Transcripts For BLOOMBERG Bloomberg Daybreak Asia 20170427

Promises and his administrations performance so far. We have world coverage on daybreak asia, live in tokyo for japans latest inflation data and a breakdown on nintendos results. Betty here in new york we will look at big earnings from Technology Companies and talk to a former u. S. Ambassador to china, from montana. President trump is set to mark his first 100 days in office on saturday. This is daybreak asia live from bloombergs u. S. And asian headquarters. I am betty liu in new york where it is after 7 00 p. M. Yvonne i am yvonne man. Forhoneymoon period President Trump may be over soon, marking those 100 days in office. We are marking it with policy with saw. Betty whiplash, in fact. Lets look at how the markets closed today. It was whiplash. We went up and down throughout the session, there were lots of questions about how we get through tax reform, are we going to repeal obamacare, are we in or out of nafta . We ended fundamentally higher, earnings doing well. The nasdaq composite up 4 10 of 1 . In thee dow and s p green, but barely. Tomorrow we have more economic numbers to shed light on the u. S. Economy. That is a first look at First Quarter gdp. Also, tech stocks, earnings front and center. See how things are trading in the asian pacific. Slow going on the final trading day of the month. This is how new zealand is trading, flat for the index. Trade get the new zealand balance, this one back into positive territory. In line with estimates. The kiwi not doing too much. 1 10 of 1 ,out. 6883 for the kiwi dollar. Futures looking pretty soft as you mentioned here with the aussie dollar. U. S. Cents. About 50 minutes time, with fresh signs on Household Spending, inflation, Industrial Production. Futures unchanged, looks pretty boring. The yen. R we have been Holding Around 111 for days now. It dipped lower after that ecb meeting but we come back slightly up. That was a look at the region. We have been talking about this updown session in wall street. We have that looming government struck down to worry about. Betty but before we get to that, i want to break news, the biggest lender in Southeast Asia and singapore. United overseas bank coming in with firstquarter net income. That is a handy beat above estimates of 756 million. Loans and noninterest income, that helping the bottom line. We will watch the stock price. 1. 5 . Tio at lets get the first word news with courtney collins. Draghipresident mario made a small concession to policymaking colleagues, wanting to discuss an exit from qe. Said rifts were moving toward a more balanced configuration, marking a change. Between now and is june 8 meeting, the ecb faces uncertainty over how and when it should wind down stimulus. The incoming data since our confirmed early march that the cyclical recovery of that european economy is becoming increasingly solid. Downside risks have further diminished. Chinas campaign to clean up its Financial System is winning attention from the best investors. Templeton and Fidelity International are among those endorsing measures recently announced by regulators to curb leverage. They want more transparency and speculation. They called on authorities to fight it falling to a threemonth low. Oils gradual recovery easing the pain of shipping outlook at chinas output that chinas companies. Production had fallen more than 6 from a year ago. Net income doubled even as output fell slightly. Sina faces a drop in production. China is ahead of the u. S. As the worlds Top Oil Buyer. It is a rare case for an activist investor, targeting a private equity term firm. They own almost 5 of kkr. They are discussing the possibility of converting kkr from a partnership to a corporation. Their shares as 5 overnight to a one year high. Foriba said to favor kkr its memory chip operation. But the selling of the unit vettingce a prolonged process with the japanese government, desperate to avoid the Technology Going abroad. They are inclined toward assisting the Capital Investment and funding. Global news 24 hours a day, powered by more than 2600 journalists and analysts in more than 120 countries. I am courtney collins, this is bloomberg. Yvonne a big story the asian markets will be watching is the data from japan. Bank of japan says it is too early to talk about it exit plan from a highpowered policy of monetary still stimulus. But they stuck to their guns when it comes to the 2 inflation target. Bring our policy editor Kathleen Hays, joining us live from tokyo. What are we expecting, is data going to match what kuroda said yesterday . Kathleen governor kuroda is staking a lot of his forecast on inflation steadily rising for that 2 target. The labor market is getting tighter. Today we look at the japan jobless rate, it rose to 2. 9 . Also, jobs to applicants rate supposed of old at 1. 43. 1. 4 jobs open for every single job applicant. Jump into the bloomberg and you lines, one going in one direction. The job applicant ratio is rising. They are working in the direction governor kuroda and his team want to see. Here is what is more troublesome. Household spending rising 0. 1 yearoveryear, after failing 4 in february. Better retail sales in march should help it. Governor kuroda said he is watching the economy. He is very datadependent. He looks for inflation to move higher and exit the stimulative ologies. Implement the exit strategy depends on the status of the economy, inflation, as well as the financial conditions at the time. Discussing the specifics of the exit at this point is premature. We will communicate with the markets as needed. The bank of japan gave a small nod to the fact inflation is rising more slowly than they had hoped. From 1. 5forecast cut to 1. 4. The 20 2019 was the first time they gave that forecast. They are determined. Fiscal year 2018 is 2019 wast time they gave that forecast. When kuroda says inflation will hit that 2 target. Does it seem like there is a newfound optimism in japan . There seems to be at the bank of japan. Straight quarters of gdp growth, it has not happened in many years. Governor kuroda mentioned in terms of rising wages, wages are rising at small and mediumsized businesses. When you look at one point for applicants per job you can see the labor market is tight. Enough forges rising people to feel confident they can spend our money and get used to seeing the type of price increases, that both economists and central bankers say you have to say . The markets are betting against inflation rights. Saidst in the previous our Consumer Expectations of the next five years have weekend. Weakened. They have a lot of work to do. Yvonne a lot of economists thinking eventually therell be a time when the boj will have to start exiting or tightening. But those speculations to bed . Kathleen i think he was so clear, it is premature, it is not time, it is something they do not have on the table yet. Cement theseto expectations, show everyone the bank of japan is determined, we are not giving up, we will get the economy going and engineer its