Transcripts For BLOOMBERG Bloomberg 20240704

Strength of the ways negotiations and the data reported on friday. That there is the expectation it will be hiking the key rate, the exit away from negative policy settings. What does it mean for purchase of etfs, that will be another question out of that session or out of that meeting, but here is the outlook we have in the session so far today. Japanese yen holding steady, but still weak around the 149 marker , and equities, you are continuing to see this place higher even though the definition boj has been something that has propelled japanese stocks. There are a lot in the market saying there are plenty of other factors and that is why investors were continue pilot into the market. Nikkei225 just one fraction under the 39,000 mark. Number economics, one of the economist highlighting perhaps the boj is not ready to like can they want to see more data to affirm their belief that we are starting to see strength in the japanese economy. Lets take a quick look at how korea is starting to trade. We are seeing a slight bid for korean equities, we saw net selling less we on investors, but the kospi want contractor at the session and geopolitical headlines or risks also front and center, because we actually had north korea firing a suspected Ballistic Missiles as the u. S. Secretary of state Antony Blinken visited seoul to take part in a summative for democracy. Haidi lets take a look at how we are setting up when it comes to about one hour of trading under our belts in australia and quite a bit of event risk that we have been talking about specifically. Watching the rba, not expecting necessarily a major change from rba. A lot of domestic activity indicators trending in the wrong direction, so the rba is widely expected to hold that the 12 year high for Interest Rates on tuesday. Particularly watching concerns of unemployment trends headed higher as well, but this is the picture is busy australian stocks declining. Miners are some of the big heavyweight since we see iron ore language. Fortescue leading losses, but Real Estate One of the laggards as well. Health shares it dragging the sector lower after be so u. S. Stocks falling after what has been a volatile week. Aussie dollar,. 6559, watching for any indication the greenback could burst it of its range bound Trading Options we have seen over the past few weeks, but the Iron Ore Price amid concerns about the china did it we are expecting later weighing on the aussie dollar as well. Treasuries starting to show signs of caution in the market after 10 years on the worst week so far this year. We are seeing traders darling back bets on the pace and the scope of easing expected from the fed and all of that has to do with the fact that we have not seen a lot of communication from fed chair powell in terms of how definitively he feels about the economy. We have fed more definitive data when it comes to the japanese economy signals toward wage infln annabelle we can get to those rest, not been features of the u. S. Economy the jay palace shied away from, but the direction of treasuries also dependent in part of what the boj does, and local media is reporting policymakers will end negative Interest Rate policy on tuesday, so thats cross over to tokyo and are chief correlation correspondent stephen engle. Really much of foregone conclusion and local media, but there are some risks present, so do we need another month to be sure of the strength we are seeing in the japanese economy . That is one of the Big Questions is why the hurry, and we had the former deputy boj governor, right handyman to the past governor kuroda was asking that same question, why the rush . Why not wait until april or beyond where you get a better picture and better data because the Quarterly Economic outlook comes out and data april, and that was the consensus in january that may be april was the bigger date on the calendar to circle because you would have a wealth of information about the Overall Health of the japanese economy. The annual Wage Negotiations in particular on friday when we got the largest grouping of trade unions in the initial Wage Negotiations agreed to 5. 28 increase in annual wages. That is far better than a year ago already had a 30 year high up 320 , so that is something governor ueda wanted to see, and that is a sustainable verge cycle of inflation above the government target of 2 backed by wage gains, so the fundamentals of the fundamentals are there to exit negative rate policy, but there is not enough strength to get to show that the economy can absorb tightening at this time, so essentially he was saying that the risks of tightening too quickly, prematurely outweighs the risk of overheating the economy which is in a fragile recovery. Haidi ueda has proven himself to be nimble but as a refrain from clear messaging, so could we get more accommodative communications along with tightening . I think absolutely he will be fairly dovish, ending is not going to essentially telegraph any future heights as well. He does not want to go against what he has always been saying, which is we will remain fairly accommodative. We are