Target, prices refusing to budget in march. Haidi chinas oil giants benefit from cruise gradual recovery. Opec says producers are unified in rebalancing the market. Rishaad the regions banks are starting to report earnings, so far reflecting a general upturn in the economy. Right, lets have a look at what has been going on today, dominated by currency markets to some extent with mario draghi beast. D as an elusive doing nothing to cement a vision that tapering will start when it comes to the Monetary Policy situation in europe. Suggestingindicates more power to move currency markets. We are looking ahead as well to data out of the united states, a first read of firstquarter gdp later today, as slew of japanese news as well. Haidi extraordinary Monetary Policy around the world. Take a look at this chart 5548, fed, boj, boe, ecb, starting to see that the versions, no surprise is from the boj or ecb, exitario draghi saying an is too early to talk about, things are going better and adjusting that language. We did see weakness in the euro as a response to those comments. The boj saying until we hit 2 , it is too early to talk about and exit. We are 30 minutes away from the open in china and hong kong, singapore, taiwan, malaysia coming online. Some window dressing, distortion in the markets. Lets get over to sophie to see how things are tracking. Mix to session this friday in asia when it comes to equity markets come up at the regional benchmarks set for its biggest weekly gain in a month. Breakdown,ook at the aussie stock swinging into the red, down a third of percent, and japanese shares down. 2 sllowing that data this morning, reinforcing with the boj had to say regarding inflation outlook, and kospi on the up. Take a look at the currency space as well, some weakness in Southeast Asian currencies as the dollar strengthens somewhat, and oil trading below 50 a barrel. Up. 1 after index that gdp boost from exports. Certainly intocks focus come up. 1 at the open. Day drop here after topping estimates in the first quarter, southeast asias thirdlargest lender and the first of singapores big three uob, tradingrts, and Wealth Management helping that boost. Taking a look at the kospi, samsung helping to keep the kospi afloat, shares having the , theweek in 1. 5 years s8 for the s device boosting suppliers. Higher sales forecast, but cut to underperform at Credit Suisse. ,ake a look at the topix hshares on the decline, but set for its best twoweek rally since november from the benchmarks thing above its 50 and 100 day moving averages for a Third Straight day, nintendo and other Companies Reporting lower than forecast earnings could affect the overall market here it rishaad thank you market. Rishaad thank you. A man waiting for political clarity and inflation as well, talking about the ecb. Lets get best are and more with first word News Headlines with paul allen. Paul thanks. Mario draghi made a small concession to policymaking colleagues wanting to discuss of come up marking a change in his carefully weighted comments. And june 8, the ecb scrutiny on how skewed to m and when it should wind down stimulus. In earlyour meeting march, the cyclical recovery of the euroarea economy is becoming increasingly solid and the Downside Risks of further diminished. European Union Leaders meet in brussels on saturday, saying it is all for one against the united kingdom, they will members talkning up unity and warned britain against trying to sew division in their ranks. The eu is increasingly confident it can speak as one when it comes to brexit talks to preserve stability. Isnas campaign to clean up. Eceiving endorsements they called on the authorities to continue to despite stocks falling to a threemonth low. Oils gradual recovery is easing big energyr chinas companies. Profit, neteported income doubled even as output fell slightly. Nooc are facing a drop in domestic production. China is ahead of the u. S. As the worlds top oil buyer. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. I am paul allen. Thank you for that. A day after the boj signaled it is too early to consider ending stimulus, a delusion of data supports that position. Kathleen hays is with us in tokyo. Lets start off with the labor market. We have seen conditions tightening, but what does the latest indicators tell us as to whether the boj maybe should have downgraded that inflation target further . Well, it did not cut its inflation target much, but it does say clearly, the boj says in its Monetary Policy report, governor kuroda to express this in more ways than one at the press conference yesterday come the labor market is tight and that is one reason why they think wages will rise and help inflation rise. Today, the jobless rate in japan stayed at 2. 8 , the second month in a row. Nice, tight labor market, london unemployment rate, jobs to applicant ratio. , 1. 