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tv   Bloomberg Markets Asia  Bloomberg  February 5, 2017 8:00pm-11:01pm EST

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♪ 9:00 a.m. in singapore, midday in sydney, 8:00 sunday evening in new york sydney. i am rishaad salamat in hong kong. this is "bloomberg markets: asia" ♪ , asian: talking banks lenders lead markets higher on the u.s. push to rollback regulation. promising hundreds of millions in savings. a year of negative rates, japanese lenders may have donald
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trump to thank for it. under 30 minutes before we get underway in hong kong. singapore, taipei, and kuala lumpur coming online. david, good day to you. david: good day. it is a good start to the trading week. pushinga-pacific towards 142. .5%. , 18 month high for asian stocks, three markets opening up. taiwan also at an 18 month high. let's let the boards and look across assets, an indication of what we are watching. the dollar on a slide, the longest streak of declines going back to 2010. the aussie dollar, some
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weakness, ubs with a note saying when you look across the , that shouldpace keep the aussie and kiwi dollar "constructive." that feeds through the inflation story. is there something more than the base effect we are looking at? gold, back to levels in november. oil pushing towards $54 a barrel. , lot of movers in japan today most down to the earnings story. a lot of earnings coming through. when i look at my list back-and-forth here, 80 companies do later on. we will talk about this later. in the meantime, reaction, laos up 6.7%, missing estimates.
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down the most in three years, down to earnings missing estimates. mitsubishi ufj had a forecast for kikkoman, demand for soy estimates,issing sluggish domestic sales. shares are reacting. good for the diet, less sodium perhaps. quickly, yahoo japan, there we go. the upside, earnings beating estimates for its fiscal quarter. story,earnings the big toyota comes up post market later on. rishaad: let's get more as we head to sydney and joined haidi lun for first word news headlines. china urging the u.s. to
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onp making wrong comments" the disputed islands in the south china sea, coming after the u.s. secretary of defense said the u.s. would help defend two islands and the east china sea that japan controls, but china claims as its own. the comments were made after meeting with prime minister shinzo of a. --shinzo abe. policy makers calling for quality and efficiency in the farming sector. state media saying the communist party central committee has published a document focusing on agricultural reform and sustainable development. and wed stabilize rice production, and increase corn acreage. he will netanyahu says push for united international response to iran's ballistic missile tests. the promised her is due to meet
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theresa may on monday, days ahead of his white house visit. benjamin netanyahu told his cabinet that the emphasis would be on assembling a partnership against iran's aggression, also set to discuss trade and technology ties between the u.k. and israel. up after boosting profit forecast for the second time this year. at oneup by over 4% point. the company sees operating profit at $7 billion, and increased 21%, thanks to the weaker yen. trump has slammed japan's currency moves and called trade between the tubing countries unfair, while hoping prime minister abe will settle the issue when he meets the president this week. we not only have production, but also development facilities 70% ofu.s., about vehicles sold in america made there. i hope mr. trump will realize
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there has been some misunderstanding about how much we already contribute in the u.s. haidi: global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: now president donald trump has been blasted by both republican and democratic lawmakers over his latest comments about vladimir putin. ramy inocencio has the details. ramy: extraordinary what he said. about the topic of moral equivalency between the u.s. and russia, equivocating that actions around the world for the u.s. of the same as russia. >> we have a lot of killers. what, you think our country is so innocent? you think our country is so innocent? ramy: that was an excerpt from a fox interview airing today as the super bowl is happening.
