The yen hits a fresh 34 your low reaching 156 after the boj colds rates steady and tweaks its language on the bond buying. We bring you the latest reaction at head of the Governors Press conference. Wall street higher thanks to a boost from big tech, alphabet and microsoft shares surge on earnings beats as fuels demand. Hopes of dampened as the u. S. Economy slows well price pressures move higher, traders pare rate cut bets as the focus shifts to bce data out today. You put from the tech story certainly on the earnings front. We will break down the gun story as we lead up to the conference 7 30 u. K. Time. The opitimism coming through, alphabet coming through this first dividend ever and to Share Buyback as well, and it is proving both of these companies that their investments and i are now paying off. European stocks pointed up by. 6 of 1 . Ftse 100 futures as copper pops up higher on the session. S p futures building on the optimism around the tech story looking to gains of. 8 of 1 after closing the session lower yesterday. Nasdaq futures looking to add more than 1 . Lets flip the board in the process with scrutiny on the currency space with the japanese at 156. The key line is 157. 60. Getting details and analysis this hour. Markets pricing the first full cut, 25 basis points from the fed not coming until december of this year. Are we approaching stagflationary territory with this economy . 107 on eurodollar. Brent just below 90 per barrel, 89. 35. Lets cross over to avril hong. What is standing up to across the asia session . Avril we are looking closely at the boj decision is the focus shifts to the words of the mouth of governor ueda about one hour from now, but also how tech is powering the asia stock recovery this friday. Now we are seeing the nikkei, the topix extending gains, about. 4 of 1 higher. They stood pat on the rates, but what was more important was how they would keep the bond purchases in accordance with its march decision, and at the same time it dropped language about ¥6 trillion in bond purchases, and some had read this as a hawkish tweak to the language, but this is something ueda will need to clarify in his prayer for in his presser. Lets flip the board because i want to show you what we are seeing among ship names as the big tech really comes through ins way as well. Sk hynix slumped 5 despite beating on its own profit expectations. Today seeing a nice recovery showing how for asias tech names are so closely tied to their u. S. Counterparts. We talk about how you weakness is driving the rally in japanese equities, and for the nikkei this year it is responsible for about half of its performance, but Something Else to consider is if you were a foreign investor, then you look at this and your returns are seen it diminishing quite considerably. This varies depending on your base currency. I want to show you how the yen is not just weakening against the greenback. It is also weakening a lot against the aussie, the euro. We are brace for a bit more hawkishness, that this is tracking what we saw in u. S. Treasuries overnight. Tom avril hong, thank you very much indeed. We will stay on the japan story and the details around this decision around the bank of japan, Bloomberg Economic saying this was a dovish hold. Paul waul is standing by and tokyo. What are you looking ahead to when it comes to the presser . It was a short statement. It was one sentence long, the shortest statement they put out in years. So in terms of moving forward with the idea of simplifying policy, we are seeing ueda moving in that direction, but what we did not get was a clear sign that they are returning to pare bond purchases despite local media reports just before the decision came out suggesting that there was going to be some discussion, perhaps an indication of that, so that has led to some disappointment. There was some confusion from this statement being so minimal, that certain statement on a buying as many bonds before was dropped, this reference to ¥6 trillion of monthly purchases was not there, but there was a line saying that the stance was largely in with march, so no change there. With the financial conditions to continue, so all of this feeds into further yen weakness and keeps us on the watch for the possibility of intervention. Tom what is the latest we have been hearing from officials in tokyo around that potential intervention . Do we have any clarity from traders if that does indeed happen . What line we might be looking at . If you ask me based on what we have seen in 2022, we have got two big pressure once coming up today. We have got governor uedas press conference. He will want to play something for the hawks, something for the doves. I think it would be helpful if he gave some kind of hawkish signal just to rein in they yen. If they yen the yen continues to weaken, we have the inflation data tonight. As the preferred indicator of growth, if that surprises on the upside there could be another surge in the yen and that is the time authorities would want to move in and intervene. It is also a holiday weekend. I think that is the timing, and i think the level is get to 157, i think intervention will come around then. Tom paul jackson with excellent analysis, thank you very much. Lets get to the tech story, microsoft enough a bit shares soaring and late trade as First Quarter expectations beat on strong ai demand. Here is what someone had to say about the results. We are very pleased with the Financial Results for the First Quarter driven by strength in searching cloud as well as the ongoing efforts to durably reengineer our cost base. Tom lets bring in robert lea. What stood out from those results and the ai component that seemed to come through for both of those companies . Absolutely, if i was going to great these results alphabet gets a solid grade star. A solid gold star. Taking a step back from ai euphoria, alphabet is fundamentally an advertising driven business, and their advertising growth was the strongest in the quarter just reported versus the last eight