5 jobs for every person who can take with them. That is a tight labor market. This is something the boj is 8152, counting on the tight labor market could boost inflation. These trend lines are strong, arent they . Look at that unemployment rate, the turquoise line. It has fallen, volatile going into the 2010 decade, but now the jobs took how applicant ratio have risen, so two very strong trends. If you are in manufacturing, another number was Industrial Production weak in march, down 2. 1 . We dont reflect in the chart on the screen right now that come although certainly manufacturing jobs are in that batch. Nevertheless, the output number month,om jobs, a weak year over year production rising, up 3. 3 , previous month up of 4. 7 . Industrial production keeps rising, still not such a bad reading. Kuroda oncegovernor to get to that inflation target he has had in place for so long, he has to get people spending, hasnt he . The think it is millennials. Fancyont want to buy close. They are too smart for that. Consumerng aside, spending is an area that is a problem for japan, and demographics are a problem in a lot of Development Nations as older people will be saving more and spending less. Down one spending point 3 , down 3. 8 in february. If you look at retail sales, they are not doing so badly, up 0. 2 the month, up month before, and year over year retail sales are rising 2. 1 , and that is up from 0. 1 . Bad,rend there is not so but could be better, and here is what the boj is looking at. Tight labor market and spending, lets see what you get. 07, the trend we described about the tight lip or market is there come but you see the retail numbers if you look at Household Spending are suffering, the broadest measure, and as that white cursor is showing you, not moving in the right direction. That is a concern for the boj. Nice one. Kathleen hays there in tokyo for us. The dojse about inflation problems under the microscope with the chief economist for japan at Credit Suisse later on. Next, banking on the recovery, the outlook for asias Financial Sector with ig. This is bloomberg. Rishaad this is Bloomberg Markets asia. I am Rishaad Salamat in hong kong. Sydney, am haidi lun in the business flash headlines. Japans biggest or oak ridge returns, posting a profit of 551 Million Dollars compared to 170 million a year ago. Nomuras overseas business became profitable as well. Operations nomura is looking at munich or frankfurt. Investment returns and premium income for chinas secondbiggest insurer. That is . 19 a share. An premiums jumping, clients buying more product and profit at the banking arm on the way up, shares of more than 13 so far this year. Haidi China Construction Bank improved thirdquarter profits thanks to higher fee income, rising more than 10 billion through march, 3. 4 better than earlier. Have beeng vendors struggling with never ring margins and defaults. The countrys Economic Growth accelerating for two straight quarters. Rishaad earnings from other big next guestks, our has a generally positive outlook for lenders and this part of the world supported by a broad recovery in the region. Have you got this positivity for . Hi, rish. It is about Economic Growth picking up in the region. We have seen a stellar firstquarter in asia, and just recently, 6. 9 year on year growth exceeding what the country had been expecting. Thea is looking rosy at moment and will help Economic Conditions in the banking and Financial Sectors here. Rishaad tell me something, we have thanks essentially trading, well, below book value, decent Net Interest Income margins as well, a key gauge of decentbility as is a return on equity and decent dividends as well, but one thing overshadows it is the specter of nonperforming loans but surely the good news is outweighing the bad . Yes, some relevance to singapore banks, recently q4 2016, a situation where there then we earnings, but had those nonperforming loans from the oil and gas sector. The situation right now appears to be picking up and is creating confidence in the market, clients more bullish than it is givingo confidence to the market, and i that there is still volatility ahead, but brought stability seems to be the case for the longerterm, rish. Rishaad right, lets have a beat and whatob you make of that when compared to its peers . The largeuation for , they are trading together. You will be surprised in terms of earnings. Of market was expectations loan increases in net interest margins and the credit aspect of things, so that has contributed to what we are seeing now. Of course as we have seen , there was ar q4 surprise in the oil and gas sector, and that is something we cannot rule out, but right now what we have this of bullish situation and the market is pricing expectations in ahead of time. Haidi i want to look at chinese markets. We have seen Global