It is a bank holiday. A lot of the data in the u. K. Closed. The ftse is not trading today. I still want to give you a quick snapshot of whats happening across europe without the ftse 100. It is down some 0. 4 . Dollareuro is the one im keeping an eye on for the week. Maria draghi, the ecb president , refrained from talking down the euro. This is what im looking at. Im looking at dollar. Kuroda,peak to governor a fantastic interview by Kathleen Hays. Crude oil, 47. 43. We are seeing a Little Movement for gasoline prices. It could also impact the oil prices. Lets get to the bloomberg first word news. Heres nejra cehic. Nejra in the u. S. , houston is battling unprecedented rainfall following the biggest storm in the history of texas. The down for has crippled the core of the u. S. Energy industry. Gasoline has surged to the highest in two years. The president of the cleveland fed urged her colleagues to look past recent inflation data and stick to their gradual pace of lifting Interest Rates. Speaking on the sidelines of jackson hole, Loretta Mester also told bloomberg she expects one more increase. Monetary policy is still accommodative. The gradual path is really a gradual path. My argument of why we want to stay on the gradual path is because we are in a more normal economy. We have to move policy a little bit before we get to the goals or else we are going to be behind. Nejra uber will appoint expedias as its new ceo. He will succeed cofounder travis kalanick, who grew uber into a 20 billion annual booking business. Man confirmed theyve chosen a ceo, but declined to name the person. Brexit talks resume today with the u. K. Prime minister under pressure on two fronts. European negotiators are pushing theresa may to reveal her hand while the labour party has made a bid. Announced that it wants britain to stay in the Single Market and Customs Union. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. By nejra cehic. This is bloomberg. Francine thank you so much. The Federal Reserve and the European Central bank may be headed towards the exit from super accommodative monetary policies, but the bank of japan is not about to follow. Governor kuroda says inflation is so far below target that the Central Bank Must maintain its policy. He spoke to bloombergs Kathleen Hays. The u. S. Inflation rate is fairly close to 2 . Ecb inflation rate may be somewhat far away from 2 . Economic and price situation in the u. S. Is much better than the situation in japan. Making Balance Sheet adjustments, or so it is said. , they are somewhat behind, so they have not yet started any tapering. The fed Balance Sheet adjustment has not been considered at all. Behind the eurozone. To 2 . Rices are rising better than negative. In the last three and a half years, we have been able to buteve positive inflation, it is far away from the target. I think for some time we have to accommodative Monetary Policy. Yes, we are carefully watching how the Federal Reserve and ecb are doing. Our Monetary Policy is for the japanese economy. Since our inflation rate is still far below the target, whatever the ecb or the Federal Reserve do in coming months, we bye to address the situation our Monetary Policy. Francine that was haruhiko kuroda, the bank of japan governor. Lets get more with izumi devalier. She joins us now from tokyo. Great to have you on the program. Thanks for coming in. Governor kuroda putting in simple terms, japan cant really keep up with the current growth rate and he will stay a cognitive for a long time. What is your concern when it comes to japan . Izumi similar to the points that kuroda was making, he also pushed back against this notion that recent secondquarter gdp growth in japan was near 4 annualized, very strong, but as the central bank stressed, this pickup in growth momentum hasnt been accompanied by price pressures. Passedes havent yet that through to resale prices. The disconnect between growth and inflation is something we are seeing across the world, but should be of concern for japan. Francine how would you score governor kurodas, what hes done so far . Hes gone beyond the bounds of Monetary Policy. Do you believe it will work . I think it depends on end you define as the target. If you talk about achieving 2 inflation, i think the boj still has a long way to go. Japan has definitely made progress towards escaping from deflation, and under coronas watch, he is correct to say that before we had average negative price growth, that is a modest positive now, labor markets have strengthened quite a bit under his watch. I think he can claim some modest success. Wascine governor kuroda saying that the yield control program was working quite well. Is he right . Izumi i agree with that. Especially when yield curve control was first introduced, it was followed very quickly by a sharp runup in global bond yields. That led to a concern that the boj bond buying was going to ratchet out of control. Holdings isboj bond already quite massive, the boj kuroda is correct to say that less bond purchases are needed. They have quite a bit of ability to maintain that ceiling on the bond yields target. I think a bigger problem is what happens if theres a very risk to pull that threatens bond yields below the floor. That is a challenge that kuroda hasnt really had to face yet. That is definitely the bigger concern at the boj. You look at the worldview, when it comes to Interest Rates, you have janet yellen and mario draghi dealing with very similar things, having inflation and growth somewhat out of sinks, and it