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tv   Asia Edge  Bloomberg  November 8, 2015 10:00pm-11:01pm EST

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shery: also coming up, the world's biggest shipping line says trade is sluggish in the global economy is growing more slowly than experts think. ready, set, indigo. qatar airways say they are keen on the stake in the carrier and may spend $2 billion to secure it. 3-d printing takes flight, a special report from the dubai air show. keep an eye on the markets, the shanghai composite extending its run, rising to an 11 week high as the government resume ipo bys to the end of the year. 225 having aei positive morning session of over
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2% and positive earnings from the likes of olympus. two big ipos in the region, see icc in hong kong and the chili crab chain jumbo in singapore. weakness and south korea. diversions there. a disappointing trading day in china. what that says about the case for further stimulus. doesn'tt xi jinping want to hartline naturally here but how much of the emphasis is now on the pto see? economy: arguably, the as far as a sustained heartland in rise we have seen many months of declining numbers. take a look at these export numbers. exports down 7%. that is more than twice the size
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and people were expecting. looking at key markets, japan, declining asports much as 12%. we are expecting to get more people a dressing this but this is an issue of external demand. lower interest rates are not going to help. even when it comes to using companies -- rishaad: that's the thing, the import sign which is reflective of perhaps weakening or slowing -- therter: that is very much picture that it paints because we have this 18% decline when it comes to chinese imports, that doesn't bode well for its trade partners. take a look at australia. iron ore down over 25%. the import and export numbers are not great. we are getting a flurry of other data. we are keeping and on inflation. those numbers have been fairly
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ugly. rishaad: the 44th consecutive month of decline. been drawnrves have down a bit -- reporter: gone up a bit. we have asked to work a bounce of outflow causing panic even though china is sitting on these still enormous horns of foreign exchange. the question is -- rishaad: $3.5 trillion -- reporter: yeah, absolutely. perhaps concerns about that being wound down were a little bit preemptive i guess because we are seeing some stabilization now -- the question is, why? nothing has changed. we have seen a bit of stabilization. the biggest gain in seven months because of the central bank putting a lot of -- under currency depreciation making it clear doesn't want extreme depreciation and in this
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currency insofar as that has happened it hasn't really helped export competitiveness. the timing has been interesting because we have the imf decision on the fdr inclusion or not as the case may be in beijing wants a part of that. it has a huge incentive to keep currency stable ahead of that. after that, if we get more easing and if we have the state putting through the first of many state hikes, that divergence from policy many analysts saying we will continue to see more f flow from china with that money going to be seeking high yields. rishaad: thank you shery: very much, indeed. shery:disappointed or from china has been high on the agenda for our guests today. sean callow, take a look at the impact on currency. uncertaintynote of to the outlook. if you are bullish, the u.s.
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dollar on the back of the rate hike in december then you should be looking for higher levels really and yet the fixings have tended to be on the low side of where models would indicate from a strictly trade data point of view so i think stability is probably the best that in terms of the short-term but if you are looking into next year i think we do have to look at higher levels on dollar china and that should be expressed through ndf, 12 month. say we cantegists expect repeated pboc moves toward off the growing signs of slowdown. had six rate cuts in the last 12 months, which means we could see another one before december 31. how much does that obtained gdp? medium to high level gdp growth is needed over the next five years. you have to build a case to see it move again and again. puts more pressure on emerging
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markets and have a moderate. if you shared by mark mcfarland, an economist. he also expects further pboc action. one.flation is the key the pboc is interested in the inflation rate because that tries their interest rate policy. they are looking for cuts. with that is probably right. looking at an inflation rate between 1.5 percent-2%. shery: on the latest trade data out of china. rishaad: chinese stocks at an 11 week high. confidence from mainland markets and indeed, we're live from shanghai. a bit of optimism here. >> that is right.
