Manus you are welcome to countdown. Anna welcome to the program. Weve got to talk about what we have seen coming out of japan this morning. A real surprise. Let us show you what happened to the dollaryen as a result. Economistst of 42 expected any expansion of stiff a stimulus and none of them godicted that rates would negative. That underlines how surprising this was. The yen instantly weakened. General kuroda really kicking the yen back down. . Ill it last canmuch of an effect quantitative easing continue to happen on market psychology . A chart showing the diminishing effect of the general kuroda surprise. We will also hear from him in. Close davos. The equity side of the story is this. We dropped 1. 7 . Youre still looking at an overall loss for the month. Up 9 . Tate is rocking, securities and commodity futures are ramping higher as well. The bottom is the bank banks. 330 Companies Reported on the topics today. They are mixing their profitability targets. Commonwealth bank of australia policy is an incremental step and these are some of the earnings that we have to get into. Key numbers coming in from honda. That is weaker than the estimate. They are sticking to the forecast. Saying that would be ¥525 billion after fullyear 2015 inch finishes in march of this year. That was as expected. This company has been hit heavily by the scandal. Manus sony. It is all about the movies and imaging. 202ating profit comes in at point ¥1 billion. A lot of news out of japan. Let us get to the first word news. Nejra the yen tumbles and tumbled bond yields after general kuroda adopted negative Interest Rates. It halted a yen rally what that was threatening to be the strongest. Speculation that the steepest monthly selloff since the Global Financial crisis was overdone. Injected morenk liquidity into the Financial System to ever a cash crunch avert a cash crunch. Cameron is traveling as he intensifies his efforts to strike a deal on Britains European Union membership. Mark zuckerberg has become the six richest person on earth. He thought his fortune rise by 6 billion after facebook delivered another quarter of record revenue. That gives him a net worth of 47. 5 billion taking him past charles and david coke. Kochs. Manus let us get straight to the asian market. Volatility is the personification. The market is up 3 and down when. 6 . It is trying to find its feet. A wild ride to say the least of markets in asia after the boj adopted the negative Interest Rate. Sorew the japanese market and then plunge into the red and then soar again and now finishing up 2. 8 . It came as a bit of a surprise. Last week, governor kuroda said the central bank was not interested, was not considering for but a different story the chinese markets, rising for the first time in four days. Solid positive territory for the whole session. Hang seng up to receptor speculation that this month selloff was overdone. Bankll as the central injected liquidity to avoid the cash crunch. Lunar new year is coming up next month. Gained. Be kospi 100 asx 200 also gaining. Saw it come off of the rally that we saw a earlier. Weakening, when. 5 . 1. 5 . Anna let us stay with asia. The big news overnight. General kuroda has sprung into action today. Speaking a week ago, he suggested more action could be on the way. If necessary to achieve the 2 inflation target, particularly if underlining the , it is seriously affected then if necessary we can expand or further strengthen our qe in many ways. There are many ways to further strengthen and expand qe. Manus today, we find out just exactly what that entails part the bank of japan voted by 54. Jodi schneider has more. A big surprise. That is the governor kuroda byword. Exactly. About lastl talking month and this month, will they or will they not. This month it is the negative Interest Rate plan. It would basically impose negative Interest Rate on part of the current account balances that Financial Institutions hold in the central bank. It was a big surprise. No one expected this. The timing coming as a surprise. The boj pushed back their target for inflation heading. Worse than in japan . Come before morning the announcement from the boj, we had several pieces of data that showed things were much weaker in december, before the recent global stock market turmoil with Industrial Production lower and exports off and Household Spending down. All of the kinds of things that governor kuroda has been concerned about, we have been seeing. Things were weaker in december. With the turmoil in the markets, there is a lot of concern for january as well as what is happening with china affects japans exports. The yen has been strengthening of late and this message is to tame inflation and to get inflation and growth and bring the yen back into the territory he wants to see it in. Manus he has a lot to achieve. That 2 seems a distant goal. Us bring in our guest host into the conversation. She is the chief economist. Welcome to the show. When we read your notes you say the bank of japan faces limits of its policy effectiveness. There is a limit how much qe it can achieve. Lena brilliant timing. The importance here is to manage Inflation Expectations and get ahead of market rate expectations. It seems like governor kuroda has taken a leaf out of governor druggies Mario Draghis book. There was no limit how much the bank of japan can print but limited effectiveness. Dollarget has been up by more than 7 in the last six months. Dollaryen has been up by 5 . Japanese stocks have not been immune to the drop. It is onlypan a matter of time that they will in introduce negative Interest Rates. Concern but also japan has a very large domestic savings. Negative Interest Rates could be a drag on can some for on consumption growth. Anna to underline that coming you do say it is only a matter of time before the bank of japan will introduce negative Interest Rates. The timing caught the markets off guard. How much of a sustained impact can quantitative easing or this new policy from the boj really have . It seems there is a theory about diminishing returns. Time he pulls these rabbits out of the hat, it has a diminishing impact. Inflation through Exchange Rates alone has been a very ungrateful job. Ofn you are in a world currency wars, collective desire to inflate domestic desires it is extremely difficult to stop the markets from speculating on those areas. A did they have to be new if they have to do Something Different . Largesthey are the holder of Government Bonds in that market, trumping Financial Institutions. Lena it is a very risky thing to do. In the short run, it will be rewarding the the yen is less attractive right now. That they risk is dont spend in japan. Boj on the one hand, the has faced its credibility challenge of a liquidity trap. No amount of money printing seems to be enough in terms of gaining traction with investment decisions. On the other hand, by surprising the markets, maybe the boj can get some inflation through the yen at the expense of the japanese consumer. Anna we talk about any National Body trying to tackle global forces, how much control they can really have. The boj citing large Downside Risks. They are thinking about china. From a trade perspective. Does that alarm you, the extent of the negativity . japan is very much a proxy of the turmoil in Global Financial markets and the downturn in asia because through its large current account surplus and rising, it is been a nets border. Of thes a beater original growth story and every time we