For shinzo abe. The pound is big today. We are up by 1 . Governor of the bank of england indicating we are going to see the possibility of negative rates. We are, as you can see, seeing a big bid for the yen as well. Dollar is down. Stoxx 600 is low. S p absolutely flat. Kailey i want to bring you news. Mgm resorts, the casino operator, is cutting 18,000 jobs. That cut impacts over one quarter of its u. S. Workforce. It has been a hard time for casinos during this pandemic. Mgm operates not just in the u. S. , the las vegas strip, but also in macau. All macau travel was shut down, they have yet to catch up. Las vegas market makes up half its revenue. Mgm cutting 18,000 jobs. At the moment, the stock is higher by about 4 . Guy back to that story relating to the bank of england. Governor Andy Beshear Lee says there is plenty of room for more monetary stimulus. He spoke at the feds virtual jackson hole event earlier. He talked about what is in the box. We are not out of firepower by any means. Vantage point, we were too cautious about our remaining firepower and our judgment precovid. Hindsight is a wonderful thing when youve got it. Strategist joining us now from principal global investors. Area, a lot of people skeptical that the u. K. Will actually deliver negative rates. This isskeptical actually what the bank of england wants to do. However, i suspect they will need to do more. You are going, if to open negative territory as an option, you are not out of firepower. The question is how effective it would be and what else they have. Kailey could fiscal help the boe hat scenthe monetary side . Be i think the optimum scenario is when fiscal policy, just as we have seen in europe come and to some extent the europe the u. S. , have stepped in to help the central bank. In the u. K. , we are talking about putting back scheme, the opposite of what you have seen from germany. Reversal inet that the way they are approaching fiscal policy, the central bank is almost on its own. Guy in terms of the way policy is likely to develop, the bank of england is talking about tapering its bond purchases by the end of the year. Do you think that is realistic even if we dont get towards negative rates . Are we going to have to see the bank of england delivering more qe echo more qe . That is what i most skeptical about. Youre looking out an economy that was hurt more than any developing g7 countries during q2. It is looking at the situations for 2021. On top of everything else, it is a difficult scenario to see them being able to take asset purchases, even if you think negative rates are an option, we still need the other side of the equation to work. Policy, if youve only got to negative rates, qe still has to still be on the table. Hours, over the past 24 have they created this new blueprint for the Central Banks that the boe is going to have to follow suit . I think that going to have to follow suit . Not just the bank of england by any means, but all sorts of ecb two. We saw this year the u. K. And europe bringing in this coordination between monetary and fiscal policy, u. S. Followed suit. Now maybe the u. S. Is laying down the groundwork and saying, pointing out other Central Banks that we need a more forceful policy to really change the way that people think about it. We need to bring Inflation Expectations up. What you are of expecting into the autumn, what does the picture look like both in the u. K. And europe . U. K. , thereor the are two sides. We have toematically see that q3 is going to be good given how q2 was. Ofn we hear the Numbers Companies refinancing, mass spectrum hungthe over the u. K. Economy. I worry about where the u. K. Economy is going. Has been astonishing. We have to wonder about that. Gottathe other hand has far better prospect in front of them. They are taking control of the virus, they have a central bank which has inspired more credibility. They are moving toward expansionary equity. In these times, that has to be one of the most important policies that people need to be looking at. Kailey german chancellor Angela Merkel spoke at her annual speech today. That she defended the governments use of stimulus. In extraordinary circumstances make it possible to act in an extraordinary way. If you are doing something wrong politically. I am firmly convinced this is a good decision to take on a high degree of debt, because anything else would mean would would be in the grip of the pandemic for longer. We are acting and absolutely the right way. Doley do you agree, or current debt levels all over the world start to concern you . Good i in full agreement think of any other countries, the way that they have approached coronavirus in terms of consolidating, but also in terms of , germany comes very high up. [no audio] debt problems will be an issue, but Interest Rates everywhere are going nowhere for the foreseeable future. It makes sense that policymakers should be trying everything they can on the fiscal side. Health economies go through