♪ stimulus,ping up japanese banking stocks soar, and the 10 year yield rises to zero for the first time since march, following the boj's latest policy decision. we have the details. focus now shifting to the fed, where the attention of the odds of the rate hike fades. and not walking away, uk prime minister theresa may tells the united nations general assembly that brings the vote does not mean they are leaving the allies. ♪ anna: a very warm welcome to countdown everybody. i am anna edwards.
6:00 in the morning in london. a lot of the focus today still in tokyo. we will get to what is happening in the asian session right now. and tell you what the boj has been doing. no change to the negative interest rate policy, -0.1%. but the reorientation of the policy is moving to target yield curves, away from setting specific monetary stimulus per year. this is the impact on the market, if we can throw the risk radar, you will see the monetary stimulus may now fluctuate in the short-term, as they seek to control the yield curve. inflation about 2%. there are the headlines. this is reactionary the 10 year did actually get to zero. if you can call zero positive territory, just got there, falling away since. the japanese yen at 102.69. shy of 1% by just
against the dollar. perhaps that would make governor boj, pleased at least in the short term. and a reorientation the policy on buying, to ron the spectrum of the buying. ,inked to the topics outperforming the nikkei. because we said earlier, banks are also rallying as a result. no further negative on those interest rate. let's get more from david ingles, who joins us now, poring over the details. there from the boj, david what is the latest you can tell us? david: wright, so as part of the japanese yen is concerned, basically looking now to the fed, traders art squaring position ahead of that. as far as this latest concern, it was a 7-2 vote. three crucial votes, because it is very confusing. as you mentioned, policy rate unchanged as -.1%.
and as far as banks are concerned, point two, they are now going to focus on the yield curve, not so much on this rigid specific target for expanding monetary base. so, what they are looking at right now, they are saying short-term fluctuation in that expansion metric, if you will, as they in other words are seeing, trying to keep the yield curve from flattening. they're playing up the bond markets, as we just showed you. when it comes to these purchases, they have kept it unchanged. but they refocused part of the repurchasing, and that is why we are seeing the topix index rising in tokyo as well. boj made aavid, the very pronounced statement on inflation. some people talking ahead of this meeting as if the boj, might step away from that inflation target at least the specific timing. what have they said this morning? david: right, so i think we'll get more meat, the press
conference happening in a few hours, hour and a half roughly speaking. and the rising inflation concerns, they said we are no longer in deflation, so that is .1. the second point, when you look at what is happening, the oil price and the sales tax, overseas factors they say have lowered inflation expectations. so, while japan is out of inflation, the bank said it will take more time before they reach and maintain -- or reach that 2% inflation target, and they will do everything they can to reach the target so far. some none of moving of the goal posts, as of yet. anna: and exciting oil and various such factors. david ingles from tokyo. we'll be back with david from tokyo to get the latest market reaction. latest market reaction. and you can follow all of the
action of course on your bloomberg to the top live blog, including governor k uroda's briefing. that is where you will find the top live blog on all things boj the 400 let us check in on market action. we agree cap am of the moves. stronger bank stocks, higher in the topics, and the moves in the fixed income market were immediate, but not sustained perhaps. haidi lun has the details. summary of what we have seen so far, talking markets, that they had to digest given the information that came from the bank of japan as became a very, very late with this decision. investors really great workout for this materially means, the investing environment. but take a look at the nikkei 225, continuing to percent.by, one we are seeing the rest of the region starting to catch up little bit. we did see gains, initially not much of reaction. but take a look at sydney stocks, up by 710 to 1%.
we are seeing reaction to taiwan, which has been up in negative territory. and in hong kong, we were sitting lowermost the day. now, the engagement about 6/10 of 1%. nort korea seeing a little bit of a, not much in the way of southeast asia, but notable to point out the likes of jakarta coming off losses of as much as 1% earlier. we are now looking pretty flat. and thailand accelerating. these are markets that will be more focused generally on what the fed has to say, in terms of the impact on capital outflows coming from emerging markets here in asia. china not reacting at all. shanghai more or less quite all day. but take a look at the banking shares can really they have been soaring, even though we do still have the possibility of going into deeper negative interest rates, according to the boj. the fact that they did not do it at this meeting is very cause for relief. and we have seen the lenders surging today. and the biggest
lenders up by 7/10 of 1%. and mitsubishi gaining. and you see the rest of the lot. in gains today. a real sigh of relief when it comes to the japanese banks, fighting hard against the negative interest rate policy. anna? anna: some of them have been quite vocal. haidi lun joining us from hong kong. we are getting breaking news from european corporate spirit that is good that briefly. and we will get back to the boj story. and interest tax interest rate, coming in at 2.1 one billion euros, that is broadly in line with the 2.1 that was estimated. this is the world's biggest clothing retailer, first half profits bolstered by the online expansion. we heard that they operate eight brands through 7000 stores in 90 countries. earlier on a lowered the retail rate expansion because they wanted to focus instead on bolstering online. that seems to be paying off at least in the set of numbers. they have been benefiting also
from the steady pace of economic growth in spain. inditex gets a fit of sales from special markets. currency has been harming on two fronts, strong dollar and weakness they are other exposed to, the russian ruble, mexican peso. analyst will be pouring over the statements to see if there is any clue on just how strong that online offering is proving to be. what that means to expansion plans, and what impact currency plans of having a letter to the bloomberg first were news. where joined by rosalind chin, who has details on we do know this morning. rosalind: thanks, anna. committed to building a consensus on stabilizing the oil market between opec and nonmember countries. that is according to the cartel's secretary-general. he's spoke exclusively to bloomberg in rome, as the energy conference was organized by the european collaboration. minister, andle