gradual meeting, a definite rise toward 2 inflation. Signal, takingo your foot off the monetary accelerator. Kuroda has it pushed to the floor, doesnt he . Yvonne he certainly does. Nintendo switch does not give the company the boost analysts were expecting. Focus on President Trumps first 100 days. The hits and misses with a former u. S. Senator. This is bloomberg. Betty good morning, this is daybreak asia, i am betty liu in new york. Yvonne i am yvonne man in hong kong. Japans biggest brokers returned to the black. They posted a profit of 551 million compared to 170 million lost a year ago thanks to a drop in trading income. Nomura overseas businesses became profitable as well. Looking at a base for european operations. Theyre also looking at units in frankfurt. We are aware of the concerns of the sustainability of recovery in our overseas operation. But our Customer Base is not only strong, but expanding. We hope to generate stable profits by maintaining control of risks and costs. Bank china construction posting crude First Quarter profits. That income rose to more than 10 billion through march. 3. 4 better than a year earlier. Chinas big lenders had been struggling with narrowing margins. Their Economic Growth accelerating for two straight quarters. Sales alphabet beat projections, ending a fouryear streak of missing postholiday estimates. It rose 20 billion as google shifted its focus toward handset and a surge in clicks on ads in mobile. Ads runningut offensive videos. They want to reassure clients that youtube is safe. Brands and agencies understand how hard we work to create a safe atmosphere. Innovative creators can earn money to support the content. They have been actively engaged in conversations about the controls we are providing and a been having very productive discussions. Regardless, i am sure he is a rich man that he is a long way to go before he catches up with jeff bezos of amazon. Based on the earnings we saw, jeff bezos is now only 5 billion away from being the worlds richest man. Has surpassed 80 billion for the first time. Billion since65. 2 we debuted this index we put together, ranking the worlds richest billionaires. He has had this huge runup in the last few years. Of course, the worlds richest is still bill gates. On this index he has been number one cents may 17 of 2013. We may have a new king very soon. Billionhe gained a 3. 3 in just the afterhours trade. Take a look at that chart. You can see how much they are riding the wave we see in the s p. An unbroken record, 20 years straight of doubledigit Revenue Growth coming out of amazon. It shows no signs of slowing. They appear to be firing on all cylinders when it comes to not just their core business but amazon prime looks good, web services looking good as well. We will talk more about the us this. This is bloomberg. Yvonne this is daybreak asia, i am yvonne man in hong kong. Betty i am betty liu in new york. Saturday marks President Trumps 100 days in office. The white house has been scrambling to offer a viable Health Care Bill since it first effort failed last month. Our next guest played an influential role in the debate over health care and finance reform. Joining us now from montana. At senator, good to have you back on bloomberg. In these in this artificial first 100f trumps days, the gdp is trying to get obamacare repealed and they cannot seem to get the right number of votes yet. If they cannot do that, how will they get tax reform through . You raise a very good question. As therience is that chairman of the finance committee, president s have their most power in the First Six Months of their presidency. That, it tends to go down hill, but as you get closer to midterm elections in general elections, politics starts to intervene. Thiss got to make good on First Six Months. The first 100 days are shaky at best. He is very good on the rhetoric. Theh in the box for all Campaign Promises he made. But he is very weak on actual performance. Where is the beef . Where are the results . It is because of his inexperience. His and the people around them, they have no government experience to speak of. Surely no experience on health care or tax reform. Problem is the tyranny of the majority, there is a tendency to believe that because you are the Majority Party you can ram something through, and you cannot. In my experience in the chairmanship, you have to work with people. In all major legislation i worked on, especially health care, that everyone was at the table. Every concept is on the table, we work together, both parties. It works very well. The same thing with tax reform. Something that complicated, both health care and tax reform, has to be worked on both political parties. Betty some might argue on the other hand that President Trump has tried very hard to make change, to get through change, even flouting normal procedures. Congress is adjusted so dysfunctional that even he is getting mired in person politics. That would be the argument on the other side. Sen. Baucus i do not buy it. He has been criticizing people so much, democrats, the media, the judiciary. When you criticize people you tend not to get much accomplished. The us to swallow some of his pride and ego, worked to get legislation passed for the good of the people. Is not about winning points for one party or the other, but to help the people we are serving. If he can show he cares about and say wen people, out, getork this something we can both live with, then we can make headway. Yvonne senator, what kind of boost could this type of boost have on the out, get something we can economy . Could generate the amount of growth the white house is saying, that it could pay for itself . Sen. Baucus it is a very big question. Reform,really not tax it is a tax cut, basically a proposal. A my judgment, just to make big splash. A lot of ceos are buying into it, to help their stock and so forth. Presented, because there is virtually no way to pay for it, it raises a lot of questions, there is not enough or do not see it much there. I worry it is another attempt to but not a statement, serious effort to get something passed. I hope it passes because we need tax reform. We have to cooperate. Should a border adjustment tax still be on the table . Sen. Baucus it should come up but it is fraught with all kinds of problems. Industry, Major Industries in the u. S. , many of their products rely on supplies from overseas. If there is a big import tax on supplies from overseas it will make it difficult for American Companies to export their products, it is extremely complicated. I think it is a hard time flying. It raises 1 trillion to help pay for cuts elsewhere. Frankly i think it is too complicated. Not enough time has been put into it. It is essentially a speaker ryan proposal. It has not been vetted thoroughly. Sit down andet, talk. Senator, i want to switch over to what is going on in asia and what we have seen with trump asia,her countries in specifically china and north korea. John mccain saying he believes fight, to go to war with north korea is a last