quarters, some acrosstheboard strength there. Margins were ahead. Happy days for investors. Decent numbers acrosstheboard strength. The upper performance did not match the magnitude of the beat, but there is no great concern on that front, so we major contrast versus what we saw from that of from meta. Tom is there anything the market could be missing from both of these stories . It would be amiss of me not to inject a little bit of caution. The market is always shortterm focus. I think a point i made previously is it is all about monetization. We are seeing early signs of monetization coming through for these companies. However numbers of alphabet were above expectations, Free Cash Flow generation was below expectations. The market is just focusing on the headlines, so the point i have made before is these companies are investing tens of billions of at a point where there monetization model and strategy is a relatively early, so the market does not seem to care at the moment, but that is something investors need to focus on through the rest of this year, because when you are interesting such high amounts on , you went to make a return. The risk is comes out to bite them on the bottom at some point. Tom continue to scrutinize the monetization of ai. Thank you very much. To the macro, the Federal Reserve facing a dilemma, Gary Shilling soft First Quarter growth and reaccelerating inflation. Later today the key inflation gauges released adding more nerves to a slightly jittery market. Lets bring in our bloomberg mliv strategist. Are we talking about a stagflationary environment now, a u. S. Economy facing stagflation, or are we not there yet . I do not think we are quite there yet. We got a gdp reading yesterday, but around 6 it is around trend growth which is around 1. 8 , so the fed is not going to be unduly bothered about the economy softness. They think of the economy is losing momentum. There is no question about it, but at the moment the feds focus is on inflation, and the expectation is that we get it pce reading of 2. 7 today. The bulk of expectations were at. 7 and 2. 8 percent before yesterdays data, and after yesterdays upside and pricing indexes some of those numbers have been revised up to 2. 9 . What does that mean . If we get an upside surprise that would be a big overshoot. If that happens the markets will complete the reprice fed. At the moment they are thinking one possible cut by the end of the year. They will price it out completely and that will send the two year yield to about 5. 22 by my calculations within a week. If it is a downside surprise, rates have soared considerably in the last month and they may see a rally. Tom there is sensitivity in the markets to the data. As we see the economic picture slowing. 2. 5 percent was the date that they came through yesterday. Ven ram, with the detail, thank you very much indeed. Here is what else to think about today. 7 00 a. M. U. K. Time, natwest earnings with a focus on Interest Income as market started to price and the expectations of a bank of england cut possibly as soon as june. Those details come out at 7 00 a. M. U. K. Time, so rounding up the story when it comes to the Bank Earnings picture, and when it comes to the liquor story we have remy conteui expected to benefit from a pickup in their Chinese Markets and potentially European Market as well as the u. S. Market looks soft. Year to date that stock is down 20 . We keep an eye on sale numbers from remy contreui. Earnings coming up from exxon mobil later today after the runup in oil prices. Year to date that stock is up 21 . Those earnings out later in the u. S. Get a roundup of the stories you need to know in todays edition of daybreak. Terminal subscribers go to dayb. Problems are mounting between economies even as the relationship shows some signs of stabilizing. More on that visit next. This is bloomberg. Tom welcome back to bloomberg daybreak europe. Chinas top diplomat warned Antony Blinken problems are mounting between the Worlds Largest economies as the u. S. And threatens beijing with sanctions for the support of russia. Blinken is expected to meet president xi jinping later today. There is no substitute in our judgment for face to face diplomacy in order to move forward, but also to make sure we are as clear as possible about the areas where we have differences at the very least to avoid misunderstandings, to avoid miscalculations. That is a shared responsibility we have not only for our own people, but people around the world given the impact our relationship has around the world. Tom for more on this story lets bring in rebecca wilkins. What is to bend tone of the trip so far . It is a difficult line to thread for the secretary of state in this environment, but it seems particularly challenging this time around. It started pretty friendly when blinken touched down. He had softer less diplomatically charged events. He spoke to students at the campus there and took a stroll, had dumplings for dinner. He has arrived in beijing and is speaking to the foreign minister. The rhetoric has slightly hardened. They pointed to the buildup of factors, some of the risks, and that reiterate some of the concerns we had in this is conference before blinken arrived, quite unusual for beijing to put on the event before an official arrives, so there has been a shift in that tone, and blinken is striking a tough balance here. We had the tiktok legislation come through and he will ask china to take a firmer hand when it comes to containing Nuclear Capability by north korea and ask beijing to take a firmer hand when it comes to influencing the middle east. Russias war in ukraine is this big, continued obstacle, and there have been repeated threats of reprisal, so there are a lot of issues blinken is trying to thread the needle here. Tom you have long chart of the evolution of this relationship between china and the u. S. When it comes to efforts to stabilize the relationship, where are we on that front . There are two elements to watch. At the big trend is we continue