the help economies go through the struggle that was forced upon them. Yes, i am absolutely in agreement with what we just heard. Guy i think youth guy it was interesting to listen to the fed talk about the desire to improve the Employment Situation to include wages. The ucb does not have that mandate, it has a single needle in its compass, inflation. Moving Inflation Higher is proving to be very difficult. ,he fed can focus on employment do you think the ucb needs that as well . I think that is probably more difficult for the ucb. I think it will be , but it has slightly out of reach. For the ecb, the first thing they need to deal with his away their target is set out. Below 2 ise to or an asymmetric target. There a reason why european Inflation Expectations have stayed low. Now, christina guard, before she became the head of the conference two years ago, she was asked a question, would you agree with raising inflation targets . She did not have any belief in the target. She said it do not make sense to her. If you cant reached oaks if you cant reach 2 , what makes you think you could reach 3 . Efficacypeaking to the of making things symmetric. I have concerns of what the ecb is really willing to do in terms of making groundwork, changing policy. Kailey fairpoint. Seema shah of principal global investors. Stick with us, we are going to get your insights next. Fresh record high on that lower for longer narrative. This is bloomberg. Kailey live from new york, i am kailey leinz with guy johnson in london it this is european close. The day after the fed shifts unemployment runs hotter. We are seeing a return to the familiar this morning and the stock market. Scarlett has more. Record highs again. The nasdaq is outperforming and tact is leading the broader market. One of the specific narratives we are following is the pursuit of tiktok. Is jones reports tiktok asking 30 billion for his operations for its u. S. Operations. Walmart is reportedly the frontrunner, but price is an issue. There are reports oracle offered 20 billion in cash and stock. Twitter had previously floated an offer close to 10 billion. It is also higher today. Looking at other sectors, energy is up 8 10 of 1 . Financials failing to build on yesterdays rally as bond yields decline. When you look at the backdrop of what is going on the equity market, it is very much one of resilience. As kelly mentioned, the s p and nasdaq at record highs once again. Today marks the seventh straight for the s p. In the last two weeks, it has fallen once. The dow has crawled back. The feds willingness to let inflation overshoot its 2 target in order to average 2 over time should mean treasuries on the long end are more attractive. Steepen, theve did five year, the 10 year, the 30 year, the widest since early june. There is still a lot of debate on whether the rise in the rise in yields is sustainable or whether they will peter out especially since the 2 target has been such a challenge for the federal reserve. Guy absolutely. One of the key questions the market is trying to figure with. Thank you indeed. Seema shah is still with us, do you think the is sustainable . Do i by banks . What is your outlook . I think it is sustainable where it is. Do i think there is going to be significant steepening . Probably not. Spoke, our expectation was inflation was not going to be really present for the next two years. 1 once recovery is in play, there will be easy positivity, there would be some inflationary. Yesterdays decision, it changes. It improves the outlook a little for inflation, but it is not groundbreaking. The fed is still going to be dealing with the issue of technology. Globalization. All of the issues that have put down the pressure inflation. I am not sure a much steeper yield curve is on the way. Mike kailey our bonds kailey our bonds still useful hedge . Great question. 6040, does it make sense . There is risk associated with assuming that bonds can play that role. When you have got the fed making very clear that rates are simply going to be close to zero for the foreseeable future, that provides reassurance. Unfortunately, it simply does not play the role. You think that yields can go significantly lower from where they are now . You talked about the bank of england with negative rates. The fed desperately wants to rule out negative rates as well. Central banks dont seem to have the ability to fulfill that mandate, they dont seem to have the ability to get inflation to rise. Continue to throw monetary stimulus at the wall, hoping some of it will stick. Qe has been a part of that. Negative rates may not have worked in the eurozone and elsewhere, but Central Banks continue to struggle to find tools that would allow them to lift inflation. Why can yields go lower . I think they can. What are the issues that has been building up in the last decade is Monetary Policy is losing effectiveness. That is not due to a failure of Central Banks by any means. When you have rates this low, even