north korea despite the latest missile tests, three, in fact. ♪ >> there is a lot ahead to kick off the trading week. i want to start with one story that may not be on everybody's radar, but certainly in california. as we speak may be holding a meeting where they determine afterll be the next ceo travis kalanick was ousted. overesting developments the weekend. the former ge ceo took him out of the running to lead uber. , "i haved, in fact decided not to pursue a leadership position at uber. i have immense respect for the company and founders." not sure what happened there, but there was speculation that jeff did not like the chemistry of the board. took herselfwho out of the running, she seems to be back in the running and may be voted in as the next ceo of this company. with all the diversity problems we have in hearing, having a woman lead uber is not the worst thing for the board. >> it could be a boost to the image of uber after the tumultuous time we have seen. saying ieen on twitter am not interested in joining uber, so it will be interesting what she has to say after jeffrey immelt dropped out. that is the big question. >> it might be one of those dating things, right? all right, let's look at how markets traded friday, not so much for the bulls, a mixed session after janet yellen, no surprise to some that front. the markets were on tender hooks wondering what she would say, but she stuck to the script. kind of a mixed session for you in asia. >> a lot to look ahead to as well. you mentioned hurricane harvey. in hong kong, we are recovering from a second typhoon in a week. when it comes to equities, up in new zealand. that is given the dollar weakness following janet yellen's comments. differed from talking down the euro. we are looking to the opens in japan, australia, and korea. onlyes in korea flat, up six for the asx 200. watch.sie, keeping a gasoline prices, gasoline futures up 6% right now. incking japanese futures chicago, unchanged at the start. dollar-yen, a little strength here. another missile launch from north korea over the weekend, so are a lot of questions about what comes next given that course when it comes to pyongyang. plenty to look ahead to come a let's get the first word news. at least two people have been killed in the strongest storm to hit the united states since 2004. harvey has dropped torrential causingd strong ravens, unprecedented flooding in texas and shut down a quarter of oil and gas reduction, forcing cancellation of thousands of flights. harvey could intensify again. heavy rain continues to lash macau, and the delta. with a 90ndfall kilometers an hour winds. it forced hong kong to issue its highest level warning for the first time in five years. flights were canceled and the stock exchange was closed for the day. it stilld states says wants talks with north korea despite what it calls the provocative firing of three short range missiles. rex tillerson said washington would maintain its pressure, working with china and other allies to move towards potential negotiations. launchesle came after washington praise north korea for showing restraint. >> we hope this is the beginning of the signal that we have been looking for, that they are ready to restrain the level of tensions and provocative acts, and perhaps we are seeing a pathway to sometime in the near future having some dialogue. on theiro see more part, but i want to acknowledge the steps they have taken so far. haslinda: china's factory output and investment slowed as the economy shows resilience. industry maintained a profit 16.5%,n july, rising maybe giving policymakers room to tackle excess capacity ahead of the party congress this fall. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. i am haslinda amin. this is bloomberg. ♪ >> thank you. janet yellen and mario draghi had little to say on on a terry policy and economies and jackson hole. by contrast, governor kuroda sending a definite message on where the boj policy will be next. he said this in an exclusive interview with bloomberg television. this growth is great in japan, but it will not last. we were so fortunate to sit down with governor kuroda. i want to thank him and his team for making this happen. this is the central bank enclave of the year, right? the fed, ecb, governor kuroda not speaking at the conference, but we got the strong message boj as to maintain stimulus. the ecb may looking for a signal strong enough on inflation to make its move. strong growth, six straight , somers of positive gdp of the fastest growth in a decade, over a decade, but even so, governor kuroda told me there is no need to follow the fed and ecb in the policy normalization direction. let's hear what he had to say at jackson hole on friday. we are carefully watching how the fed and ecb are doing, but our monetary policy is for the japanese economy, and since our inflation rate is far below the orget, what ever the ecb federal reserve do in the coming months, we have to address the situation by our monetary policy. he also saidt about the economy is that 4% growth, great, but that it can't be sustained. to 2%.ks it will be 1.5% he does see signs of wages rising, but this is someone in no way ready to think about removing stimulus unless and until inflation is closer to target. >> does this mean anything about thepolicy, dampening expectations for growth and saying it is not sustainable, that he will not respond? >> absolutely. let's say this 4% growth rate continued. it would be great. governor kuroda still once to see inflation following along with it. i asked him about yield curve control, continuing the jgb at 0%. this is the problem. the boj buying bonds at its current pace to keep that 0% jgb yield, they could end up owning all the jgb's and distort the market. he said yield curve control is function quite well. we did leave the door open to buying future jgb's, but he said the market let's them get away with it, they will do it. the main takeaway from the market is that he is tying himself to this dovish path and saying we are here for the long-term. >> that was a noted foreign-exchange analysts, what he had to say about this. i think he is skeptical and thinks there may be liquidity problems in the japanese government bond market, but says there is this very dovish stance that governor kuroda is espousing. , a lot ofident criticism and skepticism, but anything you ask governor kuroda , he thinks is going fine. etf purchases, he thinks they are succeeding because they have helped to reduce the risk premium and boost business investment. atis hard to see any changes the boj until inflation gets higher and maybe when governor kuroda steps down april next year. so far, don't expect any change. with seems like the case the boj on one side and the fed and the ecb on the other talking about some kind of exit. we didn't hear a lot of policy either. draghit yellen and mario seem to avoid it. janet yellen said she does not want a big rollback in financial regulations. who is talking about that? president trump. she made it clear that having to makes moreapital resistance to another crisis. she did not mention policy at all in her speech. be a draghi said now would dangerous time to ease regulations because economies face risks when it comes to growth. and, in the queue and a after his luncheon speech, was asked about qe. he said, yes, it is working well, but we have to be very said monetary accommodation is still warranted. this is very, very important. it seems even though the world was waiting to see mario draghi -- that is a great shot, the three top central bankers in the --ld having a cup of coffee but the one signal mario draghi said is he is not ready to announce anything on tapering. my question would be, is he waiting to see inflation go higher, right? his feet, oro drag