have negative news, weather in the market turmoil, or by the slowdown, in emerging markets or the correlation between oil prices yen, positive and inflation negative for japan. Manus is this the start . Mario draghi has to see you and raise you. Brazil has turned to emergency funding overnight. Should we be more concerned at a global level that the fed is not going to be able to hike any further. Give us your topline view. Lena i could not have put that any better. You can say that bit of audience. There is a huge credibility gap here between central Bank Volatility and markedly in the attraction that the policy is having with real economic fundamentals. Withglobal liquidity slowing growth, slowing inflation, strong u. S. Dollar degrading risk markets globally. The financial tightening has happened despite the balance sheet. Anna thank you very much. This could mean the feds next move is to cut rates. Thank you,lena. Stay with us. Thes were going to get First Reading of the french gdp data in under 30 minutes. And then mario draghi. Anna he has been watching inflation data. That is out for the eurozone at 10 30 a. M. We get a Rate Decision from russia. Manus this afternoon, the u. S. Gdp. Anna oil gains on speculation of production cuts. Russia says it is possible that opec denies. We discussed. Anna welcome back. Let us get the Bloomberg Business flash. Nejra amazon has taken a nosedive in extended trading after sales and profit for the Holiday Quarter missed estimates. 21 asng expenses jumped amazon stepped up spending on technology. Nearly 5 billion off of the leaders net worth. Alibabas earnings were be across the board that that was not enough to keep investors happy. The key concern is slowing growth in growth merchandise volume. Sales growth rose 22 . Concerns about future growth and the chinese economy as a whole overwrote the strong revenue. Sony has reported thirdquarter profit that beat analysts estimates. Thehundred 97 million in 397 million. That is your Bloomberg Business flash. Manus let us check in on markets. Anna that is check out what is happening with the oil price. Price, 34. 76. Price, 34. 76. We see positive moves around the japanese story in tokyo. Manus those are u. S. Futures. Check out the 10 year Government Bonds. Money is really moving around. Here are the crude prices. 33. 94. Up 2. 17 . Will opec and russia get together . Oil spike yesterday as russias oil minister says opec and other producers need to do need to discuss out the. Ryan chilcote is with us to tell us what is really going on. Ryan the answer, it depends on whether i go to vienna or not. Manus vienna in february. It is cold. Ryan the Russian Energy minister came out yesterday and suggested there may be a meeting in the works between russia and opec indiana in february. Inin the end a in vienna february. Saudi initiative if there was one. What a spike we saw in the oil price. We have heard this chat for the last few days. It kicked off with the iraqi Oil Ministers comments. People dispel the idea pretty quickly after it was floated by the Energy Minister. Manus this is brent crude over the last month. The more significant point is lows. E bank 20 from the we have whipped around my question is, do you think what we see this month, if russia and opec get their act together and cut things, have the oil markets capitulated . Lena it seems so. The fact that we have russia making these comments in an industry and a world where these discussions usually happened behind closed doors, it is probably more smoke and mirrors. The fact that the market has taken such a leap of hope. Manus desperation. Lena and a huge toll in russia. They have nothing to lose by floating this. The fact that we have had this very welcome Market Reaction gives them some leverage politically for starting negotiations that they can. What we cannot forget here is that russia is very much the microcosm of the big balances happening in emerging markets. Exportersd that oil and oil price sensitive place are probably not quite done yet in terms of the risk off. Weve had an economy that is contracting. To the tune of 4 last year. Russias policies have not helped the growth cycle but they have not helped the ruble from evaluating devaluing. Bettert has made things for some people. They have had this floating foreign Exchange Rates. It may not do any favors for consumers, what it has done for the Oil Producers has been a benefit to some. Lena a weaker currency and you are exporting. It does help to preserve artificially through the Exchange Rate boost profits but , theto preserve currencies Foreign Exchange reserves. Until weed about see a real sign that the oil , until wen the way up see negative revisions to emerging Market Growth bottoming out, and until we see the end of ital market overflows from outflows from emerging markets. We had a ceo in yesterday full circle in terms of what is going on with the oil market. Glencore, is storing oil offshore, no shock there. We sit and wait and the price will rise and we will be grant and then we land and make any. Ryan glencore we understand has four crude carriers. If you look at a premium right now, it is about seven dollars a barrel. That is what you make if you buy it now and sell it in a years time. You may not be in the money. We dont know the the specifics of glencores deal but it is not clear it makes sense yet to be doing that kind of thing. Anna they are driving slower. He made that point yesterday. A lot of people with these trades last year, when it was profitable and you were going to make your forward money. Now, you are in crisis mode. Does it take mexican or russia to change the market . Because they are between the rock and the hard place in terms of weaker ruble and capital outflows. They will not be able to catch. It will take the fed, quantitative easing, and buying oil. Anna that is another conversation. Ryan, thank you. Manus a day today, we have some fresh gdps. Stay with us. The only way to get better is to challenge yourself, and thats what were doing at xfinity. We are challenging ourselves to improve every aspect of your experience. And this includes our commitment to being on time. Every time. Thats why if were ever late for an appointment, well credit your account 20. Its our promise to you. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. Anna welcome back. This is countdown. We are waiting for the bank of japans press conference to start. Governor corrode is supposed to be giving his address explaining is governor kuroda supposed to be giving his address explaining why he chose to do negative rates. Plenty going on in japan. Manus let us have a look at some of the market moves we have a board that shows you the shift in dollaryen. Is that sustainable . The equity market has been on fire. We were up 3 and then down 1. 6 . Anna now, up by 2. 8 . A lot of movement in the fixed income market. A longterm charge. You go back to the late 1990s, youre talking about 1989. Rates were up to a percent. 8 . About e if you think j jbs, a colossal collapse. Talking about what the market thinks can happen next. Gdp isrench j french coming exactly in line with estimates. 0. 2 compared to the exact same in the estimates. When. 3 higher for the fourth quarter. Compared to 1. 