tv Charlie Rose Bloomberg June 7, 2016 7:00pm-8:01pm EDT
♪ >> rising acceptance that janet , sendingll hold off the s&p 500 to its highest since july. oil soars above $50, and the dollar hits of four-week low. on the. and china agree yuan, but far over steel and aluminum. global implements influencing the fed more than ever. hillary clinton is expected to officially secure the democratic nomination in a couple of hours. tocome to "first up," coming
you live from bloomberg's asia headquarters in hong kong, and streaming right here. --t's check the markets let's check the markets. to new zealand we go. is pretty trading much flat, into negative territory. we are watching the kiwi right now, 69 u.s. cents. this ahead of the rbnz decision tomorrow. zealand interest-rate cuts this week are waning. investors see of 40% chance of government lowering the official cash rate. coming down to the opens in australia, japan, and korea. futures in australia pointing to a lower open as well. at 74ssie dollar holding u.s. cents, this after jumping to ave or week i -- four-week high. numbers are home
due out, so we will be keeping watch to that. let's get to japan. futures trading in chicago pointing to a higher open, a stronger yen, 107.29, but we are expecting first-quarter growth takers out of japan later this hour. analysts are expecting a slight transition upwards. we will have that breaking news when it comes out this hour. but it was the s&p 500 index hitting a 10 month high, with commodities assisted by crude, settling above $50 a barrel. the dollar weakened to a one-month low on the prospect of gradual fed rate hikes. bloombergs su keenan is tracking all the action in new york. the s&p 500 took aim at an all-time high, came close, within 1%, but pullback in the final hour of trading, that's where we see a lot of the games fade as of late. producers andrgy
airline operators offset slumping bankshares. theks which had been in lead are falling back again. it was still the highest close since july. 11% below the 90 day average. again, the dollar weakness on the fed sort of sending out the message that they are not going to raise rates anytime soon. the $50 oil certainly giving a boost to both the stock and commodities markets. there is a view that the wednesday supply data will show a decline in supplies, and perhaps push prices even higher. but the bigger focus has been on the fed. traders have been cutting back their view of a rate hike anytime soon. june and july all but off the table, looking at how bond are being positioned at this point. sachs isldman
interesting here. what is their view on a summer rate hike? su: they are now saying that they see a 40% chance of the july hike, completely different from what the bond market is telling us. that is importing jobs -- that andppointing jobs report janet yellen's speech, her lack of specificity at all the traders backpedaling on their projections of any kind of rate hike this summer. 's strategistanley says it is more than that, the fed has other reasons for concern. take a listen. >> i think it has become acutely aware of the fact that it is the central banker of the world. i think what we are seeing is that the weakness in the global economy is both affecting the u.s. economy, and also something which is preventing the fed from really getting on with this globalization process. china i think is a big factor holding the fed back.
a 0% toe is a view of 2% chance of a rate hike when they meet next week on the 14th and 15th. of july,n four chance albeit goldman taking a much greater chance. that the drag on the market has passed, but where is the growth going to come from? the market seems to be on a sideways trading mode with limited risk tolerance at this point, and every new piece of data is going to get an awful lot of focus at this point. , focus on of course china as well for the fed. speaking of, the u.s. and china have wrapped up two days of talks in beijing, agreeing to give the yuan a foothold in america. they also sparred over excess capacity in chinese industry. stephen engle taking a look at this. sounds like progress was made, but a lot of hurdles still. >> the strategic and economic
dialogue often times is used to shore up ties, also worked out some of their differences. they hit on a number of different topics. north korea, the global economy, market access, overcapacity, and at the backdrop of all these issues is mutual trust. they say communication is getting better, but they need to meet more often then talk these issues through. on the yuan, this is one of the deliverables that the state department likes to use, outcomes from the sme day. basically, china says it will -- foreign institution were institutions raise up to 200 50 billion yuan to be invested in chinese markets. china will also allow one undisclosed u.s. bank to clear, basically be a clearinghouse for the yuan outset of china. we don't know the name of the bank yet. jack lew says it opens up an
important door. less agreement, though, was reached because the two size -- between the two sides on overcapacity. there are steel and other industries where the u.s. says china is extorting global markets. jack lew: coming out of these discussions on steel is i think a good agreement. end, itatement at the did express some disappointment that we were not able to reach similar conclusions on aluminum, but we will continue those discussions and continue to press forward. and we have many opportunities to do so. stephen: chinese officials did push back on the u.s. claims. the finance minister of china saying, while the government is addressing these concerns, the economy is certainly not a planned economy anymore, and he says private companies do not take the instructions necessarily from the government
directly. angie: what did they say about the south china sea? stephen: that's interesting, because in this outcome document, not a word was mentioned about the south china sea. this is probably the most contentious issue right now between the two sides. it reflects how far apart they are on this issue, since it was not mentioned in this. they basically said only the 30th point of 120 points in that document, this is what they said. they reaffirmed their commitment to uphold the principle of peaceful resolution and distributes in the asia-pacific region. no specific mention of the south china sea. john kerry was a little bit more pointed in a post press conference will stop -- press conference. secretary kerry: i think this is important that no claimant, not any country, engage in unilateral actions that could be deemed by somebody else to be
provocative and therefore problematic. more thanhina claims 80% of the south china region, along with some of the other nations along that rim. they say their claims are indisputable. obviously they are, though. angie: the spotlight after those talks in beijing, it also posted their biggest two-day decline since february against a basket of global currencies. pboc, does this mean the is guiding the currency for the downside again? we can say deja vu, or at least that is the concern of some market participants, that yes, china's central bank is starting to go down the road is depreciation counters the slowing economy. this is where we are at. yuan has fallen at 0.8% against that basket of currencies so far this week.