does he not want to send a signal like this in jackson hole? is he going to wait for one of these meetings? he is right in the middle. is looking at doors open, mario draghi in the middle, but the boj is not ready. >> that certainly is the case. pulled back during the q and a session, but still 1% higher for the currency. great work. that exclusive interview with governor kuroda. will have that on daybreak asia in about half an hour. >> a busy week, a preview who , a preview that says it is more important than payroll. this is bloomberg. ♪ ♪ there is plenty of big stories this week. we will cover them all here on "daybreak asia." chinese lenders reporting wednesday. in the thick of the deleveraging drive, so what are analysts predicting for them? seeing a big decline in nonperforming loans. profit should grow around 2% from a year ago. slightlyeing a improving trend when it comes to the balance sheet for some of these banks in the midst of this deleveraging campaign. some analysts saying the net interest margins are showing improvement for the most part. inare seeing that reflected a company that reported on friday. this is 8044, showing have these big four lenders have performed. we have been talking about have these banks in particular have been underperforming and below book value, according to the h-shares index, but and improving trend with banks in the last couple of weeks, so we will see if earnings continue to bring these stocks higher moving forward. >> we will follow that performance. what about the economy propelled by the jobs data? in the u.s., jobs data on friday. the economyelieve continues to forge ahead, adding jobs at a steady clip, keeping the unemployment at 4.3%, payrolls projected to increase by 180,000, in line with this year's average, but it is that old conundrum, why in an improving jobs market, is it not juicing the economy. this is 1108. verdict jobs claims, which many say is the jobs market, a leading indicator in the economy. the jobless claims continue to improve, and yet at some point here, 2014, the economy stalled. we are at this level right now. the jobs market has continued to apse, so why is this g continuing to widen, and wages, why they have not followed along, so we will continue to watch that and the jobs report this week. it is a busy few days for economic numbers out of the u.s. two discuss this, we are joined by omar sharif. let me bring that chart back up. explain this to me. bring this up on my bloomberg, 1108. this is a great chart, and the reason why we saw last year the election of president trump, because the economy stalled even though we keep hearing that the jobs market has improved. >> i don't think it is that big of a mistry. that cap is a function of wage growth. wages have been stuck around 2.5% for 18 months. and theyo further back were stuck around 2%, so even though claims data was showing a labor market tightening and strengthening, you did not have the corresponding pickup and wage growth, which is the mistry. growth for the most part is still driven by consumer spending. behind what the labor market data is telling you. >> that is the real mistry, where is the wage growth? we talked about it ad nauseam. are we any closer to seeing that pick up? >> i don't think we are there yet. wage growth is a product of productivity growth, inflation. productivity is another mystery in its own right. inflation lagging, so if you add those together come in fact, wage growth is growing to where it should be, so are we ready to go about 3%? it does not look like we are there yet. >> i want to talk about hurricane harvey. have startedf you calculating the data. is this storm going to have a material effect? >> i think it is too early to tell. the bigger issue will be the flooding within houston and the refineries. wasard you mentioned there a percentage increase in gas futures. that will translate into higher gas prices, but it is a function of refining capacity and how badly that is damaged. we will get that information in the next day or two bank, , because that could have an impact on gas prices. >> are we still short-term? >> i imagine it will be short-term blips that rebound as the area improves. >> we have to talk about jackson hole. everybody has been comparing it to portugal, and some saying the responses from the central bankers, was sick coordinated or ca coincidental? >> i don't know if it was coordinated. last week was a bit of a dud. people were expecting janet yellen and mario draghi to mention something. they steered clear of policy and both have meetings coming up where janet yellen is likely to announce a balance sheet change. i don't think she wanted to front run those discussions. the debt limit issue, a potential government shutdown on october 1. that they alter the plan. officials saying thatcial could change the calculations for the fed. >> are you talking about rate hikes are the balance sheet unwind? .> it is the balance sheet on the rate hike, they are not there yet. you have seen this divide in the fed, a debate around inflation. even in jackson hole, officials said we have to keep moving and the slowdown is transitory. other official said we can afford to be patient because we are talking about one more rate hike. i think that is put off until december. even though they would like to give the thought she in december, it depends on how everything unfolds, especially with respect to debt limit. , layingly on the speech out whether or not she is going to remain as the fed chair, did you get any sense at all on friday? a a lot of people read lot into it that this could be her swansong. quite frankly, i think she has been making the case that any change should be modest, so when she is asked about regulations, she is generally supportive of the idea that we should keep this in place. it was not that much of a departure from what she has argued in the past, but she probably did not do herself any favors in terms of retaining the job moving forward. she is not changing. whether the white house changes or not, we will see moving forward. >> thank you for joining us. i really appreciate it. omar sharif joining us. one feature on the bloomberg we would like to bring to your attention is our interactive tv function. seecan watch us live and previous interviews and dive into the securities or functions we talk about for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪ ♪ a quick check of the business flash headlines. the argentinian unit of sinopec exploring a sale of energy assets. theces tell bloomberg company has hired bank of nova scotia to conduct the strategic review and find bidders. minerna's biggest coal stuck to its pattern of skipping dividends despite an unexpected payout this year. hoping they would copy other leading companies such as petrochina, which is giving its income to shareholders. grandena ever looking for a timetable for its back your listing. first half profit could triple, however it is suspending any dividend payout as it reorganizes. threeth korea fires missiles, but the u.s. will continue to push for negotiations. ♪ ♪ track your pack. set a curfew, or two. make dinner-time device free. [ music stops ] [ music plays again ] a smarter way to wifi is awesome. introducing xfinity xfi. amazing speed, coverage and control. change the way you wifi. xfinity. the future of awesome. ♪ yvonne: 7:30 a.m. monday morning in hong kong, recovering from some monsoons. there are some of the raindrops on the skycam this morning, 30 minutes away from the market open. in newit is 7:30 p.m. york, markets closed mixed on friday. you see the s&p up 0.2%. no big rocking news from jackson hole and janet yellen. i am betty live in new york. yvonne: you are watching daybreak asia. time for first word news with haslinda amin. said to beber is close to naming