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while that is playing out, this is playing out in the u.s. and around the world, what he really means by that. a lot of people in congress, especially republicans, are weighing in. mitch mcconnell saying that there is no moral equivalency between the u.s. and russia, and said he would not have characterized that. senator rubio of florida went so far as to tweet this out, saying "when has a democratic political activist been poisoned by the gop." he was harking back to 2004, when a ukrainian president was poison. also, liz cheney, the daughter that it isney, said deeply troubling and wrong to have this moral equivalence between mr. putin and what the u.s. is doing, but one person has been supporting mr. trump, and that is the vice president
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himself, mike pence. let's listen to what he had to say. >> look at, president trump throughout his life, his campaign, and this administration has never hesitated to be critical of government policies by the united states in the past, but there was no moral equivalency. ramy: on government policy, in russia, this, that, mr. trump saying these inflammatory remarks. today saying the u.s. has its eyes on russia, and on friday, the u.s. ambassador to the united nations nikki haley saying sanctions in place because of crimea will not be lifted, so mixed messaging on behalf of u.s.-russia relations. rishaad: now, we also have the trump white house losing that bid to reinstate its travel ban from sevenants
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majority muslim nations. what happened? a member, a are citizen, of one of those seven majority muslim nations, ostensibly you will be allowed to come to the united states. happened earlier today on sunday when a federal appeals court in san francisco, which is a liberal-leaning court, more arguments would be needed to be filed by monday. that follows the suspension of the executive order from the dhs orderstate department over the weekend. court to this argument by the white house is whether mr. trump has the executive authority to control national security. mike pence weighing into this conversation, saying it is clear the president actually does have itess to this when h
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comes to national security, and he is confident they will win the argument. feinstein's going so far to say she expected this will head to the supreme court. now, it's not just executive power tested, but the will of democrats and supporters of that 2010 dodd frank act. he has ordered a review of that, donald trump has, but where are we going with this? friday, hening on signed this executive order at the white house surrounded by several business leaders, and basically it is the start of the cutting or gutting of the dodd frank act from 2010. basically mr. trump is saying to have a lot of it cut out, and the reason is because businesses can't get money to borrow and grow profits. interestingly, take a look at the bloomberg.
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at g #btv 558 nine, that is when the dodd frank act was enacted. look at that growth. 75% growth in loan origination, and that is with the dodd frank act in effect. in fact, lending is at a 70 year high, so it is interesting that mr. trump is saying one thing, but the numbers are saying another thing. happy to see the trump bomb, but main street, a lot of people and democrats pushing back, saying that is not the case. rishaad: thank you. ramy inocencio there. now key safety systems emerging bidder --takata 's lead bidder as it tries to move on from the scandal surrounding its faulty product.
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never heard of it before. rosalind: it is number four airbag maker in the world. key safety systems has a 4% share, revenue of 1.6 billion, but it is owned by a chinese company that bought it last year for $920 million. it operates independently, and it has been beating negotiations with takata. it was the company recommended by an external panel driving takata, although takata says no final decision has been made. remainscheck, takata on-traded, and a bloomberg headline saying it will drop by limit when it does trade. bylers outnumbered buyers two-to-one. rishaad: what about the
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restructuring? has been sophie: making all the right noises, although the options are still there. takata said no decision has been this couldo not deny happen. it says it does not envision this happening because it would disrupt supply, and that is one of the parts that takata is trying to protect, trying to move on from the scandal. if you look at the three-month is in very move popular with investors. you can see that shares drop sharply in january on reports of bidders leaning towards a restructuring. see it did affect takata in january. takata says key customers have a say and whether it will file
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bankruptcy protection. rishaad: thank you very much indeed. come, -- that is later in the show. we will be looking at that and more. ♪
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rishaad: a quick look at the latest business flash headlines. latest electronics the foreign company to sign up to president trump's american manufacturing drive. homell start producing appliances in south carolina with a new plan set to make 2 million refrigerators and washing machines each year. last week, trump thanked the company on twitter. where else? that after revealing it is building a new factory in the united states. yamaha down the most since 2013 after disappointing earnings,