with the pandemic and the crisis we are dealing with, Monetary Policy is no longer the best tool. What we really need is more on the fiscal side. Imagine a scenario where you have a second wave of the pandemic, you have another rise in unemployment, i think there is a potential for a further drop in the yields particularly because Monetary Policy cannot do much. The other example is germany. There was a while back then we possibly see. Exceptional Monetary Policy has been effective in one thing, supporting the Financial Markets. We are at fresh record highs again today despite the fact we are still in the middle of a pandemic in an earnings recession. Just where we fit right now concern you . Are we too far decoupled between the stock market and the economy . It is concerning. There is significant decoupling there. To me, it is down to one thing. As long it is standing behind markets, it is very difficult to see equities going through a major correction unless there is a major event. Things is that with bond yields so low, is pretty attractive. Worry, butis some when the alternative is bonds, equities are still the place to be placing your money. Kailey guy how much higher could they go . Good question. To that end of the to the end of the year, we could see flatlining. With tech having driven it so far, we are now starting to see gains we have seen since march until now are probably unlikely to slow down. It is going to be difficult for big tech to drive the industry. Unless we see a real economic recovery, cyclicals, it is difficult to see as long of the as long as the fed stands behind the market, we dont see direction. Guy kailey will it or relate soon be the time for value . If i am wrong and we do get a significant steepening of the yield curve and people start to believe that inflation is out there in the future, yes. When you look at valuations, there is a very convincing argument to be made. Going to bere looking relatively attractive. You do need inflation to pick up and redo need the yield curve. As soon as conditions improve, youre going to see a sharp rotation. Kailey all things seem to be coming back to that inflation question. Thank you very much, seema shah, chief global strategist at principal global investors. This is bloomberg. Ritika a look at some of the business stories in the news. Lay off 18,000o employees come up than one fourth of its prepandemic workforce. The cuts will be centered in las vegas. They are also taking place at Mgm Properties around the country. Mgm is the biggest casino operator in las vegas. Since been struggling reopening in june. Cocacola will offer employees buyouts as part of a strategic reorganization. The programs will be offered to 4000 employees in the u. S. , canada and puerto rico. There will be an unspecified number of layoffs. Similar programs will be offered in a number of countries overseas. Coke says severance expenses could hit 550 million. Credit suisse has uncovered of its Wealth Management unit. He was said to have forged for antation overthecounter African Wildlife management. Other clients are also affected. That is your Bloomberg Business flash. Thank you very much indeed what happened . They found that one of their bankers and their private wealth unit had forged documentation for a contract for a client. That is a big deal. It is something very similar to what has happened to what happened a couple of years ago where they found another banker had forged documentation and the instant that happened two years ago rather, was targeted by regulators two years ago, having been going on for a number of years, that banker had been sentenced to prison. These things can be taken searcy. Kailey we just saw something similar happened two years ago happening again, what does this tell us about oversight failure . About this, credit has a new ceo. He could say that he is the new guy, taking a look at regulatory hection, risk oversight, so has been looking to clean this up. This script today by my colleague patrick winters, patrick had broken a couple months ago that himself had darted to this risk review. This all is a part of that attempt to clean up some of the business. Guy what does this mean for clients . There is regulatory issues, the other big issue for credits Credit Suisse is the reputational harm. The private wealth business in particular, like Investment Banking, is tied direct is very tight to reputation. This year, we have seen this , soing scandal, wirecard another reputational hit could really impact future business. Lets see how that plays out. They can play the car that they are reviewing their rate structures, but this did lead to a client loss this year. This did impact other clients. Clients are likely to take a look at that. The question is, can Credit Suisse assure the rest of their clients this is not a broader issue . Kailey is this going to hamper his ability to lead the bank . Things i mentioned too is because he is the new guy, taking a look at was function, he