likely a most economists expect to go along with this Interest Rate hike to exit negative rates there will also be a commitment to basically be constant with this jgb bond purchases essentially to show that despite the fact that we are exiting for the first time in 17 years the negative Interest Rate policy, we will remain a fairly accommodative policy with the bond purchases. One thing a lot of economy saying they will back off on etfs. At the stock market does not necessarily need the backstopping anymore. The etf Purchase Program is been a since 2010, so that could go away as well as negative Interest Rate policy, but bond purchases can keep going. Is this the foregone conclusion . Most likely, yes. Essentially the boj has already probably indicated to the government what they are going to do, and there have been some leaks obviously with nikkei, kyoto and others reporting it as fact. Now we have to decide what will be next and what kind of guidance could we get from what will likely be a very dovish governor away down ueda tomorrow. Haidi what a monumental moment from the economy and our next guest expects imminent action from the boj given recent wage gains after nationwide negotiations. He joins us in our singapore studio. The question is how impactful will this be on Asset Classes . Is it going to be up buy the rumor sell the news when it comes to the yen, and does it at that path to equity markets . If you were looking at the yen you also have to be looking at the fed, but the bank of japan is on a path to normalizing whether it is this meeting or next. It is almost going to weapon. We all need to recognize the fact that they have been in coordinate easing since 2000. They have had negative rates for the last 17 years and have been buying etfs were many years, a be a decade now, so the fact that they are eventually moving while everyone else is contending with superhigh inflation and even at this point in time is something Everyone Needs to think about in terms of what exactly money is and how it is priced. Having said that, if we move we expect them to move, but also at the same time talk expectations down, so they do not want to the runaway policy expectation of higher and higher rates. They would want to push back against that. And terms of dollaryen particularly, it also depends on how powell handles the midweek meeting at the u. S. , and we do not expect too much of a change right now. We are sticking with our goal for about three cards this year, but dollaryen will see initial reactions just based on the news. It is a very closely watched event and everyone will be parsing the comments out of the boj. Haidi does this even momentarily derail the equity rally . Out of japan, i think it is momentous that we have crossed even though it is been briefly, we have crossed over the 40,000 mark on the nikkei levels that were set 30 years ago. There could be a pause but especially as the boj talks on future expectations of hikes, i think there is a theremin of confidence in the economy for bias to come back in. Annabelle there is the boj and then there is the fed. Do you think the inflation data we have had recently, ppi, cbi coming in hotter than expected, do you think that tells us maybe we will get a slightly different message from jay powell this week on rates . I think he is going to want to keep things on a fairly even keel. But we are focused on is the recent employment numbers, which came through last friday, or friday before, where they had my numbers were pretty decent. He also had the Unemployment Rate pickup and average Hourly Earnings tick down to 0. 16 for the month. While the annualized rate did not come down, the month on month, there was some kind of softening, and to the extent that you are seeing wage pressures in the u. S. On the bit of a back burner, you probably have some room for the fed do eventually talk rates down, but we do not expect too much out of the meeting in march. Heading into the next meeting in june is when you would have some expectation for them to provide direction in terms of which what they are going to go. December when they said three cards for this year, there is still ample time for that. Annabelle something that stood out in her nose was the question mark over what happens in the election this year, and perhaps a President Trump presidency is coming into focus, but you not quite in that camp it seems. Not at this point in time. To the extent that bullying is important, it does not capture the mood on the ground, right . We are still six to 7 months a way from the event, and there will be a lot that moves from here until then, but we have seen pulling get many things wrong the past as well, and what we are focused on is how the biden presidency as well the policy over the last three years. The manufacturing pickup, infrastructure spending, jobs getting created not just at larger corporations about smaller companies, smaller and Medium Enterprises across the country, and that is leading to what we are seeing in terms of four key roles. It is hard to find people to fill those roles, so when you see that strengthen the economy despite the fact after the fed