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eps $.47 against $.62, sales down 8%. yamaha raised its full-year target by more than 2% to 373 million dollars. the stock is down 15% in 2017. tiffany has abruptly replaced the ceo as it launches a new campaign with its first ever super bowl ad. he had run tiffany since april coming as tiffany suffers a slump under his watch, and christmas sales tumbling. at nab, shares on the way up. the bank reporting on all to did cash profit for the first
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quarter of $1.2 billion. paul allen is in sydney, and this was broadly in line with the market, wasn't it? paul: it was. expected, onewas .6 billion australian, $1.2 billion, down 1% on year. the market seems to be trading bad debt around charges, down 23%. a higher number had been expected. the net interest margin was stable, but expenses were up 5%, mainly due to regulatory costs and staff costs, because every now and then the staff does expect a pay rise. , two moreight australian banks announcing results. the same sort of thing, i guess we have to wait and see? to wait andl have
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see, but you can make broad predictions that the other major three are strained banks face a similar environment that nab does, the regulatory environment tougher, costs increasing, lending growth has slowed, so commonwealth bank out on february 15. a trading update two days later. the ceo said funding costs remain elevated, competition remains intense. it would not be surprising if we saw a variation of those words from the other two ceo's reporting next week. rishaad: thank you very much. paul allen there for us in sydney. saying european elections are one of the key risks on his radar them about what else? details on the way. ♪
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rishaad: this is "bloomberg
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markets: asia" i am rishaad salamat. one key focus will be central banks setting monetary policy. let's bring in a chief investment officer at deutsche bank wealth management in singapore. that is just one of the risks, but that does not seem to change or view as to what happens with the dollar. >> no, not really. we really think the u.s. economy has on the right track. it is not only because of resident trump's potential policy, but we also think the u.s. consumer should strengthen quite a bit this year, so hence we are expecting the u.s. economy to grow substantially, so hence inflation expectation should also be on the rise, and we expect the fed to hike to-three times this year, so this should be positive for the
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u.s. dollar. rishaad: and, tell us something about how the central banks actually look at the moment. financial a global system where you have perhaps the united states and the u.k. looking like they will be tightening monetary policy, but europeans and the japanese do the reverse. how do central banks that we mentioned look at that? >> you are absolutely right. one of our key themes for this , a multidimensional diversions, so not only monetary the u.s. fed is clearly in a tightening mood, the bank of japan, but also european central banks are still in easing. think they might will cut interest rate one more time this year, so all of this should lead to further diversions, but on the other
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side, we are seeing fiscal diversions. in the u.s., we expect because of president trump come a maybe a big fiscal stimulus program. in other regions like europe, because of the fiscal deficit, it may be difficult to increase fiscal spending, so here we are also seeing diversions as well. rishaad: right, you mentioned what you expect from the boj, on hold,urse remaining and looking at their monetary policy and what they are doing elsewhere in terms of qfii, but the point being that is not good news for the economy, not showing any signs of stopping that, so it means the economy will be sputtering, so why are you optimistic on japanese equities? are two reasons why we are more optimistic on japanese equities. the first one is the expectation of the stronger u.s. dollar, hence expecting the yen to be
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weaker. we expect the yen to trade around 120 towards year end, so this will be supportive for japanese export companies, and on the other hand, we are also seeing the japanese equities trading at an attractive valuation. p/e ratios are well below their , something weage can't say about u.s. equity markets, but these are the two main reasons why we are quite positive fun to japanese equity markets. movead: right, well, let's to u.s. equities, favorable as well, so that would seem to say you are buying into the reflation trade in the u.s., but we have had scant information on it. >> that's true. are expecting it only because president trump's potential policy for the u.s.
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economy should recover, but also expecting the u.s. consumer to be quite strong this year, so hence this should favor u.s. equities in general. we have seen the earnings thevery already started in second half of last year, so it continues quite strongly. ins year, we are expecting the low double digit areas , the fourthwth quarter earnings release. we have seen this direction in the past few weeks, so hence we are positive on u.s. equities, and sectors we like, technology. we think this is one of the key themes not only this year, but also for the coming years as well. rishaad: thank you very much indeed for joining us. what do we have out there at the moment?