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offeringson to resume was unexpected. a lot of analysts expected it to happen next year. it shows that the government is more confident in the stock market. after we hit the market last week, not just that. it shows that the government is taking steps to make the ipo system more market-oriented. his reforming the way the ipo system is currently conducted by ending the -- standard, removing some speculative excess of the stop arcade and diverting the cash crunch to offer the companies the ipos. here then,e question who wins and who loses from reforms? like today the bottom market is a big loser. we are seeing yields on sovereign notes jumping by the moneyn two years and
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flows from bond market historic market. accountseing large benefiting because under the new totem, traders will want partake in ipos need to have large shareholdings and what do you need to buy elko --? some of this table, large stocks. thank you very much, indeed, for that. ipo's not only making headlines in china but across the region. let's get back to the market. juliet is watching the action. reporter: a big week for ipos in the region. in hong kong, cic seed, the first sign of foreign investments coming online at it has had a good pick up as you can see, 10%. $10 $ of $11.34. in singapore, the chili crab
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restaurant chain jumbo coming online raising $28.2 million. they plan to use the money to expand its restaurant chain into china as well as more stories in singapore. 6000 people served per day. a strong debut up 48%. ipos or theion of anas but from the regulator really lifting things along in shanghai and we have seen on the composite all of the broker rich firms doing incredibly well today. hitting that 10% daily limit. reshot, i will have the resumption of the strong japanese morning session when they come back from their lunch break. rishaad: we are at the dubai air show for the largest 3-d printed plane took flight. plus, volatile size that
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investors should people are paired for lower returns next year. ♪ reporter: brazilian prosecutors
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will request the suspension of .perating licenses the victims from the modified sugar by ruptured dams at the iron ore project -- the hp says 15 people are missing. andrew mckenzie is fun to brazil today. cleanup cost could exceed $1 billion. indian prime minister modi has faced his biggest setback, losing an election in the state of be hard -- bihar.
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will embolden his critics who have held back a series of changes including a national sales tax. they expect stocks to fall when trading begins. of aung san suu kyi say they are in a good position. they won an election in 1990. myanmar's current president says they will accept the outcome this time. thank you for coming around, joining us today, right. what is the key thing you are asked these days.
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when it comes to employment in the u.s., what is going on? the december hike is back on the table. what does that mean for markets? the viewlways held that it is a good thing because it is the federal reserve. in china, we are expecting mediocre data. the global growth cycle is till soft. trade is still in contraction. none of these are huge surprises. marketsgoing to drive will be gradual. however chinese economy can recover from 2015. rishaad: what does that mean for
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people wanting to invest in jpmorgan? are they looking for more underlying currencies? >> currency protection is important. we think that the dollar will remain strong. looking at markets like japan, the yen weakening a bit more. it has been able to hedge currency exposure, pretty important. investors need to take a more flexible approach when it comes to investment. just to take advantage of the market connections. is there more conservativism out there yet could why you find more interested in preserving wealth? >> absolutely. the last two or three years, we have seen income feeds being popular.
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it is about generating income and interest from the base. consistent with what you said, that is about capsule preservation. in 2000 16, when the level continues to fall, in assets, that is where investors will have to think more about the return and not just about interest. that is going to fall over time. rishaad: cordova percent is neither here nor there. -- a quarter of a percent is neither here nor there. ismeanwhile, the ecb poaching even more money, you have asia keeping rates low. the struggle continues. going forward, the question becomes, how can you generate returns from income when their high dividend equities or, take
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a much more flexible approach, maybe thinking about some short positions to meet market conditions. bad does it get in china, i suppose? nothing goes in a straight line. we have to accept slower rates of growth as an economy matures. >> what china needs to look at in multiple angles, we have the service sector which is humming along nicely. manufacturing will create difficulties. we will see that turning around. rishaad: overhang overcapacity and we look at more this later this week. wellpacity, debt issues as . the consolidation of the manufacturing sector could go well into 2016. we are looking out for more positive opportunities in china, which include the service
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sector. to me, it is very much pointing toward developments in technology. we are still looking for investments in china, not necessarily all bad news. there are still some bright spots to be invested in. rishaad: where? is making great headwinds, environmental protection. non-bank financial services. rishaad: isn't a lot of this priced in? >> to an extent. when you look at the upsides from what you get from online shopping, health care, travel, tourism, there is still room for positivity. rishaad: thank you very much. next, jakarta cutting forecasts
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in losing another customer. ♪ shery: shares up today despite
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news that it slashed forecasts and say goodbye to another customer it. nissan has cut ties, whose
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faulty products are linked to injury and death. our automobile reporter joins us from tokyo. shares not really budging. nissanh of a blow will leading to contest the for the company? you read the fine print on all of these announcements, it is a narrow in scope that they takatating ties witht airbag inflator's. propellant has been, has fixated to find out exactly what is wrong with these airbags and of they rupture instead going off normally. what you are seeing here is
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nissan and other automakers going through the motions that was already put in place by the regulator last week when they ta you can no longer do new contracts with carmakers using this propellant because we have lost confidence in the safety of this propellant. it is still safe but we do not agree. shery: anything interesting their? its forecasty cut substantially. they were forecasting about ¥20 billion profits for the fiscal year, that was cut to ¥5 billion. kind of window dressing because the company still is not able to give a fair guess as to how much this recall is going to cost them.