a new ceo after months. they are holding daily meetings with meg whitman still the favorite, despite her saying she is not interested. the general electric chairman was another contestant but has withdrawn from the race. disillusionedme for the conflict. the australian banking regulator will hold and a qwerty -- an inquiry into commonwealth bank after the polyp from a money-laundering scandal widens. they say a trust in the banking system has been damaged. there have been a number of issues that affected applications. the inquiry will be conducted by the an independent panel. the former time prime minister -- time prime minister is in -- thai prime minister is in dubai to avoid a jail sentence. she could have been given 10 years. her legal team claimed she was ill and flew to the middle east. her brother is in exile. chancellor merkel has opened the door to lawsuits against german automakers and their diesel engines. blockinged them of possibility. can dosaid germany collective lawsuits, and the same could be gone to law make -- carmakers. don't miss our run-up to the german election, 5:30 sydney time. germany decides. we will decide -- bring you the biggest market analysis. global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. amin.aslinda this is bloomberg. yvonne: we are getting headlines right now that cbs has entered a binding pact to buy australia's 10 network. the cbs corp. is entering a binding pact. the financial terms of the pertinent -- financial -- they had been suspended pending purchase of a group led by or that has been led by james murdoch. cbs corp. entering a binding pact to get 10 corporation. we would get more headlines later. u.s., a big week of economic numbers which will shape sentiment in the bond and stock market. su keenan is here to look at how the numbers will affect investor sentiment. su: first and foremost the hurricane also to drive a lot of trading in commodities, that will affect a lot of oil producers. the picture is still coming in, quite startling. we had the biggest hurricane to hit landfall in the u.s. since 2004. we heard the mayor of houston saying the logistics of of activity the area would have been impossible. you can see flooding throughout neighborhoods, and what is important in terms of oil production is this is the concentration of most of the oil refineries in the u.s. and the flooding and the damage that was done to refineries effectively cost or closes down 10% of the u.s. ability to make fuel. because of the shutdown of plants, 2.6 million barrels a day of oil, on the contract surge. on the pictures of rescue, anyone who had a boat was called upon to rescue people from cars and roads. it was a major terminal, pipelines shutdown that will start the oil coming up -- starve the oil coming up to new york. in the futures, gasoline is at trading in the extended we are seeing electronically. you see the big spike up to begin trading from last friday. you can see that in oil as well, not quite as sharp a jump, but oil holding close to the $48 level where it was, that is despite the fact the refineries are close and the drop in demand for oil. this will have a major impact on the economy of the u.s. and the prices of the oil products. investors will stay focused on the key release of , things like the fed will be focused on like inflation and jobs. su: we talked about how the jackson hole symposium, not as newsworthy as expected. that would put greater emphasis on these numbers coming out, numbers the fed pays a lot of attention to your first table, second -- attention to. gainll, inflation, 180,000 in the jobs. if it comes in low numbers, that would be the lowest and may. as we look at the expectation for personal consumption expenditures, that is part of the core cpi, price index, those probably, the spending probably ine 1.4% year after year july. can the fed really raise rates by the end of the year on these numbers? that will be a key question. in bloomberg, we are looking at g #btv 9427. this is johnson hikes that shows ben bernanke and gallon, you had a higher -- janet yellen, you had a higher on the core pce, and it was much higher when rates were raised previously. notice the far right we have the blue line which is the rate hikes, and you see the core inflation state below -- stay below or nowhere near the fed target, and that is the ongoing debate. yvonne: thank you, joining us live from new york. we want to talk more about hurricane harvey and the implications for the oil industry. our chief economist joins us in over an hour's time. betty: despite labeling north korea's latest missile test provocative, the u.s. wants negotiations to de-escalate. what does the secretary of state , what has he been saying about north korea? >> he did discuss this today in terms of being provocative. want to make it clear he would like to the negotiations -- like to see negotiations. you have been hearing more aggressive rhetoric from president trump. secretary tillerson has been praising north korea for showing restraint, but but you could say the short range missiles make little restraint. betty: it may be given the context of what we have seen. i want to go from north korea to mexico and trump coming out saying mexico needs to pay for this wall. how does the administration reconcile them going from mexico paying while he is pushing for a government shutdown and congress will not pay for this? >> it will not. they are in a position that cannot be reconciled very effectively. it is still going to be a situation where you have the president threatening to shut down the government on september 30 congress does not improve -- approve funding for the wall. what would come from mexico later, the president is talking about remittances again. we don't know what that means, but that has come up before. the president had back in january asked mexico's president to please stop talking so much about not paying for the wall in public. mexico had been compliant with that. with this morning, all bets were off -- morning -- warning, all bets were off. yvonne: this prime minister had some strong words on president trump's afghanistan strategy. he has said we have set the military strategy in afghanistan has not worked and will not work. why does he disagree with the u.s. strategy? bernie: he looks back at history and the united states has been in afghanistan for 16 years. it has increased troop levels, pulled back troop levels, been more aggressive, been advisory. not only that, but the taliban has come back to gain an increasing amount of territory and controls 40% of the country. this is why the prime minister is saying he doesn't see any , thefor military solution army to accomplish anything despite talking. secretary tillerson's importance would be, while the taliban has to fire, this is the only way to do it. yvonne: great to have your perspective on this, the washington managing editor from bloomberg. haruhiko kuroda said japan's case -- growth is not sustainable. we will hear about the state of the economy with a former boj policy board member. this is bloomberg. ♪ ♪ i would like to see 3% growth . it is irresponsible to assume that we are going to get it. we have some areas that expand growth, immigration, business trade. the white house is turning those dials in the wrong direction. dialing back into -- immigration will hurt us. >> is hard to think of any realistic policy option to make a big change. america theo make place for success again. lower corporate tax will raise wages. there are plenty of reasons, there could be bipartisan support. we can't just talk about it. yvonne: some of the views on the u.s. economy from the annual jackson hole symposium. the bank of japan's bond buying program has them owning 40% of japanese sovereign debt. some say that has distorted the market, but