2 . That number is higher than the previous time around. Let us get the bloomberg first word news. Nejra the tumbled and japanese bond yields dropped to records after general kuroda adopted negative Interest Rates. The bank of japans decision halted a yen rally threatening to be the strongest since he took place took office in 2013. China stocks have risen amid speculation the steep steepest monthly selloff was overdone. The central bank also injected more liquidity to avert a cash crunch before next months hollidaysburg oil has extended gains for the highest close in three weeks after russias Energy Minister said opec and other producers may need to discuss output amid a slump in prices but no talks have yet been scheduled. Iraq says saudi arabia and russia were more flexible about operating to reduce output. Mark zuckerberg has become the six richest person on earth. His fortune rose by 6 billion after the worlds Biggest Social Network delivered another quarter of record revenue. He has a net worth of 47. 5 billion taking him past the koch brothers. Day,l news, 24 hours a powered by 2400 journalists. Thank you. The january inflation estimate for the euro area will be released later this morning. It may add to stimulus as soon as march to combat the Lower Oil Prices. That is the bane of every central bankers life. Region isation in the still far from the target of under 2 . We just had those french gdp numbers. They are not all that exciting in terms of diverting from estimates but are these numbers that we are seeing coming through for europe, are they weak enough to justify further qe in march from the ecb . Lena i think so. In the current weakness eurozones inflation rate is down to the volatility of oil prices, ultimately the ecb has a deeper credibility problem. If a perpetual residual output gap. In that perspective, in that respect, i dont think it is anything for the ecb to be relieved about. We dont have enough in terms of bank credit momentum. Things have not improved enough. And a we have political constraints and volatility in europe through the elections in spain and in portugal but through the wave of Immigration Crisis that stands in the way of full market in full market integration. Anyonei dont think could put more problems in one sentence that europe is experiencing and you just did. This is portuguese Government Bonds. This is the explosion theyse market bonds are the highest since quantity quantitative easing was introduced. When there is risk in europe, who cares about qe because they will sell the bonds. Lena this is remarkable. It shows us the widening of the portuguese and german benchmark shows the ecb has to do more quantitative easing. Come theback to the peripheraln credit that we are seeing in the emerging markets has been down to the Global Expansion of Central Bank Balance sheets with the fed no longer printing. Manus i thought that was what lena were banks four. Mona momentum. Withdrawal of liquidity in the last market through the downgrade of risk. Through this selloff of sovereign reserves. All of that is taking liquidity out and it is taking a toll on the highyield borrowers. To get ahead of berry valid concerns about political constraints. The ecbrespect was having to do what it might have to do in march because of the political vacuum that exists. We will get comments through from governor corrode a. A ernor corrode manus he sees the economy growing gradually. Have a downward effect on cpi until the end of the full year, 2016. Cpi timing pushed back and lowered for oil. It is all to do around oil. Could they go even more negative . Manus the Financial Market has been unstable. David cameron is stepping up efforts to force through a deal on britains eu membership. He is traveling to brussels to juncker. Jeanclaude manus this was a lastminute change in his schedule. Can you read the tea leaves for us . A sign that things are not going particularly well. Cameron was expecting a deal right now and there is not as much convergence on the deal as he was hoping. There is still some disagreement around europe regarding the withholding of benefits for migrants and safeguards for the city of london. For aunprecedented british Prime Minister to drop everything and come to brussels like this. Showing some panic in london that a deal is still a way off. Anna what does he hope to achieve from this visit . Having atand he is raft of meetings. Juncker, this is who cameron needs to convince. He needs to convince the Prime Ministers around europe. They are the powerbrokers. He have the years of the Prime Ministers around europe. He needs to convince them that before he holds a referendum, he wants it on june the 23rd. He needs a deal quickly if he is going to hold to that date. It has to be a thursday because of tradition and britain and other thursdays are full of things like the european championships and school racing againstis time if he wants to hold that referendum. Anna thank you so much. On things like School Holidays and football games, all of these things does the future of this country hinge, potentially. Manus you may be laughing about that but i read this this morning. Are a lot of people out there following football in the u. K. And it is a hugely important thing. These are the things that seep into the consciousness of the british public. Anna they do not want to have a vote on the day of a football match. Let us talk a little bit about brexit. This is something you are familiar with. One really interesting juxtaposition is that if this happens june 23, what state is that find the u. K. Economy in . We thought they could not hike rates at the same 10 to the brexit conversation is happening. It is unlikely indeed because we are in a world where the fed may or may not do a uturn on its december rate hike will the ecb is in the beginning of multiquantitative easing cycle. Has taken aengland tactically smart move to stay on the sidelines and wait it out. When you have this major global structure with chinas transition, with a shift towards more negative Interest Rates and the demise of global the virgins, i dont think the boe the story you highlight is an important when about cameron and his plant unscheduled visit so early his unscheduled visit so early. It hence of global complacency. Hints of global complacency. The rise of french parties and nationalism and the wave of refugee crisis. We have not got a deal yet. It shows more should have been done by now and we may well see a lastminute rush which could leave the markets dangerously unscheduled. Manus you have talked about the fed. This is twice your touched on this. Is this a cornerstone of your thinking . Why are you so doubtful about the United States . The remarkable thing is that the physics of economics and markets can be very odd. Based on the u. S. Market fundamentals alone, the fed rate should have been rising a lot sooner and it should have been a lot higher by now. Manus we ask every banker and they would agree with you. Lena we are in this interrelated world. It has changed in the last couple of months is not so much the u. S. Fundamentals. When you look at the Service Sector which is the dominant part of the economy, we have an economy that is fairly resilient to the global headwinds. The Global Markets ability to intermediate from those that have not to those who have. That has changed. On the have an impact u. S. Economic fundamentals down the line. Work and doing the feds for it, pointing out how far we have moved on. The 10 year treasury yield overnight because this is something that has moved on the back of this boj. 1. 