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up to this point, there is not a determination of the cause behind the flaws and until that process is resolved, the costs are give it up between takata, the supplier, and the customers. the carmakers are to be determined. the full impact is not filtering into the earnings statements from a quarter to quarter perspective. ahery: we are seeing takat shares rebounding today after a plunge next week. what should we expect this week? >> about a 40% plunge last week. that is the worst going back years for this company. they have taken it on the chin several times related to this issue. onis going to be dependent
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to what extent the company can easily investor concerns that they do have a plan to survive. he heard the president say that they have some concerns about their viability but they do have a plan, they are just not ready to share it yet. it is important that they do make some disclosures and do some outreach with investors to ease concerns a cousin was clear from their reaction last week that there was major worries about whether or not this was a company that can make it. shery: thank you for that. getting back to sydney, down 2%, people are opting out of mining stocks, driving things lower it. exports and imports china having a terrific impact when it comes
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to what is going on there. a mixed bag elsewhere, we have l market.the soeu this is what it looks like right now. 1%. kong, up one third of we are looking forward to the afternoon business in tokyo. people getting back to their desks now. tilde 25 is reopening 25 ♪ the latest after this. buddy- nice place, nice car what happened?
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what's my credit score? your credit score is 650. that's magic! no, that's credit you get so much more than a free credit score so do more with your score at credit >> welcome back. weak trade figures from china. expected to add to the pressure for more stimulus. down almost 7%. that left a record trade surplus. the figures come at the start of a data heavy week, including industrial production and inflation. toshiba plunged more than 6% after the company sued three
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former presidents over an accounting scandal. toshiba also taking action against two former cfos. profit write-downs of more than a billion dollars. investors are showing a healthy appetite for singapore restaurant owner, with shares jumping more than 50%. $230 million -- the ipo was eight times over subscribed. let's get the latest from the markets. japan comes back online after a strong morning session. : the nikkei 225 has pulled back a little bit. the weaker yen helping keep
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things. the resumption of ipo's, regulators saying ipo's in china can resume after the five-month halt. a little bit of a pickup in hong kong. we have had the ipo listing, a strong debut. the strong debut of jumbo in singapore as well. weakness coming through in korea and also in australia. some big falls from mining players. this is a picture on the overall regional index. oil and gas stocks, the underperformers. region,vers in the japan coming back online, very strong second-quarter numbers. about 7%.wn by i believe it there for now.
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rishaad: let's take a look at the sheba shares. toshibaeba shares -- shares. suing executives over accounting irregularities. they're struggling to recover from the scandal that came to light earlier this year. who are these former executives? >> three of them are former presidents of the company and two of them are former financial officers. they have been sued for two point formally and dollars in damages -- they are being sued for 2.4 million dollars in damages. the company disclosed investigating these accounting regularities -- irregularities. an investigation found extended
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underreporting of losses across many divisions. in september, they were fined ¥91 million. there could be more fines coming. finesllion to cover related to the cap -- to the accounting irregularities. it has caused people to look at corporate culture in japan. the prime minister has urged companies to improve. this continues to -- rishaad: what about earnings? they were out of the weekend as well. it rose -- that was helped by acid sales. -- asset sales.