them haveent, both of a short me that -- have assured me that iran will do everything they can to enhance the members within the opec group, as well as outside opec, to build a consensus on the way forward. so, i'm quite satisfied with the assurance. rosalind: the uk prime minister theresa may has insisted that britain's decision to leave european union was not a decision to walk away from allies. her comments came during her first ever speech as pm to the united nations general assembly. prime minister may: when the british people voted to leave the eu, they did not vote to turn inward or while away from any of our partners in the world. faced with challenges like migration, a desire for greater control of their country, and a mounting sense that globalization is leaving working
people behind, they demanded a politics that is more in touch with their concerns and bold action to address them. but that action must be more global, not less. rosalind: the new york bombing suspect has been charged with the blast in manhattan and in new jersey. the fbi has revealed he was investigated in 2014, following a domestic incident. authorities in a have discovered a link between him and any terrorist group or, since. accomplices. wells fargo rose 2.8%, after the ceo was grilled at capitol hearing. figures,senate banking facing consequences for letting employees open millions of unauthorized accounts over the years. said it and investors could leave the bank with a reputational scar, one that cannot recover from. >> you have not resigned, you have not returned a single
nickel of personal earnings, have not fired a single, senior executive instead evidently your definition of accountable is to push the blame to the low-level employees, do not have the money or a fancy pr firm to defend themselves. it is gutless leadership. >> i except for responsibility -- accept for the possibility for all unethical sales practices in our retail banking business. and i am fully committed to fixing this issue, strengthening our culture, and taking the necessary actions to restore our customers' trust. rosalind: global news 24 hours a day powered by more than 200 100 20 countries. you can find more on the bloomberg at top go. i am rosalind chin. anna? anna: thank you very much. but as to the latest reaction to the boj's statement, the
intention. joining us now is takuji, and in the studio, jane foley, senior fx strategist at rabobank group. let us come to you first in tokyo, takuji, to talk about your reaction to what we heard from the boj. is this what you are expecting? t quite.well, no fixing the long-term interest rate, i would say it is one of the monetary policies, although i mean it is definitely unconventional. look at -- let us look at what the bank of japan did. can we see anything that would fix the economy? the 10 year rate was minus three -2%. how does raising interest rates reflect the economy? anna: does this do something positive to the banking sector,
they perhaps have been listening to the banking sector who said the business model has been eroded by negative interest rates, therefore has adjusted the policy with the hope that maybe more lending happens, is that the reflation very force? it does help the current banking industry. but i would say that japanese banking systems are outdated. these banks are very inefficient, 73 structure. the reason they are unprofitable is not because of a multibank of japan, but because the businesses are unprofitable, so by helping these inefficient industries i don't think the bank of japan is actually helping the japanese economy. anna: stay with us. let us bring you into the conversation. do you see something in the suite of policy announcements, additional action from the boj, anything that you say that is replaced very, that is going to help the boj in the battle to drive up cpi. jane: given the amount of
pressure and criticism the bank of japan has been under this i think thatlarly, --a systems bowl move ostensible move. the bank is coming a top-five 82 ofof something like the stocks in the nikkei 225. that is quite sensible. i think to bring in some sensibility and the inflation target again, probably quite sensible given the amount of pressure they have been under, the liquidity they have been failing to hit that target, and that seems to go back to the start of the week. even the australians added a little bit of flexibility, the wording around the inflation target, too. this might not be the only central-bank that looks toward doing this. there are some sensible movements. whether or not it is really going to achieve an acceleration in the inflation of japan, really remains completely unanswered. anna: let us deal with the immediate market reaction. we have the yen weaker by the dollar, perhaps that would be
the short-term, something the boj would not be disappointed to see. given the reaction we have seen as some previous announcements by the boj,, but what we saw on the bond market this is the 10 jgb.yield on the this is just this morning. the initial aftermath of the announcement, we so it's fight back up out of negative territory into positive, hitting zero for the first time in months. but then establishing short-lived, and that was going back down again. jane: the market is not sure how it will exactly organize the inflationary targets. this is what be difficult. this is going to be, in focus watching this as it pans out. we have seen the banking stocks lose another negative interest rate, and hope that maybe the yield curve will be lasting. we have seen that come through. making socks helping the target nikkei 225, and that is really helping dollar-you go higher, too. but i suspect the movement in dollar-yen will remain dovish. anna: and we look into that
little while. thisi, i know that before announcement you expected the boj might step away from the 2% inflation target. somein the studio does see increasing possibility around the target, given what they said today. how do you view the target? j still well, bo maintains the 2% target, but i would say it is less than before. before they were saying they would do anything they can to ,chieve 2% inflation in two years. now they're saying they like to percent inflation but they do not really know when they can achieve it. so clearly, there is a monetary accomplishment and the bank policy today. anna: less monetary commendation. what you make of the commitment to target the yield curve, away from setting specific monetary stimulus per year and towards
doing what they need to do to get the yields on the yield curve when a woman to be? how are they going to achieve think?o you we are still learning the details about how that will work, i guess. takuji: right. well, in the same way to the bank of japan can control the short-term interest rate, the bank of japan can theoretically control long-term interest rates. you know, they can buy or even sell at maturity. so, they can control the interest rate. i don't think they have that much difficulty, but the problem is ok, then the market will be rigged. it would not be a market price, it is a fixed price. and we do not really know what the true long-term definite interest rate should be. anna: jane, the market rate? the stock market rate? other people's words, not mine.