9521 on the 10 year yields. Will the market come around to this way of thinking . Market downgrade its expectations about said rate hikes . Hikes . Rate the w. A. R. U look at. It has come down dramatically. The fed is saying it once to see the Economic Impact before they they dont want to be triggerhappy. They want to cut first and think about economics later. Fails to deliver. Shares plunge after a not so happy holiday. We will leave you with some dactures of governor kuro press conference. We will bring you more details of what he has to say after a short break. Anna what the back. This is countdown. Youre looking at the governor kuroda giving his press Conference Following the bank of japans decision to go to negative Interest Rates. Those are some of the headlines. To startwe will have talking about qe from the bank of japan. They are saying now that they thosese rates and all of could be easier. It adds to his options. Japanese price trend is rising steadily. Financial markets are unstable. Manus interesting in terms of the kickbacks that all of these central bankers have. Dollaryen on the move. Impact or the residual impact on the yen that governor kuroda is having is diminishing. Comeiee guy, kne you are still looking at a split vote, 54, no cohesion. Not one analyst was predicting negative rates. 54 have missed on their profit targets. Will there be a pay rise in japan . Let us get the business flash. Nejra it is a beat for sony on thirdquarter profit. In the three months to the end of 2015, as their Playstation Game business helped offset. As costly recalls to replace faulty airbags expanse. Net income of 1 billion in the quarter through december. Apple is working with partners in the u. S. And asia to develop new Wireless Technology that could be deployed as soon as next year. Apple is said to be exploring cuttingedge technologies to allow iphones and ipads to be powered from further away. Anna let us talk about amazon. Manus are you a prime member . Have you had your deliveries to the door as quickly as you would like . A surprise miss. The Holiday Quarter fell short of analysts estimate taking a shine off the stock market a record year for the stock earnings and had an aggressive expansion. Caroline hyde is here. Prime, delivery, what went well what did not . Bezos continues to spend. This is what is a fronting investors and the price. Amazon was on a tear last year. Sales up 22 . Profit more than doubled. It was well below estimates, about 54 before analyst had been estimating because the cost kept going up. 34. 6ing costs come billion. Sales at 35 billion. They really are just plowing money into how they continue to expand the company. How they deliver to you within the same day or the next few hours. He is spending on fulfillment costs. They have 50 more people. New are plowing into territories, cities, products. This is all about the investment that jeff bezos continues to make. Growing enough the size of the chunk of business to offset the profit. Anna ou follow the tech sector. Weigh in with your thoughts. Are they investing in the right things that will pay off . I think they are investing in the right things. The opportunity in the public cloud is astronomical. Potentially a 1 trillion opportunity. The amount of money that enterprises spend on i. T. , hardware or software or the Services Come is about 1 trillion out of the 4 trillion i. T. Global budget. Billion business. Anna they are also investing in spee slso investing in online world inn the general, providing customers with ease of use in every possible way is critical and they are investing in that two ensure they retain their leading position. I am not concerned about the miss. Missrelative relative to expectations. We can throw out hyper numbers, but it is not really a relevant way to look at it. Manus let us look at the climate including microsoft. Side of theess clout come up more than 70 of the fortune 500 companies are now using two different microsoft services. Microsoft, amazon, they are all going after this techoly grail in terms of or is that overstating the potential . I dont think it is overstating it. Theing at the size of opportunity. Amazon and microsoft are probably the best placed companies right now. Amazon has a clear leads. Has about a 2 billion run rate at the moment out of their 9 billion in overall cloud business. I just wonder, if you are a corporate and your used to using microsoft products and youre making a decision about whether to move to a public cloud or not, do you prefer to go with your established vendor, microsoft, or do you go with amazon web service. I think microsoft may start to garner some lead. I think microsoft may turn out to be the vendor of choice. Anna this is the key question around microsoft. Can the ceo revived lise growth revitalize growth . Caroline the share is up 25 last quarter. He resolutely bet on the cloud, on the fact that you can reach up to business. Manus they believe in him. They believe in the story of his turnaround. Caroline and on the costcutting drive that the cfo is pursuing now. The other winners from the clouds. What other businesses benefit by our move to the clout . To the cloud . Itinfrastructure providers, intel would be a good example of that providing dominant provider of chip sets for the cloud. As the software companies. Software companies are service businesses. I might take up this point again about microsoft. I do think it is important to see how well they have done in terms of their drive in terms of realigning the business which he has done successfully as well as their costcutting. His costcutting plan is very much working. The story is intact. Anna is that your topic in the sector at the moment . Networking and the cloud. Microsoft and amazon would be the cloud workers and networking would be google and facebook. Anna thank you very much. Manus were going to take a short break but in the meantime, we are going to leave you some pictures of governor kuroda justifying the reasons for joining the radical or negative club as japan goes to negative rates. Anna he does not see them having a big impact on the banks. And whether that will impact on the banks, we will discuss her there. Discuss further. Bend me shape me, any way you want me as long as you love me, its alright bend me shape me, any way you want me youve got the power, to turn on the light shape the best sleep of your life. Sleep number beds with Sleepiq Technology adjust any way you want it. The bed that moves you. Only at a sleep number store. Manus dakota supplies. The bank of japan case rates negative and catches markets off guard. The yen plummets. Anna amazon does not deliver. It is a not so happy Holiday Season at her the holiday retailer misses estimates. Manus russia suggests coordinating opec cuts could be on the table has opec throws cold water on the idea. Oil continues to rise. You are welcome to countdown. Anna it has just gone 7 00 in london. That stock about the bank of japan and what they did today, taking Interest Rates negative only six out of 42 economists surveyed by bloomberg expected any kind of easing during this policy decision and none of them expected to get negative Interest Rates. That is what we have got. Or qqre isut how qqe having its intended effect. He does not see negative rates having a big effect. Manus of course, what is he targeting . 120. 