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it did say it will not release a to alidated forecast due challenging business. rishaad: thank you very much. agreed to buy has a youtube-mike's site. owned a minority stake. full ownership will help it compete with baidu. the biggest company on the taiwanese stock exchange is said to be open to a bid from china. the chairman of the chipmaker says there is no reason to ban
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mainland money and he would like to see more easing across rate investment policies. he said an investor would have to pay $30 billion for a 25% stake in tsmc. taiwan has relaxed rules on chinese investment. the boss of the world's biggest shipping line says the global economy is growing at a slower pace than forecasters think. the engine is slowing down and trade is weaker than normal. last month, the imf lowered its 2015 gdp forecast to 3.1 percent, citing a slow down in emerging markets because of weak commodity prices. rishaad: we are looking at one company which has been halted today. the australian oil and gas
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producer, announced plans to .aise they need to cut to their debt down, that is the problem with this company. >> this plan should go towards helping. shareholders will able to -- .ill be able to buy one share that will allow the company to raise 2.5 billion. there will be a separate $500 million placement. stake will sell its 35% in victoria for another 500 million. altogether, 3.5 billion of capital will be raised. that will be used to help pay down debt. the oil price has slid by 40% the past year, so santos has really been hurting. their shares are off 54%. the chairman says the confidence of the steps taken today will
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drive better returns for shareholders. he has announced a new ceo. lots of news from santos today. i guess they changed their mind. it will be a while before we get the market reaction to this. rishaad: thank you, paul. shery: bond is back at the top of the box office. the movie earned $73 million during its opening weekend in north america. the performance is being watched -- the as a deal between deal expires after this picture. it is faring worse than its predecessor.
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coming up next, with the fed rate hike back on the table, we will your from jpmorgan on how what is affecting volatility in the emerging markets. you are watching "asia edge." ♪
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rishaad: some of the stories making headlines around the world. service hasorial been held in st. petersburg for victims of the crash in egypt. 31,rashed on october killing all 224 people on board. officials suspect a bomb caused the disaster. russia has not confirmed that. it is reviewing security procedures around the world. importantn enormously market to us. to be quite honest, there are
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many airports in the world. not just in the african or middle eastern region where if people want to do some pretty bad things, they could do it. rishaad: indonesian authorities says it has reopened after he had been shut down by asphalt -- shut down by a volcano. conditions remain unsafe. irruption's --eruptions have been threatening holidaymakers for more than a week now. an investigation into claims of systematic cheating in russia. the former president and two other people were put under criminal investigation in france on corruption charges. trust overave lost allegations of bribery,
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extortion, and doping coverups. rishaad: joining me, we have jpmorgan chief asian market strategist. one of the fastest growing pharmaceutical companies. thrownortunity has been out. what are the challenges facing you guys? >> a number of health care reforms happening as we speak. china is kind of leading the region. a lot of changes in terms of pricing, market access, making sure regulatory timelines are minimized. we need to keep abreast with what is happening around us. rishaad: we were talking earlier about the stocks he likes and he loves the health care story. everybody else does and that is
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the problem. >> you need to divide the health care companies into two buckets. one that has a geographic presence that is sustainable and others that are facing a patent cliff. shery: how is that affecting your business? a we are diversified as company. we are present globally. some of the emerging markets, especially in latin america, we are seeing a rapid decline. others are stagnant. they are balancing -- we are balancing our portfolio. should we be managing expectations? >> we have seen quite a bit of
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volatility. 2016, it should be a slightly less volatile emerging market. it will still be challenging. we are still seeing low commodity prices. that will put some pressure on emerging markets overall, but a lot of the news on the rate hike by the fed, that is behind us. how does the tpp affect the way you allocate assets? >> tpp helps the pharmaceutical industry in multiple ways. there are certain southeast asian markets like malaysia and you will see a lot more homogeneity in terms of the regulations we see in the u.s. and japan and some of the other markets. for example, there is no patent
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guidelines in some of these markets. tpp, some of the southeast asian markets will be forced to embrace some of the other guidelines. there are certain guidelines , that genetic pricing will supersede the price of the drug. we will see a better quality of drug more accessible. i believe some other markets will come. this is not the end of tpp. a number of markets will grow. >> i think it is one of the longer term themes. we are just starting to get more details about the terms and conditions. i think it will be premature to price that into the asset market . i do agree that this is a