isabel you see it? jane: if you look at the mountain of interaction with central banks, quantitative easing, negative interest rates, etc., we really do have to ask ourselves if stock markets in particular justified given that. advisors,uji, macro think you very much. jane foley, rabobank group stateless. coming up, we find out why one projectionsks fmoc will fall hard. that is coming up. time,0 am in london theresa may says the uk has not turned inward. aboute fed ceo speaks inflation. and of course, we will bring you extensive coverage around the fed policy decision. with the boj out-of-the-way, at least to some extent, we will hear from the fed. from half an hour later, you can
anna: welcome back everybody. it is 6:21 in london. a lot of the action mode has been in tokyo, of course hearing from the boj no change to the negative interest rate policy. but they have moved to target the yield curve, away from the monetary sinless per year. estimates may fluctuate in the short term as they seek, to control the yield curve seeking inflation above 2%. we will have a conversation about the stability built in the this is the reaction we are seeing in the markets. we have seen the yield on the 10 year coming back up to zero. positive territory, but then dropping again. the yen weakness that we have seen of the more long-lived,
down by 1/10 of 1%. against the japanese u.s. dollar. we are waiting for the fed. that could be crucial. xn the divergence between topi reflected at the bond buying program, extending to topix stocks. the nikkei 225 been supported by that failure to move any lower on the interest rates, which are already lower in negative japan. let us put the boj to one side, kind of and talk about the fed. and the forecast is hard, according to a person who has notes saying janet yellen has found it hard to fend off her dumbest inclinations. he also added it might send fmoc rate projections for the next three years, leaning lower. still with us, jane foley, senior fx reddest and rabobank group. i pulled up the bloomberg function, which shows you where the members of the fomc think
the members will be. a lot of focus on whether expectation will be brought down, whether these dots fall lower. jane: again, this is the trend the last few years. again and again in markets, pushing back the expectation of the interest rate rise. because inflation expectations remain quite moderate, and when that remains moderate, etc., this is the thing. and this is what janet yellen forgets. againe has time and looking at the jobless american, etc. but i think right now it is more rathernflation outlook, than the jobs outlook. i think we can pull apart the figures and say yes the mother has been improvement. but that inflation, that is still benign. and i think today, it was really important for the markets just whether or not the fed signals whether there could be a december interest rate rise or not really about the in 2017.ns,
because it seemed effectively do anyone interest rate hike maybe even less, that yield curve is going to remain really quite depressed. and that is a really big signal for the currency market. anna: back in june, the median rate forecasts imply three in 2016. and a longer run rate, that 3% reflected here in the index longer-term area of that dot function. how is that going to shift downwards? jane: i think it will, and again that is the trend. and interesting to see the bank of japan really, the fact that the bank of japan has put this more bearable timeframe when they can hit inflation targets is a signal it is not just the u.s. this is a global phenomenon. where we see inflation expectations and inflation itself just disappointing continuously. anna: when you look at the work function on bloomberg, you see a 20% chance, only 22% chance of a move. that has been building over december.
58% now for the month of december. is it heading up a little bit this week? what you make of the fed move? jane: i don't think it is today. but we did have stronger than expected cpi data last friday, and with respect to december, the back of the stronger cpi is introducing the following through, other indicators it really does seem at the prospect of a december move. and of course, many fed officials are coming out relatively hawkish statements over the last couple of months. seems quite think, likely greeted question is how much can do a 2017? anna: probably not a lot. anna:politics could get in the way. and what the bear that in mind. some of donald trump's people talking about the fed overnight, weighing in on what they think the fed should be doing. thank you very much. jane, your thoughts on the federal reserve. we will he the conversation there for the moment. up next on countdown, a surprise
anna: welcome back. it is 6:30 here in london. ofot of the focus in japan, course the boj meeting. no change of negative interest rates -1%. targeting the yield curve away from monetary stimulus per year. more on david ingles in a moment. without negative on the 10 year yield, it did get to positive territory briefly. the weakness and again has been sustained, still down by 1% against the u.s. dollar as they go towards the fed meeting later on today. and a thought of central-banking sandwich in european time zone. and you see the topix, as well. banking stocks supporting the
nikkei on the interest-rate policy. let us get more details on what the boj told us today. david ingles is in tokyo talking us to the details. david? na, i am actually outside the boj, itself. where rates were waiting for quantitative trends, the building right behind me, that is the boj. we are going to get more meat on a lot of these top lines that we got.and as you mentioned, really playing out on the markets. i think three key points about to make. first, the cap the positive rate unchanged at -10 basis points. that is really playing out in banking stocks. on a related note, the point number tw the second one i want to makeo, from this more rigid targeting of how quickly they want to expand the monetary base. something a little bit more flexible, but have more control over the yield curve, which is , being seen by not
wanting it to flatten i was little to help the banks as well. now, that being said, the third point is when it comes to the asset purchase program, they left everything unchanged, except the target for purchasing. but they have tweaked a portion of that, or refocus it if you tracking.opix which is why you're seeing a rally on the index here in tokyo. the boj made a pronounced statement on inflation. we had a discussion with our guest in tokyo and jane foley from rabobank group, did they really work in more for its ability around the inflation target? what did they tell us today? so they are, ieping expectations rounded, think. the first thing they can unset japan is no longer in deflation. second point, when it comes to reaching that target, we are likely not going to see it
happen in the near future. because of external factors, the price of oil, looking at sales tax, and other external factors. and one of them, is to the strengthening, of one of them that basically brings down the import cost for japan. wet this morning in japan, can the latest rate it appeared with weekly showed an absolute drop in imports. 18% drop in imports. it has been falling double digits. but it shows you i guess at the currency strengthens, it will make it harder to reach 2% inflation target. and i'm sure the governor kuroda will be questions on that when the press coverage begins in about an hour's time. anna: david, thank you very much. about, in tokyo outside of the oj waiting for the press conference in an hours time. uroda effect. the nikkei not too far behind. nejra joins us now. and is japanese equities topix, higher.