the line is in white, the replication bloomberg has done up that basket of currencies. that is the lowest since october 2014. it has been more stable against the dollar in the blue line, dropping just 1/10 of 1%. .he pboc has been weakening it yesterday, it was the weakest in almost a week. all of this coming on the back of this 1.6% decline that we saw in may in the yuan, that was the biggest monthly decline for the currency since august. the dollar's slump has given the pboc the best of both worlds. against theer dollar, as you can see in white, and weaker against the basket of currencies, in the blue. that gave them the ability to control outflows while also benefiting chinese exporters. goldman is saying this is fated -- that this risks reviving capital outflows and fueling
fears of the devaluation, what we saw in august, the impact of which we saw again in january. yuan hasr you on -- also been playing out in china's foreign exchange reserves. fx foreign reserves falling to the lowest level since 2011. we are seeing that currency affect play out. note the yen and the euro also weakened against the greenback. china's currency stockpile is still the largest in the world, selling in may for a little bit what -- a little bit more than what bloomberg had been expecting. we are holding steady, may's decline strengthens it to 20% from the peak we had since june. we have gone from 4 trillion to 3.1 9 trillion.
economists are saying these movements that we continue to see in the dollar will continue to play a key role in driving out pressures. angie? we are also waiting for the trade data to come out this morning. how will that play into the pboc maneuver? we have the fx reserves, a key component of how they manage their currency, in terms of how much money they used to manage the currency. we are expecting today's trade numbers to come through, showing exports have dropped another 4% in may, so they would have fallen for of the five months this year. bank of singapore is saying that it is a clear preference for yuan depreciation. the question is, what is the limit for which they can let the currency fall without getting into these concerns about competitive devaluation, etc.? because westing,
hear it from the pboc's deputy governor, saying that china's exchange rate has been stable, transparent, that the way they similar to other countries' best practices. they also said the pboc had good communication, and that chinese is concerned about the normalization of the fed's monetary policy. at the end of the day, there is not a lot of confidence in the u.s. because of the fundamental economic slowdown, and every time the yuan rises, the market will tend to sell on that rally. angie? angie: thanks. you can get that story and more on all the day's top stories at our digital destination. bloomberg business, bringing you the best at one address. also on bloomberg.com, we are going to take a look at how riches dream dr. market
is facing a harsh reality. and turning toxic assets and the gold. that's bloomberg.com/asia. check it out. coming up, boosted by the black stuff, oil rises above 50 bucks a barrel, helps the s&p 500 hit a 10 month high. we will be live in chicago to discuss those market moves in much more, coming up next on "first up." ♪
angie: it's 7:16 a.m. in hong kong. these are the stories making headlines. david cameron has accused leaders of the brexit campaign of lying to voters about the risks of leaving europe. he spoke ahead of a tv debate on the referendum, now just two ekes away. cameron says the campaign is resorting into untruths.