to see both sides trying to stick by the commitments that were made between president xi and President Biden in april of last year. A lot of discussions for example. Lloyd austin spoke to his chinese counterpart for the first time after the chinese minister was put in place. Meanwhile despite some of the developments like tiktok, china has made a relatively muted tone including a response to things like the triple tariffs biden has proposed on chinese steel. When we think back to the response of xi jinping to the last trip by blinken, he described to meeting is very good. He was quite optimistic or at least praise the developments the two sides intimate. While it is positive we do have these conversations between lincoln blinken and his various counterparts, the backdrop in the u. S. Has made things more hawkish, we have seen warm intimate policies aimed at potentially curbing china, and it is hard to see the more optimistic, more positive response from xi jinping this time around if they do meet as expected. Tom thank you very much for breaking down the story around the u. S. And china. Antony blinken meeting with his counterpart and potentially meeting with the chinese president later today. Chinas cleantech dominance is growing despite an all ensuring push from the west. Our deep dive on the Energy Transition and those supply chains. That is next. This is bloomberg. Tom china is Manufacturing Clean Energy technology at a breakneck pace, driving down prices on everything from solar panels to lithium ion batteries. This is causing a headache for Companies Looking to onshore cleantech. Lets bring in the head of nef trade and supply chains team. We need more manufacturing capacity for green tech as we phase up to the competitive challenge from china . The Energy Transition, usually we are used to hearing things in a going fast enough, so this is an exception. When it comes to those watching the supply chain we have seen massive investment all the way up and down the value chain. It is unsurprising and unprecedented. Right now when you look at solar panels, lithium ion batteries, china alone has enough manufacturing capacity to supply the world twice over today, and based on what is being planned we have got 460 billion plus overcapacity spending. Historically on is the dented and debate of an exception when it comes to decarbonization. Tom what does that mean for pricing . How does that challenge the economics around the all ensuring push . Chinese manufacturers are under a lot of pressure, they are underperforming the general Stock Market Index in shanghai. Margins are squeezed, prices are going down. If you take a solar module, 11, things are falling off a cliff. It means deployment is going far faster than we expected. Worse news when you were trying to justify manufacturing outside of china, so the u. S. , eu, all these policy mechanisms. The economics of that is a lot more shaky. Right now the cost of the differential between chinese manufacturing cost at western manufacturing because has never been greater, so that could challenge onshore policies. Tom really fascinating and worth digging into in more detail. Really fascinating. Excess capacity of renewables, part of the ecosystem coming through in the consequences of that. There is plenty more coming up. We will check back in on the japanese yen, of course, her uncles unhappy. Im sensing an underlying issue. Its tmobile. It started when we tried to get him under a new plan. But they they unexpectedly unraveled their price lock guarantee. Which has made him, a bit. Unruly. You called yourself the uncarrier. You sing about price lock on those commercials. the price lock, the price lock. so, if you could change the price, change the name its not a lock, i know a lock. So how can we undo the damage . We could all unsubscribe and switch to xfinity. Their connection is unreal. And we could all unexperience this whole session. Okay, thats uncalled for. So tom good morning, this is bloomberg daybreak europe in london. These other stories that set your agenda. The yen hits a fresh low. 156 after the boj holds great steady and tweaks its language on bond buying. We will bring you the latest reaction ahead of governor uedas press conference. Stocks in asia falling higher thanks to a boost from big tech. Microsoft shares surge on earnings as ai fuels Cloud Computing demand. Plus, soft landing hopes down put, as the u. S. Economy slows while price pressures move higher. Rekha bets as the focus shifts to pce data out today. We remain in earnings season. We are getting lines crossing. It is a beat when it comes to sales. The Chinese Market doing some of the lifting for this French Liquor maker. Revenue coming in above the estimates, 230 7 million euros. The estimates had been for 232 million. Quarterly basis revenue is a beat. They see in terms of margins they continue to hold their guidance for 202320 24 margin guidance. They are reconfirming that. Sales out of china slightly better as the challenges in the u. S. Market continue. Organic growth in revenue from cognac coming in well above the estimates, so people are getting that at a rapid pace, up 15 versus the estimates of the contraction of 7 . Organic revenue coming through from the cognac segment of this business. The revenue coming through broadly in terms of organic revenue for the Fourth Quarter contracting 0. 7 with a contraction of 3. 4 . A better salt a better part of results coming through with the Chinese Market turning around and taking the slack coming through from the u. S. We bring you the latest in terms of redhead crossing the terminal. We continue to bring you the latest on the earnings front. We look ahead to the u. S. Later today. We break down the tech story. The redhead crossing, the epc g is set to acquire 20 of steals unit. The details we will be hoping to get for more on bond. But again, the epc g group set to acquire 20 of the steel unit. We check into it at the market open 8 00 p. M. U. K. Time. Lets check in on the markets. We have to fold in the softer gdp