and it is banks and insurers leaving the game, no surprise that shift to confirm the yield curve you're just hearing able ingles talk about. and if we take a look at the you mention the nikkei. that is up 1.8%. you can see here on the left where we have a lot of other equity indices heading higher in asia. the yen now down 8/10 of 1% against the dollar at 102.52. butas broken through 103, we have seen some weakening in the end. and the 10 year yield in japan up for basis points. we are still in negative territory now. but of course we did see it turn positive for the first time since march. worsthe yen is the performing major currency against the dollar today. in fact, it is the only one to be weakening against the dollar. it has been strengthening before the decision. i wanted to show you overnight volatility, over six months because overnight volatility was only about two thirds the level
on july 28 actually. the day before the yen jumped more than 3% following the boj's decision to keep bond purchases and interest rates unchanged. that was back in july. ahead of this meeting, you see , droppingatility was down as well since a decision so the impact not quite as strong at this time from the meeting. and finally, this is something to keep an eye on. this is the premium on 10 year u.s. treasury yields, versus 10 year jgb yields. before the announcement, this twowidened the hi most in months or as in the yield up some 2-3 basis points since the decision, but this is summoned to keep an eye on. ra, thank you. a new edition of daybreak is now available on your bloomberg and on your mobile. the function is go. but it's take a look at the top story. no surprise, the boj announcement is the cover story.
boj central-bank choosing to tweak the policy, in the words of daybreak, following a review. and they have big yens. symbols let us remind them that the yen has gained since every meeting since january and the fact it is down, 8/10 of 1% against the u.s. dollar certainly an achievement relative to other meetings. and the weaker yen is the target. the drop today following the boj decision to shift the focus away from preset targets for expanding the supply of money, more towards controlling the yield curve. the next story on daybreak, here is a look ahead to the other big central bank story of the day. that is the fat of course. get theest news, we decision later on figure it and the line that daybreak is going with is that perhaps a hawkish hold is what is being seen by markets.we talked about a lot of the dots with jane foley of rabobank group. and the bloomberg survey which shows most analysts thinking
that opec probably will not make a deal to limit oil production in algiers next week. at 44.90. a decline in u.s. crude industry it helped oil pickup but could be algeria that was the biggest risk. yousef gamal el-din joins us now the chart of the hour. take us into the nigeria conversation. we heard earlier on this week from the oil minister ther about incidence was in the niger delta. yousef: they crunched a few numbers, trotting up different scenarios. the impact on a return of some of the supply outages in algeria would have on the market. i have mapped this out on a chart you can put up on your bloomberg as well. just to get an idea of some of the correlation in the past
between nigerian oil output specifically, and of course the oil price, and this case brent, your orange line there. , in augustmething that is bloomberg data. and we can also see that red line, that is your locate scenario. which the group identifies, then you have the green-yellowish line which is your best case or hiking scenario, at 1.8 7 million barrels. the interesting part about all this is that you are looking at the swing of 400,000 barrels a day. and that is with the time months.of about 6-9 there are four active supply disruptions in nigeria the moment, and as you said the nigerian president was optimistic they can resolve some of those.and also some other analysts know some like to rope in, citigroup if theec needs to hike
cartel like to keep the $50 a barrel range. anna? anna: yousef gamal el-din looking ahead to algeria, september 27 is only get that meeting of opec and others. let's talk about the uk the prime minister theresa may has a sister that britain's decision to leave the eu was not a decision to walk away from its allies. her comments came during her first ever speech as prime minister to the united nations general assembly. prime minister may: when the british people voted to leave the eu, they did not vote turn inward or walk away from any of our partners in the world. faced with challenges like migration, a desire for greater control of the country, and the mounting sense that globalization was leaving working people behind, they demanded a politics that was more in touch with their concerns and bold action to address them. but that action must be more global, not less. anna: still with us, jane foley,
senior f extra just rabobank group. jane, limited survey out at bloomberg, a survey around interest-rate expectations from the bank of england. when we last heard from the boe, they kept the door open to another rate cut, having done one in the wake of the regular. the survey suggest that economists are expecting another this year. what are your expectations? wording you look at the that we saw in the latest minutes, it suggested there could be another interest rate this year. and that i think his pickup by economists, but i think if you look at the economic data, it seems the other variable like the bank of england want to keep it dry, i'm not so sure they will go this year. i think perhaps february might be a more interesting meeting. i think we have to wait, not just the economic data, but we had this really understanding that bracket has not begun. and now that the political forces are back at work, i think