resort. Trumpsou think handling the situation, and you believe he also believes in the next 100 days those relations will go down . Sen. Baucus President Trump is learning, i will give him great credit for that. After he publicly questioned the one china policy it created a lot of consternation in china and asia. But he is backed off significantly when he met with resident she at merrill lago maralago. At starting with north korea, President Trump is somewhat on the right track. Korean nuclear and missile threat is getting very, very serious. It is very important that President Trump starts to focus more on trying to solve the problem. Has done so in many ways, aircraft carriers, submarines. However, i think he has to work more with china. Xi, howd tell president do you and i both solve this . Yvonne senator when kim jongun realizes there is no regime change. Yvonne stick with us. This is bloomberg. Yvonne we are counting down to asias first major market open this morning. Japan futures looking like this, a lot of cautiousness again. We saw a lot of whiplash when it came to health care. This is a day after. An optimistic view of the economy but they did cut their inflation forecast. Lets get the Kathleen Hays with more. We have better than forecasted numbers for the month of march on the labor markets. The jobless rate remained at 220 , a very low level. The survey of bloomberg economists, and uptake of 2. 9 . When it comes to the jobs to 1. 45cant ratio, arise to positions open to every worker. They were expecting it to beach unchanged at 1. 43. A small change. Here is a conundrum for the boj, overall Household Spending year on year down 3 . Previous month, february, showed a decline of 3. 8 . It is a question for the boj of when and how does a tight labor market translate into more spending . Can i throw to a spot first . We are going to get back with you for more on these numbers and Household Spending is not a damper for the boj. Lets check in on the reaction in the markets. That core cpi coming in as estimated at 0. 2 on year. The yen, not much reaction at 111. 22. Coming up at the opening of 111. 26. Say onhat the boj had to thursday, it lowered its forecast for cpi, given it does not expect to hit its 2 target by its initial forecast. The boj is only halfway to its price target. I want to take a quick look at the euro, which surged after the french vote. 121s falling back below after draghi made a commitment to stimulus. Ecb holding off on exiting for the meantime. Lets check out japanese stocks are set to open. We can take a look at the futures board, we are looking at that set up in tokyo, seoul, and sydney. The Software Open down 2 10 of 1 . Japans reaction to cpi. Thank you, the reaction to that japan data. Lets get back to our conversation with former senator max baucus, former u. S. Ambassador to china. We had a conversation on north korea. China walking a fine line between the u. S. And pyongyang right now. I am curious to get your take on this. Is north korea going to be the corridor that china uses this regarding trading currency issues . How significant is north korea as a bargaining chip . Sen. Baucus first of all, it is a mistake for President Trump to ,uggest he bargain with china north korea, for trade. A big mistake. Urgency of the National Security threat we face from north korea. China ono deal with trade directly. China is very protectionist, there is no question. Overcapacity in semiconductors, for example. Let alone new commodities like solar and wind power. To deal with that directly in china has to back off. The United States has to lead. Were the Biggest Country in the world, people expect us to lead. China cannot do this alone, nor south korea or japan. We have to deal more seriously with china than we have in the sure our allies, south korea and japan, are with us. In my experience, the United States has not made a sufficient effort with respect to dealing in working with china on the north korea problem. It has been superficial, not urgent or direct. We have to talk with turkey more for a diplomatic solution. Learned int we have the past 24 hours, the Trump Administration once again can flip a switch on a policy on short order, particularly when it comes to nafta. Sound bite from the president mr. Trump rather than terminating nafta, which would be a big shock to the system, we will renegotiate. Since i am unable to make a fair come on meeting a fair deal for workers and companies, i will terminate nafta. Yvonne mixed signals there, keeping his options open. Could he do the same with china . Sen. Baucus that is a big problem, he is very unpredictable. All the time, he is bombastic, and often he backs off and it makes people uncomfortable in the u. S. And worldwide. And jongun, president xi, it makes them nervous. Disability is what the world wants. It protects security. He has to get his people together with china and other countries to start to lead. That ratcheting up this pressure, although it is pretty good, it is going to reach the Tipping Point after a while, a gets pretty dangerous with all the military personnel, all the ships, something that could happen. We need to work for a solution jongun realizes it is not regime change, he can stay in power. Work with china, if we do not, it is a nonstarter. Betty senator, is there no recognition that the status quo is not enough when dealing with north korea . Theres been continued engagement with china to rein in north korea, and yet we keep seeing this buildup of arms and north korea, we keep saying missile tests, nuclear tests. Not seem touo does be working, so why shouldnt President Trump push the situation . Sen. Baucus he should push it. And he is. I applaud them for that. It is unpredictable the way he is doing it, but it is better than doing nothing. We have a policy of strategic patience, trouble is, we have been to patient. That allows kim jongun to take advantage of us. Yvonne do you think china could still be labeled a currency manipulator . Sen. Baucus no, i do not. China is doing what they can to prop up their renminbi then to devalue and let it fall. I also think we made a big mistake, the u. S. Did, in dumping the transpacific partnership. During the three years i served as an basset are, the most important yield geopolitical measure across might desk. It is a huge mistake, it allows china to fill a vacuum. Yvonne great to get your perspective on this. Former max baucus, senator of montana and former u. S. Ambassador to china. Console failedch to help their profits. They fell short of analysts estimates. Lets get to our reporter with more. Delve into these tech earnings. Were lookingysts in on that switch Sales Forecast. Why are they so conservative on their profit projections . That was a big reaction yesterday. The short answer is that they are very, very conservative on software. They see 35 million titles shipped, compared to the 10 million hardware. For every switch game they will buy 3. 5 titles. Analysts we surveyed expected about 4. 