Scandal that has already brought down the president. This is the second hour of daybreak asia. Im in hong kong and is just after 8 00. Betty it is just after 7 00 in new york. We are jumping to 24 hours from now when President Trump will be addressing congress. The has the congress best the markets excited. We just got retail production numbers out of japan. We are looking to see if any more stimulus is affecting the economy. We did not get those results in january. A stall in terms of industrial output for january. We are expecting three straight months of gains, but we saw it fall. 08 . Take a look at the breakdown. It seems like what weight on the month of january was mining and manufacturing. That fell. 08 . Manufacturing of business machinery falling 0. 2 percent. We do get the weaker number when it comes to exports in the month of january. Not a whole lot of reaction with dollaryen after that news. But lets look with sophie. Sophie as you mentioned, not much reaction in the yen following the latest data out of japan this morning. You have to note that the government is still maintaining that output shows signs of pickup despite the numbers coming in when it comes to industrial election. The dollaryen is that 112. 8. Take a look at the way japanese shares are reacting to the latest numbers. You did have it swinging into the green for the first time in five days. Almost 1 . Take a look at some of the bloombergs index so far. We do have mining up 2. 8 . We are keeping a close eye on given thers today likes of softbank, and sony. Qualcomm and 5g wireless standards. Those stocks in focus. Snapping two days of losses, south korean manufacturers feeling more february. In looking at Consumer Confidence that came out this morning. That schillers on monday with electronics seeing the biggest outflows. It marked the biggest withdrawals around chip prices. The sentiment today is about looking ahead to what trump made eyeballs regarding his plans on attacks program as well as stimulus. Have the lowest level since 2014. Investors may wait and see. Environment, it has been no fun for oil investors. Look at this chart on the bloomberg. 6304. It tracks the blows around the United States. This is the biggest tracking Oil Prices Last week. They pulled the largest weekly withdrawals since the end of january. Trading in a tight range, the fund has dropped 1. 8 since the start of the year. Volatility stock at the lowest level since 2014. As you can see from the white lines in the chart. Low volatility is the name of the game so far. Yvonne thank you. Takata has pleaded guilty to wire fraud related to exploding airbags which are linked to the deaths of 17 people around the world. Facing fines and compensation worth 1 billion despite victims trying to force a delay. Lets bring in Ramy Inocencio was watching this in hong kong. Ramy the biggest part of this saga is a 1 billion settlement. They are pleading guilty to one count of fraud with regards to falsifying data around airbox that have been around the last 15 years. This is an admission of guilt. It turns out to be the biggest product recall in history. 100 million airbags or so. It is broken down into three separate parts. The biggest part goes to the automakers themselves to bear the cost of the recall that they were involved in. That is it hundred 50 million. A smaller chunk, 125 million goes to victims as well as their families. There was an attempt to delay the acceptance of this on behalf of the judge to get more money for the victims. The judge denied that. There is also a criminal fine on the order of 25 million. The judge, it is interesting he said he could have ordered an even bigger payout, he is injured injured troy nobody said the distracting of the corporation would be a fair outcome. But he said it would put takata out of business and hurt the victims. The victim said that the awarding of the settlement was a little bit strange in that they do not agree with it. Things that the automakers could be have to defend themselves as victims as well. A new lawsuit alleged that by automakers were buying takatas airbags and knew that they were faulty. These include toyota, honda, nissan, ford, and bmw. Most companies have declined to comment. Looking ahead, takata is subject to an independent monitotor and other probation for the next three years. A Justice Department investigation . Ramy were talking about a criminal probe. They said this wraps up the criminal federal side of things. There also a lot of lawsuits that have popped up on the consumer and state side of things several dozen people as well as drivers and passengers for already sued takata compints of Excessive Force in th shrapnel aspect. The initial reports was that shrapnel was exploding out of the airbags and killing drivers and passengers. Settlements and finds regarding additional losses could cost millions of dollars. Takata could face u. S. Prosecutors in terms of getting former executives extradited out of japan. They are a legend to have known of these faulty airbags. Betty thank you. Lets get to the first word news. President trump will propose raising defense spending by 10 in his first budget. Administration Officials Say 54 billion boost would be offset to cuts to most federal agencies, with the state department and epa pick the hardest trump has promised not to cut Social Security and medicare which makes up two thirds of the budget. The plan has to past through the congress to be enacted. Former president george w. Bush has criticized Donald Trumps stance on education immigration and the media. While backing calls to investigate the administrations links to russia. He said America Needs answers and that he supports an immigration policy that is welcoming but upholds the law. He insisted a free press is indispensable to democracy. U. K. Prime minister theresa may has been attacked or one of her predecessors who says