different opinion polls give both sides the advantage of ahead of the referendum, but undecided voters hold the key. the indian prime minister has met president obama in the oval office. afterwards, they announced an agreement to enact a global climate deal that india was reluctant to join what it was negotiated in paris last year. the two countries also announced a deal for westinghouse electric to develop sites for six indian nuclear reactors. modi wants american investment to kickstart a manufacturing boom. the world bank says global growth will move at a tepid pace due to spending in the u.s. and japan. the bank forecasts global gdp will grow by 2.4% this year, a downward revision of the 2.9% predicted in january. the downgrade comes among a range of challenges, including
changing conditions in geopolitical uncertainty. powered by journalists in bureaus around the world, this is bloomberg news. markets, theo the s&p 500 hit a 10 month high. the index is now advanced more than 3% so far this year after the worst start on record. the rise is largely driven by oil, with crude above $50 for the first time since july, and u.s. inventory is likely to have fallen for the third straight week. dollar is declining on the speculation that the fed is not having a rate hike. it weakened to a one-month low. in three first decline sessions, with the prospect of higher rates curbing the appeal of precious metals. a lot of action overnight on wall street, but joining us now is the president of bianco research. s&p at another high, but what does this all really mean? i think this is a relief
that the fed is not going to raise rates. there are two driving forces in the stock market and the u.s. this year. one of them has been weak earnings, which has been a drag, and the other has been what fed overy is going to be, and the last several weeks, especially for the last couple of days after the weak employment report, we are hoping that there won't be any more fed hikes this summer, and the market is having a little bit of a relief rally. no catalystere is for growth, what should investors do, take money off the table? guest: i think they need to understand that a opportunities out there are going to be limited. last year, if you looked at all the asset classes, the best was 4%, the worst was 0%, and that 4% spread is the worst ever reported, and this is continuing this year. if you get it right, you will get 5%, if you get it wrong, you
2%. get 0% or i think the stock market is going to be on the lower end of that, in the u.s. at least. the bond market, i think rates will go down probably by closer to that 5% range, so i favor fixed income right now, especially sovereigns over corporate's. guest: -- angie: we have the fed worried about china, but is there something else perhaps we are missing that the markets have not ached in? guest: that something else is brexit. the markets right now are pricing about a one in four chance of brexit happening, but the polls are telling you it's even money. votes to remain, i think it is a mild positive for markets, but if they vote to leave, and some of the polls are league,eave is in the it is a huge pull for markets.
i think people are complacent about that. it is the start of a process, not the end of a process. outoon as we try to figure what it means, finland and france will want to line up and do the same thing, and we will have to question the entire existence of a eu, and maybe even the euro, at that point will stop -- at that point. the polls are keeping you uncomfortable, and the markets are just now pricing in any chance of a lead, setting up a surprise if that should happen. angie: what if investors have a significant chunk of europe in their portfolio? what kind of exposure and impact could they have? if you have exposure to europe, and brexit happens, you have blown your year. it's that simple. it's that big a deal. if it doesn't happen, this morning is just that, a warning
for something that never came up , but there is definitely a real risk or anyone who has european exposure, given the way the markets are pricing. it would be different if the markets were pricing in the brexit and the polls were staying 50-50, but right now the polls are state -- are pricing in brexit, and the polls are 50-50, which has me worried. angie: let's say you want to take your money out of europe, where do you put it? guest: it depends on your risk tolerances. u.s., it should probably give you a low single-digit's return. china rightly into now. i think the speculative moves there are going to be high. if you have experience with china, it will be a speculative type thing. japan is not ready to move out. the u.s. would probably be our best bet, may be a country like australia or canada if you wanted to move into something more commodity oriented. angie: but still a pretty
bow to boost infrastructure stranding -- infrastructure spending, also the promise to invest more in farming and cut red tape, if rightly and successfully implemented. economy is already one of the fastest-growing growing in the world. q1 gdp came in at 6.9%, exceeding growth in china. the other thing encouraging goldman's view is what it is hearing in its meetings in decisive, hehe is has a strong political will, he is also key to delegate work. in goldman's words, everything points to growth oriented and business finley policies that will benefit the secular growth of the philippines. investors are pretty upbeat. if you take a look at the philippine composited index, it is up about 7% since two. take
duterte won. lots of optimism. angie: but with optimism comes risk. what should investors look out for. look for several things. how lawmakers respond to plant tax changes. the world bank says, as is often the case, the speed and extent of implementation remains highly uncertain. that as to look for well as the world bank's rankings of ease of doing business. the risk, some say, relies in the average ability of duterte. he has talked about shutting down congress if he does not get what he wants. his preference for vigilante killings shows he may volume