can say he has coming in an era taking a fresh look at all of these businesses. Not just private wealth. Some of it is Investment Banking and the other cases. With all of that said, another interesting part of this case in particular was the indiscretion found in a reporting line that led to , who has moved over to ubs. The real story over there. When you look at all of the management involved, is the past going to come back to haunt to haunt the people leaving . Its depends on how far along the regulators go and crackdown on this. Much rope guy how much rope of the regulators be given Credit Suisse . Suisse regulators will not be happy about this. By all accounts, regulators have been very tough on their banks in recent years. Like we mentioned in 2008, the issue with that has happened with Credit Suisse, a similar issue. They have been taking a look at ubs for other things. They are looking at everything from money laundering, tax avoidance, the capital standard. Regulators have been very tough on the banks, particularly the swiss. The question also is, does that go to other countries as well . Guy we will leave it there. Thank you much. Updating us on what is happening at Credit Suisse, the story broken by bloomberg a little earlier. We are counting down to the end of the week. In some cases, the end of the month. European equity markets are broadly lower. What is interesting is that the european banking sector, unlike the United States, is significantly higher, up by 1. 88 . Experience the ultimate sports hub. Where you can find games, news and highlights. All in one place, right on your tv. The xfinity sports zone. Use your voice to search every stat and score. Follow the teams you love. And, even get notifications with breaking news alerts and more. With the xfinity sports zone everybody wins. Now thats simple, easy, awesome. Say xfinity sports zone into your voice remote today. Guy 30 seconds until the end of regular trading in europe. The stoxx 600 is down. 4 . It is big names like nestle under pressure. The bond proxies are sending it lower. It is the banks providing upside trajectory at the top end of the grr. As you can see, a move lower ftse. Negative territory throughout the day. Europe is flatlining at the moment. Trying to look for a sense of direction. Yup the wedge, the 50 day moving average, the 600 day moving average. In terms of the month, we are having the best month since april. The stoxx 600 up in positive territory by. 3 . It has faded a little bit. As i say, going sideways, trapped, but at least it has been positive. Lets talk about what is happening with currencies and individual markets in europe. That is something you want to be paying attention to. Noweurodollar trading 1. 19. A lot of reports today talking about the idea if you get to 1. 30 that will provide a significant problem for european companies. At the moment the trajectory is slow and seems to have stalled. Nevertheless, the dollar down trend seems to be something a lot of people are spending a lot of time on. The ftse, the tax, the cac 40 all trading lower. The cac 40 outperforming slightly but not meaningfully. We have a bank holiday on monday that will mean very light volume. We do have the end of month affect that is a factor. In terms of that sector story, i want to show you what is going on. We have seen the banks outperforming today. It has been a story today. Bank outperformance, defensive underperformance at the bottom end of the market. We have seen Credit Suisse not reacting a great deal to the news we have been talking about with sonali basak. This is the one year story. I bring this up to not only flag what is happening with Credit Suisse, but to encapsulate what is going on with these european banks, trapped in a tight range, not going anywhere in a hurry. What we have seen is upward trajectory today, trying to provide a safe catalyst to get a breakout will prove a little bit more difficult. Maybe more difficult than todays price action suggests. Kailey lets talk about the airlines. Europes discount carriers look to continue expanding their fleets despite the hit of the Global Airline industry is taking. Joining me is mark manduca. I know you do not cover norwegian air, but i want to start there. They say they will need more funds to divert insolvency. How can we draw a line between norwegian and the Capital Needs of its peers . Mark the reality is this is a section that has tough times ahead. Transfers not working. North atlantic not working. You mentioned capital raises have been coming thick and fast and they will be coming thick and fast. Certainly as we headed to the captains of a dark and dreary winter. What can you say to that . Therell will be more consolidation ahead. Possibly the bottom 50 of the tail. Outside of getting excited about vaccines, i worry about the sector in the short term. Like i said, more capital raises comment a good chance that after this winter a lot of these companies do not have enough money. Lets