7. Nintendo being very conservative with how many games they think they can sell, which is surprising. When you think about what is already out, you have super mario coming out this holiday season. Two already that every switch owner will buy. Comes out today, and minecraft. Nintendo came out with such a low estimate, which lowered their profit estimates, as well. Nintendo is a conservative company, it looks like another one of those cases. Every single analyst i talked to was surprised. Typical Japanese Company move, being conservative at the beginning of the fiscal year. Betty now it is a new fiscal year starting. What should investors be looking out for . At 10 00l find out a. M. Japan time, at an investors conference. Media is not invited, very sad about that, but we will see the nintendo posting their presentation from that meeting, 11 30 japanaround time. They will give a lot more guidance on why their forecast was so low, we also did not hear anything about smartphone games. The said they will reach about three per year. Another coming out this year is called animal crossing. I look forward to this meeting today. They can formulate our vision, what comes later this year. Nintendo is a funny company. What they should be reporting in their earnings, it is a talking about them at these analyst meetings later. When markets are already moving. It is a little funny. You have to keep a lookout for that. We will find out a lot more, especially on the smartphone side. Betty no wonder you want to be in that room. Thank you so much. Delusions added today. Household spending numbers coming in worse than expected. More data coming up. Through and get reaction. This is bloomberg. Betty this is daybreak asia, i am betty liu in new york. Yvonne i am yvonne man in hong kong. Profits rose 11 . Premium income expanded. At that income for chinas secondbiggest insurer was 3. 4 billion or . 19 a share. Earnings from the mims a jumped 34 in the period. Banking bank increased. Betty United Airlines settled out of court with the passenger dragged on off airplane. Widespread condemnation of the air carrier. His lawyers say he suffered a concussion, broken nose, and lost two teeth. They are raising their compensation for passengers losing their seats to as much as 10,000. And they will reduce but not stop overbooking. Shares roseast after a successful foray into hollywood. Darker drove an increase in sales for its universal unit. They beat the highest analyst estimates. The cable operator bucked the trend for the fifth time in six quarters. More we are awaiting economic numbers out of japan, including retail sales. Tokyo, the chief japan economist. Hleenloomberg news kat hays staying with us. It looks like the trend is right here in terms of a tighter labor market. We sell the jobs to applicant ratio picking up slightly to 1. 45. Household spending down 1. 3 . What do you make of this . It is definitely strong here in japan, wage growth and income growth. Consumption demand in japan is still very weak this morning, the Household Spending numbers justify the situation. It certainlys, explains the situation very well. When we going to get a labor market tight enough it will increase those wage pressures, is going to get that Inflation Higher . In thean economist on last hour that said the japanese way tookers are optimistic about inflation. Far too optimistic. What do you think . The unemployment rate, were stille, numbers. From those the Japanese Labor Union is cautious about setting forward higher wages toward the management side. Stable wage and stable wage contract. Those are the reasons why the wage growth here in japan is so depressed. [indiscernible] yearoveryear, retail sales is still rising. The Department Store sales that ine so weak, what happened those months with the consumer in japan . Japanese consumers have the confidence, it is gradually recovering from february to march. The basic trend in retail consumption is recovering. [indiscernible] it is very twisted, the numbers. Kathleen we are looking to see how twisted the march numbers are. It could fall by 0. 3 . I am seeing the Industrial Production numbers coming first on my bloomberg. Industrial production in march down at 2. 1 . Yearoveryear it is still up 3. 3 . Less than a month before, but still a sign of growth. Economists across japan, focused on production and manufacturers because it is such a big part. Here we have the retail sales number and it is a pretty good beat. Retail sales month on month rose by 0. 2 . Year over up 1. 2 . Department stores, supermarket sales remain weak. March, a month before they were down 0. 7 . And the forecast was for a drop of 1 . What are japanese economist here at our tokyo studio, what is your reaction to the numbers that have been forecasted . It is quite natural that the retail sales will be stronger in march. Consumer confidence for japanese consumer industry is recovering. This is a sign where the it willnsumption continue on into q2 this year. It is interesting, we have heard cautiousness from the Central Banks when you talk about the ecb and boj. They are trying to temper down these expectations of an exit strategy. I want to get to a chart that talks about policy diversions. Gence. Er this is still considered low, but the rest of the ecb and boj remain the merchant remain divergent. Remain how close are they to the ecb and boj now . Takashi the ecb is far behind in terms of Monetary Policy. Number forlation tokyo are better than expected. We still have a very weak momentum for inflation. That is the actual inflation. Slow. Ld be very [indiscernible] it will not be achieved. As the boj mentioned, they argue that they can reach 2 inflation target in between fiscal year 18. I think it is realistic. Bojhat sense, i think the must prolong the current motivation. Much, chief you so japan economist at nomura. Plenty more to come. This is bloomberg. Betty we have big tech earnings in the after hours. Su keenan has more on the headlights of amazon, alphabet. A big tech week this week. Su a little light on the revenue in terms of the data center. We will see how that translates through to the more positive earnings in the friday session. The good news is, we can take a they have boosted their revenue by back by about 10 billion. Lets look at microsoft. This is a stock many believed was priced to perfection. They hit a record going into the earnings. Many believed as they transitioned into a cloud, centered business they would blow it out. They did not, there was a slowness getting off the ground. It was down as much as 2 after hours. Aside from the slowing momentum of the cloud, a lot of the internet and webbased units were up 93 , the Revenue Growth of their. They did well in some of their software sales. Finally, starbucks. This is a real shock for starbucks investors. Down as much as 6 after hours. Growth for sales in the First Quarter they are getting a lot of problems with some of their mobile order systems in terms of their lunch items and other things and the competition from mcdonalds and dunkin coffee has hit them hard. Betty i have to confess