has hiked over the last 12 to 18 months significantly, the economy is not rolling over. Had we been in one year prior to the fed hike that we said the fed is going to ike multiple times over the next 18 months, what will be the state of the economy, it would not have been as robust as what we have now . All set the economy is firing pretty well. Inflation is sticky, so we need to handle that as well. Overall i do not think it is a done deal that biden is not going to win. We keep our bets open for now. Annabelle it really is that focus on the health of different economies and where we are seeing the weakness is in the Iron Ore Price because we are continuing to drop below the 100 per ton mark, and we have been keeping a watch on mining stocks internet as well, and you can see pretty mixed as we come online, but fortescue really expressing that so far in the session. Watch on iron ore, the slump below the 100 more, lets move on. North korea reports that it is fired listed missiles or one suspected ballistic missile. It is the show of force because we had a visit to seoul by secretary of state Antony Blinken taking part in a summit for democracy, so keeping an eye on defense stocks, and we are seeing those moving higher so far. As well seeing japan launching a protest over that launch. Haidi it is a busy week for many reasons, and we will be getting some views on what we should be focusing our attention on and some of the risks and opportunities in china. Our guest will be with us ahead of the release of key data. I new Bloomberg Survey sees japanese money staying offshore once the bank of japan hikes rates. We get the details next. This is bloomberg. We have been seeing the bank of japan is ready to tighten policies. My interview is it will be a dovish exit. Market split between a march and april exit from negative rates. The u. S. Goes lower and against and the yen strengthens. At i do not think they want to risk instability. The stock market has performed well so that could take this as that of that. There will be hiccups and it seems that these couple of months will be rougher japanese equities, but at the same time they can give you opportunities. Where does the money go . Maybe to china. Annabelle some of the bloomberg tv guess we spoke to, and one of the questions in our survey is if we do see the boj hiking and that is being reported as a foregone conclusion in local media, is that going to trigger a flight of japanese selling of overseas assets, and this results saying there is a 40 chance of that happening, the majority is saying, no, there are more than 4 trillion being held offshore by japanese investors and it will say that they. Lets bring in our senior asia stock reporter. If we do see a hike in the makes japanese assets more attractive, but why arent investors worried about the repatriation risk . I think that the reason is simple. But boj is going to do this time the boj policy is quite complex, but when it comes to shortterm Interest Rates to shortterm Interest Rates the boj will raise the benchmark Interest Rates by 10 basis points to 0. 1 from the current policy bound of 0. 1 . If you look at the dollar Interest Rates it is more than 500 basis points, so what the boj will do is shave 10 basis points off the massive high massive hundred yield gap. Most investors think that is not going to change the mindset of market players, and i can also point out the fact that even though the japanese have raised quite a bit, japanese investors cap to buying foreign bonds. They bought a few trillion yen and we have not seen any change this year. It seems unreasonable to think this 10 basis point hike is not going to change anything. Haidi nikkei trading at a session high, and i do wonder is there a sense any kind of yen strength has been priced in already . What happens if we see a bounce . That is an interesting question. The yen weakness has been a main driver of japanese stocks, but on the other hand a lot of investors are expecting the yen to strengthen a little bit later that year. People who are worried about the yen strengthening have the memory of what happened during the great financial crisis in 20 08, and, yes, at the time the boj raise rates a couple of times and a couple of years later the yen strengthened by almost 50 , so if that happens that is really worrying, but there are two key differences. The japanese investor now has a High Percentage of currency hedges on their bond investment, and that is completely different from 15 years ago, so even if the yen strengthens they do not need to sell u. S. Treasuries because the yen strengthened, because there currency portion is hedged. I guess not many people are worried about the yen strengthening at the moment. Haidi get more analysis from our expert editors on our markets a live blog at mliv. This is bloomberg. Who work at shriners hospitals for children. You might see everyday people just doing their job. But to me and other kids, they arent just receptionists, therapists or doctors. 