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concerns about south korea surrounding the decision to deploy a u.s. missile shield, and how that may be provoking in the future economic retaliation from china. more on that, plus the market open in hong kong. ♪
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rishaad: what, just about a minute to go before things get underway in hong kong and shanghai. shenzhen entering into the mix, but what themes? weakening the fix, i given recent dollar weakness as well. that is what we have in place from the pboc, which also said it did not confront reverse repos they want to do at that particular time of the day. elsewhere, retail sales all straight weaker than anticipated. regionalave six
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central banks deciding on the india, srirowing, lanka, australia, new zealand, and the philippines, all deciding in the next four trading days, but it is about that open. let's have a look at premarket showing an upside move for the hang seng. the open should be right upon us. there we have it, slight for the hang.5% seng. shanghai moving higher, .1% after a dismal first week of their of february. that's what we have. let's get more on what else is going on out there, heading over far as is going on as the markets go, broader context, no reverse repos in china today. david is in singapore with an update. .avid: right a lot is happening in the last 15 minutes. let me paint the broader
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picture. we still see gains, but off the highs for indices. .5%, a lot comes down to the dollar continuing to weaken, some yen strength capping gains. 142 .63, an 18 month high for the regional benchmark. taiwan, also 18 month highs. australia, banks keeping that market afloat. , there we go, have a look at hong kong, .4% better, shanghai composite there. the big story across china, what is this about? a weaker fixing, fairly straightforward. it'sve the pboc skipping
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open market operations today. we will see if there is reaction there. drop in the money markets, the seven-day repo theing sharply, lessening need for the pboc to inject cash. i will get you more details in a moment. cny, still at sea an quite a spread between cnh and the onshore spot rate. on to currencies, the dollar is on a six-week slide. sharp moves in the tie one dollar, the south korean won. why am i singling goes to bring out? the bloomberg,n asia's best to performing currencies this year. we may likely see these two thetries come in and reduce
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need to intervene in the markets , certainly the incentives are lined up in a way that you don't want to stand out as far as that is concerned, so still seeing gains across those two currencies, quite sharply. it is screaming at you in terms of bright green. socgen saying when you look at the gains and how potentially these economies can be affected once trade barriers are brought up, it might be time to be more careful if you want to add long positions on currencies. the aussie dollar, ubs likes it by the way, dollar-yen pushing towards 112.30. wep the boards, some shares are following, japan, and update, there we go. toyota .3%, an update on what we might see later today. , toy yoda is in
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talks with suzuki. the board will meet later today. is in talks with suzuki. the board will meet later today. seeta, if you want to shares go down the toilet again, poised to fall by its daily limit. we will look at that stock when tokyo closes up. that is a stock said to be in the lead, key systems, likely to offer for takata. rishaad: thanks, david. first word news headlines from haidi lun. travelpresident trump's ban remains suspended after a u.s. appeals court declined to grant a repeal. it gave the doj and till to
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submit further arguments. donald trump's case will hinge on whether the executive branch alone has the on matters of national security. the head of president trump's national economic council gary cohn has taken aim at dodd-frank , saying it stops banks from lending. theman sachs join conversation over deregulation as the administration waits to see its new secretary. willrump administration attack all aspects of dodd-frank as it works towards jobs growth. >> we want to get the banks working again. we want banks to be back in the lending business. what we think dodd-frank has done is that it has stopped banks from lending to small and medium-sized businesses, and stopped banks from lending to entrepreneurs. haidi: i ran carried out further missile test saturday, a day after the u.s. impose new sanctions on individuals and companies. a commander of the revolutionary
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a range of missiles were successfully testfired during drills and the north. targeted, companies based in taiwan, the uae, lebanon, and china. the philippine president has canceled peace talks with malice rebels after three soldiers were ambushed and killed last week in the country south. he told troops to prepare for a long struggle as a lasting peace with the maoists may not come during his term. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: right, south korea, fears china may be stepping up economic retaliation over plans to deploy a u.s. initial shield, the impact felt in high toilets
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to cosmetics. give us the details here. korea increasingly concerned that exports are being targeted by china. the south korean finance minister said in an indirect and unfair manner over what they see as punishment for the decision to go ahead with washington to deploy this missile defense system that china sees as a threat. it is aimed at north korea, but beijing sees it as a threat, and china takes in 25% of south korean exports. they are now feeling the pressure from china, optical fiber, collector of vehicle batteries, travel, tourism. is this also a case of china exploiting the political crisis in south korea? clearly the political
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rumblings and south korea present something of an opportunity for china to drive home its message, according to experts who say that what china this is doing is, look, the economic pain that will be felt if you go ahead with the decision to deploy this missile shield. they may be betting on the opposition winning power later this year, and hoping they may scrap this decision. thatconomic pressure point china has been applying have yet to be true, so look for that in the months ahead. wildly popular, 8 million chinese tourists went to korea in 2016, but it is expected to continue when we saw james mattis reiterating his determination to deploy this missile defense shield with south korea later this year. you veryright, thank much indeed. that is tom mackenzie there for us in beijing. ok, the boj's introduction of