governor kuroda said it will make yield curve control easier. >> we have been carefully ,atching monetary markets whether market liquidity has substantially reduced or not, spread and so on and so forth. always we are carefully monitoring the market conditions. and so far there are indicators market liquidity may have been reduced, but on the functioningarket is quite well. bank of japan has already gdpired about 40% outstanding. that means 60% is still in the basket. and curve control is not limited to the amount of gdp purchase. two points of to interest rate. been -- liquidity has been gaining in the market, it is going to decline. that means with one unit that you would purchase impact on the interest rate could be bigger. months, theoming will be less and less need to .urchase jgb's to maintain at this stage market is functioning. we have already acquired 40%, but 60% remaining in the market, and third, thanks to the control, we are not required to purchaserselves to this amount of jgb's at the same impact on the market. yvonne: that was the boj governor speaking with ethylene hays at jackson hole -- with kathleen hays at jackson hole. armor bojbring in our policy member joining us -- former boj policy member joining us. the just -- gist we got from jackson hole is the boj is out of step with what the ecb and the fed are doing at least in terms of exiting and tapering. what is the risk, and the boj continues to do those things? >> at the moment boj is able to cb because there is demand. rather than buying more and further download pressure is that -- downward pressure on the yield, it is more. they could control the yield curve. what is happening because it is a really low standing interest rate and there is complacency among the government and corporate sector, because everyone can get very cheap [indiscernible] also fiscalect and consolidation. betty: there is a couple of interesting points. you are saying this is something that is good. we would agree with you, but -- governor kuroda with agree with you, but it is not bad to give low-cost loans, because we are trying to get them to inverse -- to invest to be transparent. they know what they are doing. why is that a bad thing? sayuri: having the very low lending data is helpful, but what is happening is we need to include productivity growth and economic growth. that is quite low. if you have a very low interest rate for everybody, we have the overcrowded banking sector, so everybody is providing very cheap loans not only to the on viable companies but also -- unbuyable companies but also government. so structural reform is growing. youne: i want to talk to about the potential risk of the boj continuing to buy so many government bonds, because you were among the people i have spoken to in tokyo, people that work at the bank of japan over a year that have been making this criticism governor kuroda said, so what, but we own 40% of the bonds, the market has 60%. there is a risk to the market that could even -- the boj could own all of the bond. own, it makes we it easier for purchases and keeping yield at zero because each amount of bonds we buy proportionally has more interest rate impact. he sees everything is working well. do you see merit to that argument and if not, what is the risk? sayuri: if you really look at the effect of monetary easing in terms of impact on the consumption, aggregate demand and it is very limited. japan's economic growth is starting to pick up for the second quarter, that is true. if you exclude the impact coming from 2020 tokyo olympics activities, and if you eliminate the global growth momentum, then you really, what you have to look at is economic growth. that is quite low. that is when you have to speed up structural reform. so repeating what i said, that extremely low interest environment, people start to be laid-back because people see a low interest environment, and they cut into exchanges and stay forever. rather than speeding up because on favors, they speed up structural reform. everyone is paid off. they think the current will continue forever. that is a growing concern in japan. and you mentioned if we talked about exit strategy for the boj, we are possibly years away from that, but you mentioned the etf purchases, that will be more challenging than any allen sheet. -- balance sheets. what are you seeing their? -- thre? -- there? sayuri: reducing from 50 to 60 is very easy. purchases to zero, that is tremendous because there is no large staff to take over the boj position. there is problematic for the boj because it is distorting market prices because of the suchvention based on introduction. the stock prices are not correct. this is quite the distortion. what people are holding out if the boj announced tapering of somethat may really hold negative impact. so as the boj continues to purchase bonds, it is the third-largest investor in japanese stocks. it is creating distortion. so i think boj now or later will have to pay for this etf purchase. betty: it is a risk for stock markets. i am curious where you would rank that in terms of the biggest risk on the outlook on the japanese economy. sayuri: yes, the biggest risk is thehe boj continues purchase, a substantial amount of japanese government bond, maybe we can really reduce the holding on jgb. if the boj is on paper or even reduce the holdings of this active purchase. that leads to the sharp interest rate hike. this could cool the economy and lower japan's stock prices. they may end up buying lots of jgb. change.the biggest if that happens, that means the boj money is not really going to stimulus policy. it is more like monetization. yvonne: how likely do you think governor kuroda look at a second term next year? sayuri: the government decides, but i think boj have to really have a realistic assessment for the monetary easing on demand and inflation. we have got that. for me, it is better for the boj to have a more sustainable monetary policy. i hope the governor can do it. yvonne: all right, thank you for joining us. the professor and former boj policy member. kathleen hays, thank you as well. there is more of kathleen's exclusive interview with haruhiko kuroda ahead on the list hour of daybreak asia -- the next hour of daybreak asia. it will hear about the yield curve at 8:30 a.m. in hong kong, 8:30 p.m. in new york. this is bloomberg. ♪ betty: breaking news, the uber meeting minus the ceo. according to the new york times, the board is set to vote on the new ceo. they want to announce the decision first to their employees and then publicly. hass like yvonne, the board voted. it will replace the founder and former ceo. [please stand by] they could be seeing news in the next hour when the markets open. this is bloomberg. ♪ ♪ 8:00 a.m. in hong kong. we are live from bloomberg's asia headquarters. the top stories this monday, headlines from jackson hole. central banks on to verging paths. jay y. lee to appeal his sentence, the corruption verdict with implications beyond samsung. >> welcome to "daybreak asia" from bloomberg's global headquarters. it is just after 8:00 p.m., gasoline surges as harvey s, shutting 10% of capacity. ago, thenews moments bydochs have been out did cbs to buy the 10 network. ♪ of jacksonrecap hole, not a lot of headline grabbing lines when it came to policy from janet yellen and mario draghi. that led to this rise in the euro because mario draghi did not talk down the currency as some were expecting. it raises this contrarian call that hsbc morgan stanley has for.calling mario draghi was grilled by reporters, let's talk about onicy and where are we inflation? he said inflation is still going the other way. the euro-pound, we hit the 92 level against the pound for the euro in more than he year. morgan stanley saying the euro could rise to 102 against