Equities rallying to record highs sicken this month, and china has been the market doing things on its own. You have these conflict doing two drivers, one is that growth has been generally pretty good, stable, better than expected over the past couple of quarters , but tighter pboc money market rates and also these curbs aimed at deleveraging. What will win out in terms of the driver . Is it still fundamentally the liquidity story that will be important . You have people trading asian afters seeing a recovery the political concerns wear off. Created ations have situation where prices have dipped significantly. Over the week, people have been saying that this is just a concern at the moment and not theamentally change situation for chinas rosier outlook, so this is what people have been saying, an opportunity to get into the market at this moment, but the Holding Period might take a while. We dont know how it will fade out given that we have seen situations in the past like this as well. More it is always systemically supported, but unclear how long it will take to get there and what volatility a the road, but are you saying by every dip when it comes to mainland markets qamar are you seeing support coming soon for shanghai . Or are you seeing support coming soon for shanghai . The fundamental factors are supporting the market, but looking at the technicals, you are seeing support for the 3100 level on the shanghai composite. Csi 300. He these are the key levels at this moment. Rishaad nice one. Joining us from ig asia from singapore. Reporting a drop in firstquarter profit could we would look at the market stock in the premarket next. Haidi this is Bloomberg Markets asia. I am haidi lun in sydney. Rishaad i am Rishaad Salamat in hong kong. We count you down to the start of the trading guide here, shenzhen, and shanghai. Premarket pretty much flat, not a lot of conviction. The futures contracts suggesting, diversions, but we can expect the index to, well, flip between gains and losses. A story about the banks as well when it comes to china particularly, Bank Reporting season. That is what we have at the moment, on the way down to China Construction Bank down. 3 , net income 10. 2 billion dollars, the countrys secondbiggest bank, a big increase on fee income. 813 eight tells you shares in hong kong compared to shares in china itself. Hshares and ashares, hshares at a discount to ashares traded on the mainland. If you look at China Construction Bank, there we go, trading at the Biggest Discount five cents a share. That is what you have, the one with the least discount is ab bank of china. There we go. Take that as it it is an make of it what you will. Haidi we keep talking about premiums, but not happening so far. , china second largest Residential Property earnings,out with disappointing, firstquarter profit falling 17 , higher costs offsetting homes. Surprising given the property boom, the revival in chinese cities. Income. Lion is net this is the company that has been that has been at the center of this battle for control, this littleknown Company Emerging as the biggest shareholder, a move the developer called hostile, situationwhite night where and group gain control of the company with the near 30 voting stake last month. Are seeing stocks trading higher in the premarket, and that may be on account of being morningstarbuy at from a previous hold. The stock is up 12 this year in terms of that hong kong listing. A welcome return, chinas Energy Giants getting a boost from recovering oil prices despite stagnant output, Third Quarter earnings details our next. This is bloomberg. Rishaad the icc building right there in hong kong. We are counting down to the start of the trading day here and greater china. Taking a look at what we have in moment,of events at the japanese data, retail sales better than expected, Household Spending worse. We are looking ahead to firstquarter gdp. What will growth be like . It will be incredibly important for the Federal Reserve and 30 liberation. ,ooking at banks, chinese banks recordings the season for them. Reaction to those figures as well. I am Rishaad Salamat coming to you from bloombergs asian headquarters. Haidi i am haidi lun in sydney. There is a lot for investors to digest as we close out the end of this month. Details, markets contending with what trump will do when it comes to taxes and movement on the health care last well, nafta on top of that, and the french elections. Some data crossing the bloomberg, austrias march numbers when it comes to 1. 3 cer prices, ppi rising year on year, extending gains, rising. 7 from the previous month, a nice beat. We are seeing an improvement. Also seeing credit to business and consumers rising by. 3 as well. That is versus expectations of there,rease, so a miss but Producer Prices painting the picture we are starting to see and collation or he come through when it comes to factory prices given that we did have cpi this week, and in fact going into the reserveman from bank of australia, so looking at reaction to the aussie dollar and aussie markets. Growth,on quarter,. 