Take a look at the china [indiscernible] this is a key gauge of sentiment. Retail investors very much an important part of the equity market on the mainland. We did have chinese small caps falling to a threemonth low on wednesday. This index has lost 3 this year. We see those declines continue this thursday. We arecurrency front, seeing the offshore rate hover around the 100day moving average. This is supposed to ease some slow curves. Earlier, we did hear from a former regulator who said the china should open up the yuan before lifting capital. The currency stability has also seen bets on volatility decline, as you can see from this chart here. More. Oes not expect if overall, it is about stability being the name of the game. Rishaad thank you so much for that. Lets get over to the first word news headlines. Paul china intends to further ease [indiscernible] individual tax burden as part of a broader drive to boost consumption. It is easing the structure of valued added tax come including gas and various agricultural items. The state council says the changes should ease the tax burden by about 55 billion. U. S. Vice president mike pence has told Business Leaders in tokyo that the u. S. Is grateful for japans investment and the jobs it has created. He also said washington seeks stronger and more balanced trade ties with japan and would combine economicallys with diplomacy to provide pressure on north korea. Japan italy come the u. S. Supports japan, including in the islands in dispute with china. Australia is tightening rolls on citizenship. Heap the rolls on citizenship citizenship. On we need to ensure that our citizenship test enables applicants to demonstrate how they have integrated into and engaged with our Australian Community so that they are part of the community, have lived here as a permanent resident for four years, speaking was, share our values, the integrated. Those are critically important elements. I believe that they will be empowering for applicants. Paul global news 24 hours a day, powered by more than 2600 journalists and analysts in over 120 countries. Im paul allen. This is bloomberg. Lets get to the trade day in japan with the country ending the First Quarter with stronger imports and exports. There were surprises all around and ask a good news for shinzo abe. Brian yes here in this finishes the fiscal year for japan and japan finishes with a surplus for the first time in six years and ands in a positive note, a note that was surprising in a in a positiveends note, and know that was surprising in a variety of ways. There is some question about whether it will be sustainable. But definitely ablest way to start the new fiscal year. We are seeing on impact on the stock market today to that effect. Rishaad the question has to be asked. Is this trade performance a oneoff . Is a sustainable . What are the political toing and froing . Brian there are different areas to look at. First of all, theres currencies. We saw the yen starting to strengthen at the end of march. Depending on where they dollaryen goes from here, that could weigh on exports in the second half of the year. We have also got china. Chinas growth remains pretty robust. However, there is some sense it may decelerate in the second half of the year. There is some hope as well that china will try to offset the Property Market the celebration with more infrastructure investment, that will help Companies Like umag sue and Hitachi Construction like kumatzu and Hitachi Construction. With mixed messages. Haidi the missing pace when it comes to abenomics, is there an indication they might switch this Economic Growth in export numbers to a more demanddriven performance were the spending will pick up . Brian its kind of difficult to say. We have seen mixed signals. On the one hand, the labor market, you look at the jobless rate at the lowest in decades, yet wage growth is rising at a slower pace than it was last year. That is not good in terms of Household Sentiment and spending. Imf raising its projection for japan gdp. Sign. A good on the other hand, we see analysts setting back their forecast for when the boj mesa to taper, probably not this year when the boj might start to er, a bubbly not this year probably not this year. So mixed signals. We see some signs that packet that cap x is looking pretty good. I would guess that domestic demand, based on what we see solid, maybefairly not enough to entirely offset the slowdown in exports later. Haidi well focus on the positive for now. Blowout trade numbers coming from japan for the First Quarter. Chinas economy continuing to face significant risks despite stronger than expected fiscal gdp. Tos according to8 guan tao. Tom, guan was calling for faster reform on the chinese currency to broaden the trading been. Trading ban. Tom thats correct. Clearly, there was this call for an appropriate level of speculation on the yuan, this onshore yuan, that is, which is largely traded by banks. He wants to see more participants able to trade. He says the benefits will be greater liquidity and also that the yuan will be able to price itself more accurately according to the market. Of course, the negatives from the policymakers point of view is that you could see some extreme moves because chinese investors can take extreme thats one way or the other. Policy the concern for makers. He said that the Capital Markets are being opened quite quickly. But the yuan and currency reforms are not keeping track and it would need synchronization on the front. We asked him about the q1 data that beat expectations. He was quite circumspect. He said now is not the time to be complacent. Thetao the strong data in First Quarter gave the market confidence. [indiscernible] ans too early to say economic pick up a solid for the markets to have a dispute on outlook of the economy in china in the shortterm. Expecty, many analysts the economy will slow down again in the Second Quarter or third quarter. I dont think the comments on the market are overoptimistic to the First Quarter data. Tom what do you see the key risks for china in 2017 Going Forward . Concern i think the key is the financial risk, such as Property Market bubbles, [indiscernible] Something Like that. A very cultural prospect on the economy. The fed is still a key concern to me, i think. To speedtream view is up Monetary Policy in the u. S. Probably bring a new challenge to the market, bring new volatility to the market. The Chinese Government will closely monitor the movement taken by the fed and what would be the response from the market. Tom what do you make of President Trump apparently trying to talk down the value of the u. S. Dollar . Trump gives some incentive for a strong dollar. A strong dollar may be [indiscernible] with the package from the Trump Administration. Be effectivecould in the initial stage. But in the midand longterm, need some concrete action to stop the strengthening of the dollar. Tom it was interesting that cautious. As and a number of the headwinds we had been warned about in 2017 not materializing. Tensions for example, in the u. S. China relationship. He is still saying be cautious. He is an influential researcher and former