the pound. their call of to 101 by the end of this year, so more and more people are giving attention to this cross in particular. >> that's right. the fact he didn't mention about the euro gave people the idea that he is not that worried about the strength, and maybe the strengthening is helpful for mario draghi when he finally starts to pull back on qe. fornt to pull up this chart some historical context, 8568. look at where we are with the euro, almost back to the level we were when mario draghi first, when qe was first implemented by the ecb in 2014. if you were to start tapering that qe, that is a must at the level where the euro was before. coming full circle here with the currency in the market conditions. in the meantime, first word news , a lot going on in the last few hours. haslinda: janet yellen's speech at jackson hole was the government's response. of also said any rollback post-crisis reforms should be modest. janet yellen's remarks could put her at odds with the trump issued aation, which treasury department report that called for "significant changes." growth paceys the is probably not sustainable. governor kuroda said policy makers would continue with the stimulus program for the foreseeable future and said the 2% inflation target can be achieved. growth is excellent, but we don't think 4% growth can be sustained. andnd 2% growth is likely inflation ratee would climb to 2%, but 2% inflation target must be maintained and must be achieved, but it may take time so that we have to be patient. bank indonesia says it sees room for further easing with inflation this year and next to remain manageable and possibly lower than expected. due to could slowed falling oil and a lack of regulated price increases rather than weak demand. it lowered its key rate last week by a percentage point after six cuts last year failed to boost growth. the new york times says the goober board has voted on a new ceo, but we are awaiting and name. the vote came two months after the toppling of travis kalanick. the board has been holding daily meetings with meg whitman, the favorite despite saying she is not interested. withdrawnmelt has from the race, disillusioned with the conflicts among board members. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> thank you. how markets are performing this monday morning, dollar weaker, equities in the green. let's get the latest from sophie kamaruddin. sophie: quite a bit this week, more earnings out of chinese corporate's. japan's job data tuesday, followed by retail sales on wednesday, the nikkei 225 higher , up .25% ahead of that. aussie shares extending right is drop, but the kospi continues to gain. the korean won also gaining ground. plenty of action given the dollar near a 2.5 year low as janet yellen said little when it came to policy. jumping against the dollar and trading at october 2009 high against the pound. keep an eye on the yen, particularly against european currencies. areaess against the euro could limit its gains against the dollar. 9.40.en trading at 10 markets, the boj set to buy bonds monday and wednesday. governor kuroda at jackson hole saying the current yield curve control program is functioning well, and that could mean the boj could get away with future purchases of jgb's. traders will have a busy week and hes. economic data, bond options, particularly the sale of a four-week bill on tuesday, so 10 year treasury yields edging lower. oil prices, hurricane harvey pushing consternation about what is going on there. nymex gasoline soaring 6% on the back of that tightening incapacity. with the rains looking to continue in the houston area. watch the continue to gas and oil prices on hurricane harvey. thank you so much. we are watching samsung electronics, shares in the report up .3% after that sentenced jay y. lee to five years in prison on corruption charges. rosalind chin was reporting on this verdict. what impact is this verdict going to have, if any, on samsung? samsung: that's right, shares doing better this year, outperforming the kospi. the fitch and s&p ratings a comment on this case, saying they did not see the conviction making a significant impact on increasesing it could longer-term business risks by delaying business decisions and the ability to form alliances with other corporate's, which could affect competitiveness. reflecting the fact that samsung electronics is itself has different management teams to run ferries departments and jay y. lee was on the strategic level looking at the longer-term business and a different investment plans in the future. even jay y. lee saying the company did not need him on a day-to-day basis. so who will take over? fingers are pointing to his sister, if they decide to keep it in the family. schiller, a hotel and duty-free business unit. editor did suggest other executives within samsung running huge parts of samsung electronics and that are influential as well. >> this adds to what the president has been pushing for, less influence from these conglomerates on the overall economy. seeinginess in general some soul-searching under this administration. how has this case affected all of that now? rosalind: opinions are divided. some say the ruling helps give leverage to moon to reform, to loosen the grip of the conglomerates in regulation. he has pledged something like increasing taxes on the biggest companies to 25%, but other say it will not make a lot of impact because change is slow. one investor saying this sends a strong message to conglomerates that nobody is above the law come a but saying some suncorp its governance is ahead of other places like japan. one asset management firm saying this will not have an impact on corporate governance of conglomerates. movesg has been making for more effective and friendly policies, so the impact of this one case will be limited. ofa part of a slow process conglomerate reform? they're not on the same page, but change will come. a look at shares today, pretty much flat at the open. little market impact from this decision from the judge. thank you so much with the latest on samsung. still ahead, the strongest hurricane to hit the u.s. in years closes down gas and oil infrastructure. the potential damage. >> next, jackson hole failing to shed light on the fed's rate hike plans. the implications for markets in asia, we discuss with jefferies chief global strategist. this is bloomberg. ♪ ♪ so i think we should be removing accommodation, but done gradually impatiently. we can afford to do it gradually and patiently. patient and see how these forces are unfolding regarding inflation. i think we can afford to be patient. >> monetary policy is still accommodative. the gradual path of normalization is a gradual path. we want to stay on that path is because we are in a more normal economy. inflation is not yet 2%, but we have to move policy before we get to the goals or else we will be behind. watching howefully the federal reserve and ecb are doing, but our monetary policy is for the japanese economy. and since our inflation is still far below the target, what ever the ecb or federal reserve do in the coming months, we have to address the situation by our own monetary policy. global central bankers talking about policy at jackson hole. joining us now is sean darby, geoffrey's chief global equities strategist. great to have you. i guess you could say it was a boring speech from janet yellen, mario draghi at jackson hole. what they didn't say what is your take? will this be a green light to buy more equities? >> they have economic growth with low inflation, the goldilocks scenario. the scenario that has played out in the background ,or all the economy's in the g7 so they have not had a bad time. difficulty is that monetary policy has loosened because real rates have gone negative, so they have said things are still very accommodative. they probably have some work to do in tightening policy, but it is not as bad as people are patrolling. >> looking at the price action, the market has waned a bit. high yield spreads are getting tighter as well. how are you feeling things now? are you still holding your strategy? will continueowth to do quite well over the next 12-18 months. the paradox has been that every time people tried to feel things will slow down and we will have a recession, actually things have expanded further. that is the paradox, real rates have been very good for the global economy. these credit spreads and asset prices will remain reasonably high. now is a goodeing profit cycle in most economies, a good gdp number out of japan for the second quarter, china produces better numbers, upside risks at the moment. 