelle that was at the Apollo Management chief economist there explaining his forecast that the fed wont cut rates this year. Lets look at the week ahead. Chinas National PeoplesCongress Begins tuesday. Officials are due to unveil the National Growth target for 2024 that will set the tone for government policy for the rest of the year. We are also watching for Inflation Numbers out of japan, the philippines, south korea, and taiwan. Fed chair jay powell will deliver his semiannual Monetary Policy before test of testimony before congress this week expected to provide more insight on the u. S. Central Bank Rate Hike pass. On thursday President Biden will deliver his state of the union address. We will have special coverage here on Bloomberg Television and the ecb is expected to hold rates steady awaiting more evidence inflation is under control. It will be a big week of earnings out of asia. Jd. Com, nio, bilibili among those set to report. That is your week ahead. Haidi how we are setting up at the moment when it comes to about 30 minutes or go into the start of trading here in sydney. We are coming off what was a record high reached last week for australian equities. We are watching to see how much we see further momentum as we saw wall street setting more records as well. Early gains, pretty flat at the moment when it comes to trading in sydney following the alltime high. It has been a tremendous run. 16 out of the last 18 weeks, we have seen this rally for australian stocks. A lot of it is to do of expectations of what we might get from the rba as well. Elsewhere seeing weakness in new zealand trading on the back foot. Singapore nikkei futures looking perky. 8 . As was mentioned earlier a lot of focuses on japan today, given it is looking like we are one whisker away from the 40,000 level for the nikkei to do five and whether that continues to drive more momentum behind this extraordinary japanese rally. We have a few data points out today including japanese Capital Spending giving us more of a gauge of how corporate japan is feeling about investment. U. S. Futures look pretty flat at the moment. We are watching euro politics and the leaders of nine Southeast Asian nations and australia are gathering in melbourne today for three day meeting to commemorate 50 years of relations between australia and this block here the ase an block. Ben wescott joins us from the summit. These relationships and the fortification of these ties takes on new importance given a strengthening china. Ben absolutely. At this particular moment when we have a growing military presence in china in Southeast Asia and a potential return of u. S. President donald trump geopolitics has been fractious at the moment. Given that the Southeast Asia australia summit is designed away for which powers across the region from australia to the philippines, indonesia, and vietnam can come together to find consensus over issues that will be affecting them over the next four years or so. Annabelle for these asean countries is there and assumption that australia has its own Foreign Policy or is it seen as an extension of what the white house wants . Ben there has been a real shift since the election of a centerleft neighbor Government Labour government in may 2022. Until then leaders saw australia as a follower of u. S. Foreign policy. But since the election of Prime Minister albanese theres been more of a shift of Positioning Australia as a middle power alongside other middle powers in Southeast Asia. Its a degree of independent Foreign Policy more effective in blaring bringing the block together to advocate issues that are important like open ceilings open sea lanes and peace in the region, things along those lines. There has been a shift to subtlety in diplomacy in recent years. Haidi what about the shift we have seen from the albanese government and Prime Minister benny wong in terms of how we engage with china . Theres a lot of focus on the economic vulnerabilities and also in tandem with that is a lot more associate assertiveness we have seen. Ben absolutely. We are seeing china go through its own journey at the moment with balancing the risks to its own economy against political control. I think that as china is balancing that difficult situation, australia ands out, they have to look after their own interest in that timeframe. I think that is something that will be discussed here today. Already we have seen at this summit for more than in previous years, more discussion of the South China Sea. Any wong started out her speech by offering up towards maritime security. Saying in her speech that all of Southeast Asia depends on open sea lanes and what happens in the South China Sea affects us all. Thats a clear example of airtime security being a big concern. Annabelle thank you for your time. That was ben wescott at the asea n a story a summit in melbourne. Keep watching for the First Edition of bloombergs the china show, your definitive source for news at analysis on asias largest economy from politics and policy to tech and trends. We will have indepth discussions with the newsmakers that matter. The childish premieres monday at 9 00 a. M. In hong kong, shanghai, and singapore. We will have more on daybreak australia. This is bloomberg. Something amazing is happening here. Retailers are moving inventory quickly and securely. Thats because cdw designed and built a solution with cisco security. End to end protection, defends against attacks and makes better decisions in real time. So warehouse and Customer Data stay protected every step of the way. Make amazing happen. Cisco and cdw. And other partners for a Space Defense exercise in france monday. We are watching nissan jars amid reports the japanese carmaker is in talks to invest as much as 400 million in the troubled ev maker frisco. Japans fourthquarter Capital Spending and Company Profits data are due out in the next few minutes as well and we will bring them to you. We are hearing the japanese government is discussing whether to officially call an end to the countries. Period of deflation. We know what the trend has been. Why would an official government calling this be significant . Taro the government has been declaring deflation since march 2001. Though the current headline figure is brisk inflation. The basic idea is it is still inflation. Kind