69. Oung, moveuestion is, can this effectuate the move in dollar you dollaryen. The nikkei has had a moderately volatile session. Of course, what you see at the bottom of the screen, 10year Government Bond yields in japan are at record lows. Anna we saw stock market reacting positively to the bank of japan. That takes us on to what we are expecting to see in the rest of the session around europe. Europe will open on the front futures suggesting we will open in positive territory on u. S. Equity markets when we get there as well. Bund you have the bund at the bottom of your screen. There is a real move into u. S. Treasury bonds and german Government Bonds, japanese Government Bonds. Indeed, developed Government Bonds. We will talk about this with mark barton. They are the winners in a raucous january 2016. Lets get the bloomberg first word news with caroline hyde. Caroline the yen crumbles and the japanese bond yields shrank to record levels. The bank of japan decision halted a rally that was threatening to be the strongest uroda tookna k office. Oil has extended gains. Russias Energy Minister said opec and other producers may need to discuss output amid a slump in prices. No talks have yet to be scheduled. Iraq said that saudi arabia and russia were more flexible about operating to reduce output. David cameron travel to brussels today to meet jeanclaude juncker. That is as he intensifies his effort to strike a deal on Britains European Union membership. He will then meet with eu president on monday. Mark zuckerberg has become the sixthrichest person on earth. He saw his fortune rise by 6 million as the worlds Biggest Social Network delivered record revenues. A netives the 31yearold worth of 57. 5 billion. He just past the refining tycoons charles and david koch. Thank you very much. Is going to break down the numbers. We have a couple of new appointments. James murdoch named as the chairman at bskyb. Martin gilbert, who is ceo of Aberdeen Asset management anna friend of the show. Manus he is named deputy chairman. He was asked about his future at Aberdeen Asset management and he said he was staying as long as the shareholders wanted. Anna lets talk about the numbers. Revenue at five 72 billion pounds 5. 70 2 billion pounds 5. 72 billion pounds. 7 million new customers joined sky to the highest Customer Growth in 10 years. 1 million new products Strong Demand for those tv and broadband. Interesting to have a discussion about this. Mark is still with us in the studio. How do you look at a business like this . Do you look at the growth numbers, the rate at which they are adding or losing customers . Is that what you do with this business or do you think about a company that could be under threat from other suppliers and take a longerterm look at this . Mark in the shortterm, it is about customer acquisition. I think that number was lighter than what analysts were looking for. Anna they were looking for third 435,000. Mark the u. K. And germany look a little light. But structurally, we do need to look at the longerterm. Is it possible for sky to continue to compete successfully in a world that is moving more to an o. T. T. Model . 47 pounds is the average payment. Ade in the u. K. For sky they can get netflix for seven pounds a month. 74,s and amazon prime for 75 quid. Premier league, usa, pga tour. Anna none of that comes cheap. That is one of the questions. How much are they going to pay for these rights . Bundesliga writes in particular. Mark exactly. The only way you can fight the battle is with your content. Content is about to rise aggressively. At the very least, one would anticipate they are going to come into some kind of margin pressure. Anna Quality Content management. Shery ahn is standing by with an update. A lot to keep you busy in todays session. Shery yes. It was a wild day not only for investors, but the reporters trying to follow the markets. It was wild. First, we saw the japanese stocks soaring after the boj announcement of negative rates. It finished 2. 8 higher. Analysts are thinking that the lower rates will support the economy and support the earnings, will help stocks. They are saying that because this is a first, everyone will have to keep a close eye on the impact of these negative rates. Is more stable today. It was in positive territory route the session. The shanghai composite finished 3 higher. The hang seng index is up 2 . Speculation that the selloff this month was overdone and we saw the central bank injecting liquidity into the markets ahead of next month Lunar New Year holiday. Kospi advanced. 3 . Australia largely followed japan today. After the negative rates in japan were announced, we saw the yen tumbling. Yields tumbling. The two and fiveyear yields setting new lows. Manus thank you very much be the bank of japan governor is on tape at the moment. He is doing his press conference. It was a surprise day friday. He spoke to bloomberg just last week and suggested that more action was on the way. Achieve theary to iftarget, particularly underlying inflation trend is can expand orwe further strengthen qqe in many ways. There are many ways to further strengthen, expand qqe. Anna today, we found out what he was alluding to. To bank of japan devoted adopt negative Interest Rates well maintaining its record asset purchase plan. Analysis with our next guest. Economist atchief japan macro advisors. Wasreason why i was smiling we had a new acronym and she has made it up, which is quantitative, qualitative, and rates easing. So qqre. Shock and awe. What do you make of it . This is one of the biggest changes that the bank of japan did since he initially started qqe, which is now, according to your acronym, qqre. That. Ally like i think the market is right in receiving this positively. The boj basically opened the floodgates. Anna does that mean they are going to do more . Do you expect to see these rates get increasingly negative . Yes. I believe so. Your new center wasnt showing the twoyear rate and fiveyear rate. There was the 10 year rate next to it. As the chart implies, i would expect to see 10year rates turning negative pretty soon. Manus many people have questioned the impact, the longerterm impact k ofurodas odas quantitative easing. It tends to diminish. It is losing its ability to shift a drop in the yen. Do you think this move will have a more substantial impact or is he going to have to do more quickly to continue the move lower in yen . I think there is a sizable possibility that the market is underestimating the impact of boj options today. This is exactly what we saw into the halloween easing thousand 14. We did not see that much of a , it did move,n but over the course of one or did noths, the yen depreciate significantly. I would not be surprised if we see extended depreciation of the yen in the next couple of weeks. Anna how long do you think governor kuroda has to deliver the inflation target that they have set themselves . It keeps getting further out into the future. Manus i have some sympathy. The global decline in Energy Prices was it was something very scary the stop the boj from achieving the inflation target. Having said that, Lower Oil Prices are good for the japanese economy. Just by simply pushing back inflation target, i think that is not necessarily bojs fault. The real fault on the part of the boj is on the growth front. Exports are not growing. Capital investment is growing. These are the areas the bank of japan needs to focus on. Manus one of the big concerns for japan is the demographics. Population. Aging the risk is that these negative rates are transferred to the savers, and, to that this could have a negative residual impact on the domestic economy. I do not think so. I think the chain of consequence is the other way around. Is this a pessimistic outlook of the