44,country out of the venezuela is in recession, so not a bad world. that is reflected in a lot of asset prices, but does not mean we will have a sudden downturn. >> we have some breaking news on uber. a headline here in our bloomberg , meg whitman of hp hewlett-packard enterprises is said to not get picked as the uber ceo, this after report she made a presentation saturday and was the leading contender according to this headline here. meg whitman is said to not get picked as the uber ceo, so there is another person who has been picked on the board has confirmed they selected their ceo and will tell employees first before making a public. pardon me, had to get that breaking news out there first, but back to the markets. speaking about credit markets, we show this chart to an earlier guest who said this is the stuff of nightmares for central bankers, 9433. with negative yields are now starting to creep up. the market value starting to creep up. this is a spike, but there is an area of the market where people are saying in the u.s., one i are we so focused on higher interest rates? what about interest rate cuts given where we have seen inflation? >> it is actually a good point. over the last 12 months, more central banks have been cutting rates than actually raising rates. if you look within latin america, chile and brazil have been cutting rates. the russian central bank has the norm to cut rates over the next of theonths, so outside g-seven, monetary policy is loosening rather than tightening, a feature of the emerging markets where the gdp component for the global economy is a much higher delta. i as i said at the beginning, think we will see better economic numbers, and monetary policy regimes will remain loose. a lot of the growth rates are occurring outside the g7 where monetary policy has been cut. >> is it so out of the question to say that might be a reality , particularlys. if we see inflation so tame and not much movement of growth? >> i think that is the essence of what we were hoping would come out of jackson hole, why we have a low inflation rate regime. we have seen this move through emerging markets as well. latin america's inflation rates any otherlower than expansion cycle, and the same has occurred in asia, korea, taiwan, record low rates. that is the central paradox, it has also been occurring in emerging markets as well. a strategist was talking about how in the 1980's there of these bondon vigilantes, traders who would oppose any monetary fiscal policy moves. bank stimulus, is that not going to be happening in the bond market anytime soon, that stocks are the ones to watch? are we going to see stock vigilantes soon? the stockld use market because it is the second derivative of what has happened in bonds. outside japan, there is no central bank buying of equities comes the that is a better barometer of global growth. in north asia, free cash flow yields around 6%, three times treasury yields, so the chances of a severe correction in equities prices here is quite low. recent credit spreads are generating massive cash at the moment, which is good for shareholders. now?ere do you see values shifting away from the u.s. towards this part of the world? >> i think north asia could have a good 18 months here it monetary policy will remain accommodative. the economies are doing well on global trade. lastly, the positioning of clients has been very much in g7 and north asia has the hallmarks of good value, good earnings, and central banks which will remain accommodative. china and money market rates, that spike last week, what did you make of that? was that a policy missteps, what you watching for? >> these types of jobs are mainly to do with banks finding a sudden shortfall. is running open market operations, so it has changed how it moves short-term rates, and you will get these blips now and then. >> great to get your view there. one feature we like to bring to your attention is our interactive function where you can watch his life and watch previous interviews or dive into securities or functions we talk about. this is for bloomberg subscribers only. check it out at tv . this is bloomberg. ♪ ♪ >> some breaking news out of uber. to pick itsting next ceo. reports from re-code saying the person that has been chosen has been coming from, not from meg imelt.n and jeffrey m ou this is a surprise from left field. we mentioned there was going to be another person considered here, but this is surprising. >> i have not heard this name. expediaident and ceo of said to be the next uber ceo, mentioned by the tech side recode -- site recode, this after jeffrey immelt and meg whitman were not pick. certainly the board did a good job of keeping the list of contenders, at least the one who was really going to get it, private or out of the public eye. meantime, a quick check of the latest business flash headlines. another u.s. retailer filing for bankruptcy as americans turned away from all sin favor of online shopping. . increase said plans to its e-commerce business and emerge from bankruptcy. it sought bankruptcy protection in the u.s. this year. higheriba shares opened after the sale of toshiba's chip unit periods reports the sale could be signed by the end of august. it includes western incj and kkr. rights digital's voting will be less than one third of the total. coming up, wind the boj governor says central banks can continue cutting bond purchases. more from our interview with harry veto corrode a next -- governor kuroda next. this is bloomberg. ♪ ♪ >> 8:30 in singapore. half an hour away from the open of trading. >> you are watching "daybreak asia." the last several minutes, meg whitman not the new uber ceo. it looks like expedia's dara khosrowshahi, the ceo since 2005, has been picked to be the next ceo of uber. this is according to people familiar with the matter. the board spokesperson said they wanted to make this announcement first to employees, then to the public, but could lock, right? silicon valley is a leaky false it. you knew that information would come out quickly. now the nexteo is ceo of uber, at least according to people familiar with the matter. really a surprise. we have been talking about whitmanimmelt and make for weeks and months now on who would take the reins, but dara khosrowshahi will have a lot moving forward given the tumultuous months we have seen. on, butcontext later for now, first word news. the united states says it still wants talks with north korea despite what it calls the provocative firing of three short range missiles. rex tillerson said washington would maintain pressure working with china and other allies. the missile launches came soon after tillerson had praised north korea for showing restraint. >> we hope this is the beginning of this signal we have been looking for, that they are ready to restrain their level of tensions and restrain provocative acts, and that perhaps we are seeing a pathway to sometime in the near future having some