we are getting a taste or how complicated brexit is going to be. , economy ishe uk still vulnerable because of that but i think it might be february rather than november. the bank is issa cut rates again. anna: and that would tie more info we might see, the triggering of article 50 of course, it might make sense to keep. what do we know about the lower bound for rates and the uk? because mark carney has been quite outspoken on the subject the negative interest rates. jane: he has. if we go back to february, of the g20 meeting then, that was just at the bank of japan had gone negative january 29. and mark carney was saying really to it knowledge the sense that they're going to really go negative, a currency war. he was really outspoken. because we're seeing in the minutes that there is a lower bound for rates, above zero. you're talking about at the most points move. basis
the other thing which is interesting about becoming a policy is quantitive easing. we know they expanded bond buybacks by 60 billion. in the initial press conference is it that can be done in six months or looking at the case of the early days, what actually they are doing is running at a very slow pace, and that is because of difficulties in the market, well, sure. but if they go this continual not, they could take years, six months or the summit to bear in mind. but that it means that come february, they may not be in a position to extend qe. anna: i have chart of sterling, you recognize without even needing to see a label i suppose, where does this had it now? what triggers another fall in sterling? you have toagain, take a dollar out of this. i think if we were to get a more hawkish fed, clearly that would be a trigger. but we just look at the uk, what we have seen over the summer is
really that we saw better-than-expected sales data, manufacturing,, tourism etc. you have her number breakfast on begun. what we have right now is a trading relationship with our trading partners essentially unchanged, with the benefit of course of a big movement in the pound. now, i think as we move further into the autumn, i think we're going to get more understanding of the convocations of brexit. anna: certainly the news flow coming fast. jane foley stayed with us, senior strategist at rabobank group. the ceo speaks about the lender's expansion plan and eight. more on that exquisite interview, next. and we are back at the bank of japan, awaiting governor kuro da. lockstep in the long-term, the correlation between u.s. and european shares at a four-year high. we will have that chart. this is bloomberg. ♪
anna: welcome back. this is countdown. 6:46 in london. this is the reaction markets overnight from a we heard from the boj. so, we had the 10 year yield spiking up positive, that devon negative territory though. weakness sustained in the markets, against the u.s. dollar. and we see a strong performance nikkeitopix, versus the 225. both of those being supported by higher banking stocks, as we saw the boj deciding that the move more negative on their interest rate policy, cutting away specific monetary stability target for your husband the bloomberg business class. here is rosalind chin. rosalind: microsoft says the by back atop a liv
an existing reversing program, which it plans to finish by the end of the year. the software maker has also raised poorly dividends to $.39 per share. microsoft's stock has jumped 30% in the past year. the chinese investor group is seeking to provide a false bank report during the initial negotiations, that is according to a statement from the lender, whose name appears on the document. people with knowledge of the matter said investors often pay for what appears to be stationary, of the bank said it has not issued any such documents. in a statement, the chinese consortium says it does not confirm the documents and remains committed on the closing of the deal. and the ceo of europe's largest airline says he is examining a range of options for entering the low-cost, long-haul trevor market. 's boss told bloomberg that the company can no longer ignore the emerging threat.
cost,have protected our ensuring our right next year, but if the oil price is increasing, the world economy is get more,tter, we can so there's that only the get wind we can also of the increase rosalind: of the oil. and that is your bloomberg business class. anna? anna: rosalind chin in hong kong. shaping up to be a good year for the julius baer group, clients are returning to the market following the brexit vote. in a exclusive interview, the ceon told hot haslinda amin that the lender is also picking up the pace of hiring, both in asia
and the home market of switzerland. >> i think in general we are following where markets are growing, and asia is our second home. haslinda: where in asia? >> hong kong and singapore, in a big way. haslinda: adding about 200 people. boris: we have added over 200 bankers globally, probably more than half here in asia. and this comes with a lot of support function product people, especially support staff, so probably more than 200 people here in asia. haslinda: adding 200 last year, 200 this year, that is no growth net. are you adding more? boris: we are adding more people in the integrated operation, so our headcount in the euro area is probably up 700 people, so we're kind of also refinancing our growth by cutting overcapacity. haslinda: part of the expansion
also involves doing that, intending to do more, does it make sense? boris: i think if you look at the market cycles now, we are probably in a period of time or acquisitions have cooled off a little bit. i do not exclude that there could be some opportunities down the road, but we have kind of organic that back into growth. we see a lot of bankers looking for a new home. i think if you look at the financial services sector in general, a lot of companies are under pressure. and i think for clients and bankers, they need long-term people committed to the long-term gain. you are digesting and reassessing where you need to expand now. boris: we are using all the different avenues of growth that we have, and right now i think the risk return,, on organic growth hiring new people is a better alternative than making an acquisition. haslinda: it is a tougher revelatory environment because regulars now want scrutiny.