talk about those that do. We were talking to joseph friday earlier on this week. Gatwick, andg to norwegian has a footprint there. He wants to take advantage of this. He sees opportunity. Is the spread between the haves and the havenots getting bigger and bigger . Mark it will be the story of the next five years. I love your point in regards to the haves and havenots. There is bound to be consolidation at airports like gatwick. If you think about where gatwick stands, it stands next to a financial hub. Growirlines that want to and can promise growth to their suppliers, including airports and oem, for those that can promise growth and do it in force over the next five years, airports will want to hear from them. It is a highly consolidated backdrop we are heading towards. The names you mentioned, the lowcost carriers at the top of the market, you will not have many growers in europe. If you turn up at gatwick or madrid or budapest and you can say i can bring you demand when others cannot, they will give you good prices. That is the lowcost model. That is the quintessential way to do business. I definitely see the spread widening between the haves and the havenots. Haves isho among the best positioned . Mark the Capital Markets will always gravitate to people who have done it best. There is a history of ryanair. The problem is it is a bit of a Mad Hatter Tea Party between the shortterm and the longterm. ,f you speak to most investors most investors want to tell you about the vaccine. A lot of the vaccine use forgives the fact that in the short term we will be facing a nervous consumer, therell be a lot of u. K. Isolation rules that will have an effect on demand, let alone the titfortat quarantine endorsements across various countries. A lot of talk on your show about ineffective and effective levels of testing. There is brexit, lest we forget. There will be a truncated market and a difficult market. A vaccine does not solve for that. And investors will always go to the names that can give you declining fuel costs, tumbling airport costs, benefits from more consolidated markets and cut staff and the right places and still grow the top line. That is ryanair through and through. Guy why would investors give airlines more money, and if they do not our governments going to be prepared to step in . Mark interesting point you make about Airlines Getting more money from investors. There is a good chance there could be a second round coming post this winter. If the recovery gets pushed further and further out to the right, i think the biggest risk you have is how deep and dark the cash burn will be this winter. Even at the best of times it will leave many airline Balance Sheets for aft heading into the next five years. The problem is the sector was not loved heading into this crisis. Turned a effectively bunch of challenged companies from an esd perspective into an even more challenged company through bad Balance Sheets. To want to give these companies money, you have to be extremely discerning. You have to go through the names of the top of the market that are able to consolidate and survive the longest. The trend i see most is demand recovery getting pushed out to the right. Everything i am hearing is august is bad in september will be worse. Not get excited too soon do not get excited too soon. Kailey i am looking at the stoxx 600 travel and leisure. It is about to close out its best week since april 2009. Have we overprice the recovery . How i was listening about equities have continued to run in the face of mixed news flow. The truth is it is exactly the same in the airline sector. Corporates and shareholders are pinning their hopes on a vaccine. Aside from the fact vaccines are hard to come by in the best of years for a number of legacy viruses we know, you have to ask yourself the simple question in the face of fairly nonmedical enthusiasm what are your adoption rates going to be like . What is the availability of dosages . What safety tests have been done on a vaccine that has come to pass in the space of nine months . It is unlikely corporates will face force consumers to take the vaccines. Once the enthusiasm passes if the vaccine gets announced and the share prices moved to the upside, after that move, what are you left with in terms of demand recovery . I think the demand recovery will still be slow and uneven. It is a quintessential case of fate the rally. Me if we things up for could. I want to talk about the north atlantic. Iley is in new york, i am in london. Impossible to get from one to the other right now. Tell me if you have any expectation that would change between now and christmas. There was a piece in one of the british papers talking about an air bridge between london and merkelk, but angela advised germans not to travel to high risk areas and she said the United States in that sentence. What happens on the north atlantic . As you have already indicated, this is where a lot of the Airlines Make their money. Not just amark and little bit of money. 