Cousin will mama and Danny Blanchflower. I mentioned the risk on rally that we have seen, yes, it is sustainable but not when it comes to dollaryen. Jonathan futures positive for tents. Dax, the ftse 600 up. The bloomberg dollar index is down about 2 10 of 1 . Dollaryen on the back of the but thinly we rolled over, unchanged on the session. Market,ook at the bond twoyear yields up for basis points in japan at the frontend. They did not cut rates, they left them at 0. 1 0. 1 . Is moving away to target the shape of the yield curve going to do anything . Ingles in tokyo and Carl Riccadonna in new york getting us ready for the Federal Reserve policy decision. Want to begin with you, david walk me through what we got from the bank of japan, was it all style and no substance . Was widely considered a smart move because what they did was essentially took additional action without having to commit report explicitly commit to more stimulus and in the process they kept the door open for them to be able to buy more bonds between now and the next policy meeting if the need arises. You guys were talking about the yield curve control. We are calling it the curve like kuroda. That is a key take away from what they did, essentially this move away from having this rigid, specific target on how much they want to expand the money supply and focusing efforts on open Market Operations on controlling the yield curve. They are saying they are going to what most people are not really talking about is the fact that they might buy more bonds. Market participants in tokyo are now complaining that this might kill off the jade you be market. Jonathan the jg be market. Jonathan for the inflation target, looking at a big take away. Are they going to allow an overshoot of a target they cannot hit anyway . David there were two votes the tooke, one on policy place, one on Monetary Policy. It was a 81 vote, almost unanimous on trying to overshoot this 2 target so what they have essentially done is committed themselves to not only meeting the target but to basically keep on this path until inflation is stable above the 2 target. During the press conference he was asked to give a timeline. Giving anyned from specific timetable and he blamed other factors. He blamed other external factors on why they have not reached their target and he said if they did not have oil in the mix, they would have reached their target right now. They remain fully committed to reaching this target. Jonathan david ingles in tokyo. Carl riccadonna with us now. Alix hawkish hold seems to be the rhetoric rhetoric in the market. Carl that will look like the fed is not raising rates today because the data is not justifying the move at this point. The fed taking a different stance in past episodes where they have taken a bit of a dovish turn in not moving on rates or advancing the ball down the field in terms of policy normalization. He saw expectations of future rate hikes slide much further into the future. The fed wants to pay the expectations around december for rate increases so they will hold but will continue to make the case that policy normalization is coming sometime soon. Alix the big deal is the dot plot. We will get projections for 2019 as well. The whole median estimate comes below the 3 they have now and the other is the hawks are going to jawbone those dots higher to see more hikes later. Which one wins . Reconcile,ed has to initially they were saying for rate hikes this year and now we are likely getting just one. I think what they are going to do is maintain the pace of three ,5 basis point hikes per year and it is a phase shift lower across the board. Thisill see one rate hike year and three per year until we get to that neutral fed funds rate, which i think they will keep a 3 . From the fedtoric over the last six weeks has been very strenuous with the doves and the hawks. Will there be language to offset that dissent . Carl i think we will continue to see the sent for mr. George and that is likely to be repeated at the november meeting. They will likely be satisfied when the fed tightens at the december meeting. I think it is not so much dissenting views and chaos. I think there is rather a chorus 10 hours andre is tenorsnd baritones and altos and baritones. It is just sounding a little different from different members of the committee. Alix that uber hawks are bubbling of asset inflation. What we see anything in this statement reflecting the possibility of asset doubles . L i do not think they can they will put it in but we cannot rule it out as a topic of discussion at the press conference. Yellen could reflect similar views that keeping a great low for an extended time risks Financial Market distortions. A healthy economy is what is needed for the fed to take the next steps and were just not there yet. Alix Carl Riccadonna. Later today a special bloomberg ratet on the feds decision at 1 00 p. M. When we tie these decisions together at seems that it is the Monetary Base and the link with inflation and Inflation Expectations that cannot reconcile. Jonathan lets bring in kazuo momma. He joins us from tokyo. Great to have you on the program. We arer whether struggling to buy the bonds we need to buy, how do we communicate to the market that that is not what happening not what is happening. Have they shifted the goal post . Was sohink today they can have much more flexibility on the parties of the jg be. A very constructive step. Alix part of the rhetoric coming out of the market is they achieved no harm, but did the boj do anything else. What was your biggest take away . Actually, one very constructive