they want to know that all of the assets that you manager clean. and that is adding to cost. how is that impacting julius baer? boris: i think it a general trend. i think our industry has been asked to do more in qualifying clients, anti-money-laundering, this is had a tremendous cost across the globe in operations, and you can only offset that cost by growing. so, need to pick up more assets, generate more revenues from the expanded base, so that is why i think you do not pursue a growth this willultimately, lead to more conciliation. haslinda: can you quantify how much this is adding to cost? boris: as a number or per se, i can only tell you that the entire value chain of compliance and others have had double-digit growth and headcounts over the last 10
years, and i think that is there to stay. anna: boris speaking to haslinda amin in singapore. still with us, jane foley from rabobank group. a bit of a sort of central banking sandwich, in the since we heard from the boj this morning. we will hear from the fed later today. the ecb caught in a time zone in between those two. what do you think the ecb want to get out today? we have story yesterday, but what you think the ecb is looking for? jane: to be honest, it is interesting when we saw mario draghi speak about the mechanism of monetary policy in europe never been stronger. and that is something different, than the euro has not been able to weaken, despite all of the quantitative easing we have seen this year. and the same can be said for the bank of japan. we heard earlier on that today was perhaps the first meeting japan,ar for the bank of
which has managed to engineer a weaker trend for the reason why both the central banks find it difficult to weaken the currency, despite huge amounts of monetary accommodation, is the fact of the yield curve for the u.s. has been pushing down for most of this year. as expectations for the fed have been pushed further and further out, so i think both the ecb and the bank of japan will be a movement higher in u.s. yields, and more hawkish tone from the fed. that was certainly give a boost to the dollar, and that would be welcome i think from the bank of japan, rba, etc. but they will not get that. anna: low volatility for the euro, i think on this chart for hours, i have on the bloomberg bureau versus the dollar, the lowest among g 10 currencies. euro-dollar volatility dropped to the lowest level in two years. does that tell us more of the ecb, the fed, or other things? jane: a mixture of a lot of things. i think that the market has done
a lot in terms of repricing expectation for the fed. no one really expected the fed to be aggressively hawkish going up. so the market needs to tweet expectations, and will do what the fed says, but no one expects too much. if you look at volatility, what we do have our critics on the horizon. we do have the u.s. election, and if the good truck victory there, you can see a big spike in volatility. and beyond 2017, huge amount of european politics, with french and german presidential elections. anna: as the boj tweaks policy, we looked at how successful the policy today has been. we had the results of some reports today, the analysis. this was an interesting chart. this shows the japan generate against the euro area shadow rate, and basically managing the effect of quantitative easing on the sovereign body world, for
part of the world. showing the japan rate comes down as result of qe, for the euro area is has a bigger impact on rates, on interest rates, in the euro area. deserves someghi credit for the way european has been designed? jane: i think probably not. and the reason for that is japan already owns over a third of all expanding, so is really coming to the end of the road, at least that is the criticism we have heard time and again. we have to remove or the bank of japan has been buying a lot since the start of the century, and after the financial crisis, ecb is not doing it for a much shorter period of time. , i think that is why we see more impact now but it is interesting that the ecb as well is a big japan have been thrown the spaces in the qualitative easing has too many side effects. anna: maybe the boj responding to what they have done today. thanks moving higher.
anna: stepping up stimulus. japanese stocks soar. zero0 year yield rises to for the first time since march following the boj's latest policy decision could we have all of the latest details. focus shifts to the feds where the focus turns to jobs. not walking away. reza may tells the human general assembly the brexit vote does not mean britain is leaving its allies. ♪ anna: welcome back to countdown i am anna edwards.
let's have a look at the futures. the start for the you connecting market. we saw the asian session was positive. by .5% istoxx 50 up the estimate on the futures. you have the risk radar. the response you have seen in the overnight session. 10 year japanese bond yields, -0.02. it had fallen down a little bit since then. the dollar --is 102.57 is the dollar up onion. -- we have seen the topics outperforming the nikkei in the run up to today's decision. the nikkei up by 1.9%.