it's a: 30 in tokyo, a beautiful look at the imperial palace. we are also looking ahead to this hour, were rewarded gdp figures coming out. we will share those live as well as the current trade balance. there 30 minutes away from opening in trading there, as well as in south korea and australia. top stories this hour, u.s. stocks bounced back from their worst yearly start on record. the s&p 500 hitting its highest level since july of 2015. above $50 ad
barrel, but the dollar is the lowest this month amid modest growth and speculations that the fed will raise rates gradually. u.s. stocks hit a benchmark for the first time in five days. the u.s. and china have agreed to give you on a foothold in america. finishing today's talks in china says $40 million will be raised in the u.s. to be invested in china. they also identified -- there is also an unidentified yuan bank to clear transactions outside the mainland. hillary clinton is expected to formally wrap up the democratic nomination within the next couple of hours in the primaries across the u.s. she will accept the nomination after votes in the new jersey, california, and four other
states come in. clinton has already been named the winner by the associated press, but has not declared victory herself. bernie sanders says he will not quit the race. powered by 2400 journalists in over 150 euros around the world, this is bloomberg news. china trade and japanese gdp figures are due out shortly. we have juliette with what we can expect. in investors react to the overnight session on wall street. juliette: first to europe, we had quite a good rally. they were really rallying on the fed comments from janet yellen. you can see all that strong buying that came through. as you are mentioning, it was a choppy or session coming through on the u.s. higher,closed slightly the s&p 500 and a 10 month high,
but certainly coming off today. the u.s.-chinese index was actually down 1/10 of 1%. a mixed picture we are seeing on futures markets today as well. we do have japan gdp coming through in about 20 minutes, an annualized 1.9% rise on the quarter expected there. futures looking pretty flat in japan. we are expecting to see downside coming through on the australian share market. we have seen crude rally above $50 a barrel, but we did see weakness in iron ore contracts will stop -- iron ore contracts. we are expecting downside coming through in australia. also, home sales in april coming through there. china, futures suggesting a pickup, one third of 1%. we do have the may trade data coming through out of china as
well. that is going to be key for investors to looking at -- to be looking at. i want to show you the crude price, because it did rally above $50 a barrel in the new york session. we are seeing it higher in the --an session, $50 and $50.37. the likes of petro china and hong kong, watch out for those. the gold price pretty flat. it has had a salad rally over the past -- solid rally over the past few sessions. i think gold is holding up high thef 1% at the moment, and japanese yen is pretty steady as well. expect a mixed picture to come through out of asia. a lot of data for investors to get through. if we could have a quick check it out new zealand is doing in early trade. --retty weak start, down one
1/4 of 1%. it has been trading for about an hour and a half. japan, korea, and australia coming online at the top of the hour. angie: thanks, juliette. today could be the end game in the fight between hillary clinton and bernie sanders. six states are up for grabs in riemer is, including california and new jersey. trackings tim hagan is the developments. we all know what's at stake. reporter: yeah, for clinton onight, it's capitalizing historic major, becoming the first woman in u.s. history to become the presumptive nominee of a major political party. she needs to use this speech tonight to really build momentum into the general election, frame the argument against donald trump, and really unite the party to bring in bernie sanders' supporters. clinton may be on the
brink of history, but bernie sanders still may push on until the july convention. said, sixas you states being contested tonight, about 800 delegates at stake. even if sanders does really well in california, where the majority of those delegates are in play, he would still lack the delegates needed to win. as we have said, clinton has already been crowned that way. what he is trying to do is stay in and contest the party convention, maybe switch superdelegates to him. it is an uphill battle, but he would need a big play in california to do that. angie: that's right, because superdelegates are not confirmed even if they did pledge, they can change their minds at any time up until the convention. let's talk about the gop side, because trump is getting slammed about his comments on the mexican heritage of the u.s. judge. reporter: he came out today with an unusual statement, saying his
past comments had been misconstrued, that he feels a judge can, despite their heritage, the impartial, but in this case he is questioning some of the rulings by the judge in the case. that came a couple hours after house speaker paul ryan issued another statement that was pretty hard against him. here's what he had to say. who can'tan: a person do their job because of their race is like the textbook definition of a racist comment. it's absolutely unacceptable. but do i believe that hillary clinton is the answer? no. after that,ump trying to reframe what he is saying. we also saw senator mark kirk of illinois saying he is pulling back his endorsement of trump. not the place trump wants to be. we will hear from him in a couple of hours and see what he has to say. angie: extra tracking that. let's take a look at what else we are following for you on bloomberg this morning.