5 1. 3 year on year. Its get it over to sophie for the reaction. Sophie with that miss and ppi, tightening grip on the aussie dollar, Holding Losses below that 75 level, so hovering around its current session right now. Take a look at the way stocks are panning out. On thels and tracking , a 2 , and now the focus but rebound on thursday, the shanghai composite falling. 3 , and the hang seng snapping a fourday rally. Taking a look at what is moving elsewhere them up have had a raining inrding the Financial Risks in china. Some potential spillover effects. , Foreign Investors dont seem to be overly concerned by chinas credit default swaps. Moreyear, that has fallen than the index, the line in blue, so that tracks a combination of corporates and sovereigns in the region. Taking a look at what is moving , leading theeng drop, falling almost 1 , a bunch of earnings to digest out of hong kong as well as china. Stocks to focus on, chinese banks in focus. Icbc, bank of china, and ab bank to announce earnings after the market closing. Giants though finding support in Higher Energy prices, so petro sign a and petrochina and sinopec on the way up. Resultsnke disappointed, but on the way up. Rishaad first word News Headlines, here is paul allen. The rba governor says china should be wary of the message it is sending with its clampdown on capital outflows. In the speech, philip lowe commended beijing, but said tightening outflow controls could the interpreted as concern about the wider economy. He also noted the influence of chinese buyers in austrias housing boom. A rare case when an activist investor targets a private equity firm. Reveals it on 5 of kkr. This cussing possibility of converting kkr from a partnership to a corporation. Kkr shares surged 5 overnight to a oneyear high. Kkriba said to favor the groups bid for its memory chip says thes, however nhk sale of the unit could face a prolonged antitrust vetting process. The japanese government is desperate to avoid the Technology Going abroad. Toshiba is also likely to talk withple, likely to assist investment and funding. The tense relationship between the u. S. And canada now sees iering accusing bombard of selling planes at low prices. To byear, welker agreed the seaserious just for 19. 6 million of these, parlous than what boeing says is the 33 million a costs to build. Global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Rishaad chinas Big Energy Companies reported higher earnings last quarter. Sinopecs net income doubling seeing surging revenues. Lets get more. Tell us about these companies. They have done pretty well, havent they . , rish, a pretty strong showing, petrochina, the countrys largest producer said earnings swung to a profit. Said sales rose 56 from a year earlier, and sinopec said net income more than doubled. The pricey factor is of oil. Brent crude average 55 a barrel in the first quarter, 55 above what it averaged a year earlier. Oil was up after opec led global efforts to trim production with opec countries and other outside producers like russia from january 1 through the First Six Months of this year, so you see the impact of that on the price of oil and now impacted in earnings of chinas big three oil companies. This in theee earnings, but what will they do with the extra earnings . With a boost spending what it comes to domestic output . Right, that is the big question. All three Companies Said they will increase Capital Expenditures this year, but the interesting thing is none of them set Oil Production would increase. It will take a few years to really see a boost in production in china. One analyst saying you will probably not see it until 2018 or 2019, an increase in production. Another reason why you may not see an increase in Oil Production is a shift towards natural gas. The government of president xi jinping is pushing natural gas fired generation to reduce lines on coal and cut pollution, so it is both those factors that may limit oil output in the coming year. Haidi thanks so much for that. With theenergy editor Chinese Oil Refinery earnings out of tokyo for us to the opec secretarygeneral said the cartel has seen the light at the end of the price tunnel when it comes to the Global Oil Glut continuing to shrink, the u. S. Inventories not reflecting the overall trend, but there has been movement there too. To go fullyd transparent, but to answer your question, we are looking beyond the shortterm, looking at the mediumlongterm and the picture emerging, which is a picture of a stable market when supply and demand will balance itself in the second half of this year. We are satisfied with the level of conformity. All participating countries in the declaration of cooperation are participating. We are also aligned with the demand numbers that are coming in, including ours, which is robust, raising from 1. 