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Org to give right away. Your monthly gift helps us be superheroes too. Haidi you were watching bloomberg daybreak asia. Vladimir putin has secured another six years as russias president winning more than 87 of reported with half of the votes counted. The 71yearold will extend his new quarter century of rule into a fifth term of the strips something offensive in ukraine. Three other candidates offered no serious competition in the tightly controlled election. India has announced their general elections will be held over six weeks from april 19. The Election Commission said the polls will be completed on june 1 with vote counting on june 4. Prime minister modi is bidding for a third term in office boosted by a Strong Economy and it weakened oppositional line struggling to put across a cohesive message. I minister netanyahu says israels military will begin operations in the Southern Gaza city of rafah within weeks. The u. S. Described an assault on the city sheltering 1. 5 million Palestinian Civilians is a redline. Netanyahu push back on calls were early election saying about paralyzed the country for six months enemy losing the war. Donald trump says he would hit chinese cars made in mexico with the wanted to percent tariff if reelected, double what he promised. The redemptive president ial publican republican nominee addressed the chinese president directly. 10 on goods made anywhere else in the world. Annabelle taking a look at how we are fearing so far in the session, every single sector in the green, but Bank Stocks Among those gaining today. That is a secto her uncles unhappy. Im sensing an underlying issue. Its tmobile. It started when we got him under a new plan. But then they unexpectedly unraveled their price lock guarantee. Which has made him, a bit. Unruly. You called yourself the uncarrier. You sing about price lock on those commercials. The price lock, the price lock. So, if you could change the price, change the name its not a lock, i know a lock. So how can we undo the damage . We could all unsubscribe and switch to xfinity. Their connection is unreal. And we could all unexperience this whole session. Okay, thats uncalled for. All right. We are getting breaking news data when it comes to trade numbers out of singapore at the moment. For the month of february, nonoil domestic exports falling by 0. 1 . That is missed given expectations for a gain of 4. 7 and when it comes to exports, we are seeing that decline month on month again of 4. 8 percent. The estimate was for a contraction of half a percent. Electronics seeing a rise of 5. 2 . In this really, you know, when it comes to the export oriented economy, we are seeing signs of some weakness depending on which country that you are seeing exports being driven to. For example, nonoil domestic expert to china seeing a decline of 0. 1 . For other major markets like the u. S. , we are seeing a gain of 17 . Weakness for those headed to the e. U. Such a big focus on so many different economies this week but not least of course the u. S. Where fed chair jay powell has been reluctant to make a call on how the u. S. Economy has changed since the pandemic. The feds Economic Projections for the long haul have hardly changed since 2019 and investors are growing frustrated over policymakers lack of conviction. Furthermore, lets bring in our guest for some analysis from the big take and we know that there are risks to calling out any sort of changes or new futures in the u. S. Economy, not least politically in the election year, but is that what is holding jay powell back at this point in time . It is interesting because i think what you are seeing here is a disconnect with what a lot of companies and investors are experiencing on the ground where they are saying this labor market resilience, this tightness they are experiencing seems like they are kind of settling in for the long haul and they are seeing that change in the Overall Economic picture. We really have not gotten that really robust forecast update from the fed in quite a while. At this point, traders are pricing in Something Like 3. 5 longerterm fed Interest Rate, about one percentage point out somewhere the fed is actually at with its own projections but obviously, they will have another opportunity to revisit that. You are right. We are in the middle of an election year. I think anything that jay powell puts out there to the broader public can be interpreted one way or another based on whatever political leaning you have and that is obviously, theres a lot of concern around that but i think what we are seeing again from these traders and companies is that absence of any sort of update right now is what is leading to a lot of uncertainty and a lot of volatility in the market. I suppose what is not helping or i can see why hes being like this is the lack of conviction and commentary we have heard from fed chair powell, right . Yes. I mean, look. At this point, its a very tricky situation the fed is in where they have got this we saw just a couple of years ago, you know, some of those projections that ultimately led them to have to raise Interest Rates in this incredibly aggressive Interest Rate hiking cycle, highest in many decades. I think at this point, you know, there is a lot of confusion