seems exacerbated in japan. What can he do more . Izumi to be honest, i think theres not much that Monetary Policy and the central bank can do alone. One thing is that we need to be a little more patient. I do think we are starting to see the tightening labor markets result in higher wage pressures, especially for parttime workers. To get to higher inflation is going to require some more time. I think the other key pillar is fiscal policy. One of the reasons why the economy has done well over the past year is because weve had less fiscal headwind. Im not saying you need to do a big fiscal party, but i think it would be important for the fiscal authorities to hold off the temptation to tighten too early. Francine we have a question from one of our viewers, saying, why is he so optimistic about cpi . Is he really optimistic or is this part of his psychology of forward guiding inflation in the hopes that it picks up more . Izumi that Forward Guidance thing that you mentioned is definitely part of it. Since kuroda became the Central Bank Governor in 2013, he has always been the biggest cheerleader and optimist on japans growth and price outlook. I think the central bank is genuinely quite optimistic on the dynamics of the labor markets. The prospects for wage growth. I still think they have faith in the phillips curve. Markets think that is dead. The boj Still Believes theres a connection between labor market tightening, wage growth, and prices. Francine thank you for joining us. Stay with surveillance. Back to the brexit talks. The labour Party Changes tact. Where does this leave Prime Minister theresa may . Hurricane harvey may have been downgraded, but gasoline hits a twoyear high. This is bloomberg. Francine this is bloomberg surveillance. Lets get straight to the Bloomberg Business flash. Nejra china is creating the Worlds LargestPower Company as the merger of chinois group with one of the nations biggest Power Generators has been approved. The new company would have total assets of 271 billion. Wonder Hotel Development fell after Chinese Media reported that its billionaire chairman and his family were stopped at an airport. The real estate and Entertainment Group denies an article and other reports on the travel ban. Buy strugglingto australian broadcaster 10 network. The deal saves 10 network from collapse after the new yorkbased media giant pledged immediate financial support. 10 has crumbled under the cost of buying programs from the u. S. Has reportedlyr appealed the verdict that sentenced him to five years in prison. On friday for bribery, embezzlement, and perjury, accused of funneling millions of dollars to a friend. It is the harshest sentence ever given to such a prominent korean figure. That is the Bloomberg Business flash. Francine brexit talks resumed today with theresa may under pressure from labour in the e. U. Negotiators are pushing her government to give more details. The Opposition Party has made a dramatic shift, announcing it once britain to stay in the Single Market and Customs Union for up to four years after leaving the block. Lets get more with daniel gros from the center for european policy studies. What does it mean that now labour is getting in the way of negotiations . It seems that at the moment, whether u. K. Should be ready to talk with the e. U. , it is negotiating amongst themselves. Daniel that is actually true. Nobody in britain really new one brexit was going to mean. The silent majority is reasserting itself. People wanted to have control, but didnt want big economic cost. Therefore, trying to stay into the Single Market and the Customs Union makes sense as a policy goal. Francine you live in brussels. You are at the center of policymaking in brussels. Really as put together as a lot of people say, or as much of a mess as the u. K. Is, nothing has been done like that before, everyone is trying to fight the right angle . Daniel yes, but for the time being the e. U. Are in a comfortable position. They were just awaiting what the u. K. Was going to say. If theresa may and the opposition come with a similar message, then maybe divergence within the e. U. 27 will also appear. How do you want to give them access . How do you want to keep them in a Customs Union . Details are going to be important. Divisions can arise. Francine the third round of negotiations start today. How do officials figure out who they are negotiating with . Do they talk to theresa mays people and figure out how they want to deal with labour . Daniel there is one iron rule in european diplomacy. You talk to the government and only to the government. They are the people who sit in front of you. Maybe you talk a little bit on the side to see what the opposition thinks, but you negotiate only with the government. Francine what do you see as the most difficult point . Part of it may be the irish border, where we heard from david davis, asking for flexibility and imagination. Or is it the e. U. Nationals rights once the u. K. Leaves the e. U. . The kindt depends on of brexit we have. If you really have Single Market access at least for a transition period, then we have three or four more years to deal with it. The same applies to the Customs Union. On the european side, for the time being, they are asking, show us a concept which can actually work. If it can deliver the seamless border that we want to have, then i think people are going to be open. U. K. Hasime being, the not shown any concrete approach. Francine do you see a lot of concern in brussels about the u. K. Crashing out, leaving