banking stocks across japan are moving higher as a result of the boj not going negative on interest rates. governor kuroda said the basic fluctuate inw short-term as policymakers seek to control that curve. let's get more from david ingles who is in tokyo. you are out and about outside of the boj. talk to us about the details that have been announced. so as far as the expansion of stimulus, they were talking to two main levers, negative rates and expansion of the asset purchase program. a kept those things unchanged. they kept the policy rate at -10 basis points. as we talked about, this played out quite nicely. the key take away from what they
did was this refocusing. as you mentioned, not so much -- they don't want to be caught with this rigid target. that is the dollar equivalent of the market expansion target. it could fluctuate, it could be higher or lower. their focus is on the yield curve which a lot of people have said they don't want the deal curve -- as far as the boj is concerned, they said a flat deal curve is bad for the economy. they have come out and they have declared victory over inflation. the prices are no longer falling. they have acknowledged that prices are not rising ideally. the target of 2%, they said nothing about the timetable. we are expecting the boj governor to take a lot of questions when it comes to the
timetable. people were expecting them to move to a more flexible timetable. anna: david, anything that we have learned around the comprehensive review of monetary policy echo we have seen -- policy? we have seen the results of their review. what have we learned on that review? david: absolutely. that is a good point. they are coming out with these policy tweaks that we talked about in light of this competence of review. it is on the boj website. thanges, but it says more half a year since they introduced negative rates along with qe. they concluded that it works. they managed to get japan out of deflation, bring them short-term yields. down short-term
yields. they have managed to bring that down as well. i have come out with a tweak because it is flattened up until maybe a month ago when it started to stephen. guess started to -- started to steepen. the boj did not take rates further below zero. anna: thank you very much, david ingles. don't forget we will have the press conference in around a half hour time. governor kuroda giving that press conference at the boj. you can watch that. we will be digging into that. let's get to bloomberg first word news with tom mackenzie. ♪ iran is building a consensus on stabilizing the oil market. that is according to the mohammed bahr khiem do, he spoke
to bloomberg in rome at the future of energy conference in collaboration with any. >> i met with the minister as well as the president. both of them have a short me that iran will do everything possible joining hands with group, within the opec as well as outside opec to build a consensus. i am satisfied with the insurance. -- with the us assurance. tom: theresa may has insisted that britain's decision to leave the european union was not a decision to walk away from allies. this came during her first speech to the united nations.
>> whether these people voted to leave the eu, they did not turn -- they did not vote to turn inwards. facing challenges like migration , a desire for greater control of their country and a mounting sense of globalization is leaving working people behind. they demanded politics that is more in touch with her cce that action must be more global, not less. tom: the new york bombing suspect ahmed khan rahami -- new jersey. the fbi has revealed he was investigated in 2014 boeing a domestic incident. -- 2014 following a domestic incident. they have not made a link between rahami or any terrorist groups. wells fargo stock rose $2.8 billion yesterday after ceo --
after the ceos grilling on capitol hill. they faced banking committee members -- for letting employees open millions of unauthorized accounts over years. analysts say it may leave the bank with a reputational scar but one it can recover -- but from one it can recover. >> you have not fired a single senior executive. instead, your definition of accountable is to push the blame to your low-level employees who don't have the money for a fancy pr firm to defend themselves. it is gutless leadership. >> i accept full responsibility for all unethical sales practices and our retail banking business. i am fully committed to fixing this issue strengthening our
culture -- this issue, strengthening our culture in taking the actions to restore our customers trust. tom: global news, 24 hours a day, powered by 2600 journalists and analysts in more than 120 countries. you can find more stories on the bloomberg at top go. i am tom mackenzie. anna? anna: breaking news from the swedish engineering business, adb. they are selling their cable euros.s for 836 million closing of the deal is expected in the first quarter of 2017. they are talking about taking market opportunity -- seeking market opportunities within inter-connectors. the latest on that story for you . let's get back to the broader market action, a lot of activity
in the broader sector in japan. haidi: thereeek -- is a feeling that the market is trying to digest and work at what this means and whether these gains we are seeing can be held onto. this is what we see, tokyo stocks closing higher. there is a reversal of previous losses and hang on to the gains after the announcement came through. we are seeing gains around the rest of the region. korea closing of higher at .4%. australia seeing gains. u.s. -- cruise in the gains and crude in the u.s. meeting -- energy
stocks on top of the financials that pulled that rally driving this higher. ready flat when it comes to southeast asia. we will focus on the fled into -- on the fed in terms of what this means. he spoke about the bank. look at this breakdown of the gains we saw. [indiscernible] financials popping. it went soaring. simply at the news they were not going to go deeper into negative rates. it is good news for that lenders. mitsui closing up higher. you can see that playing out. i will leave you with a quote from this strategist from singapore saying this is a knee-jerk reaction. what happens from here on in terms of yen? the movement come into equities? it could be done -- it could be undone by the fed and 12 hours.
-- by the fed in 12 hours. anna: haidi lun in hong kong. richard saldanha. in the short-term market reaction, the high we were talking about. they can be pleased with what they delivered on the end. we've got a little bit of weakening -- on the yen. we've got a little bit of weakening. we will see where it is by the time the fed meets. what you make of what the boj told us? richard: and got off to a decent start. when you consider the uncertainty that was going into this announcement, the talk about further rate cuts, helicopter money, all of the things on the table, what you was the innocent from crowed
of which sounds pretty sensible. -- a littletion early to announce big three. -- announced victory. battles been the real since what they have been doing. we've seen the young strengthening considerably. the fact that it weakens today it will please grow to and equity markets. anna: we will see where it heads by the end of the day. it seems we are emphasizing today the end goal rather than the means. previously with the announcement of stimulus, just getting bigger and bigger, the market was very fixated on the means of stimulating the japanese economies. now they are telling us more about the end. does that drive inflation in japan? richard: the jury is still out. some clarity in terms of the end
goal can only be a good thing for markets. we entered into this new world of negative rates in january. we have seen the yen strengthening 20% since then. the fact that they have come out saying this is what we are try to target, it can only be a good thing. etf's -- you have seen etf's. it is a welcome boost. you have seen that in the japanese bank prices. all in all, considering the uncertainty going into this decision, from our perspective, a pleasing result. anna: what does it do with equity? we have seen the banking stocks going higher. this is something that was challenging the banking sector. they have been outspoken. richard: if you look at japanese highs, it has been a pretty tough market. the announcement will help that.