japanese economy . Which is causing negative Interest Rates. If it was not for the negative , it would fall into negative territory i would say years earlier. On theative sentiment japanese economy is causing negativity. In that sense, negative Interest Rate is a natural result. Anna i want to draw our viewers attention. The 10year isow going to go negative. If we look at the yields across the curve, we are negative on oneyear, twoyear, all the way up to eight. How quickly do you think the 10year turns negative . That is hard to say. I dont think were going to i do another, say not want to say months. I think it is a matter of weeks. I cannot say for sure, but i would put more than 50 chance that we will see negative 10year rates in the next one month. Manus great to have you with us this morning. At japan macro advisors. Anna it is just coming up to 15 minutes past 7 00. U. S. Style share activism is coming to europe. We will explain next. Anna welcome back. You are watching countdown. Lets get the Bloomberg Business flash. Caroline sky has announced that James Murdoch is the new chairman. Martin gilbert will become his deputy. The companys reveals firsthalf operating profit of 700 or he 7 Million Pounds 747 Million Pounds. Profit fort for net sony. Booming playstation business offset slowing demand from chips that our smartphone cabinets. Amazon has taken a nosedive in extended trading after profits missed estimates and took a shine off the year of record earnings. Operating expenses jumped 21 as amazon stepped up spending on new technology. The share slightly raised more than 5 billion. That is your Bloomberg Business flash. U. S. Style Shareholder Activism is coming to europe. Are you the hunted . Are you the hunter . Alex webb joins us from unit from munich. Tell us all about it. Alex different slightly from the u. S. Case. Which is swedish Fund Investing in some of the most Prominent Companies in europe. Industrial companies, a lot of them. The likes of abb in switzerland. The famed Steel Company in germany. Way, perhapsivist Companies Like danske bank. Anna how do they operate . You say that some of the things that they do are like the americans and in some ways, they are different. Alex they come into a company and they are very amicable. They say, we are going to work with the company and try to help them. They say a lot of the companies are undervalued and they want to create value. Them andmpany rejects does not work with them, they start this phase, which is known as the hunt. They will speak to the media and say, we think the company should be doing this, perhaps talk to investors behind the scenes. They use their board seat, which they often get it is easy to get a seat on the oversight committee. They use that to influence what is happening within a company. One of the big ways they generate the value is by selling and spinning off divisions. Manus how successful are they . Alex they have generated pretty good returns in the past few years. Saidund some filings that they averaged a 13 return over the three years to 2015, which is pretty good. Manus i am going to interrupt you because serendipity has played into your hands. You are a boy with tiny. They are saying this morning that they have looked at tilia, but the stock is fairly expensive. You are right. These are stocks that they want to get involved in. Are they quite vocal . Are they typically very vocal . Alex it depends upon the investment. There are some when they go in and get what they want straight out of the gates and do not need to talk to the media. Or companies have a bit of a hiccup and investors are very open to it. Anna thank you very much. Alex webb reporting on the shareholder activist story. Lets bring in mark. Ctor of investment at are you ever the hunter . Have you ever participated in not necessarily being an activist, but talk us through this. Mark it is much higher in europe than it is in the United States. I have been in the industry for over 30 years. It was notoriously hard to make these kind of changes in europe. I am skeptical. Anna why is that . I remember hearing recently about one u. S. Activist who was saying it is a big opportunity in europe to do this a bit like they do it in america. You say investors in europe are very nice and do not ask the tough questions from management. In the end, you have to have some kind of approach. You need some process i with you can make the changes that you want to make. Hat is very tough in europe European Legal structures are much more aligned to the company , the management, the stakeholders. In the u. S. , it is much more aligned to shareholders. Manus it has been a tough month in equities globally. Here are some of the best in the world. These are the shiners and the less shiny parts of the world. Shanghai composite down 24 . The worst performing primary index. Argentina, brazil, nothing shocking. I will spare you are blushes. Volatility,el of this is unprecedented. More of it to come. What is the biggest concern . Anna the biggest for january. Mark there is no reason why january should not be singled out in many ways. In most, like any other, we all have a huge sense of emphasis. Now it is the new year and traditionally, the markets start well. Wondering why it would be struggling to perform in january. If you had run the exchange, you would have been wiped out. Not only battered by the equities, you are tortured by the currency. Bonds, wasnt it . That is where you really wanted to be, wbix. What is your secret for the rest of the year . How do you approach the rest of the year when you are looking at Investment Strategy . Ask i am not as frightened by what is happening in the world. Everyone is talking about potentially a new banking crisis in the periphery of europe. Even if we see a need to raise another 20 or 30 billion capital, that is not crisis territory. Banks globally went through a very cathartic process or 2008 and beyond. Their Balance Sheets have been heavily repaired and heavily reviewed in a way never done before. It is highly unlikely. It was quickly dealt with in the United States. Mark yes. It is slower in europe. The banks performed pretty much the same, both down about 15 year to date. The Interest Rate environment is driving banks lower, rather than concerns about what is going on. Manus the last few conversations i have had with ranking ceos are that the rate curves were not what they were supposed to be. The rethink larry fink says you need more losses. Mark there is no doubt that the Energy Market and commodities are going to drive a bad credit cycle. Athink that we will see credit cycle driven by that. I do not think it will be thank you fornna joining us today. Have a good weekend when we finally get there. Lets talk about japan. We woke up this morning to this news out of the bank of japan. Lets run through some Asset Classes and show you some reactions to reactions. Da saying the board sees higher Downside Risk to gdp and cpi. Will dollaryou move lower question dollaryen lower . Anna equities move higher. Have a good weekend. The only way to get better is to challenge yourself, and thats what were doing at xfinity. We are challenging ourselves to improve every aspect of your experience. And this includes our commitment to being on time. Every time. Thats why if were ever late for an appointment, well credit your account 20. Its our promise to you. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. Guy welcome to on the move. We are counting you down to the european open. What do we got . Jonathan 10year yields hit an alltime low the nikkei to 25 enters its the nikkei 225 ends its volatile session higher. Oil extends gains from a threeweek high. And amazon does not deliver. The retailer falls short of estimates in the Holiday Season. Shares get crushed in afterhours trading, falling more than 13 . Guy markets have got that friday feeling. Lets find out what is happening around the world. Here is caroline hyde. Caroline the yen tumbles. That is as central kuroda adopted negative Interest Rates. The bank of japan halted a yen rally that was threatening to be roda tookgest since ku office. China stocks have risen for the first time in four days amid speculation that the Global Financial crisis is overdone. Liquidityrejected into the Financial System. The gains were led by industrial and financial companies. Gains toas extended the highest in three weeks. That is after they said that opec and other producers may meet to discuss output amid a slump in prices. No talks have yet been scheduled. Iraq says that saudi arabia and russia were more lexical to reduce output. Back to you. The European Equity market open. Lets give you a heads up on what we think is going to happen on that open. We think we are going to get a nice, positive open. On the back of that tokyo surprise that we got earlier. Jonathan we havent looking at that throughout Asset Classes this morning. The nikkei, what a volatile session. After that decision, a jump in the u. K. , then a plunge and a jump again. The market did not know what to do with this. You see it in equity markets and dollaryen as well. The japanese yields plunging to alltime lows this morning. 14 basis point on the 10year right now. It is a risk on trade. Crude at a threeweek high. Let me go to the chart we brought up briefly. This is critical. We spent a lot of time talking about dollaryen. Kuroda corona striking back. If you want to talk about currency wars, you have to talk about what is happening regionally. Part of it. A big the currency factor has got to be playing in. He is worried about the inflation target and says this will get them there quickly. I will talk about that in a few minutes the big move we have seen since the end of the year. Theght into the end yen. Jonathan kuroda makes his move over to the pboc, surprising the market, adopting negative Interest Rates while maintaining its record asset purchase plan. Our tokyo bureau chief has more now. Really appreciate your time on such a busy day for you. I was going through the estimates and struggling to find anyone who saw this move happening today. How big a surprise was it . There was not a single economist who we survey before the meeting who was expecting this. That was partly because corona waself kuroda himself speaking in parliament that he was not looking into this option at all over the last few weeks, he did not seem that worried about the turmoil in Financial Markets. This was a surprise to all of us. Kuroda has become famous or notorious for shocking in its market in this way. Guy lets look at what he has done and think about it. From a european perspective, we have sent we have seen this done before with limited effect. Our people convinced this is going to have much of a meaningful impact . That is the question that we are all asking right now. If you were looking at japanese stocks today, you saw that stocks surged after the announcement and then they plunged and came back up again. We are all trying to digest this. It is unclear whether this will have a really big effect, but at this point, the bank of japan does not have a lot of tools. They are trying everything that they can. Thank you for joining us from tokyo this morning. Lets bring in our guest for the next hour or so, alexander dryden. A surprise move. Shock and awe from the boj. What they have actually done. Only a certain portion of cash will get charged with the negative rates. Alexander i think what you saw overnight added to the confusion. There was a lot of news to digest. It was not quite as vanilla as a negative Interest Rate cut. The threshold added to some of the volatility. We are starting off down a path of negative Interest Rates. In japan, they have come a long way in terms of quantitative easing. The bank of japan has taken that as far as it could possibly go in the short run and now they have to reach for another interesting, unorthodox Monetary Policy. Guy they talked about the inflation target. This is more about the chart that jon showed us earlier. The chinese are exporting deflation. Japan has, since the start of the year, then a recipient been a recipient of it. How much is balancing the books . Alexander part of it is a currency war that is starting to settle in and asia. It is also about trying to stimulate the domestic economy. There has been a string of relatively poor economic data. They needed to do something, particularly in these follow markets, to stabilize the situation. The yen is seen as a safe haven currency. They are trying to push that back and stop the deflationary pressure. That is something that we will see carrying on. For everyone awake in asia and those who woke up early in europe, you would have saw the Market Reaction. Forget where we are now and where we were at the close of the nikkei. The market did not know what to do with this initially. The market jumped and then it plunged and then it jumped. It took a while to digest this. I looked at the dissent to get this through. Dissenters, the reason they dissented, one of their worries was that this could be a signal that they were at a stalemate in terms of how much policy was left on the table. That was his concern. Are you concerned about that, too . Alexander that is definitely an aspect to consider. , the three arrows, they have been gunning the Monetary Policy era for the last couple of years. There has been very little action on the fiscal stimulus and structural reform. Where were those . The bank of japan cannot drive the japanese recovery on its own. There needs to be reform on the fiscal side of things. They are starting to approach the realistic limit when it comes to stimulating the japanese economy. I think they are going for something slightly more unorthodox. They have seen other banks do it. ,hey do join a very unique small club of about five countries who have been experimenting with this idea. Guy interesting message for the ecb in march. We will come back and discuss that in a few minutes. Alexander drive is going to stay dryden theres going to stay with us. Up next, find out why barclays more concerned about the eu than sterling. A barclays report is up next on on the move. Jonathan hello to you. A warm welcome from the city of london. We are 17 or 18 minutes away from the future of trading in europe. Lots of news to get through. Lets cross over to caroline beat forline it is a sony. Net income was 997 million. That is as its booming Playstation Game business helped offset slowing demand for chips that power smartphone cameras. Inzon has taken a nosedive extended trading after sales and profits for the Holiday Quarter missed estimates. Asrating expenses jumped 21 they stepped up spending on new technology and delivery services. The share slide it raised more nan 5 billion of jim bezos et worth. The jamesnounced murdoch is to become its new chairman. Martin gilbert will be his deputy. The news came after they unveiled first half operating profit of 747 Million Pounds. That is your Bloomberg Business flash. Guy lets