i like both of their coffees, mcdonalds and dunkin donuts. Yvonne oh week open a weak open. Betty opec sees increasing unity. Yvonne stuck in neutral. Another month passes and japan remains far from its inflation target. Betty delivering the goods. Amazons seemingly unstoppable ride propels jeff bezos towards the top of the rich list. Yvonne i am yvonne man in hong kong. Betty is just after 8 00 in new york, i am betty liu. Through a rash of economic numbers coming from japan. Isseems like the economy steadily improving but that bborn inflation, still not you are still not seen that anywhere. Retail sales coming in surprisingly stronger than estimated. Happens,hat is what the biggest beat was the retail sales front. In line. , 2 for core, the jobless rate also remaining in that 20 decade low. We are not seeing wages tripling. How close, betty . Negativeht months in territory. We were hoping for upside in the month of march but it has not translated. A big miss on Industrial Production as well. Lets take a look at the market open. Sophie we have a bit of subdued trading in the last day of april, after u. S. Stocks you doubt a gain of less than 0. 1 . We did see european shares fly. The nikkei opening just flat, following the data delusion we got, cpi and output. Aussie stocks falling almost euro. 1 . Looking a little bit down and so far this morning. Lets take a look at what is going on with commodities. We did have crude coming under renewed pressure, dropping to a onemonth low. Now we are seeing marginal gains here, about 0. 4 . Still below the 50 mark. Have been arices key driver for japanese inflation. Lets check in on how the yen has been reacting. Lets take a look at the way the dollaryen has been faring on the terminal. Not seeing too much in the way of reaction, although we are seeing the nc a little bit of strength. 111. 28. We are seeing momentum for inflation. Affirming Consumer Prices refusing to budge. This has led to households spending less as wage growth has not really picked up, but interestingly retail sales picked up more than expected in march. While we did not see much reaction, something for yen bears to watch. Betty lets get to first word news. Reporter mario draghi has made a small concession. Policymaking callings wanting to discuss an exit. Between now and the june 8 meeting, the ecb faces increasing scrutiny over how and when it should wind down stimulus. The data since our meeting in early march confirms the cyclical recovery of the euro area economy is becoming increasingly solid. And that Downside Risks have diminished. Reporter over to asia and chinas campaign to clean up its Financial System is winning endorsements. Theyn is among those called on the authorities to continue despite stocks falling to a threemonth low. Graduale, oils recovery is easing the pain of shrinking output. Petrochina reported First Quarter profits, despite production falling 6 from the year before. Are facing a drop in domestic production. Asna is ahead of the u. S. The Top Oil Buyer in the world. A rare case where an ester targets a private equity firm. We are told they are discussing the possibility of converting kkr from a partnership to a corporation. And toshiba is set to favor the kkr groups did. Bid. Prolongedould face a antitrust vetting process with the japanese government. Toshiba is also likely to talk to apple, which is said to be inclined towards assisting with Capital Investments and running. Funding. Global news, 24 hours a day. This is bloomberg. Console hasendos failed to supercharge the market. Lets get to our tech reporter, here with more. A gain of about 0. 3 . There were a lot of expectations. Would you say it was a bit safe . They are keeping it very conservative. I think the market is seeing right through that. Three or four analysts said outright, nintendo is going to be overly conservative and slowly revise that as the year goes on. To put what they announced into perspective, the met hardware Sales Forecasts. Missede forecast bigtime. Nintendo thinks they will not be up to sell as many switch games for every switch user. Are estimating Something Like 3. 5 games per user. The market was expecting Something Like 4. 7. A lot of people are questioning conservative guidance. They have a lot of titles, zelda and super mario. Minecraft, all kinds of things coming out. The conservative forecast, everyone is seen through that. That is why shares are only up or barely down. The big takeaway, the 10 million number is strong. Remember how successful the wii was. You mentioned some of the games that are coming up. What are some of the positive and negative surprises we could see out of nintendo . I think besides the switch, we are going to see more on the smartphone gains. Gamnes. A lot of investors looking forward to a meeting that is going to start where executives will meet with analysts. That is not open to the media. I will not be able to report exactly what they are saying. We do expect to see transcripts and presentations from that meeting coming out around 11 30 a. M. Keep an eye out for that. The main thing i am looking for is for them to explain why there Sales Forecast was so low, and what is going on it with smartphone games. It brought in a lot of money for them. 400 million last fiscal year. That is indirect money from pokemon go, which it invested in. As well as games like super mario. That is a pretty big bump. Smartphone games are super lucrative. Lets see with the announce there. They did not give any details at all. I think people are expecting july for the release date. Nintendo might and out something later on. Looking ahead, outside of nintendo, sony is going to be releasing their results as well. Would you expect from those numbers . Sony is in a happy moment right now. They finished 70percent of operatingout profit is going to be the highest in two decades. Question is, you have turned around the company. What are you going to do next . On yourgoing to focus entertainment and games . That is your next grow story . That is what people will be looking for when sony reports. Sony, it has done well. Hats off to him. Profits are going to be 5 billion next year, analysts are expecting. Yvonne they do so much for joining us on those earnings still ahead, oils recovery eld chinas producers. Modest plus, japans recovery continues but inflation refuses to budge. This is bloomberg. Is daybreak asia. Yvonne a quick check of the latest headlines. Alphabet eat sales projections, ending a fouryear streak of missing estimates. Revenue rose 20 billion. Advertisers have caused concern on youtube amidst concern about ads running along offensive videos. Agencies understand how hard we work to create the safest possible environment. We do this by being careful to ensure youtubes innovative creators can earn money to support their content. Inhave been engaged conversations about the tools and controls we are providing and we are having productive discussions. Betty amazon shares rose in signs of showing no abating. After revenue in the first three months of the year increased 23 , almost 36 billion. 