for japanese corporate in general, some direction on the central bank was needed. when you look at the frustrations, there are plenty of good things going on in japanese companies. you have to find this macro side of things. companies that have been previously hoarding cash put some in a cash to work now. in general terms, i think this can only be a good thing it anna: as an equity investor, the you worry when a central bank owns such a portion of the equity market? richard: you have to. you look at the amount of government bonds that they own, that is a concern. as i said, the fact that there is direction. time will tell whether this has been a real turning point. the announcement in terms of clarity on the end goal,
targeting that yield curve and almost carrying the battle towards inflation is important. anna: the hunt for yields has been the dominant theme. does what we heard from the boj change that? richard: it is hard to say. what will come up will be -- what will come up from the fed will be more interesting. the hunt for yield and equity markets this year has been a dominant theme. if you look at sector movements, they have been quite dominating. anna: are you holding equity in places or you would rather be in bonds? you are hunting for yield and acting markets? richard: the key is -- the key is sustainability. you add the stock. you had -- you had u.s. 10 year you saw massive outperformance of stocks at what is been interesting for me is in
june we saw u.s. yields jump up , as people get more constructive on the potential for the fed rate hike late this year, you see these yielding sectors go from being top performers to bottom performers. a real shift out of this into some more cyclical sectors. banks started outperforming. carefultors, i would be on this jason yields at this stage it always look for -- this chasing yields at this stage. always look for sustainability. anna: up next, connecting the dots. will the fed interest rate signal a september hike -- a december hike? we take a look next. this is bloomberg. ♪
we digest what the bank of japan has done. they kept the negative interest rate policy on hold, but they have done a lot of other things, they have taken additional measures. moving away from set monetary stimulus. they say the monetary stimulus makes -- as they seek to control that yield curve. the aim to get inflation up to 2%. -- they aim to get inflation up to 2%. that the spike up, the yield spiked up to zero. it was negative briefly. it went positive, but now it is down in negative territory. we had a sustained loss of the yen. down by .9% against the u.s. dollar. the stoxx 50 -- toward the etf from the boj. the banking stock generally in japan doing very nicely as a result of the cold and the
negative interest rate story from japan. let's get to bloomberg business flash with tom mackenzie. tom: -- first half and earnings that beat analyst estimates. the owner says operating profit increased 8% to 1.6 one billion euros in the six months through july. that as the biggest clothing retailer prioritized expansion over store openings. microsoft says it stores are authorized to buy back when he billion dollars of stock that is on top of the existing $40 billion repurchasing program which a planned to finish by the end of the year. the software maker has raised its quarterly dividend by 8.3% to $.39 a share. the stock has jumped 30% in the past year. the chinese investor group seeking to buy -- is said to
have provided a full bank report during initial negotiations according to a statement from the lender whose name appears on the document. people with knowledge that investors offered papers on what appears to be the stationary. the bank has said it has not issued such documents. the chinese consortium says it does not confirm it ever sent such a document and remains committed on the closing of the deal. that is your bloomberg business flash. anna. anna: tom, thank you correlation isween the stoxx, euros 600 near 8 -- the stoxx europe 600 -- weaker global growth and arising you was dollar may drag down european and u.s. shares are still with us is richard saldanha of aveva investors. let's show the charts. between theelation
stoxx 600 and the s&p 500. european stocks and u.s. stocks near its highest since 2012. you would put this at the door of the central banks? richard: today being a classic example. in terms of the chart, the correlation -- what you have seen is exactly what you said, central banks driving movements within sectors. that kind of hot feel that we talked about. at some point, that will reset itself. investor focus will shift back onto the micro and that is when things start to get interesting good we have had a deal for some time were -- had a period where earnings were sluggish. they are expectations. perspective and from a lot of bond manager's perspective, the focus shifting back to the macro rather than the micro.
year onsnapshot year on the stoxx 600, this is european profit. 15 months of downgrade we have seen from analyst community. ubs talking positively saying that may be coming to an end. do you share the optimism? richard: i think so. there are expectations for rebounding in q4. that is to do with gdp in general. we expect u.s. gdp to rebound if you look at the fed forecast. handledlet's face it, brexit pretty well -- anna: the brexit vote anyway. richard: we expect to see rebound there. if you look at market expectation at the double-digit earnings gains. we have been able to this time of year expectations of double-digit gains, we have had
flat to down earnings. we think this time you will see .he growth coming through anna: we had the pleasure of providing the feeling -- a lot of the filling. .- providing the filling fed officials have forecast interest rates to be a fed fund target rate. long-term, we might see that coming down. what is your expectation around the fed? richard: we think rates will be on hold. we do think expect to see some signaling towards a hike in december. what you are seeing if you rewind a month ago, expectations were complacent in terms of markets and the direction of rates. janet yellen will be looking to adjust expectations. you will see some messaging towards a hike in december. anna: we will look out for that.
guy: welcome. you are watching "on the move." we are counting a down to the european open. i am guy johnson alongside caroline hyde. this is what we are watching. curve control. the boj bails out the banks but at least -- believes the market is -- but leaves the market wondering if there is more to come? the possibility of surprise lurks as investors brace for the latest decision from the federal reserve. will you remember the 21st night of september?