step of the decision today is that they are trying to mitigate any possible side effects from the excessive flattening of the yield curve. Talks about the possible negative impact on the economy through the International Mediation and a negative impact on the sentiment of the household, because they are concerned about future income streams and Interest Rates. Is trying tooj minimize that side effect. Curve, the new framework is constructive in terms of maximizing the possible impact of Monetary Policy. Struggling to are hit an inflation target of 2 and they are now saying they are willing to overshoot the inflation target. What does that entail . How do they deliver what they want to do . I do not see how they can do it because they have not hit it in so many years. What do you think . , they analyzed through a comprehensive assessment what went wrong over the past three and half years and im sure they came to the conclusion that japans people, the expectations are formulated three backward looking formula. The boj decided to be more forceful in creating forwardlooking mechanisms in the minds of the people but i think i agree with you. It is very difficult, challenging situation in japan. Fact, i think the Consumer Sentiment has been Strong Enough so a marginal impact of the decision is still questionable. I think we have to look at the economy and peoples expectations. Kazuo momma is sticking with us. Coming up next, we will dig deeper into the boj shift on focus. Has the bank of japans policy reached the limits of its up, get aess . Later will be joining us. Up, new york city later Danny Blanchflower will be joining us. Alix this is bloomberg go. I am alix steel. Steepening the yield curve, the two results of the bank of japan today. As he with us in tokyo. Kazuko mommat with us in tokyo. The white lines are the big banks and that yellow line is when the boj went negative rates. Since then we have seen bank rough it ability with Inflation Expectations. Is the goal to help bank profitability, to help the transmission mechanism that will support higher inflation . Actually, this is the indication of the boj. The flattening yield curve was a concern for many people, particularly in the industry. [and discernible] [in discernible] there are some factors depressing the banks ability so some factors should be solved sometime in the future. [indiscernible] how much control do they actually have over the long end of the yield curve, considering that we have seen long alltime lows couple of months ago yet the boj has been tapering their purchases at the long end throughout much of this year. I much control do they have over the long end of the yield curve in japan . Actually that is going to be tested from now on. , there was an impact on longterm Interest Rates but at the same point they have been generally left to the market. From now on, boj is trying to control their 10 year bond yield more accurately in line more or less with the current level. Two new boj introduced that makes them able to control better the longterm Interest Rates. I think this is still testing time and there are going to be some kind of confusion in the first weeks but after that settles, i think the communication between the market and boj will be much more constructive and eventually they will have a better result on the longterm and. Alix can they actually control the fx . Take a look at dollaryen, yen deeply lower after the boj announcement but positive on the delay on the day. What is the relationship . Kazuo actually, it is hard to the exactly to analyze volatility of the Exchange Rate market. Actually, before the meeting there was some about the boj did not come up with anything in terms of the market decisions. Decisionlly, todays was very good in terms of the mitigating any possible side effects of the current Monetary Policy. I think markets generally welcomed the conclusion of todays meeting but at the same time, over time for an Exchange Bond more to do with the economic fundamentals and more a longterm view of the economy and conditions. I do not know how much impact Monetary Policy alone would have on the other International Markets. Jonathan we had a big move on dollaryen since governor corona came into office. As the has the importance of the fx channel diminished for the bank of japan . Ofy are weighing the risk what it means for financials versus what you would get for fx. Has the channel diminished . ,azuo actually, Exchange Rates it is generally important for small economies and large economies. It is difficult to predict the Exchange Rate. Generally speaking, other International Market conditions control the outcome of the market policy conditions. They have to use Exchange Rate policy as a tool. Exchanget importantly rate and other Financial Market and the caterers as well as other elements, not just Monetary Policy. Monetary policy in japan was affecting this Exchange Rate but at the same time there were more forces in the global Financial Market for the risk on mood. Policy was on the verge of tapering. Pinpointy difficult to the source of the effect on the foreign Exchange Rate. Alix you were at the boj for 35 years. You have decades of experience helping set Monetary Policy. If you were there today, what would be your biggest recommendation to boost expectations, get inflation to 2 , and help get a weaker yen . Actually, i do not know about the second part of the question how to get a weaker yen. I think the most important element in terms of creating more inflation pressure is the confidence of the people about the future economy. I do not believe