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negative interest rates, one year old that policy, japan's biggest banks managed to beat estimates when it comes to third-quarter earnings. ont do the results tell us how these lenders and how they could deal with all this? certainly if the progress they are making towards going prettygets, well. all three banks are ahead of targets. mitsubishi ufj, 93% towards its full-year target. admittedly, targets are down come about 5% given the banks taking a conservative stance and negative interest rate environment. all three are still ahead of their three quarters mark, so we could be seeing some significant outperformance in terms of profit targets this year. what went well? items,ere some one-off four aanagement's, these
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subsidiary. , up quarter on quarter from year earlier. that was because credit costs remain low, and the volatility and markets has given them an opportunity in bond and security trading, a theme throughout all three. negative rates themselves, well, not all good, but still a lot of uncertainty about what the banks will face going forward, but certainly brighter than it was 12 months ago. quickly, a team to study the impact of donald trump's policies, what is behind this? >> that's right. they have assigned six analysts what donaldto study trump is doing and what that means for japanese companies. mexico, there are a huge number of japanese companies operating
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there, all big carmakers have factories there. suppliers and parts manufacturing's, thousands of companies operating in mexico, so if trump gets what he wants and revises nafta and starts to put tariffs on cars made in mexico, that could be disastrous for japanese companies. looking to support customers operating down there and provide them with up-to-date intelligence on what is going on and what they can expect to see. internallyued today, , doingt client request bespoke research as well on a case-by-case basis. rishaad: thank you very much indeed for that. the big question for u.s. markets this week's momentum, and this is after friday's close above that 20,000 mark, helped that vastly
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stronger-than-expected jobs report. let's look at that with su keenan. let's start off with this upcoming market reports. su: the trump bump for financials, will that continue? let's go into the bloomberg, the talk of dodd-frank sent financial sector rallying higher. a 2008 response to the financial crisis, and lifting restrictions clearly will allow profits to soar for financials, a concern on main street, but not wall street. elsewhere, reports coming, consumer sentiment widely watched, expected to weaken in january, trade deficit expected to stay the same, and president trump expected to make more noise and headlines in washington, expected to meet with shinzo abe later in the week, among other developments. rishaad: also hitting the peak of earnings season, give us the
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big names this week. , twitter is up front, a story of slowing growth. can they sustain our political higher? the stakes are higher. stock little changed, expectation is 740 million dollars in revenue, the weakest since they went public, adjusted profit below where they were a year earlier. disney, a similar story of a potentially weak fiscal first-quarter due to tough year-over-year comparisons. the parks hurt by a hurricane, and even though they did well with star wars, tough year-over-year comparisons. bp, focus on energy companies, because their downstream weakness could hurt them, and with opec cuts, there is a view that even though the short-term weakness is there, investors
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will look to the long-term outlook, which is positive. you.ad: thank su keenan there. up next, we are asking ubs wealth management whether the dollar rally has come to an end. this is bloomberg. ♪
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rishaad: this just in, the for january, 52.2 a composite, reiterating that. part of that is down to the manufacturing pmi, also weaker. essentially less strong than the number we had from the official gauge. 53.1.es pmi, it was 53.4 and december, so in easing off their on those two pmi's. let's get more on what is going on out there. dominic schnider from ubs wealth
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management. good morning. where does dollar go? are we at an inflection point? your argument is we have -- perspective, we are not at an inflection point. we do think the dollar will weaken from here. rishaad: why? >> $ strengthened to trunk euphoria. that is one factor. still looking at two rate hikes. -- the dollar strengthened due to trump euphoria. that is one factor. still looking at two rate hikes. look at the pmi's across the world, that is something. rishaad: even europe is looking better. >> some of the indices, they are territory,tive
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and accelerating. plus, that is an important factor to mention. you know, it's a question i have been asking over the years. you ask somebody, does this asset class, the stock, this currency, is it fair value? it is an impossible question to answer, isn't it? some metrics, and some purchasing parity can give you some value. to 120, 120 54 euro -dollar. the euro is super cheap, and what happens if the ecb tapers? that lesson generous monetary policy will support it. rishaad: a lot of dollar strength we saw was down to the thought of reflation taking place, the prospect of it, but we don't know anything as to
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what this fiscal stimulus will be in the u.s. economy. when we get flesh on the bones of that, that may well help the dollar. >> it is important what kind of fiscal support we get. if it is 25 basis points additional growth, that will be disappointment. if you give me something like 0.5 up to a full percent, that is a different story. on the other side, who says what donald trump is doing will be inflationary? who says growth is kicking in at the same time? what happens if trump's policies are more reflationary than growth supported? that will be damaging for the currency at well. at the end of the day, the u.s. runs a current account deficit, and i think -- rishaad: what does it mean for currencies in this part of the world? thepeso, the rupee, and