80 million subscribers to its prime service. Up more than a third from a year earlier. Surge hasazons propelled jeff bezos nearer the pinnacle of the bloomberg fortune list. His personal fortune top 80 billion for the first time, putting him 5 billion behind bill gates. Be confirmed will if the gains hold on any friday session. In the friday session. Betty what is a few billion between friends . Airlines settled out of court. His lawyers say he suffered a concussion, a broken nose, and lost two teeth. United says they are raising the amount of compensation to as much as 10,000 and will reduce but not stop overbooking. Yvonne a day after japans Central Bank Left Monetary Policy unchanged, new data indicates modest growth but inflation remaining. The ecostory remains the same in japan. A tight labor market. Trickling to wage gains and inflation. Domestic demand still low. Governor kuroda saying, strong accommodation moving forward still. Is that enough to drive the market . I think what we have seen unfortunately this years repetition of last year. It is more or less a function of where the u. S. Dollaryen is going. Whenever the yen is strengthened, the equity markets are reacting in the opposite direction. Slightly andtal, slowly improving, it does not help the equity markets to go higher. Japan is the underperformer this year. Onnne giving what is going with trump, we are marking 100 days tomorrow, we have seen more intangibles than tangibles of what he has achieved, doesnt force you to push spec your forecast when it comes to some of these benchmarks . We still think the yen should drop to somewhere at 120. Currently in the shortterm, trumps policy is maybe not as aggressive and early as predicted. In the short term, we think the yen might just move around this level between 110115 where we mostly currently are. We dont expect a lot of movement in the japanese equity market. We started the year with a higher overweight. Because of this production prediction, we have trimmed it down a slight bit. There a situation where it looks like rates are going nowhere, and laois and is where is thew, money in japan going . Is it going to continue to go into the stock market . Where are people finding that yield . Think it is more opportunity in the stock markets, as you know. The pension fund has already equity exposure into the equity markets. What is still missing are more Foreign Investors going into japanese equity markets. We need to see more conviction in terms of the bank of japan policy. Improvement in fundamentals, before we see a strong rally in the japanese equity markets. Yvonne absolutely. Given that, we heard the boj yesterday. They bring down there inflation for this year. We are dealing with this 2 inflation target. Should they come back to reality here that perhaps that might i dont want to say never but certainly in investing cycle, may not be achieved . That is why of course, a weaker yen would also help a little bit to import inflation into japan. As you rightly said, given where japanese inflation currently are, at 2 target seems out of reach, at least in the short term. Yvonne you keep hearing these alarm bells about the flattening yield curve. This chart shows the yield spread has actually continued to come down. Actually have seen a white diversion when it comes to the performance on the topic. It has widened in the last two weeks. Is this something you Pay Attention to . Yes, we Pay Attention to this but more in terms of yield spreads. Yields inhe lower the japan are, and the higher the yield would move in the u. S. , so as you know our forecast will be 3 for the end of the year. We would expect more japanese Bond Investors to switch out of japanese government bonds and more into the u. S. Ones which would drive the dollar higher. N wouldker ye stimulate more inflation. Tonne if we continue see that spread narrowed, when does it start hurting the Pension Funds . The insurers . That is why they have agreed to increase and double their equity exposure. Having 90 in bonds is not the right strategy anymore. It is also more or less the question of how much you want to invest in domestic bond markets and how much are you allowed and willing to move up rod broad . To move abroad . Yvonne coming up, japans biggest brokerage needs to itsde where to base operations after brexit. Talk about the possibilities, next. This is daybreak asia. Betty the biggest brokerage returning to the black last quarter. Nomura reporting profits of 550 allion compared to a loss year ago. Here is our editor in tokyo. How did they do this t . Basically, it is down to the overseas operations. The overseas operations have struggled. They cut about 900 positions over the last year. Ur straightade fo quarters of profits. Overseas improvement plus income from trading helped boost the actual final line. The tough retail environment in japan where the population is declining. Yvonne we also learn what may have overshadowed some of the numbers, is the company or the bank deciding they are in a final stage of deciding where to move their european headquarters. It seems like they have narrowed it to germany. It looks flat way. That way. Officer, henancial named four locations. Paris, luxembourg, munich, and frank ford frankfurt. When pressed, he narrowed it down to the two in germany. Brokerage in japan is also looking at frankfurt as well as dublin. Some ofyou mentioned, their competitors looking at different locations, too. What kind of the difference might that make when they are looking at, when they are looking at those locations in europe . What kind of a difference might that make . Obviously, they feel they ate they will be looking a whole bunch of different factors. Taxes, prices. Standards of living. There is a whole bunch of things they have to consider. Regulations as well. Looked atike nomura all the options and felt like germany would be the best place to go. Betty thank you so much. Toother so much, ford needs convince investors there that on self driving cars and robo taxis is going to pay off. Fell 42 . Ter earnings the ceo needs they need to better explain the opportunity for revenue and Profit Growth ahead. Yvonne comcast shares jumped yfter a successful fora into hollywood. Share be the3 a highest estimates. The u. S. Cable operator also bucked the cord cutting trend. Betty a chinese refiner has itved the marketing will issue shares to be called cytotec marketing. Last month, bloomberg reported ec was considering selling shares. That offer could happen next year. Yvonne coming up next, the light at the end of the tunnel. The opec secretary general says he sees ellens returning to the oil market. We will hear from him, just ahead. 