without a deal . Has receded concern a lot. Really representative only of a minority. With labour coming out clearly in the form of a very soft brexit, people are fairly confident that even if negotiations last a long time, at the very end, the default solution might be, lets keep the status quo for another few years. Francine wonderful. Thank you so much, daniel gros. Up next, counting the cost of harvey. One report suggests the bill could be as much as 24 billion. Gasoline spikes. We have all the details next. This is bloomberg. Francine you are watching bloomberg surveillance. Floodwaters have been rising across houston as Tropical Storm harvey continues to drench americas fourthlargest city. Gasoline has surged as the wider impact of the storm, which has shut more than 10 of u. S. Feel making capacity, becomes evident. Lets get more with yousef gamal eldin. Do we know the extent of the damage . We are still trying to ascertain the scale of the devastation. Fuelwe do know is 10 of making capacity in the United States, 2. 2 Million Barrels a day of Refining Capacity that is offline. Pipelines have been closed. That is disrupting the flow from west texas crude to the new york harbor. That very much still happening. The question becomes, what happens now . Gasoline prices are likely to continue rising because you are looking at three additional days of rain. Weve put up what exactly this means in terms of the spread to wti. What you see here is your line in lieu, your gasoline futures, which tend to move with wti. That is broken up completely with gasoline futures soaring. That is traditionally a pattern that happens with some of these storms. Barclays did point out, dont underestimate the impact this storm could have on the u. S. Energy industry. Francine a lot of the pipelines were closed, which means some of the crude is stranded. How quickly can you put it back on . Is it a matter of days or even hours . It is not that easy. In terms of getting the right equipment and the right labor, it could take weeks, even months. If the rain continues with the same kind of severity and there is extensive damage, theres no quick fix. The absence of refinery activity is going to impact the demand for crude, which is why you are seeing this juxtaposition. Gasoline futures much higher, but not much happening with wti and brent. Francine . Francine thank you so much. Up next, japans economy is slowing, but dont expect it to last. More from our exclusive interview with governor kuroda. This is bloomberg. So we need tablets installed. With the menu app ready to roll. In 12 weeks. Yeah. The world of fast food is being changed by faster networks. Data, applications, customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Fast connections everywhere. Thats how you outmaneuver. Francine you are watching bloomberg surveillance. Lets get straight to the bloomberg first word news. Nejra in the u. S. , houston is unprecedented rainfall following the biggest storm in the history of texas. The downfall has crippled the core of the u. S. Energy industry. Gasoline has surged to the highest in two years as flooding inundate refining centers along the texas coast. The president of the cleveland fed urged her colleagues to look past recent inflation data and stick to their gradual pace of lifting Interest Rates. Speaking at jackson hole, Loretta Mester also told bloomberg she expects one more increase before the end of this year. Monetary policy is still accommodative. The gradual path of normalization is really a gradual path. My argument of why we want to stay on that path is, we are in a more normal economy. Inflation is not at 2 . We have to move policy a little before we get to the goals or else we are going to be behind. Nejra uber will appoint expedias as its new ceo. He will succeed cofounder travis kalanick, who grew uber into a 20 billion annual booking business before scandals forced him out. A spokesman confirmed theyve chosen is ceo, but declined to name the person. Brexit talks resumed today with the u. K. Prime minister under pressure on two fronts. European negotiators are pushing theresa may to reveal her hand while the labour party has made a bid to lure critics to its side. It wants britain to stay in the Single Market and Customs Union for up to four years after it leaves the bloc. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. Im nejra cehic. This is bloomberg. Francine thank you so much. The japanese economy expanded for a sixth straight quarter. Gdp increased by an annualized 4 . The bank of japan governor is warning that it cannot last and the economy needs accommodative Monetary Policy. He spoke to bloombergs Kathleen Hays at jackson hole in wyoming. In the u. S. , and in europe, inflation rates are actually close to their target. Close to 2 . In japan, the inflation rate is still 0. 5 , far from our 2 target. Betweensome difference u. S. , europe, and japan. Waves are not rising so fast. That is true. Ut prices are not rising theres some kind of. Eflationary mindset strong among business leaders. To be cautious in raising prices. What companies are doing is, investing in laborsaving equipment and so forth, and they are changing the laborss model to reduce content. Increase,me wage ,abor cost has not been rising so they are not required to raise the prices. But they are doing well. Gdp growth of six quarters in a row. You are succeeding on growth. Maybe something has changed. Does inflation matter so much . Japanese households like low inflation. Two things. One, 4 growth is go