dialogue. we need to see more on their part, but i wanted to acknowledge the steps they have taken thus far. >> the united states is barring the trade of new debt issued by venezuela and its state owned oil company and american markets. washington is blocking some bonds owned by the venezuelan public sector. treasury secretary steven mnuchin said the move was in response to venezuela's attacks on democracy and the rule of law. the economic front, i would say our plan has to ontinue to turn up the heat the venezuelan government, and these specific actions we have tried to balance, things that don't hurt the venezuelan people. trump has renewed his pledge to build a border forcefullyexico says, no chance. the president tweeted that the u.s. may have to terminate nafta and repeated its pledge to make mexico pay for the wall. he did not elaborate on how that would happen, but the white house was previously suggesting a 20% import tax on goods from mexico. global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. this is bloomberg. >> thank you. time to see how the asian markets are shaping up. things taking a turn in the last half-hour. sophie: the mood has turned risk off, stocks leading the drop. trading atyen 109.18, and gold on the up, above the 1293 handle. with that dollar weakness, the korean won rising by the most since july 27. i want to focus on oil. new york crude below $48 a barrel, .4% lower as the impact from hurricane harvey is ascertained. let's look at the move and seoul, korea today. some movers in the oil space dragging on the index. south korean defense stocks on the move amid reports the four ad launchers will be deployed this week. checking in on the sydney sharemarket, losses of .7%, little in the way of right spots, industrials moving over 1%. i will tell you why. qantas airways sliding today, losing over 6% this morning. commonwealth bank losing ground as it faces a second pro by the banking regulator over its governance in addition to the probe underway from the securities regulator and financial crime agency. >> thank you. the movers in the market. as we talked about, cbs agreeing to buy 10 network, beating out a rival bid led by the key shareholder murdock. assets and the provide immediate financial support to keep it running. james thornhill joining us now. this was quite surprising, right? we heard that murdock and gordon were buying 10, so what happened here? >> you're right. that reports last week rupert murdoch son and bruce runnershere the front to acquire 10, which has been in administration since june. the problem was they ran foul of australian media ownership laws, which means you can only have one medium in any particular local market, and they were wakin waiting for parliament to change this loss which would allow them to progress. they couldn't in effect complete the deal, which allowed cbs to come in and snatched 10 from under its nose. >> 10 network is suspended from seeing them a so we don't any reaction right now, but is there likely to be opposition to this plan by cbs? don't think so in terms of the regulators. if it washe an issue a state owned chinese media company buying 10, but that is not the case contrary to what you hear and the states. presslia does have a free and not influenced by the government, so i don't have any issue for seen with cbs buying 10. broadcast, a web viable, but not as viable as it was 10-15 years ago before the development of video on demand and cable television. james, talk about the implications of this. will this be a good deal for cbs or australia? >> well, most likely for australia. a smallprobably cause ripple for cbs in terms of financial terms. the market cap was well below 100 million australian before it went into administration, so you can imagine cbs paid much of this asset. perspective, the austrian market is tiny compared to the u.s.. australia's biggest sporting event learned of viewership of 5 million last year. the super bowl got 111 million, so this is a small market. >> it certainly is. thank you. our bloomberg asia editor live from sydney. coming up, gasoline surges as harvey hits america's energy hub. that is next. this is bloomberg. ♪ ♪ i am betty liu in new york. this is "bloomberg markets: asia." uber, said news with to have picked expedia's the ceo, dara khosrowshahi, to take the helm. we been talking about how this was unexpected coming out from the uber board given that we heard from jeff immelt, who pulled himself out of the race on sunday. the same from meg whitman as well. onwill get some more context what this all means. >> that will dominate headlines tomorrow morning in the u.s. david kirkpatrick will join us in moments, the ceo of well noted tech analyst and interviewed many of these personalities, including the expedia ceo, and meg whitman as well, so interesting to hear his take on what happened, particularly with meg whitman, who seem the leading contender. we follow the developments in texas with hurricane harvey. the strongests on storm to hit the united states and 13 years, costs could top $24 billion, combining the effects of tropical storm harvey on the labor market, power grid, oil and gas. harvey has killed at least two people and caused unprecedented flooding. it is drifting towards the gulf of mexico and could intensify again. it appears that the quarter of the oil production in taxes is very much going to affect the jobs market, the therey in texas, but also is some question about whether it might have a larger national impact on the economy. >> we saw the market impact in gasoline futures, spiking 6% this morning. the crude market has been relatively steady though, and so it makes you wonder, there is how the market will be impacted as we wait the implications of harvey. let's bring in amd chief economist live from melbourne this morning. a question on the overall impact here. some context on what you think in terms of the oil markets in general? marketsoks like the oil will take a wait and see approach. we haven't seen much response at all. we are looking at a different market than we did last time we had a big weather event like this 10-12 years ago. the u.s. oil production landscape has moved more on shore a century away from the gulf of mexico. for that reason, what is occurring in this part of the world is a lot less. certainly over the next couple of days, if this weather event thesethrough into some of shale producing regions, then we could see a response. >> what is the worst case scenario? ,ou mentioned gasoline prices flooding, power cuts as well, what will be the knock on effect? be inlooks like it will the gasoline markets, where it is the downstream impact to refinery capacity sitting in the gulf on land. we are seeing it already with some prices moving higher, this price between gasoline and the widening price, now out, so high pump prices, but the crude oil prices likely to remain steady. this weather event is occurring at the shoulder period of the oil market where demand starts to slow down, so it would not thatthe same sensitivity it would have earlier in the year. >> how can you compare this to other weather events and impact on the market? hurricane katrina, for instance? >> that's right. when you look at the lasting ,mpact, hurricane katrina, rita it was producing close to 35% of oil production. now it is close to 15%. look at the increases, it is in the shell market, which is onshore, so it is a different oil dynamic. for that reason, the impact in this case is limited, but again, the market will wait and see. we have crude oil stocks. thatve production guidance will rise in the short-term. reason for real buying oil aggressively at the moment, but it could spike if we see major outages come in particular u.s. shale production. >> how long do think it will take to get the true