50e see oil prices around for wti. This is bloomberg. Ways wins. Especially in my business. With slow internet from the phone company, you cant keep up. Youre stuck, watching spinning wheels and progress bars until someone else scoops your story. Switch to comcast business. With highspeed internet up to 10 gigabits per second. You wouldnt pick a slow race car. Then why settle for slow internet . Comcast business. Built for speed. Built for business. Did you know slow internet can actually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats over 6 times faster than slow internet from the phone company. Say hello to internet speeds up to 250 mbps. And add phone and tv for only 34. 90 more a month. Call today. Comcast business. Built for business. Yvonne it is 8 30 in singapore. Open ofhour from the trading in the lion city. Betty you are watching daybreak asia. First of several mongolian broadcasters, newspapers, and websites have gone to black to protest a bill they fear means censorship. They printed the black front pages to call attention to the proposed law. It would allow police to impose spreading40,000 for libelous or defamatory information without going through the courts. In a speech in sydney, philip lowe commended beijing on its efforts to globalize the yen. Uan. He also noticed the influence of chinese buyers on australias housing boom. The pboc says chinas commitment to the internationalization of the yuan is longterm. The Deputy Governor says boosting the global role is a Market Driving process. He also says the pboc is confident of maintaining stability and achieving growth of 6. 5 . Thailand sees a stronger currency than in january, while forecasting growth at a fiveyear high. Sees itnce ministry averaging 35 to the dollar this year. Thailand is a regional laggard in gdp growth as its history of political unrest curbs appetite to invest. This is bloomberg. Yvonne time to see how the asian markets are shaping up. Lets go to sophie. Selfie a mixed picture in asia. Ofwrap up a busy stretch earnings, take a look at this. The nikkei down 0. 10 percent. Reporting this week. At the nikkei 225, some laggards of note. Advantis dropping over 9 . The chipmaker dropping. Nec. Ame picture for lets take a look at another have thisocus, we do one. Down over 3 . After gaining on thursday to the highest level in almost a year. Have lowered their estimates for the First Quarter. I want to end on a stock in sydney. Rejecting acompany cash bid. They are agreeing on a merger. We are seeing shares dropping in sydney this morning. Betty take you so much. Thank you so much. Improving thepan economy and inflation are improving, but no signal it is time to exit the stimulus. Haysng us now is kathleen to sort through what we saw in terms of retail sales, Household Spending, and the jobs market. Kathleen very important numbers for the bank of japan. They are counting on the labor market to remain strong and get stronger in order to help host inflation. S start with what we saw because we did see numbers on the jobless rate and the jobs to applicant ratio. The jobless rate held steady at 2. 8 . Very tight number. Jobs to applicant ratio, that actually rose a bit to 1. 45. Lets jump into the bloomberg. This number will show you how this trend is really running in the bank of japans favor. They are moving in opposite directions. Those directions show unemployment has continued to fall, while the number of openings to labor participants is rising. We already had a guest who said thatroblem is it is not there is so much more demand, necessarily. Is the really going on labor force is not growing as it needs to do. Betterough there is participation, this is still an issue for the boj as they moved to try to boost the inflation. This is what they are up against. When was this going to feed through to spending . We also got numbers on Industrial Production, Industrial Production fell in the month of march more than forecast, down 2. 1 . This is a very important manufacturing, an important part of the economy. Kind of a mixed bag on that front. The Household Spending numbers were a big miss. What happened there . Kathleen what happened, lets start with the actual number. They were down 1. 3 . They were supposed to fall a smaller number, 0. 5 . As you point out, not much of a comeback. Retail sales, which is part of the overall Household Spending, looking a little bit brighter. In march, down 0. 3. Retail trade, up 2. 1 . Department and supermarket sales, down 0. 8. Not as much as the month before. Our guests said the retail numbers are twisty. I think he is right. Retail numbers, it is hard to pick a trend month to month. Looking at the yearoveryear rate is what is important. Consumers actually spending more than the year before, i guess you can say that is the Glass Half Full number. Empty the glass half still seems to be inflation. As we heard from the bank of japan and the governor. Kathleen lets look at those numbers. If you are saying we are moving in the right direction, they are holding steady. Headline at 0. 2 . Food prices, that state at 0. 2 . National cpi, 0. 3 . Row. For three months in a when you take out energy prices, you have a bit of an improvement. Thats super number was flat. This is the problem. Just about every guest we have had talking about inflation, the consumer, says the bank of japan is overly optimistic. Moving tot see them boost inflation as much as they want to. Japanrmer bank of specialist we also talked to said it is important for the tok of japan main that maintain that 2 target. It sends a signal they are rising. Ed to get prices another economist suggesting the reason the bank of japan cannot say, 2 , we will never get there. We will have a 1 target. Othery do that, and every central bank is targeting 2 , that could ultimately strengthen the yen, something the bank of japan does not want. So you see, it is a tricky balancing act for the bank of japan. Central banks in this day and age look a lot at forward guidance. Create expectations, make it clear you are determined to do something. Monetary. At the new is telling them. The bank of japan seems to be staying on that path. Yvonne kathleen, thank you. Sayspec secretarygeneral they are seeing light at the end of the tunnel. Inventories have not reflected the overall trend. There has been movement, too. A long time before, when we decided to go for transparency. To answer your question, i say we are looking beyond the shortterm. Looking at the medium, longterm and the picture it is demanding. A picture of stable markets, when supply and demand will balance themselves in the second half of this year. We are satisfied with the level of conformity. All participating countries, cooperation. Aligned withully the demand numbers that are coming from moscow. Including ours, which is very robust. To 1. 