or uncertainty over calling something before it is actually time to call it so what you have been experiencing and what you have been hearing from jay powell and others from the fed is that they are still in this we are still sort of observing what the impact is on the real economy and what that is going to be looking like Going Forward. I think it is very difficult to kind of make a judgment call especially because you dont want it to be the wrong judgment call. The Central Banks really set that narrative for the broader economic trajectory and this massive responsibility and you really want to get it right. I think what we have heard a lot out of fed speak over the last several months, not the last year, is this idea that they want to be patient and they want to wait and see how all of these things are transmitting through the economy so i think that that is all kind of combining to see, you know, this kind of uncertainty you are experiencing now. Bloombergs guest with the latest on the fed and what is a very busy week and of course kicking it off when it comes to the bank of japan. Its interesting the way we are seeing japan risk assets trending, suggesting that maybe a lot of this risk is starting to get priced in. We are seeing some very hefty gains for the nikkei 225. 1. 6 higher and the yen is above that 149 level as well so potentially if we got a breakout after the fed with the dollar, that might be a different question but certainly, japanese assets look pretty comfortable with the boj lift off that is expected this week and we are seeing the kospi up by just about. 2 there. It is not just the boj or the fed. We are getting other Central Banks including the reserve bank of australia. A little more caution with expectation that they will stay on hold. Some of these concerns over recent data but aussie bonds, i should mention, opening the week lower heading into a bigger risk. And also a big update on a lot of different economies and we are going to get that for china later today as well because we have activity data that is due out in just a couple of hours here. If we take a look at headline readings for industrial production, investment, retail sales, they are likely to show some growing or slowing. Growth rates from december but lets get more insight with our next guest because Credit Agricoles china economist is in studio this morning and when i took a look at what the consensus was that we were expecting and your team and what you were expecting from Credit Agricole, you were a little bit away and perhaps a little bit more bearish on the outlook for chinas economy in some parts. Is that right . Yes. I think the january and february data is unlikely to show any exciting news about mary swift coming back of the economy itself for this share, our forecast is the idea that it is showing a cautious view. I think overall, we think the data will show a Slower Growth compared to last december. Largely it was because there is largely, it was because there was a difference in the comparison base, but beyond that, we are seeing underlying growth momentum may not be very different. I think that we are seeing some of the stabilizing effects coming through after the policy easing. For example, the Services Consumption was quite strong during the lunar new year, but we are still seeing some of the warning signs, for example, property sector slump has continued and if you look at the credit data from last friday, it was not that great either. In particular, if you look at the household names, the data, there was quite worrying there as well because he shows that they could be some evidence of, you know, deleveraging effort from the household. While there could be they could be quite concerned about their Income Growth and also if we look at the labor market, the youth unemployment is still a problem that the policymakers need to address. Yes. It is something we have tracked so closely is that we have seen credit is available but the uptick from corporates and households has been just so weak. So those numbers that we got out plus wit we are inspecting today what we are expecting today, how much does that tell you we need to see more stimulus and also faster . I think there is room and i think there is also for policymakers to step up their policy easing measures. We have seen a lot of policy documents coming from the National Peoples congress and also, there has been following up measures but so far, if you look at this policy packages, i would say it is still quite modest and it is eyeing the longterm benefits of how to rebalance in the chinese growth and also to force the longterm productivities through those industrial policies. I think they will benefit in the longer term but in the short term, i think the Multiplier Effect may not be that strong as compared to policymakers have a big focus on the demand side. But definitely, i think even where we are in terms of growth, where we are in terms of chinas inflation, the policymakers will definitely do more including from the pbocs side. You know, as we see from japan, even on the cusp of lift off, it is hard to exit that deflationary mindset