40 to 80 of their profit. This is the cash driver for most of these businesses. It is where they make their 15 , their supernormal profits come from this consolidated group run by the few, not the many. Me, it is a critical obviously companies and countries are trying to balance this ageold problem of consumer corporate andde ultimately economic benefit. The truth is before the u. S. Election you can pretty much write off a mass reopening of the u. S. To europe. I think you are right in suggesting as the press has suggested there may be u. K. To news to put york on the map, but it is hard to police, particular given the fact that we in europe have very fixed borders, and the u. S. Do not. How does one please just new york . It is a difficult question to ask. Your question about tesla is important. We have to find a miller a new normal in terms of effective testing. Manduca, we have to leave it there. Thank you so much for your time. He is joining us from citigroup. Lets get a check on the bloomberg first word news. Ritika Prime Minister shinzo calling it quits. The longest serving Prime Minister in japans history is residing to undergo treatment for a chronic illness. Shinzo abe has been in office since 2012. His liberal Democratic Party will pick the next Prime Minister. Shinzo abe is perhaps best known best known for a program nomics. Abe the rebound in u. S. Consumer spending slowed down. 6. 9 rise iner june. There could be another roadblock. The federal government cuts supplemental Unemployment Benefits to millions of americans. Britain once to make sure its citizens can get a Coronavirus Vaccine as quickly as possible. The u. K. Is changing its rules to allow the emergency use of an effective vaccine before it is effectively license. Britain says there is a precautionary measure and would only be used as a last resort. The country has had had more than 41,000 covid19 debts, the highest toll in your. The federal reserves new plan to run the economy hot looks easier said than done. Jerome powell says the fed would allow inflation to rise above the 2 target and lets unemployment run lower than officials have clear be asleep have previously targeted. It will take a while to get to 3 . Inhnology enabled disruption particular are limiting the Pricing Power of businesses and inflation has been muted for close to 10 years. Ritika global news 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in over 120 countries. Am ritika gupta this is bloomberg. Guy thank you very much, indeed. European stocks ending the week, pushing lower, session lows as we come through the end of the week. The ftse 100 down. 6 , underperforming. The last few minutes, we did see a push lower. It has been the more defensive names that have given up the biggest gains today. It is the banks that have provided some spite provided some respite. We will carry on the coverage with the cable show on dab Digital Radio in the london area. This is bloomberg. Kailey this is Bloomberg Markets the european close. I am kailey leinz in new york. Guy johnson joining me in london. Guy, we have to talk about japan. Guy we certainly do. Lets talk more about that that resignation. It came as a little bit of a surprise. Indications were something was brewing, and then shinzo abe shocking everybody. What will change, what does this leadership shift mean, particular for the haven currency that is the yen. Joining us is derek halpenny. We appreciate this. We have seen a bid on the yen. What you think the longterm implications of this. Abenomics has been something that has dominated the japan economy. Does that change with the departure of the Prime Minister . Derek first of all we have uncertainty today. That is why the yen is considerably stronger. Looking ahead, better way of asking that is what is japans choice . Policymakersthe having much choice but to continue on with what is already in place. The last thing a new administration would want is to signal to the Financial Markets the potential for a change in the dynamic between the government and the central bank through monetary stimulus and fiscal stimulus, because to change that perception in the markets would obviously result in not just equity markets corrections to the downside, but also a considerable surgeon the japanese yen. The message next week and through until the election, possibly on september 15, will be one of continue and see, and whoever takes over from Prime Minister abe is likely to maintain that crucial relationship between government and the central bank. That is of paramount importance for the Financial Markets. Kailey is it just going to be the status quo . Does any japanese asset need to be repriced on the back of this news . Derek it had happened to a degree right now, and i think shortterm, the level on uncertainty will remain elevated. A debateing to have like we are having now in terms of potential consequences of this resignation. It would not surprise me over the short term if