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rupiah? >> we will get local left in industrial activity. exports have been lackluster, so that needs to change. some of the leading indicators have some value, some relevance, that kind of acceleration should help us to see some currency strength, and we already see the ones that are heavily exposed to global trade doing extremely well this year, so everything related to export will do quite well in 2017. rishaad: gold the big winner? >> with rates negative, absolutely. i think you should belong gold. right, great having you to the program. dominic schnider there could let's look at what we have, donald trump is ramping up his deregulation agenda. we hear from the man who is spearheading the push against the dodd-frank. that is on the way. ♪
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ishaad: deregulation emerging as a key focus of the presidency of donald trump. this as the new administration sets its sights on overhauling dodd-frank. sachs gary cohn tells bloomberg that the administration can get a lot done with or without congressional support. >> we can do quite a bit of what we need to do. obviously, we will work with congress. i met this morning with committee members to talk about what we can do at the house. the house wants to be very active and helpful with us as financial service regulation. we will engage the house, the senate. they are equally interested in reforming regulatory processes as well. we can do quite a bit without them, but the more help we get from congress, the better we
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will be in making this jobs creation vehicle more effective. not just financial services, regulation in every industry group. automobile manufacturers were talking about the epa and other regulators. manufactures were talking about different regulatory groups in manufacturing, so we will need help from the house and senate, and give them help from the white house as well. >> there is a wide panoply of regulations. you know dodd-frank as well as anybody in the country given your experience at goldman sachs. what are the specific areas you think need to be changed? big issue.ok at the the overarching issue is we want to fix, we want to get the banks working again. we want banks to be back in the lending business. what we think dodd-frank has
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done is that it has stopped banks from lending to small and medium-size businesses. it has stopped banks from lending to entrepreneurs. we know the day job creators in this country are entrepreneurs and small and medium-sized businesses. banks have been forced to order to capital and have not been allowed to lend money. we need to get them back into the lending business. that is our number one priority, getting capital flows back into businesses. >> does that suggest changing the volcker rule is not that important to you? needsry place a banking to hold capital, and they need to retain capital, prohibits them from lending, so we will attack all aspects of dodd-frank. lcker rule, the u.s. has
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a competitive advantage and we want to preserve a competitive advantage, so we will be looking at the volcker rule as well, but we're trying to free capital and regulatory costs. all the banks have been hugely burdened by in norma's quickly costs. rishaad: that was the director of the economic council gary westin.aking to david a quick check on the trading day just far, the first session of the week, there we have it. showing an advance of .2%. the shanghai market flat. the nikkei to 25 shrugging off yen25 shrugging off strength. we do have a bearish tone, just that that 19,000 level. tokyo, shanghai come in hong
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kong. up next, takata to the downside as a chinese rival emerges is believed bitter. details on the way. ♪
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rishaad: it is almost 10:00 a.m. in singapore, 1:00 p.m. in sydney, 9:00 p.m. on the eastern seaboard of the united states i am rishaad salama. i am rishaad salamat from bloomberg headquarters in hong kong. this is "bloomberg markets: asia" ♪ banks leading stocks higher, rally on plans to roll back regulation. a leading bidder emerges for the troubled airbag maker. netflix and twitter joint legal action against donald trump's theel ban, praising
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contributions of immigrants. live across this part of the world, taking you to sydney to tokyo. let's begin with things in singapore with david and glass giving us the pulse of the markets. we are still looking at gains, volumes are decent. i do want to and for size is we are well off highs of the day when you look at the benchmarks. most of that drag coming from japan. yen bobbing between 112-113, so that is pushing the nikkei lower. it is still a decent day, every single market on the way up, 18 month high, adding 600 billion u.s. dollars since the start of the year, a very good time for
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equity investors here. a look at howe some of these markets in southeast asia have been faring, a bit tricky when you look at southeast asia. first, a lot of outflows into dollar assets, now reversing itself it we will talk more about the dollar at the moment. have a look at the philippines, .7%, there we go. way, indonesia reporting gdp numbers today, fourth quarter, looking for 5% growth. all right, flipped the boards, currencies, dollar index back to the levels a day after the elections, november 10-11. dollar can see, a lot of asian crosses in the red. i talked about dollar-yen. the south korean won, and the
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taiwan dollar -- i would watch the taiwan dollar closely. the dollar is essentially at its most oversold level against this currency going back to, let me stretch my chart, going back to 2012.ly september of so that is asia's best-performing currency. technical, watch the chart closely. very quickly, commodity prices, dollar dropping, i lift when it comes to contracts. 1226, aere we go, decent good when it comes to energy prices. oil back to levels last seen july 2015. tohaad: david, nice one
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write, we take you from singapore to sydney as we join haidi lun for the first word headlines. president trump's travel ban remains suspended after a u.s. appeals court declined to immediately grant an administrative appeal, giving the justice department until monday to submit arguments for enforcing the ban on people from seven muslim majority countries. on whether the executive branch alone has authority on matters of national security. the head of president trump's national economic council gary cohn takes aim at dodd-frank. the former number two has joined the conversation over deregulation that the administration waits to see its new treasury secretary. gary cohn says the trump administration will attack all aspects of dodd-frank as it works towards jobs growth. >> we want to get the banks working again. we want thanks to be back in the lending business.