of on a deflationary mindset, lowwage growth and a lowinflation state has not been broken yet and that is the basic concept. So the government declaring we arent in this state anymore will absolutely be a moment that suggests in some important recovery from the longtime struggling macroeconomy. Annabelle we have seen inflation figures either meeting or exceeding expectations now for nearly two years. What does that tell us about momentum. Taro it is very tricky. Obviously, headline inflation is still clinging to 2 inflation. We have a genuinely generally a figure for the national cpi. Based on my understanding, it just helps to buy data from the statistical source. Given the country is in recession, the consumption data is plunging. I think the underlying momentum of inflation is getting weaker and that is probably what is making the bar the bank of japan probably still a little cautious. Haidi what is the latest assessment in terms of timing when they pull the trigger and how this how does this potentially play into that decision . Taro actually of the government declared that there is no deflation anymore, it will make the bank of japans life easier for the policy people. At the same time, the declaration timing by the government is still obscure. Obviously, the gdp is in recession. Also they have a package of stimulus evacuating from deflation. The massive household benefit will come in june. So probably those are starting to loll. That does not necessarily mean they will declare in march or april. I think still the jury is out for the call and also the boj pivot. Annabelle that was our senior japan economist taro kimura. A dovish boj has been one of the factors that has really helped to prepare Japanese Equities over the past year or so. This morning we are very much tracking this key psychological level we got hit at the open. Given activity in futures is so far it is indicating we will open above the 40,000 mark. This chart looks at the runup we have seen and also rsi at the bottom. It is at 81. That indicates we could perhaps be in overbought territory. Seth fisher is the founder and cio of activist fund oasis management. In your view do you think the rally we have seen in Japanese Equities so far is justified by the fundamentals as well . Angela seth absolutely. Everybody is making it a big deal and i think it is a big deal that japan is finally surpassing its 1989 high. Since 1989 japan is just beginning to get there. Japan last time was overbought. In 1989 very expensive. I think japan made moderate evaluations and at the microlevel we are seeing activity towards profitability and across the board in Japan Companies are increasing profit. Annabelle of course producing better profits relay tracks back to what you have been doing for years, putting pressure on Japanese Companies to radically change the way they operate. Where do you think we are in terms of the corporate structural change, governance reform process . Seth we are only made earnings. There is an enormous amount left to do in terms of correctives. Better drive in Holding Management accountable. Detecting minority shareholders. There was much more to do in m a across the board that will increase margins. There is a lot of levers you can full to improve the possibility. Haidi when you say we are at the midpoints, is that looking at proposing more difficult changes that you Want Companies to attack, or an act . Is it looking at Different Industries . Is it scaling up the size of the corporation . What specifically tells you we are at the midpoint . Seth there is simply a ton to do. There is a lot of m a left to be done that has been in japan since the 80s. It was a lot of consolidation across japanese sectors. With japanese corporates, within industry sections. As in the u. S. And europe we have two companies that produce better products, a wider array of products and Cheaper Products to customers and this has not happened in japan. There is a lot of leverage to increase margins in all these companies by executing in just having 2, 3, 4 companies that will be in all of these Different Centers across the board. That is an extraordinarily important and easy lever to pull that remains to be geographic expansion and in a lot of companies we are engaging with, a lot better management. Yes, go ahead to figure out how to increase marketing globally, to improve profitability. And mostly, to improve revenue. A lot of these companies have not been fantastic a run for a long time and that is where these nomination committees do a better job of making sure they are providing the best management. Japan still has a nepotism problem in many companies. They continue to appoint the chairmans son to executive offices. That is one place in particular where i think independent directors can do a better job of making sure we get the best for the companies so they can be world leaders. Haidi it has been over a decade in the making and there has been in the name and shame campaign, activist investors as well. How much do you think this rally has been driven by the fact investors have been fleeing china . Japans Corporate Governance books more advanced in the process then when it comes to chinese companies. Seth there is no doubt that a lot of asian investors have been choosing japan as opposed to china. I think this is systematic work japan has done over the last 10 years now in terms of improving Corporate Governance, being shown as one who will engage with companies, pushing companies to improve their r. O. E. s, improve their price ratios, improve profitability. I think actually the credit goes to japan much more so than Companies Fleeing china in terms of lack of clarity in the situation. Haidi how much does the bank of japan, when they eventually pull the trigger on policy normalization, the impact of that subsequently on, like, the yen, does that make a difference in the trajectory of the broader rally . Seth there is no doubt that low negative rates are helpful for this. Japan is extraordinarily disciplined in not changing rates, not raising rates. In terms of inflation, numbers are extraordinarily moderate. I think that it will be epochmaking when we finally get out of inflation. But from a taxation point of view i hope we remain extraordinarily moderate. So you continue to see the rally and also see