shes making undeliverable promises on brexit and should prepare voters for the compromises that will follow the negotiations. Speaking in london, john major accused brexit fans of treating the minister with contempt. He said theresa mays government is not being honest and what they can expect from the retreat from europe. The candidate to be hong kongs next leader as monster election manifesto amid protest by democracy activist. She spoke before the deadline for handing in nominations to see the president. She says she would prioritize local hong kong issues in the election. She said the current Political Climate does not favor relaunching political reform. Shares of australian baby food under tradingl halt after the resignation of the chairman and an extraordinary meeting on tuesday. The ceo left in january following revelations that they had greater stockpiles, excess ingredients, and a shortfall in payments. Profit wasirst avnet down 47 from a year earlier. Global news. 24 hours a day. Powered by more than 2600 journalists and analysts in more than 120 countries. This is bloomberg. Sources are telling us that something is in talks to merge with a satellite setup in what could be an 18 billion deal. The managing editor is in tokyo. We are talking about the oneweb unit or business. Talk to us about this deal. What is it exactly . Softbank seems to be at the middle of deal talk in all sorts of sectors. There is telecom, technology, and now satellites. The sources are telling us that something has begun talking with one way about combining with satellite. Is to use Satellite Technology and terrestrial technology to provide Internet Connections and other kinds of communication in remote parts of the world that they would not be able to reach with traditional cellular technology. It is a big investment. There is a lot of capital that we going to Something Like this. Its been tried a few times before with not great results. These negotiations are early at this point. It remains to be seen where exactly this will go. Betty why would these Companies Want to Work Together . Oneweb would get the advantages of the infrastructure that has already been built around the world. They could clock rate on satellite technologies. Oneweb is early in the process. They are trying to extend their coverage. The challenges that softbank was tonning on buying the bonds be a look to take out some of the debt at the company. The price they were planning on paying was below with the bonds traded out when this news broke. It is still early. Is not clear if they can reach an agreement on price. Seems like it is still pretty early. How close are we to a deal . It is very early in the process. They still need to agree on some kind of price. Has been looking at other Satellite Companies to. There may be some alternatives for oneweb in the future. Yvonne can swapping fossil fuels for renewable help boost growth . We that question to a ceo of a leading power company. Betty up next, how emergingmarket companies are shaping up to be the next big local players. It is the opinion of our next guest. This is bloomberg. Betty this is daybreak asia. Greatestets check the latest business flash headlines. Morgan stanley will take a 70 million charge that is related to a tax reporting error. The news came at a filing with the retail brokerage client. They reported incorrect Tax Information to the irs and face operational issues from 20112016. Betty General Motors boosted incentives and had to fight the rights for the most profitable and hotly contested segments. Dealers advertise 25 off as intensive incentive spending raised to the highest number since 20 talk. It reflects the u. S. Are the market long after seven years of expansion. Yvonne chinese Sports Media Company is said to have lost the right to broadcast Asian Football Confederation soccer games after defaulting. A missed payment on the 100 Million Contract in january and another deadline last week. Office to decline to comment. The Asian Football Federation is yet to comment. Says thee next guest Global Economy is on the low growth connector it but emerging markets are where you can find opportunities. Is the Equity Investment director at Capital Groups. Rather than handwringing the you heard about earlier this year, you actually see them as the met next Global Player . Yes. Thanks for having me on the show. We see around the world that plenty of opportunity, particularly amongst individual companies, are benefiting from the change in the way that goebel global changes changing shape. That is true in Global Markets where youre seeing consumers change attitudes toward consumption. Betty you are definitely seeing that change. On the flipside, we are on the eu a President Trump outlining economic licies that are much more isolationist talking about trade wars against many of these markets. Is that priced into your outlook . Time are spending a lot of looking through how some of these policies might shift the shape of trade. Over the long term, trade has changed many times. There been confrontations in the past between different plays. The issue is to get ahead of those changes. Try to identify the companies that would benefit from those changes. The companies that can adapt to shifting trade patterns. Yvonne what kind of companies are you looking at right now . Your new fund does look at a lot of issues involving world trade. A quarter of your assets, him outside your home country. What kind of companies can withstand these trade frictions . It is a long list. Let me focus on a few. There is some significant trends going on in the world. One is the digital trend. Youre seeing a lot of world trade now as the trade of ideas. That can be medical ideas, a lot of scientific discovery going on. It can be use of the internet as a distribution system. That means more goods and services can get to more people. Yvonne what about here