take you to our morning mustread. The paper writes that a brexit vote could turn the u. K. Into a safe haven. If it triggers an eu disintegration. Argue that a referendum is generally seen as a u. K. Issue when it is better seen as a european issue. Barclays writes that in politics in the eu turn for the worst, it may reverse the eu Exchange Rate appreciation. Some would argue that appreciation has been fairly muted. We are talking about the fact that this would open a pandoras box and change the way that we would look at this story. I do not want to take sides here. I am not going to do that. But it is an interesting point. We have seen this time and time again through financial crises. London, the u. K. Does become a safe haven. The argument coming out of brussels is you guys are in trouble. If you leave, you could be pointing across the channel and making the same argument. Carney backed off with the bank of england, but a large part of this move is the concerns around the brexit. Im going to bring back alexander dryden. Part of that move has been the brexit risk. Risk, does it actually become risk on sterling . Alexander it is hard in this stage of the game to work out which way the currency pair is going to go. Still a lot of uncertainty over what will happen. It is president of for a company it is unprecedented for a country to be leaving an organization such as the eu. Only half a page is dedicated to how a country exits that will position. So much uncertainty. It is early in the game to be saying which way the currency pair is going to go. Guy lets take a more political stance. There seems to be this sense that the u. K. Would lose the most. The safe haven story comes at such a moment of political stress in the eu that you wonder whether or not the barclays story has some legs. Alexander i think it is a valid point that he is making, it is still early days. It is as simple as that situation. The eu loses out. They want them to stay. What they do not want to do is have to renegotiate every single term. It is not worth it. Guy the guys were asked this in the press conference in frankfurt. The response was london is a place that people want to live. They want to do business there. The Financial Community aggregates there. It would be a hard story to unwind for the Global Financial industry. Pouring a little cold water on the fear associated with london, particularly the financial center, losing out. We spend a lot of time talking about the politics as well. David cameron in brussels, trying to come to some kind of deal with the eu. They would have to invoke limitations after four years. Is the state under severe stress . I do not know if that means anything as far as the electorate is concerned. Look at the economics. The boj going into negative rates. The eurozone is set to do more in terms of stimulus. If you were going to lose anything right here, you would have europe losing a member, the European Union losing a member, and the u. K. Exiting at a time when there is a stronger economy. You just wonder, when we talk about risk, what the biggest risk is. Alexander i agree. People have only been considering it from the u. K. Angle. What i would say is it causes significant uncertainty. It will damage investment in the eu and the u. K. Inyou are a senior director a company and you are concerned about one of your major partners leaving, you will not invest in the new technology. Use the you should start. Eeing investment flatlining that could take at least a couple of years to do and could damage both economies in the u. K. And europe. Dryden,nks to alexander who is going to stay with us. Up next, we look at what is going on at sky as it reveals a new chairman with a familiar face. Jonathan hello. Welcome back to on the move. This is bloomberg tv. We are about nine minutes away from the open in london. By 2. 8 . Ei 225 up kurodand awe by governor as they going to negative Interest Rates. Lets get some stocks to watch with caroline hyde. Caroline a bit of m a speculation. This is going to be a big mover. It is a spanish Renewable Energy company. Speculation that siemens is eyeing it up. A report that siemens has hired Deutsche Bank to explore the purchase. Up byould send the stock 7 10 . These are some of the calls i am getting. Riseer company that could in the back of energy in the sector. Keep an eye on this swedish phone carrier, betterthanexpected numbers. Fourthquarter earnings of 11 , beating estimates. Consumer demand helping the highspeed internet demand for them. Likely to rise as well. Sky. It is they meet forecasts in terms of the revenue. The big thing is the fact that there are changes at the top. James murdoch becoming chairman. Boosting the family control of sky. It is backed rupert murdoch, his father. We are also seeing Martin Gilbert becoming deputy chairman. All changes at sky. Guy is mr. Murdock senior act hunting again for a possible takeover of sky . That is a question that could impact the stoxx later on. Lets bring back alexander dryden. I want to get a quick take we are minutes away from the open. European equities on the front foot this morning. Stocks being driven by what is happening in tokyo. Give us a sense of where we are now. We have seen an incredible selloff. Do we see further falls. The bears are making all kinds of cases that this is not done yet. Alexander what you have seen in the last couple of days is stock market gaining a little bit of the confusion that they have lost. You have yourself a bit of upwards movement in the stock market. I do think there are still some risks, but it is washed out. Valuations have come down significantly. I think that is starting to be enough to get a few people back in the marketplace. You should start seeing us move a little higher. If we can keep this up, it will be back to back games, which will give us momentum going into february. Jonathan alexander is going to stay with us ahead of the open. Entiment is shot, yes is a negative Interest Rate enough to turn sentiment . Is it also fundamentals . We need to get growth back. Stocks moving again. The multiples are such a bad influence. Growtham not hearing this morning. I am hearing a lot about inflation and deflation. How does this change Market Sentiment . Jonathan i am hearing regional effects, negative rates,. 1 . A triple tier negative rate. Very mechanical. It is not like the blunt sword of october, 2014. Ahead of the open, we are about four minutes away. Futures higher. Up 136 points. The European Market open is coming up next. Jonathan good morning and welcome to on the move. Moments away from the start of european trading. Guy johnson has a very japanese morning brief. Guy the bank of japan adopts negative rates. The yen drops. Awakening. Crude cuts could be on the table even as opec throws cold water on the idea. Oil extends gains to a threeweek hyperion amazon doesnt deliver. Shares get crushed in afterhours trading. Falling more than 13 are to jump ahead of the opening. 2. 3 . Crude higher by 34 a barrel. European equity futures look to decline this friday morning. Thats also for two caroline hyde. Could we and on a high this friday . We are down 1 on the week. Could we eradicate that with todays risk on environment . Japan takes the genetic steps to fuel volatile trading. 1. 9 in volume. You saw wild swings. Today we see an upward trajectory. Energy stocks on the rise. It is all going to be about the hardhit falling Gas Energy Companies as well. We are opening on the high when it comes to equities