Tracking here defying concerns for investors. We have seen a big advance from the 18 1989 peak from last months and onward past the 40 saddles and the 40,000 mark. Despite concerns investors thought the gains were too rapid. You had the rsi above 80. It has been above 70 for almost three weeks now. Certainly in overbought territory, perhaps, from that indicator. Still we are above the 40,000 mark for the first time, very much erasing taking us all back to the levels we were at, as we said, during the early 90s when you had that bubble bursting. Japan, the gains you are seeing in the session, the nikkei up point data presented broadly. We will be watching that one. To Holding Around 150. We know that that weakness the yen weakness has been supporting Japanese Equities given the large number of exporters. Company profits up 13 on the year end sales as well increasing, and positive indicator lending to Japanese Equities. Now, not to forget. As you said, japan, the focus on Corporate Governance reform, korea wants some of the same. They were getting focused on thats as well. The kospi continues gains and the korean won a little firmer as well, just a signal of the level of risk tolerance we have in markets right now. Lets bring in christie 10, aipac investment strategist at the Franklin Templeton institute. I am interested, then nikkei two to five reaching that key 40,000 mark for the first time ever. What do you think about the gains so far . Are you concerned that it has been too far too fast . Christy it is amazing how japan went from the most unloved to now i think one of the most loved equity indexes across globally and, of course, the asia pacific. I think that this has to do with a lot of the positive developments that have happened and keep happening. We saw how profit levels of Japanese Companies has been on the up and going from strength to strength as well. And Manufacturing Activities are also more upbeat. At the same time, i think if you look at the developments that have started to manifest, including the increase in wages, corporate reforms development. And also i think, sustainable inflation that could support the overall policy change, policy shift, from a negative Interest Rate policy to normalization. I think that these are continuing supportive factors for japanese equity markets. At the same time, look externally. There is also the reality of unattractiveness the relative unattractiveness of, for instance, chinese markets. Also, i think that flows of Investment Funds are looking for opportunities across the space. This fear of missing out, given the irrational exuberance in the u. S. Equity market is probably widening across to the Asian Pacific region. Annabelle how long do you think that would persist . Im curious as well, when you look at the inflation outlook, we just had local media in japan saying japan could consider calling an end to deflation. That could also factor, of course come into the boj thinking. How do you think that Central Bank Policy shifts are likely to play into that Market Dynamic . We are definitely looking at a potential shift. Again this will be a structural possibility. In that case, timing is a big issue. But sometime i think this year, and this is largely within a lot of Investment Analyst expectations, that, you know, the boj will, at some point this year, actually shift towards removing the negative Interest Rate policy. Then what is important is whether or not this is priced in. From what we have seen across the equities complex in japan, you know, possibly, 40,000 being reached for the first time, potentially going from strength to strength, it is still a possibility. Especially when we see that, you know, the policy shift and in the boj actually signaling that has already started to happen. And at the later part of this year, there is definitely a possibility for that. Haidi if you look at what is driving the rally, the momentum factor for japan has been getting stronger and stronger. The Winning Strategy of buying stocks doing well. Are we starting to look at a more polarized market, though . There is starting to be a pretty big applicant comes to stocks that have rallied, continue to rally, and underperformers that are bully starting to lab. Christy we are definitely looking like that across the region. If you look at how india vietnam, and also, now, japan, these have shown that relative strength that aipac command and the attractiveness of emerging markets versus, perhaps, some of the opportunities in the developed markets. So, going ahead, the divergence is a reflection of how the Market Sentiment is placing playing out in regards to the u. S. Where there is narrow leadership. In the u. S. There is the magnificent seven. In japan increasingly investors are actually talking about the seven. There is a momentum starting to build up across the asiapacific region. We arent seeing investment opportunities, and this is from the survey we are doing across our Franklin Templeton complex, we have actually surveyed and received survey results from 300 investment professionals within the company that shows that going ahead, we are expecting that some of this narrow leadership to broaden outbound as well as brought in out and not just as well in terms of equities, given where we are seeing fed policy and where rate cuts will be. We expect Global Growth to be slower than consensus across all major regions. At the same time, recession will be avoided. Inflation in the u. S. Will continue to moderate. Some of these factors are actually driving investment growth potentially to fixed income. Haidi we are watching south korea very closely because obviously regulators there want that market, the reforms to follow the trajectory we have seen for japan. But, the response from