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positive long-term development. >> i want to touch on the china data that came out over the weekend. what does that tell you on how effective the measures have been in trying to stop the hard landing? reality, the rate cuts from the pboc have not been that effective. i think it is not just cutting rates on reserve requirements. it is also about how the sector can perform effectively, moving the capital around the markets. , 28 to be ipo's listed by the end of this year. are we going to run into liquidity problems again? >> what does it tell you about what the authorities are thinking? >> it is a comfortable stock
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market. in terms of liquidity, there will be more fine-tuning. as we have seen in recent weeks. i feel it is much more comfortable about the stock market after a difficult summer. >> short memory maybe? >> doing it to raise capital. >> china is one of your biggest markets. how does everything that is happening there affect your business? >> we have been in china since 1993 and we believe we are well prepared. it is the largest pharmaceutical market in asia. it is the second largest in the world. fors a very important companies like ours to adapt and
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work with the regulators and a brace -- and embrace the changes. >> how difficult is it to do that? you can do a 360 within a day. >> how in line with your expectations have policies been? >> the health care reforms are on top of the agenda for the chinese government. they want to have a policy where every single chinese is covered through the state. i believe, i think there is a huge opportunity to work with the government and adapt to the changes so as the population ages, as more and more patients come, the chinese government will have to support them. rishaad: selling all this is your goodwill ambassador, caroline wozniacki. >> we signed her to be our ambassador.
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we believe she will raise a lot of awareness, especially in the last few months, this part of the world has seen bird flu, etc., and a lot of this to do with hand hygiene and body hygiene. having somebody like her will help us with our mission. rishaad: thank you very much. >> coming up next, hot off the press. rishaad: this is a plane almost entirely made of 3-d printed -- >> we look at the future of aviation when "asia edge" continues. ♪
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>> welcome back. says -- tries to
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spark interest in its flagship model. to potential customers -- two potential customers are looking at the double-decker. he does not expect any orders to be announced in dubai. he was aiming for 32 orders this year. shery: lufthansa has canceled almost 1000 flights today. more than 100,000 passengers are expected to face disruption, but the carrier says 70% of its operations will be unaffected. it is always ready to resume negotiations. indigo shares will begin trading. it would be valued at $2 billion based on the offer price.
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it would be the third-largest low-cost carrier in asia. worth nine times more than spice jet. gotkine has more on the aviation industry from dubai. >> i could not take a stake in indigo. the indian authorities have restrictions on airlines, taking part in ipo's of an airline. it can only be sovereign fund or it can be an outside investor. owned by the are country's sovereign fund, to do it would have taken longer and they were in a hurry to do the ipo. >> you cannot participate in the ipo, but once the shares are
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ready -- ,> once the shares are listed we are free. i think this is very crazy. it is the same at the end. know, maybe i could have gotten a lower price in the ipo. indigo is a very profitable indian airline and we would love to to have been part of it. >> what kind of stake would you be looking at? if we can go up to 49%, we would like to go up as much as that. a wave of innovation and new thinking. aerospace companies embracing 3-d printing. shery: the world's largest unmanned aircraft built using
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3-d technology. ♪ >> i was the engineer that did a lot of the actual assembly as well as some of the control. this aircraft went from design to construction to flight and around two months. footaircraft was a nine wingspan, weighs 30 pounds, has a jet engine, or capable of speeds of 150 miles per hour. this aircraft was designed to showcase how quickly we can go from the design phase to a test flight. it will not be available for sale. we are able to help designers build lightweight structures using thermoplastics as well as enable design freedoms that are not possible for the
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manufacturing process. we are always trying to help the aerospace industry. we have plenty more coming up from the dubai airshow today. clark will be joining us. it is well worth listening to. shery: let's head to hong kong. shanghai composite up more than 1.6%. chinese stocks soaring today, at an 11 week high. exports wereaw weaker, imports also weaker. suggesting the slowdown is taking rate. -- taking root. we came frack -- we came back from lunch in japan about 25
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minutes ago. the nikkei is up about 1.8%. shery: that is it from us here in asia. ♪
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