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what we think dodd-frank has done is that it has stopped banks from vending to small and medium-sized businesses. it has stopped banks from lending to entrepreneurs. furtherran carried out missile tests on saturday after the u.s. impose new sanctions on individuals and companies. a commander of the revolutionary guard told state media that a range of land to land missiles were successfully test fire the country's north. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: we are looking at takata shares. were set to plunge by the day the limit at one point. the japaneseor, airbag maker looking for a buyer.
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it is starting to move on from that scandal. rosalind chin has been on the story. rosalind: it's been going on for a long time. sellers outnumbering bidders. day ifopen later in the the two come together, but essentially that news has been greeted, key safety systems the company put forward i an executive panel leading this takata restructuring. takata saying no decision has been made yet. this is just a company the committee is putting forward. key safety systems has 4% of global market share and revenue of $1.6 billion, and it is owned by a company that
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bought it last year. it does operate independently, itst is conducting negotiations directly and has to take a 30%n stake. -- bain capital to take a 30% stake. it will become the number two airbag maker if it goes ahead and get more access to japanese automakers, which is key. rishaad: one thing they won't be after is takata technology, but joking aside, we saw in december how the stock price went on an absolute flyer down to a court led restructuring. we still have that in the offing, haven't we? rosalind: that is correct. takata said it made no decision on the court-led restructuring. it does not envision this happening. supply ofd a study
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parts is key for its future. we saw shares drop in january after news came out about this after it increased in december, based on reports it was going to pay this $1 billion settlement in the u.s. it dropped again on this court led restructuring talk. key customersying have a saying in the sale process and whether it will file for bankruptcy protection at all. donald trump's immigration order, legal challenges, intensifying as well, aren't they? thank you very much indeed. indeed, looking at this because atflix, twitter made file
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brief setting out their opposition to that immigration ban. what are these tech companies hoping to achieve by this move? yes, they are planning to file this brief with the ninth circuit court of appeals, voicing their disagreement with trump's immigration ban. this is the tech industry stepping up opposition to trump's moves on immigration. they pride themselves on integrating immigrants into the founderscompanies have and cofounders from overseas, many of them are the children of immigrants, and so they have escalated their disagreement with trump over these immigration issues. another groupwas of technology companies planning to publish this open letter ban, so they are taking a step further now. rishaad: what exactly are they
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objecting to? to a banre objecting on immigrants from these seven predominantly muslim countries and refugees, but it is more symbolic than that. they don't like the idea that they will be closing the doors to immigrants because it partly fx employees, but it is a symbolic gesture that the u.s. may not be as welcoming to these immigrants who have contracted so much, particularly to the technology industry. , do you know,ss where does this debate go from here? the appeals court is going to hear the difference of opinion. the trump administration has appealed this judge in , opposing thete trump move on this, so the appeals court will be the next place this is heard. the trump administration is pushing for a quick resolution,
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and they will probably get it relatively soon. rishaad: thank you very much indeed for that. , mongolians taking to the treats to protest against pollution choking the city and turning away foreign investors. a report later this hour. still ahead, the health of the are strain banking industry. the big four lenders out with results. ♪
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rishaad: a quick check of business flash headlines. shares rising after the company boosted profit forecast for the second time this year, operating profit $7 billion, increasing 21% thanks to the weakening of the yen, trump slamming japan's currency moves, calling trade between the two countries unfair. will hopes that shinzo abe
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settle the issue when he meets with the president this week. we not only have production, but also development facilities in the u.s., about 70% of our vehicles sold in america are made there. i hope mr. trump will realize there has been some misunderstanding about how much we already contribute in the u.s. samsung electronics appears to be the last foreign company to sign up to president trump american manufacturing drive. it will start producing home appliances in south carolina with a new plant set to make 2 million refrigerators and washing machines every year. last week, trump thanked the south korean company on twitter after it revealed it was considering building a new factory in the united states. twitter has abruptly replaced this ceo as it launches a new campaign with its first ever super bowl ad. theshakeup follows