improvements by japanese corporates. Haidi says, what companies are on your radar the moment . What have you been building positions in . What are you targeting now . Seth we are engaged with what the meat i would call of a lot of companies that are consumer facing businesses. We are involved in a lot of businesses. Retail outlets, retail stores. We sell retail products. We are involved in actually some other parts of the industrial homeland in japan that are producing auto manufacturers and a whole host of companies that have a lot of margin improvements to be done. There are no into the companies. Annabelle im curious about the reception you are getting. You mentioned a nepotism problem. That might meet makes me think perhaps management of a company is sometimes not receptive to the changes you wanted to make. Since the Tokyo Exchange has started focus on Corporate Governance reform have you seen a changing attitude around that in companies you are working at . Seth the seachange over the last 1011 years has been dramatic in terms of companies saving up stating publicly about their pricetobook ratios, their targets, their improvements. Adding an enormous amount of diversity to the boards and independent directors to their boards. There is a seachange across the board. There is still a lot more to be done. Now that companies have nomination committees, our agenda is that they nomination committees need to do their work. They need to function. They need to find the best of management. Nepotism has gone down over the last 10 years that i japan but i still think the 352 companies that continue to have the set of the president who now becomes the next president , i think that is one example of how much more we can improve. We can find the best of management, not just somebody that happened to have the right father. Haidi great to have u. S. Assets feature seth fisher. Japan Capital Spending, the Company Profits numbers coming through as well. A big jump when it comes to capex spending year on year, 16 point 4 against expectations of under 3 . This is outstripping Software Year on year, a gain of 11. 7 again beating expectations. Company profits lower than expectations, 13 against expectations, 21. 3 percent in sales also just missing expectations. More ahead on daybreak australia. This is bloomberg. Haidi south korean doctors have led thousands of protesters in seoul as their standoff with the government enters its third week. East asia government editor John Herskovitz. There was a deadline. There was a push to get back to work. What has ensued since then and what are we watching for in potential developments this week . Jon there was a march 1 deadline to get back to work at about 9000 trainee doctors, 70 of the overall total, have not gotten back to work. So, monday, we are two weeks into the labor action and the government is looking at legal steps that will start the punishment process for this. They are thinking about it for from a couple tracks. For the organizers they could suspend the medical license of those involved in these labor options the government argued this and it defines of south korea mall. For those taking part they are looking at a suspension of medical licenses for about three months, something that could really hurt longterm employment processes if it was on the record their license had been suspended. So, the doctors are still off the job and the government is stepping up procedures that could lead to punishments being dispensed. Annabelle if anything, the support for japans or koreas government has increased over the course of the strike. Public opinion, i mean, it is really behind the government at this point in time. Jon exactly. About 75 of the public is behind the governments plan to increase medical enrollment by 2000 slots from the current 3058 per year. South korea has a doctor shortage. Waiting times are long. There arent enough doctors in rural areas and the government thinks the plan would be a way to help that process. The doctors argued this really will not fix fundamental problems. But, the public is not enamored with the doctors positions. You see it more as self interest then helping them. The government Approval Rating is at a higher not seen since july. People are standing behind the plan. They want more doctors. The country is rapidly aging and there is a shortage and the country sees this as a way of helping to fix the problem. Annabelle John Herskovitz there. Keep watching for the very First Edition of bloombergs the channel show china show your definitive source of news and analysis on asias largest economy from politics and policy to take and trends, we have indepth discussions with the newsmakers who matter. The china show premieres monday at 9 00 a. M. In hong kong, shanghai, and singapore and just ahead we have the market open for tokyo tracking to see if we get the nikkei crossing the 40,000 mark. Futures are certainly indicating that milestone is possible. When i was your age, we never had anything like this. What . Wifi . Wifi that works all over the house, even the basement. The basement. So i can finally throw that party. And invite shannon barnes. Dream do come true. Xfinity gives you reliable wifi with walltowall coverage on all your devices, even when everyone is online. Maybe well even get married one day. I wonder what i will be doing . Probably still living here with mom and dad. Fast reliable speeds right where you need them. Thats walltowall wifi on the xfinity 10g network. group cheers [narrator] next term starts soon. Visit snhu. Edu. Visit snhu. Edu. Annabelle this is daybreak asia counting down to asias major market opens. I will want to discount korea but my focus is on japan tracking a rapid ascent in the nikkei to do to pass the key 40,000 mark with futures very much indicating that will be happening. Haidi i am sure a lot of investors in south korean equities have been looking keenly at this hoping that it is a trajectory and unlocking of value in korea follows. We are watching development in beijing with the political pageantry and also the twin sessions, cc ppc and nbc taking place. But 40,000. Annabelle that is a level we will watch closely here. The up and open for japan, as we said the nikkei 225 level today. Within a whisker, rather, just passing the 40,000 mark a key psychological level