2 Million Barrels a day to 1. 6 Million Barrels a day. You are seeing the rebalancing process coming forward, and in the second half of this year, we are going to have a balanced market. Is saudi arabia enjoying this rebalancing . Is saudi arabia committed to the opec model of production . The Saudi Oil Minister who is the current president of the opec conference not only played toeading role in the runup the landmark decisions last year, but also played a leading role in the fact that we fully implement this in a timely fashion. As i speak with you now, he is extensively engaging all participating countries to ensure we have a consensus in the runup to a conference on may 25 in vienna. It need desirable for opec to engineer some sort of forwardation in the curve for oil . To take the slope downwards rather than upwards come you would prevent them doing that. Is that an objective you think further down the road . Backwardation is a question of supply and costs, and what we are seeing particularly in this quarter is attributable to seasonal factors, which are themselves transient, but in discussionsin our with the key producers in the united states, i think we agreed that Oil Producers have a responsibility to restore stability to this market because we all belong to the same market belong no one producer singled out of the market. I dont want to suggest focus on the immediate shortterm. We should look beyond that, and i remain confident that we are on course. Opec secretarygeneral speaking earlier on bloomberg surveillance. Right, coming up, the japanese economy growing steadily, but inflation refusing to budge. We get the view from the chief economist for japan of credit squeeze. Rishaad this is Bloomberg Markets asia. In honghaad salamat kong. Haidi and i am haidi lun in sydney, the latest business flash headlines. Projections,ing ending a four streak. Google shifted its focus to handsets and away from laptops. The company is benefiting from increasing the number of ads in searches. Company shares rising 4 in extended trading. Rishaad amazon shares on the up and extended trading, its unbroken twentyyear streak of doubledigit Revenue Growth shows no signs of abating, projecting sales after revenue increased 23 , coming in at almost 36 billion. 80 million subscribers to its prime service, up one third. Amazon surging in after hours trading, propelling jeff asus to the pinnacle of the bloomberg rich list, personal fortune topping 80 billion, putting him 5 billion behind longtime leader bill gates. Bill gates has been number one on our index since may 17, 2013. Nation isnflation still not a term one could dream of applying to japan at the moment, core cpi up as expected, is,the bojs 2 target well, as far away as ever. Is in tokyo and joins us from their once again. Another month with not much to say, is there . It depends on if you think the inflation class is half empty or half full. Halfeconomists think it is full, although the boj says it is closer to target. We have a special guest, the chief economist for japan at moret suisse, and so much than that, 16 years at the boj, economists, senior administrator. He worked on the financial domestic crisis from 19971990 eight and is a special assistant to the governor, a highly ranked forecaster on bloomberg as well, and we are happy to welcome him to the show. Welcome. Bojovernor kuroda and the in a Monetary Policy report looking at inflation, the positives and the japanese economy. One day later, they are put to the test because the actual numbers come out and they are not necessarily so different, but it shows how far japan has to go. The inflationth numbers themselves. The core measure that is most important is is your. 2 year over year for the last couple of , ands, the target is 2 governor kuroda says by march 2019 that we will get there. Headline was in focus on the the excluding food and energy part of the index. This suggests that without the thegy inflation push, headline number could be weakening from here, so the Biggest Issue for the boj is whether there is any fundamental changes happening on the side of directionin an upward because the economy is growing, but not necessarily happening yet. Theverybody looks at Exchange Rate and the yen and what it will mean for inflation, but these Energy Prices are so important for the actual headline number, but even the , Energy Prices have a way of seeping into that over time, and Inflation Expectations could be very much affected by oil prices. So how closely are you watching opec and what will happen to Energy Prices as you try to gauge what kind of wind at the bank the boj will have or