investors to the corporate value of program has been lackluster. Do you see south korea being able to above the date in so far as it has taken over a decade for japan, this level of success . Christy there are opportunities within south korea that prioritize the technology space. This continues to be acres a key support for the south korean investment and opportunities and asset classes. At the same time i think you are right. In mentioning that the gap between korea and japan could be widening and get wider. I think this has a lot to do with also the challenges south korea is facing. I think that with the u. S. Reelections happening this year, there will be a lot of geopolitical concerns that will also drive a lot of selectivity in terms of whether or not korea will actually outperform in this case. With what is happening across the headlines, of course, with the situation within the medical profession, that is also manifesting. I think that will be a drag on sentiment somewhat. But, we do not expect any kind of a structural negativity that will actually affect south korean assets significantly. I think theres still a lot of that tech possibility and, potentially, i think, the continued maneuvering of the south Korean TechnologyCompanies Towards the tech sector will be a key driver that will support korean assets. Haidi what do investors want to hear from leadership this week as we kick off the two sessions . Is there anything that could consolidate more confidence including the gdp targets . Christy well, china is definitely at a juncture where policy authorities will have to send the right communication messages across. I think they will. I think the best the base case is that the nbc extra sessions happening this week that will probably end by the middle of this month well will see that the baseline growth of around 5 target. And also, at the same time, to achieve that i think that not only shows the conviction of chinese authorities to maintain that growth policy, but at the same time, there will have to be more growth supportive policies and measures that will have to be implement it. I think that, in this case, is a vote of confidence for investors. Chinese authorities will be more. We are starting to see that already happening since january. So, the pivot, the policy pivot we are expecting, and i think markets are looking for that, about a 5 growth target. Around a 3 Inflation Expectations and also at the same time, more fiscal policy measures that will support the overall growth momentum. I think that will be in place and what markets, investors, will then look out for is that these policies actually get implemented. More supportive fiscal and Monetary Policy directions. This has to be communicated. We think it will be. At the same time, i think that if you look at then, the kind of fiscal spending for this growth target to materialize, it is probably around 3 trillion yuan4 trillion yuan of policy measures. Annabelle christy tan thank you. China is set to announce is 2024 growth target and outline its strategy for supporting a slowing economy at the countrys top annual political gathering this week. Our chief north agent correspondent Stephen Engle joins us live from beijing. We know it will be around 5 perhaps. Still it means we need to see a lot more supportive policies coming through. Stephen yeah. Are we going to see a lot of supportive policies coming through . I think they will talk a good game. Obviously over the next 10 days or so of the National Peoples congress that begins tomorrow and probably runs through about the 11th. We dont have the final date yet. Of course today is also the cppc the National Advisory to the peoples conference. Thats why we are here previewing this. As of the last guest rightfully said, the world, really, and, investors are looking at china to see what kind of forceful measures might come out of this two sessions to stimulate and restore confidence. I agree with the guest bed said implementation will be key as well. As so far xi jinping and collective leadership in beijing has avoided the big bazooka approach. Yes, we have had the National Team come in and support the stock market what it was wobbling at the beginning part of the year, february was fairly decent month for equities year in china because of the state support and also the Property Market. We saw banks essentially cut the loan prime rate, the fiveyear tied to mortgages. So, that was a good step. But collectively it is not a big bang and we are wondering whether there could be more property measures to support and put a floor on this sinking confidence and the situation for developers. And also, restore confidence in the private sector. It has been absolutely battered, obviously. If you go back to 2020 with jack ma added the collapse of the and ipo and then the restructuring of alibaba. Keep in mind, the private sector in china essentially accounts for 60 of national gdp and 80 , essentially, of urban jobs. That is a key component. You have to keep the young and recent graduates employed. That is a struggle Going Forward. So, there is a whole list of problems in the chinese economy right now and we are looking for signals that they will be at least supportive in both fiscal policy, perhaps, even more, monetary easing as well as just confidence and measures Going Forward. Haidi investors are looking for physical expansion and physical easing and at the same time you have heavily indebted provinces. What does that mean for the discomfort of trying to support the flagging economy versus what local governments do . Stephen yeah. I mean, that is why we will really be looking at the work report tomorrow at the beginning of the National Peoples congress from the premier. His marching orders to the provinces. So far, in