there is a continued repricing to incorporate some level of increased risk of the potential for a change going forward. When we talk about three hours ics, the Monetary Policy arrow is by far the most important. That can extend the fiscal stimulus era. Arrow has stimulus been shot hugely aggressively. The stimulus that has been ongoing from the boj is also of importance. Statement,ing a governor kuroda reemphasizing the stance of the boj remaining unchanged. Whether it is next week or to coincide with the election of a new Prime Minister, but it might depend on the way in which the Financial Markets respond over the coming days and weeks. Abenomics worked . In. Rought kuroda the idea was to use Monetary Policy aggressively. The japanese economy still remains in a difficult place. At what point do you think the new japanese leadership has to reassess what they are doing rather than continuing what abe started . Derek to be fair, we can measure success in different ways. What ive been highlighting to clients is before covid came along, we actually had 39 consecutive months of positive coordination wide cpi in japan. That is the longest run of positive inflation since we had the First Episode of deflation in 1995. Why we did not get through the 2 target, i think it would be a little bit unfair to criticize japan in not achieving that goal when you consider the problem central bank globally are having in terms of achieving a certain level of inflation. The fact we have a positive inflation is an achievement in itself. There are other areas like on the physical side, although the side, on the fiscal although the basic balance will not be achieved in terms of the primary budget balance back into positive territory. Powerminister abe came to , tax revenues have jumped 36 where expenditure has remained unchanged. The fundamental backdrop of the fiscal position has improved, but because of covid, that has been destroyed over the short term. Putey the policies abe had into place before his resignation, are they enough to restabilize the japanese economy, or will his successor have to do more . Derek that is a good question. Can the press conference today, Prime Minister abe spoke about new leadership equating to new economic policies. Pressure for more to be done. I must say i find it difficult al consider additional fisc stimulus on top of what we have already had. I think the scope for any kind of substantial change in policy is quite limited. It may be enough over the short term to simply reinforce that we are still on the same path and therell be no fundamental change in the direction of travel. As i said earlier, there is evidence in some areas that havemics was beginning to success before covid hit. Guy the cost is enormous. The authorities in japan own huge sways of not only the bond market but the equity market. How much more road you think japan has to continue along this path . The rest of the world is watching with interest. I appreciate what you say about some of the successes that have been achieved, but you have to ask the question about whether or not there is a functional Financial Market in japan and ultimately whether or not other pulled, need to be demographics, etc. Derek even in demographics, exceptions have been made. Female participation in the labor market has been important in diminishing the impact of a shrinking labor market. Ultimately, politically it is difficult, but some from of change in immigration policy is inevitable in the wrong cash in the longterm, and the idea of mmt in the long term, the idea of mmt, that is not going to change for a very long time. Kailey we have to leave it there. Derek halpenny, thank you so much for joining us. This is bloomberg. Guy coming up in the United States, balance of power with david westin on Bloomberg Television and radio. The nasdaq outperforming, up. 6 . The ftse 100 moving further below the 6000 mark and we have a stronger again a stronger yen. The pound catching a strong bid. Indicating negative rates are still on the table for the bank of england. 133. 47. 1. 3347. David from bloombergs World Headquarters in new york to our tv and radio audiences worldwide, i am david westin. Welcome to balance of power, where the world of politics meets the world of business. We begin in japan, where Prime Minister shinzo abe surprised even some members of his own party when he announced overnight he is resigning. Shinzo abe has been the longestserving Prime Minister in his countrys history. He spoke earlier. I am not ready to respond to the mandate by the public. I made a judgment. I should not continue my job as Prime Minister. I decided to step down as a Prime Minister. Beid shinzo abe will staying on as leader until his party picks his successor. We welcome sheila smith, senior fellow for japan studies at the Council Foreign relations. Was this a surprise to you . Sheila thank you for having me. I think we were beginning to see it coming a few weeks ago where he was not well and id