regulator. So his views are listened to and respected. Rishaad the question that ryone wants the answer to when is guan tao expecting the easing of capital controls . Tom that is the question we put him. He said no time soon. Dont expect any major moves on these capital controls anytime in the near future. We have a chart that shows what has been happening with the renminbi in terms of volatility this year. The chart starts from about 2015. The in 2017, the volatility, the bets on volatility reducing stability for the yuan as the dollar has weakened so far. Tao said we needed for those capital controls to move our be pulled back would be inflows into china. We have not seen those Strong Enough to make that move yet. He said stronger inflows and any pressure on the yuan to appreciate. Windingy may consider back capital controls. He says what they dont want to do is whine then back and then having to impose them again. He said it would be like flipping a pancake and it would do no good to anyone. Rishaad thank you so much for that. Hisng up, paul volcker as voice of the debate of Bank Regulation in the house and how the Trump Administration will go in rolling it back. Stay tuned for that exclusive interview. Rishaad this is Bloomberg Markets asia. The veteran fed chair paul volcker has defended doddfrank and other regulations, saying there is no evidence it has hindered any financial markets, banking or growth generally. Speaking to Kathleen Hays in washington, he also called for a more unified approach to financial regulation. Kathleen started by asking him if the Federal Reserve should have more oversight. Aul im sorry to tell you or maybe happy to tell you the Volcker Alliance has a report on this particular subject. And it makes a particular suggestion on how to do it, but there could be other ways. Just give the Supervisory Authority to another agency. Agency,it in a new relate that to the Federal Reserve, because the federalirman of the reserve for supervision can be the chair of that or on it anyway. Other agencies may be represented on it, but you have to have a unified supervisory approach. That supervisor will supervise the banks and he is going to supervise Goldman Sachs if he goes outside the banking system. So thats the way we would handle it. Clarify, theto other loose point historically and even now is who is responsible for oversight . Fsoc. Equipped and certainly not the treasury of the secretary. He doesnt want to be. There is the feeling that the Federal Reserve no, there is nothing in the law that says that. The instinct that it should be the Federal Reserve is correct. The central bank better Pay Attention to the institutional structure and the stability thereof. That is an inherent part of their responsibility, in my view. Some countries do not agree with that, but that has always been my view. And it is not an uncommon view, but that is the way i would solve it. Get an independent supervisory agency. Get it all together. Make sure the Federal Reserve that it is supposed to be exercising surveillance. Power whenregulatory they thought it was necessary, given the overall structure. Kathleen you also talked about resisting idiosyncratic domestic approaches to regulation. He also talked about the need to have our own Bank Regulations, however they change, said of, harmonious with international regulation. Are you concerned about what is coming out of washington, that that is being ignored and we are going back to the past . Paul that is the reason i wrote the speech. Yes,nternational point is, dont forget that, in this area and other areas nothing is going to work very well in today,s interconnected World Without some basic degree of consistency between the other big markets and ourselves. That is true now in capital requirements. Its true in some derivatives stuff. Its all steps in the right direction. That is a good conclusion for this p. M. Kathleen one more question though i want to conclusion for this. Kathleen one more question though. Shoulducture of the fed, it have Monetary Policy rule . Paul this is an entirely different subject. [laughter] i dont think you can compress it all. And test yourules judgment against the rule. But i dont think we will have Monetary Policy by a [indiscernible] rule. Rishaad former fed chair paul volcker speaking to Kathleen Hays. Coming up, apple is under pressure again in china. Means onurbs on life streaming apps. Rishaad this is Bloomberg Markets asia. Chinese regulators are putting pressure on apple, demanding more stringent review when it comes to life streaming applications sold through the app store. Peter, what is really behind this latest move . What are they trying to do here against apple . Peter this is the beijing city regulator, the Cyberspace Administration that is taking a apple. It is saying that, in the app store that apple runs, it needs stricter review processes for these livestream apps. These have become quite popular now. And the city of beijing is saying that we want more stringent regulations around this. They want to be able to verify the information of who is running these Live Streaming apps. They expect content controls, like they do for the rest of the internet. And they want to be able to see who is actually viewing these Live Streaming apps, too. It is a series of regulations that go beyond what you would typically see what these kinds of services. And they are going after these apps specifically. These Live Streaming apps have become very popular broadly in china. Haidi so i guess the question, why this is significant . Peter apple has been struggling a bit in china. Crack seen regulators down on a number of their services around the app store. They closed the service for movies and books earlier. They also faced Patent Infringement lawsuits with competitors there. It is a competitive market for cell phones. Where investors may be concerned is that this is a broader knock to apple. How is apple actually doing in china . How is it doing more broadly there . Peter it has been extremely popular. At one point, it was the most popular phone in the market. It has lost a lot of ground. A series of a a series of local competitors have done really well. Xiaomi has been displaced by other competitors. And while way and wawai has been a good competitor. It is hoping, with its new smart phone that will come out later this year, apple will be able to claw some of that ground back. Rishaad thanks for that. Lets tell you what we have coming up. With foreignexchange very much in focus. We will talk with the fed chair from barclays. The fed, looking at what other banks can do to address their ballooning balance sheets. A bit of recovery in the asiapacific equity session. Announcer from ours studios in new york city, this is charlie rose. Good evening and Jeff Gore Phil in and for charlie rose who visited oa today. Development,ng Prime Minister theresa may declare to a call in early general election on june 8. The move reflects an effort to give the Prime Minister marv flexibility more more flexibility. It is a saturn reversal from her previous position at that the company needed time to ensure stability. The house of commons will vote on wednesday