headwind if they try to move ahead. There should be some headwinds from Oil Price Inflation or gasoline inflation because the japanese Consumer Behavior is somewhat different from the consumers and the united states. We are less affected by gasoline prices, in the meantime, went downrices go up pressure on other prices mainly because of their Pricing Power, but one important thing for japan is the japanese consumer is sensitive to food price inflation. The food prices go up and they tend to limit spending on other products, and their prices soften. An important point often overlooked, people think cometion and Central Banks a fed included, inflation rises, compass will give you a higher paycheck to pay for those extra prices, but in the world today, that does not seem to happen, or to i pay more for food fill up my car, i will have to cut back on an on eight shoes or electronics for my kids. That is correct. The problem in japan is that wages have bottomed out, but wage growth remains moderate, so the Pricing Power has not improved much. If you take a look at pricing on food consumers products, it is still deteriorating. That is a problem. So, wages, the unions, to what extent i want to continue this conversation with you in the united states, unions dont have much power, but play an Important Role in negotiating wages. That of our guests as we continue, the chief and commonest for japan Credit Suisse good we will look at the jobless rate and more. Keep it here. This is bloomberg television. Welcome back. An indepth look at the japanese economy one day after the boj holds policy steady as it heads towards the 2 inflation target. The labor market is an important part of this. We are speaking with the chief economist for japan at Credit Suisse in tokyo. Lets continue to look at this question of labor market and inflation because another set of numbers, the jobless rate, staying at 2. 8 . Almost 1. 5ant ratio jobs open for anybody who can take them. With the labor market this tight, why dont wages rise . The labor market reflects the mismatch the between demand for labor and labor. Companies want to hire people. Thats why the job to applicant ratio is high, but not necessarily meaning that wages are picking up. Function of the productivity of labor. ,he labor unions for example they are inclined to continue to ask corporate managers to keep their jobs, but that means in some industries that employment, low productivity, and not hide way growth wage growth because of low productivity. You spent 15 years at the boj as senior economist there. You know how these debates work. What is the reason why . Boj, why dont you just drop your target . , so why keep to 2 the 2 target and change it . Did they drop the 2 target, their concern is possible negative reaction by the Exchange Rate market, the yen starts to appreciate because of lower expected inflation in the market. So they wouldnt keep doing stimulus . In the near future, they have to stick to that number because Market Reaction is a concern. Inflation will inflation ever get back to 2 in japan . No. Why . This country is aging, and an aging population means declining productivity of labor, and declining gdp of japan. It is difficult to say income is picking up. Four quarters of gdp growth that has not happen for a long time in japan. It is true the economy is but thatthat growth, Economic Growth is not necessarily suggesting the moremy is in a inflationary situation, mainly because japan still suffers a negative output gap or shortage of demand. Are we going to have fueled curve control, 10 year yield of zero, 0. 1 percent key rate, and bond purchases forever if japan . Oes not hit the 2 target does japan keep its policy forever . That is the question. The boj is already renting money a lot, and the boj share of bonds in the market is close to 50 . How they can continue to expand the Balance Sheet . Xit . How can they e we dont know when the boj will give up buying bonds. They will keep it up for the next 23 years. What is an investment outcome from this . If the Interest Rate remains low, prices benefit, and in the end, we talk about a bubble situation of japanese equities. It looks very interesting, doesnt it . Us today. For joining the chief economist for japan at Credit Suisse. Rish, back to you. Announcer from our studios in new york city, this is charlie rose. Charlie we begin with the unveiling of president trumps plan to overhaul the u. S. Tax code. The white house considers this effort one of their biggest priorities to boost Economic Growth. The proposals at revealed earlier today were dramatic, they called for sharply lower rates for businesses and individuals. Also eliminating key tax breaks. It represents a first moved to begin negotiations with congress. I am joined by Dennis Berman of the wall street journal peter , coy of business week and from