impact, whether this is a short-term impact or something longer term would take years to recover from. well, we can look back at history and how it played out with previous weather events. it could take weeks to get a better idea. wete is still a lot of weather going through that part world.herba the oil market is very supply driven now. demand is elastic. so this is a supply event and does have more sensitivity to the same, but on stage, we stand to see increased oil production not just in the u.s., but some of the non-u.s. production. opec's compliance has slipped, so they are producing more oil than they are saying, and therefore most traders are --ing a] cautiou cautious approach. wti belowinue to see $50, so we have not seen that much reaction. how does this fit into the bigger picture when it comes to the global oil landscape? will this affect rebalancing efforts? >> there are some interesting dynamics behind that, talking about rebalancing the global market. there are a lot of crude stock in the u.s. right now. there is talk that middle east apply or the saudis are looking to export less crude to influence those stockpiles and get bigger drawdowns and rebalance that market. on the flipside, in the u.s., we are seeing spare capacity in uncompleted wells, which allows them to respond quickly if prices do pick up. so that means that if there is any price gain, it is probably short-lived with supply coming online quickly. >> much in different market than we saw 10 years ago. mark, always great to have you. joining us live from melbourne. you can get around of the stories you need for bloomberg subscribers. go to dayb on your terminal. it is also them on your smart phone in the bloomberg anywhere app where you can customize the settings and get news on industries and assets you care about. picture to check it out. this is bloomberg. ♪ -- make sure to check it out. this is bloomberg. ♪ ♪ this is "bloomberg markets: asia." i am yvonne man in hong kong. news, uberbreaking has according to people familiar with the matter pick the new ceo in expedia's dara khosrowshahi. bloomberg tech editor peter else from joining us with more details. is under wraps. no official announcement from uber, but what we know about the expedia ceo and why was his name never floated in the media? this comes as quite a surprise. >> it was kept under wraps. it was a tumultuous board meeting today. jeffrey immelt has been in the mix, and also meg whitman, whose name was floated early on, then she went to twitter to take her name out of it. apparently she did a presentation over the border the weekend, as did jeffrey immelt, as did dara khosrowshahi. this guy has been at expedia a long time. he is a trusted hand with the empire of berry diller and has built up this juggernaut in online travel. they see him as someone with stability. the company is going through tumult at this point, trying to get back on track and call him down the culture of the company, so they are hoping he will move them forward. >> what will be a priority for him? building the brand once again, the culture it self at cooper also. there are lawsuits pending. what are the things that he needs to put in the past and the first week of the job? >> stabilizing the ship. the company has been going through so much tumult with travis kalanick stepping down as withthe board conflicts benchmark capital investors, allegations of wrongdoing of the company over the years, so they need someone who can come in, bring stability, and focus on the business opportunity, which has led this company to be the most viable private company out there. they want to focus on that opportunity of ride hailing and beyond. >> thank you. joining us live from tokyo. let's get more from david kirkpatrick on the phone. all ofs a surprise for us. what more do we know about the expedia ceo? somebody who has been running a company now $9 billion in annual revenue. that hehown in the past is able to jump into something without all the relevant experience. he became ceo of expedia at 36, only 48 now, so younger than the other finalists here it he is admired as a manager and well-liked at expedia. the company has been frequently named as one of the best places to work, one of the most admired companies. inhas had a quiet reputation the industry. to be the third candidate and the group must have been daunting. he comes out of the travel industry, and make sense somebody running a $9 billion travel company should be a strong contender. he has been outspoken in criticism of trump. the guy has a spine. he could be an interesting choice. >> why do you think the board decided not to go with meg whitman and why jeffrey immelt called out, worried about the board chemistry. why do think neither of those became the next ceo? >> i don't know. i was not in the board meeting. probably a little advantage to having somebody who is more of a blank slate. --frey m out or meg whitman mmelt and meg whitman would come in with so much baggage, and they are both towards the end of their careers. this guy is 48. i would want somebody with the most energy, because the problems and challenges they have and the strength of personalities inside that company will take somebody with a lot of spine, a lot of energy, and a lot of great ideas. it might make more sense for it to be somebody who is able to get in there and not have to doing the he is not way they did it at ge, hp. >> as we know, the problems that uber are not with the product. there is nothing wrong with the product. they have been growing like a gang despite the problems within the company. morale issues,e culture issues, so does he make the most sense for that? hard to say. i could see how he would be a good person from a cultural point of view. considered well managed, great place to work, hugely admired in their industry. grew 26% last year, so it is a fast-growing public company. ofhas learned of the seat berry diller, one of the toughest and most experienced people in business. culture is the secret of running a successful company, regardless of whether the problem is the product or anything else. uber has a huge cultural problem. most executive leadership is missing. .hey don't have a cfo, coo they have been through this litany of challenges, almost tragic problems really, and this guy is somebody who has proven time and time again that he can walk into a situation and roll up his sleeves and get it done. there,ave to leave it but i appreciate all the insight on this breaking news. that is it for us here. market coverage continues next. >> that's right. continue to be watch closely and dominate the news cycle tomorrow morning in the u.s. this is bloomberg. ♪ got you outnumbered. the dinosaurs' extinction... don't listen to them. not appropriate. now i'm mashing these potatoes with my stick of butter... why don't you sit over here. find your awesome with the xfinity stream app. included with xfinity tv. more to stream to every screen. you're searching for something. whoooo. like the perfect deal... ...on the perfect hotel. so wouldn't it be perfect if... ....there was a single site... ...where you could find the... ...right hotel for you at the best price? there is. because tripadvisor now compares... ...prices from over 200 booking... ...sites ...to save you up to 30%... ...on the hotel you want. trust this bird's words. tripadvisor. the latest reviews. the lowest prices. ♪ in hong kong,a.m. 9:00 in the evening in new york city. i am rishaad salamat. ,ber picking dara khosrowshahi persistent losses and a tarnished brand. on,son hole, central banks well, diversion paths. sydney. am haidi lun in changing channels, cbs agreeing to buy 10 network, saving the struggling broadcaster from collapse. this is "bloomberg markets: asia." ♪

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