trap. Sentiment has not returned for japanese households. Is china in that same situation . Is there a real risk of a deflation . Or is it already in that situation . Thank you. This is a very important question. If you look at the chinese inflation, i would say there is still quite persistent this Inflationary Pressure in the economy given the quite weak expectations and soft confidence. If you look at the cpi, i would say that Going Forward in the rest of this year, i think cpi has likely returned to a positive territory even though the reflation process could be rather mild. I think china has relatively low inflation and the recent disinflation pressure is about chinas soft demand. If you look at also the overcapacity issues in the Manufacturing Sector and then how the policymakers are carrying out their policy easing measures, some of them may not be that reflationary either so i think it is an issue to be tackled but with the policy easing measures coming through, that will help, you know, be filled by the overall economy and likely to help the rather mild reflationary process and the rest of the year. It is likely the cpi inflation will be at in a positive for the rest of this year. All right. That was the china economist at Credit Agricole joining us this morning in studio. Thank you for your time. Lets discuss the market set up and bring in Charlotte Yang. We have seen sort of so much focus on chinas economy. It has been just one of the factors that investors have tried to steer clear but at the same time, we got that focus on what is supposed to be the new economy as well and that has sort of been this focus on renewables and materials in different parts of the economy. What is the readthrough from investors . I think the battery maker just reported earnings on friday and remember that they had the big jump earlier this month which helped push the index, onshore china tracking growth stocks. Earnings so far has been pretty positive. The earnings surprise investors with our special dividend. It is one thing to watch and with more earning coming out this week, with tencent and xiaomi, that will give us a broader assessment of whether this earnings season is as positive as the ones that have reported so far so even with only 25 of msci china reporting, there have been aggregate expectations. On top of the china macro data watching, earnings are definitely a big thing this week. That was Charlotte Yang and i am really glad you mentioned it as well because we have china pledging extra support for its ev sector as the e. U. Looks to add more moves, tariffs on imports. We will have more news coming next. This is bloomberg. China will take pragmatic measures to support the growth of the new Energy Vehicle industry according to the head of the countrys National Development and reform commission. The call comes as domestic ev makers steer up to report their quarterly earnings. Byd following the next week and those results could provide better insight into the impact of the price war begun by tesla and how that strategy will impact some of these other countries as well companies qamar should say, as well. Briggs linda lew reports. This is the ev that is popping up on the streets of sydney, berlin, and sao paulo, and more chinese evs like it are being exported to the rest of the world. Chinese carmakers now account for half of all global ev sales and they benefit from access to minerals and the Cost Effective supply chain built over years. From 2016 to 2019, chinese carmakers received 28 billion of government subsidies. That Rebate Program was phased out in 2022 so now, china is entering a new stage of adoption. The transition from a traditional one to energy era is still unstoppable so we are still very hopeful we will bring a lot of growth opportunities. Carmakers want to make inroads in smaller towns in rural areas but to do that, pricing is key. The competitive auto markets is a price war started by tesla two years ago, showing no sign of slowing down. Pyd and others have all slashed prices to follow suit, raising questions over the sustainability of the strategy. When you look at the intent price competition in china right now, that is not sustainable for any company. It is a game of thrones price war happening in beijing. The record deliveries dont always translate into bumper profits. When the oil you overtook tesla last quarter, preliminary profits for the year were short of estimates by half a billion yuan in shares slumped. With the lack of government funding and a slowing domestic market, ev makers that do survive have to come up with better, even cheaper products, and sell to overseas buyers that may not be friendly to cars made in china. Number news. That was some reporting from our asia transport reporter, linda, and she is joining us in studio with our earnings specialist, rachel, joining us here. For both of you, it is a busy week for earnings across the course of these days but lets kick it off because we just heard about some of the risks and things we are watching so give us a little bit more context on what we should be watching out for. Linda the market is going through a very intense