anybody is saying that Monetary Policy is not enough. The money is already there and i think people are worried about income. This is an unusual situation from the market context. We are in an extremely accommodative position as far as financial conditions and what is ing in japan is how to terms of more investment, more risk pressure, more hiring, growth, and productivity, a much more tangible impact and more tangible element in the economy is something missing. , itink under the abenomics is going to be implemented in a more accelerated way and also impact on the private economy will definitely be felt. That will be the point where free,t Monetary Policy is affecting the overall economy. Jonathan it is great to have you with us on the program. It does feel like it is up to abe now. Coming up, much more on the bojs latest policy decision plus we will head for day two of the uns General Assembly debate where david westin will be speaking with Michael Bloomberg and penny pritzker. This is bloomberg. Onathan this is bloomberg go i am Jonathan Ferro live from new york city. Futures positive, risk on it seems. The dax up 1. 2. Capturing the boj debate, dollaryen, 101. 44. A stronger japanese yen perhaps off the back of the fact that andtive rates did not move no signal that that is where they are going. Alix is the fed more important than the boj . The second u. S. Africa Business Forum is being hosted in new york city. More than 200 global ceos are there and so is our david westin with some special guest. David thank you so much. We are at the plaza hotel for the business form and we are joined by penny pritzker, the secretary of commerce and Michael Bloomberg, known as the Majority Shareholder and founder of bloomberg tv. Michael the boss. David and threetime mayor of new york. This is the 2016 version of this forum and i want to talk about this year and 2014. What were your original goals in bringing together this partnership, public and private partnership to convene these World Leaders . Penny bloomberg philanthropy has been a great partner. Is to deepen the economic ties between the United States and africa. Africangether about 46 leaders with over 200 ceos from africa and the United States so we can do more business, build a Greater Network and greater relationships. When we did the first one, we believed, both of us that if you put people together then good things will happen. There is enormous demand for us to keep it up and do it again. David how do you measure success for Something Like this . Michael i think number one, getting people to talk to each other keeps the peace. Introducing businesses to opportunities and letting them make contacts is great for america because we sell our products to africa and buy Raw Materials from africa. An awful lot of american jobs are dependent on us reaching out and trading across the world. Africa has 1. 2 billion people but and in arms landmass. You can put india, china, and north america together and that is the landmass of africa. This is a market of the future. David what is the potential growth in africa as you look forward . Penny yesterday we were focused on three sectors. We brought together five heads of east african countries. We talked about travel and tourism, enormous opportunities in both americans going there and east africans coming to the United States. We were working on agribusiness. As the mayor said, 50 of the underdeveloped world land in the world is in africa. Third is the infrastructure, enormous infrastructure needs, particularly region of all withnal so you can connect where agribusiness is driving driving, or so you can get tourists around different part of the continent. Lots of opportunity. David the u. S. Is not the only country interested in commerce with africa. Where are we in that competitive race . Penny we are continuing to grow our footprint so you see trade growing, nonpetroleum trade. Petroleum is down. We just have to keep growing deeper economic ties and what is critical is our private sector. It is important to get the heads of state with the private sector together because at the end of the day the United States economic relationship is expressed through the private sector. The awareness of global ceos of the opportunity and what hurdles are there to getting increased commerce . Michael they understand the market. Business people are not political. They look at the numbers and say, 1. 2 billion people, we can sell, we can buy. They understand what has to be done. The problem is always making contact. You could say, they can pick up airplane. Or get on an they can come here and meet a lot of people and once you start the dialogue, you do not have a substantive conversation but i am going to call you and the call will go through and im going to come visit you. You will schedule time and make a presentation, and it works both ways. African Companies Want to sell to america and vice versa. That is what trade is all about. Trade n eyes global trade. Ize global stop that is to build more markets and we have to be able to sell our goods and services. ,hat is why ttp is so important why the xm bank is so important. All of these things create jobs for americans. David about ttp, you wrote thaty strongly about recently. Tell us why that is so critical. Michael you will find all these Asian Countries signing trade deals with china and we will be left out of that market. It is half the people in the world in asia. You cannot not do business that if we have our hands tied for lack of contact or treaties, it does not bode well for america. It is easy to stand up and blame global tra