here's haidi. haidi: tesla sert -- tesla tesla shares surged, projected to reach of market value of $700 billion. tesla's biggest investor holds 1% of shares, valued today at about $325 million. the 73-year-old says there is no competition for the market, and he expects his stakes to return $6 billion or $7 billion. toyota is facing more bumps in the road. it's luxury car has received complaints about onboard navigation systems. the complaints come from chicago and southern states. the navigation systems have been disrupted, and they have not yet found the cause. lexus had the highest ranking in a dependability survey, but it is facing rising dissatisfaction. internet financial services tumbledlending club
after canceling its annual investor meeting. .ells phil -- sales fell 7% lending club has been struggling after its founder suddenly quit botching.a and that's on new zealand interest cuts this week are waning. investors now see a 40% chance of the governor lowering the official cash rate to 2% on thursday, down from 80% a month ago. ,conomists' views are separated expecting by bloomberg that the rate will be held at 2.25%. thehousing boom may give governor caused a delay, despite flagging inflations. that is a look at some of the stories making headlines this morning. a forecast for global growth, this after a downgrade
on corporate spending. we have ramy inocencio joining us from new york. this is kind of depressing. what does the world bank have to say? yeah, pretty depressing if you look at the whole global economy. i imagine, at least with the u.s. federal reserve, this could add more concern as they head to their meeting later this month. but let's get to the numbers. the old 2016 forecast from january was 2.9% for global growth, but the new forecast is now a 2.4%. this new forecast matches gdp growth from last year. the world bank is calling it , and that means anemic, lifeless, dead. a 0.5f the downgrade was percent cut, and outlook for advanced economies is here in the united states. the u.s. bank as it forecast at 1.9%, down from two point 7%
when the forecast earlier came out in january. the world bank chief economist had this to say. he said, eight years since the start of the crisis in the united states in 2008, the global economy seemed trapped in low growth equilibrium. for the following global growth, he says commodity exporting countries have seen a slump in commodity prices, and the world bank has cut growth in those countries to 0.4% from 1.2%. if you look at commodities across the board, crude is down 18% in the past year alone. downook at copper, it is 25%, aluminum down 11%, platinum down 9%. , other emerging markets have private sector debt levels associated with "financial stress." -4%, it wasto already down at negative two point 5%, and russia down to -2%
from a -0.7%. one thing to talk about, angie, china, the world bank kept its forecast unchanged at 6.7% there . a little bit of good news. the takeaway ultimately is that global growth is expected to slow down pretty much everywhere else. angie: including japan. thank you so much for that. up, china challenges. after the break, the latest in our series of special reports on the future of once great provinces. the coal giant, that is, coming up next. ♪
at three of them. biggest local economy, hung sing, described as red hot. hanxi is one of the largest producers on the planet, but it's minds are loaded up on dead, and most are unprofitable, with 80% of gdp tied to coal. the provinces -- the province is in trouble. economic china's slowdown is being felt hardest in places like this. the cofounder of a company in this province, where more than half the provinces unemployed. >> most of these people are out of work. where can we go? we have no other skills. reporter: even those with jobs are shoved -- are suffering. for have not been paid several months. the boss can't make any money,
so he does not pay us. is a new reality for a coal rich province that was one of china's fastest-growing regions. now the week price of coal is undermining shanxi's economic foundations. we were shown around the region's biggest private line. they have a debt load, and even with the modest rise in prices, they have had to slash production. this is the part of the mine where the call is washed and loaded onto trucks, then shipped out. this coal mine produced 100,000 tons of coal in april. that is just one third of their potential capacity. workers have seen their wages cut by 50%. some told was off-camera they have not had a paycheck for five months. making sense of the economy tied to call, the domino effect is not hard to find. opened duringt the years, now a distant memory.
we can still ago, make money, wages were high. now most of us are out of work. toorter: some are trying adapt, with varying degrees of success. unusual attempt at diversification, taking an old coal mine and turning it into an amusement park. park is owned by a former mine boss to cash out of coal to focus on tourism. further is no development for the coal mining industry in this area. we will transform the environment to make it a greener place. this resort is doing great, and i expect more like this to open. reporter: whether it will be enough for the mounting job losses is the key question. than 500ng wants more million tons of china's annual coal capacities -- coal capacity shut down by 2020. that leaves many out of jobs.