thing. You have Something Like more than 100 players in the space although that is going to decrease as domestic market slows and funding drives drives up and you have this intense price war started by tesla two years ago and now, you have Companies Like byd that is continuing to slash prices, followed by rivals. It is a market that is looking very uncertain Going Forward for some of these players. It is expected to widen its losses. We are also expecting tech giants like xiaomi and huawei entering the ev race as well so what does that potentially mean for this whole space and consumers . The tech giants like xiaomi and huawei entering the space means that they are going to bring some of these very hightech features that are only starting to come into evs coming to the market. Huawei said they want to be the best driver systems. Essentially giving selfdriving futures to some of these evs. The leader previously has been they continue to really try to hold onto that lead. And you have xiaomi as well entering into the space, trying to bring this very sophisticated car ecosystem which can really link up with your phones to try and provide a seamless User Experience and they are hoping that in such an intense market, their technologies going to stand out to customers and put them over other rivals like byd that has not been so strong in developing these advanced technologies. And of course, there is that focus on tech as we were discussing but we have a number of other Tech Companies and tencent is one of them this week so what are we looking out for here . Likes we are seeing strong growth for tencent this quarter so this is supported by advertising, International Gains and sales. They expect that to see doubledigit growth for their revenue this year as well so in terms of their profit, . 10 profit will be further driven up by ai as well as demand for short videos and this was supported by cost control and a stabilizing Regulatory Environment as well. Rachel, when it comes to meituan, are we expecting more cash to be returned . Rachel yes. Meituan is expecting to return more cash to shareholders and in terms of the earnings, they are expecting to see better growth as well as are seeing success. You know, expanding beyond that. For example, having a Meal Delivery Service Expanded to hong kong, for example, which comes as chinas Consumer Sentiment is waning as well so meituan has expended their revenue stream rings with sources as well such as, you know, for going into Grocery Retail so we will see how that will play out in the upcomings earnings estimate. All right. Very busy couple of days ahead. We will have more from both of you. That was rachel and also our asia transport reporter, linda. We will have more ahead. This is bloomberg. But starting it eight months pregnant. Thats a different story. With the chase ink card, we got up and running in no time. Earn unlimited 1. 5 cash back on every purchase with the chase ink business unlimited card. Make more of whats yours. Linda some of the latest corporate stories we are following. Boeings production delays are starting to hit airlines and their passengers. United, southwestern, ryanair are among carriers scrambling to deal with reduced deliveries as a playmaker focuses on quality control. Carriers say they are trimming schedules and looking for alternatives to the 737 say already ordered. Ikea is planning to spend about 327 million in south korea over the next three years to increase market share there. The Swedish Furniture maker will open another socalled blue box store in seoul and is considering many more smaller formats. Ikea has four outlets in south korea. Kuester pans chief executives are repairing their businesses for the first rate hike possibly since 2007 with the central bank widely expected to end its negative rates cycle as soon as tomorrow. Bloombergs Haslinda Amin spoke with the recruit ceo to find out what a boj normalization could mean for business. I think, you know, the one big fact one big risk factor in the japanese economy is the yen so i think seeing as other Central Banks, its just a matter of time how japanese centralbank is coming back to the normal situation. Has sentiment improved, do you think . Finally seeing the kind of growth that you wanted to see . Yes. You know, what im hearing is Japanese Companies can increase their prices of items and that is the first step to increase the compensation and hourly wage and that cycle, we have to definitely make it better. And so to do that, you know, first of all, we need to increase the price on the items. Everything is becoming more expensive, but i think that is probably the first step to normalize japanese inflation in the economy. The ceo there. You can watch that full conversation in the next episode of latitude with Haslinda Amin that premieres on march 20. That is it for daybreak asia. Our markets coverage continues, next. This is bloomberg. Happy monday. We half an hour away from the opening bell. You are watching the china show. I am david ingles with yvonne man. Investors brace for big centralbank decisions including a fed call Center Reveal whether policymakers remain on track