6 million2 barrels a day. We are seeing the process coming forward. In the second half of this year, we are going to have a balanced market. Is saudi arabia enjoying this rebalancing . Is saudi arabia committed to the opec model with production . The saudi will minister not only displayed a in the runup to the landmark decisions last year, he is also playing a leading role ensuring we fully implement this decision in a timely fashion. Is excessively engaged in all participating countries to the sale producers in the United States can hedge forward with their production. If you are able to take the slope downwards rather than upwards, is that a concern further down the road . Which are themselves transient. In some totals, in our discussions with the key producers in the United States, we agreed that will producers have a Oil Producers have responsibility to restore stability to the market. We belong to the same market. No one producer was insulated from the market and the consequences that we witnessed during this downturn. I dont want us just to focus on the immediate shortterm. We should look beyond that in the comprehensive manner. I remain confident we are on course. Opec that was the secretarygeneral speaking earlier. And coming up, construction banks delivered a strong start to earnings. We are going to preview the other four to come. Next on bloomberg. Asia. This is daybreak yvonne the first of chinas biggest lenders has posted its result. A China Construction Bank rose 3. 4 thanks to higher income. The performance we have seen out of the chinese lenders. The worst performing sub gauge, the only one to post a decline so far this year. Down from 0. 7 . Faring a little better when it comes to hong kong and how the financials are doing there, but still ranking eighth. Lets discuss more of this. The other big banks set to report. Tell us what we have so far and what analysts are expecting. A case of so far, so good. One thing analysts are picking up, net interest seems to be stabilizing. Bottoming out, coming back a little bit. With tightening liquidity, the odds are it is going to continue. At the same time, the bad loan and overhang and the last 23 years. Analysts are starting to look more for growth, expansion. Even as asset quality looks to be stabilizing, we have seen the government stepping up efforts to curtail financial risks. Why the urgency . There is need for urgency. It has to do primarily with shadow banking. Even though you see information trying to stabilize, there is so much and of risk pent up risk. , two fairly new regulators. They are both looking to make their stamp when it comes to financial risk. You also have the insurance regulator being deposed earlier. And now that there was a meeting focused on financial stability, it is coming from the top. It is not clear how it will affect in the banks. If you look at things like Wealth Management products, interested in advance, which is a big the generator, that is definitely coming off. Yvonne if you look at the biggest four, they have big exposure when it comes to shadow banking. They do. Relatively compared to their asset size. Some of these Smaller Banks are net borrowers. Definitely play in this area. They are probably not considered as much to be at risk. Betty what will be the true appetite for5s reform . One would be an economic slowdown. You take liquidity and leverage out of the system, you are going to slow down the offices for Economic Growth emphasis for Economic Growth. Reversal, a real policy makers might rethink some of these things. The other is a sharp market correction. 2015 taught us there is only so much the authorities will stand by and watch. If you really have a disorderly selloff in bond markets, that will provide a real test with how patient authorities will be. Etty thank you so much for joining us. The latest is this flash headlines. 11 asuarter profit Rose Investment returns extended. Net income for chinas secondbiggest insurer earnings jumped 34 as clients more profits shares of more than 13 so far this year. Havee nintendo shares erased earlier losses and are up company caping expectations in check over the release of its switch console. Sales are in line, nintendo is maintaining a conservative look. Sales in thedo socalled asiapacific region rose 3 during the time. Growing competition from mcdonalds and duncan has hurt starbucks in the u. S. They have had hiccups with their mobile ordering service. Rather than these lines, it has created traffic jams. Samsung, thes to index is rising, barely. Mostly helped by samsungs record rise. Prices hitting a record high of 3 . Surprise they are listing this. They have been increasingly a bigger part of the entire market cap. Yvonne singlehandedly really just lifting the entire benchmark. There are plenty of bullish signals as well. Net income coming in. Phone, achieving a record First Quarter profit. We have the essay coming out, orders the s8 coming out. Betty it is interesting, for the first time, i am seeing as i trains, s8the advertisements all over the place. A lot of excitement they are drumming up. They are getting a head start. Big reveal coming out of apple with their new phone. We will continue to watch the samsung shares. After theews restructuring plans. They are not going to be converting into a holding company. More plans for buying back shares. More to come. Yvonne this is daybreak asia. Betty chinas Big Energy Companies reporting higher earnings in the last quarter. Petrochina swing into a profit. Asiaore, here is our Energy Reporter in tokyo. Tell us why these companies did so well. What is going on . Like you said, petrochina, the largest producer in the country, their net income swung to a profit. The have primary factor is the price of oil. An amount 55 up from a year ago. That flows down to earnings for these cavities. Ledis higher after opec reduction cuts with opec as well as nonopec countries including russia. Clearly that has trickled down and affected these companies through the higher oil price. Yvonne how are the big three going to use these extra you means . Are they going to boost spending . All of these Companies Say they are going to boost capex. Forecasted companies their Oil Production would rise and that is for a couple reasons. First, it takes a few years for these projects to come online. Bear theal projects to fruit of these. One analyst said we may see production rise starting in 2018 or 2019. The second factor is a shift toward natural gas. The government is trying to push more natural gas use in the energy mix as the country tries to reduce pollution from coalfired generation. O boostan to natural Gas Production by 15 . Has lower chinese production impacted the Global Crude Oil market . It definitely has an impact. China is probably the largest producer. When production falls, they are going to have to rely on global markets. Production fell this quarter. China surpassed the u. S. In terms of the largest, they became the Largest Oil Importer last quarter. Clearly it impacts global markets. Yvonne aaron clark joining us from tokyo. Daybreak for us on asia. We are seeing cautiousness inequities. China manufacturing pmi coming up. Betty looking ahead to u. S. Markets, waiting for economic numbers, First Quarter gdp. It is 9 00 a. M. In hong kong, 9 00 p. M. In sydney, 9 00 p. M. In new york. I am haidi lun. Rishaad i am Rishaad Salamat coming to from bloombergs headquarters in asia in hong kong. This is Bloomberg Markets asia. Haidi a flat day on the last trading day of april, the nikkei 225 dragged down by guidance misses. Rishaad stuck in neutral, another month passes and