years past, in times of economic pain there would be stimulus Going Forward in the form of Shovel Ready Projects at the municipal and provincial level. Really, to stimulate growth in that form, on the fiscal side. But again, that has incurred a lot of debt at the local governments. The local governments are in fiscal distress in many cases. Or, strained, i should say. I am not saying they wont necessarily default, but keep in mind, property troubles in china really exacerbates the fiscal situations at the provincial level because land sales have fallen off the cliff and that is a huge part of how they get to refill their coffers. So, what we are hearing is essentially that xi jinping mentioned this 128 times last year. He wants highquality development that is essentially sustainable and this boom and bust cycle of incurring high debt at the local level is not something he wants to exacerbate further. They are constrained. The Central Government is trying to remain constrained. In adding to that debt load. At the same time, everyone is saying, we need something. Annabelle that with our bloomberg chief north agent correspondent Stephen Engle in beijing. Stay tuned for the very First Edition of bloombergs the china show coming up in the next hour. It is your definitive source for news and analysis on asias largest economy from politics and policy to tech and trends. We have indepth discussions with the newsmakers that matter. To try to show from yesterday at 9 00 a. M. In hong kong, shanghai, and singapore. There is plenty more to come on daybreak asia. This is bloomberg. Haidi opecplus is extending supply cutbacks until the middle of the year. Lets get more from our energy and commodities editor andrew james. Focus about talk to us about what jumped out to you and is a difficult environment this group is facing when it comes to trying to predict Market Dynamics for this year . Andrew yes, so, about 2 Million Barrels of oil a day caps were extended through the end of june, pretty much widely expected by the market. A couple interesting points. First, the saudis account for about 50 of that cut. They are under a lot of pressure. Selfimposed pressure to keep the Oil Price High given they need a price of around, and average price around 90 per year for this year to balance their budget. Finch came out with that estimate a few weeks ago and that is as they build futuristic cities, host sports tournaments, pay top footballers a lot of money. They will have to work quite hard to get the oil price up there to balance the budget. The other interesting point is russia, which has been given a special exemption gets to mix production cuts and export cuts with its quotas. They have said they will focus more on production cuts and that will allow them to keep exporting more to fund the war in ukraine. We have not exactly seen good compliance from russia and other producers as well. Do you think we will see better compliance moving forward . How is that likely do play into the broader oil markets especially if we see cuts extended even longer . Well, compliance is always an issue. The smaller members have a history of not complying not well that well. At the bigger issue i think for opecplus is we have surging production from outside the cartel, from the americas, particularly the u. S. And also brazil and gion a. Gianna. Though oil prices have been on a slow but steady ascent of this year the extra production has capped the gains. We also still have a bit of a middle east war premium in the price. Transport costs have gone up as tankers are diverted from the red sea and the suez canal and they have to go around africa. Thats pushing the price of a bed. This sewage and production outside opecplus is pushing it down and in the demand outlook is not looking that great particularly in china. So all those things mean it will be tough for opecplus to push up prices. There is a tradeoff here because as they keep reducing production and production from other places surge is they will lose rk share order they are already losing market share but will lose more. That will come to more of a head at the next meeting in june when they are deciding what they are doing for the rest of the year. There will be pressure particularly from smaller members that dont want to keep cutting out product but at the same time you have the saudis under selfimposed budgetary pressure. Annabelle that was our energy and commodities editor andrew james there. There is more to come on daybreak asia. This is bloomberg. Haidi the leaders of nine Southeast Asian nations and australia are gathering in melbourne today. Bloombergs paul allen joins us for more. China is looming large. Paul very much so. This forum is in many respects about countering china in the region and i think you can put the agenda into a couple buckets. On one hand, economic and on the other strategic. On the economic side there is always an interest in growing trade. Taken as a block aseans australias second largest trade partner and theres an opportunity for australia do to participate in a Green Energy Transition as well. The strategic side is more nuanced. We had the philippines president arrive in the country a little earlier. Australia and philippines signed a pact on Maritime Cooperation and this is obviously with an eye towards south genesee. That the south china sea. Vietnam is looking to sign a traditional relationship with china as well. Annabelle a lot of countries are represented but myanmar is not one of them. Paul right. And mark is a very repressive military regime. It has been three years since the military seized power their and their shortlived democratic experiment in myanmar ended. Australia did not invite myanmar. But, it will be represented by the diplomatic Embassy Staff inste