angie: welcome back. breaking news from japan, the current account balance. let's go straight to you on. -- yvonne. yvonne: gdp in line with estimates. they were expecting a revision upwards of 1.9%. it seems like that is in line with forecasts. take a look at this current account balance. miss as well.
we were expecting deterioration in that surplus, but prior, we did see ¥3 trillion in the current account balance, actually coming in at ¥1.8 trillion. that is significant lower than the previous number as well. for ¥2.3 were going trillion. take a look at this, we were expecting numbers to be slightly better in terms of gdp. we did see capital spending, saw a rise of about .4% from the previous quarter, so this suggests that business sentiment , investment was doing a little bit stronger than previously thought. the better revision also confirming that japan did avoid the technical recession. we are going to see some easing coming out of the bank of japan when the central bank meets next week. the nikkei reporting that the majority sees easing this summer .
34% of economists think it will 23% june. there is a delayed sales tax hike until october 2019. we also expect a fix will stimulus -- a fiscal stimulus sometime in the fall. with these numbers, maybe we can see a smaller package, but the current account balances, the big miss we should be talking more about, this is made up of trade balance in net income. the weak demand is weighing on exports, but with the oil price, that drop in commodity prices is dampening imports even more. foreignr factor, that asset position is still quite large in japan, so that has resulted to a net income surplus, but much smaller than expected. the gdp figure for analyzed quarter on quarter coming on 1.9 percent, current balance coming in at ¥120 trillion.
-- ¥1.8 trillion. analysis fromet our japanese economist. much lower than expected, implying domestic spending is weak, and so our exports. guest: exactly. i do get is mostly due to deterioration in the trade balance. i think right now, domestic demand is speaking up, but exports are still struggling with weak global demand. angie: and that strong the end does not help. guest: yeah, and i think it is only starting to show its effects. the current worry is that, with the fed sounding a little concerned about the employment numbers, our economist does not expect the hike until september. in the interim, we can expect to see pressure on the yen to strengthen, and that is what japanese policymakers are worried about at the moment. angie: some say it will strengthen to 90. that is the most extreme call.
but there is a lot of consensus that it is going to weaken, especially after the fed is probably going to delay june and july, not likely until december. but in your sense, has that shifted? guest: yeah, i think the problem japan faces now, one, there is monetary impotence. as iteld curve is as flat can be. what more can they do to lower nominal yields? in the absence of lower nominal yields, you need to get inflation up, but it's going to take time. wages gradually rising, but it is going to be a long way off from where we can see an honest acceleration and domestic demand-led inflation. itie: beating the drums as were on the third arrow on reform.
what specifically needs to happen? is that over? is it all about helicopter money? guest: we are still optimistic that third arrow can be delivered. the hope is that prime minister abe, who continues to use his ve market capital, lea regulation on the top of the agenda. also, dealing with the low birth rate and trying to encourage women to not feel like they have to worry about losing their jobs or childcare. that's all on the agenda, it's just that it is moving at a glacial pace. say that again. let's talk about capital expenditures. there is a sentiment that at ,east we get revision upwards with gdp coming in line with estimates, but what does capital expenditure, that kind of investment led growth from the business sense, tell you about what the outlook is japan? guest: i still think that outlook for business investment
is shaky. once supported business investment was weak growth over the past few years. are talking about new investment going forward, i think japanese companies are still dealing with a lot of uncertainty with the global outlook, with the currency. so far, we have not seen that turn up in the data, but we are concerned about the sentiments we are seeing in the business surveys. angie: what is the greatest headwind for japan? is itthe strong yen, or just this kind of internal strife of decline? guest: i think it is the external side at this moment. now that the hike from 2017 has been postponed, and the role be some fiscal stimulus supporting domestic demand, i think the worst for the domestic demand is probably over. the problem is, japan is still dependent on exports for growth, and if we continuously is slow down -- if we continue to see it
slowed down, that is going to hit exports hard, and we don't grow. angie: and we are waiting for stake -- for fiscal stimulus as well, our? guest: -- aren't we? guest: yes. bank of japan easing is still up in the air. is it going to be june or july? policyre still a lot of catalysts in japan. we expect the fiscal stimulus to be announced soon, and we think the bank of japan will be inclined to ease in june. helping, i guess, is the central bank, the offsetting in june and july. the bad jobs report, of course we will have to wait for that. but it does mean it is a weaker u.s. dollar that japan has to pay. guest: yeah. alwaysparticipants are nervous about fx intervention directed by the ministry of finance. angie: do you think we will get it? guest: i think it is difficult