in asia, anything you can focus on that has exposure to this part of the world . Tencent. We have investment through a South African Company and softbank. The point of the perspective by looking at multinational companies, you can find different ways of accessing what is the chinese trend. I was going to jump in. Group take a lot of time lookinand picking at what are going to be the Global Players that stand out. Im curious if i can take a left turn and ask you about something that has been growing here in the news today which is all about Warren Buffett and his annual letter over the weekend where he took some shots at stock pickers. He himself is a stock picker, but he talked about paths of investing. I want to read you one quote. If a statute is ever directed to honor the person who has done the most for american investors is jack bogle. On your side of the world, how is passive versus active looked upon . That there ist room for both passive and active approaches. If you look at the data, the average active investor does not be the index. Most people are looking for something that is not average. We have looked at our american numbers were we have grown in the index over one year. Over longer. The time we have increased that winning percentage. It is important for investors to do the work. Low feesdentified that and having investments by the Portfolio Managers in their own funds are the critical determinants of the active managers who might do well in the future. It is who will do well in the future that is the most difficult issue for choosing active managers. It is predicting that is so difficult. Ofch is say that now is one the best times to be an active stock picker . I would say that because Capital Group are all active managers. But theres somethg in that. Eight years we have seen the world crawling out of the abyss of the great financial crisis. Risk in fear have been ever present. As we move further away from that, greed begin to take over. The animal spirits begin to return to stock markets. Toyou see more dispersion companies, active managers should then be able to do what they are meant to do. Should is the critical piece. Yvonne let me bring it back to trade here. We are about to hear the confirmation hearing for wilbur ross for comment secretary. Nafta. D be renegotiating the u. S. Also dropped out of tpp. With a be better to invest in the mastech small caps in the u. S. Versus the domestic that you look at . Yes it could be, but we do not know where it would all end up hearing you talk about renegotiating, but it is important to note that a lot of this will be a renegotiation rather than an ending of trade agreements. Yvonne so did end up benefiting or renewing in a way . We look from the bottom. Some companies could really benefit from a shift in trade. We were talking to Taiwan Semiconductor and they would say, if there is a border adjustment tax, there are various things we can do in order to limit the damage to us. We are looking for those flexible companies that have the weights, wisdom, and experience of having been in this situation before. Yvonne thank you for being here. Coming up next, facing charges of ivory bribery and embezzlement, the same some head faces his indictment. This is bloomberg. Betty this is daybreak asia. A piece of breaking news out of washington, it looks like wilbur to confirme votes him for commerce secretary. The boat is still ongoing, but it looks like he is well on his way to becoming the commerce secretary. Debt a billionaire investor famous on wall street. He is taking on the role now of commerce secretary. Yvonne not a whole lot of surprises there. He easily got through the procedural vote. The big question is, what ll this mea for nafta and other trade pacts. More on that later on. Weve been moved to the special prosecutor in south korea. Tuesdays deadline for the inquiry to and could she the samsung vicechairman indicted. Pipeline . The rosalind we are expecting the special prosecutor will come out and indict him and possibly the four other samsung executives. They have been identified as suspects in connection with the influence peddling scandal that has gripped south korea for many months now. The prosecutor is going to make his final decision. That is because the acting president declined to extend the investigation. Declined to extend the investigation period. He did say that all of the samsung executives will be indicted today. Son of thethe chairman, who has been on welker lees, has led to jy stepping up and taking more responsibility. He was arrested on february 17. Taking charges of bribery, or injury, and also embezzlement. Funneling tens of millions of dollars to the friend of the south korean president in return for political favors. Yvonne thank you. Coming up next, no deal. Theyre not interested in diversifying. We will hear from the minors ceo. This is bloomberg. Take a live look out at the sydney opera house. We are seeing and 7674 after we did see the current account balance out of australia coming through for the fourth quarter. It is coming in at 3. 9 billion current account deficit. It is pretty much in line with estimates economists were hoping for. It is shrinking from the previous number we got in the third corner of 11. 4 billion dollars. A doubledip bit better news when it comes to those numbers. Well see how things go here. Lets get to the first word news. Heir maker takata has admitted guilt in court and will pay penalties worth 1 billion. Despite victims attempting to delay the settlement. Takata is to pay a 25 million fine, establish a 125 million fine to pay victims, and pay a hundred 50 million for recalls. The second ranking democrat in the u. S. Senate is calling for an independent commission and a special prosecutor to investigate russians interference in the election. Just back from a trip to that you came ukraine, dick durbin said an invest