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departure of the top designer three weeks ago. tiffany suffering a slump and weak christmas sales, which sent the stock tumbling. he will be replaced by the chairman and former ceo. i look at shares in nab on the way up after reporting on audited cash profit for the first quarter of $1.2 billion. let's get to sydney for the details. much in linety with market expectations, wasn't it? very much so. no huge surprise from the headline number from nab. 1% oning profit was down year, quarterly revenue was up but offset by a rise in expenses come up 5% in the quarter, mainly due to increased regulatory costs and increase
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wages burden, so you might ask where is this 1% gain coming from? debtsswer would be bad down 23 percent, so bigger than expected reduction there, one hundred 64 million australian dollars for the quarter. have otherus we australian thanks announcing results this month. more of the same? paul: i would expect so. season for earnings in australia, commonwealth bank on wednesday, anz trading update on friday, the same sort of challenges. the regulatory environment is tougher, bending growth slower, profits more difficult for the big four banks. we have the national austrian bank ceo noting that funding , thes remain elevated competition remains intense, so one would assume rishaad:
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competitors are dealing with the same sorts of challenges. thanks rishaad: the pound could face fresh challenges this week, prime minister theresa may getting set to formally start brexit negotiations, and debates over legislation. anna edwards and test the details. onthey u.k. brexit bill is its way through the u.k. parliamentary process. we will be looking for clues as to whether the prime minister's self-imposed deadline is still relevant, whether it stands, and to what extent her hands will be tied in crafting the type of brexit she wants to see. the bill will move through stages this week. last week, it got its initial vote to the house of commons. that will be followed this week by a committee stage, in piece -- seeing in piece -- him
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please\ again one voted wednesday evening. the bill will travel to the unelected upper chamber, or house of lords, which can make changes to the bill or delay the bill. that happens in february great it is unlikely the government will be defeated in any of these votes, as neither they want to be seen is standing in the way of the will of the people, but depending on the how many admin mints are agreed in committee, we could see more rebellious numbers of lawmakers breaking ranks in the next vote that takes place this week. the parliamentary process looks like it will not block brexit them up at the government might have to make concessions in terms of the type or hardness of brexit it wants, and indeed around the timing. up, presidentg trump's defense secretary takes a measured approach to the south china sea issue per we have details on the way. ♪
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now, president donald trump's top man took a measured tone towards china compared with rex tillerson. we are looking at the defense secretary trip to south korea and japan. jonathan mathes, what is he saying? >> mad dog was more measured. senatelerson during his confirmation hearing, he is the secretary of state, he was more hawkish, insinuating perhaps military action to prevent china from accessing the south china as it continues to militarize that area, which china claims 80% of the south china sea. then you have the defense secretary james mattis offering
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a more diplomatic solution to the problem. here is what mattis had to say in tokyo. what we have to do is exhaust all diplomatic efforts to resolve this properly. our military stand should be one that reinforces our diplomats, and he added that at this time, we do not see any need for dramatic military moves at all. he also did say that china's actions in the south china sea heart ache regional threat, so he did add a bit of a caffe out there. it is the first trip abroad for one of, trump's cabinet members, and he did go to key allies in this part of the world, south korea and tokyo, to perhaps assuage their fears that the united states is altering its protection umbrella in this region. rishaad: what has been the response out of beijing? >> you could probably say pretty predictable. again, they brought out a similar line that they have used in the past, calling the u.s.-japan alliance a result of
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the cold war. this is what the spokesperson at the foreign ministry said, reaffirming the claim that the thends -- keep in mind that japanese had minister those islands, and james mattis happened to say that as long as japan administers those islands, it falls under the u.s.-japan defense treaty. we urgeesperson said, the u.s. to take a responsible attitude, stop making wrong comments on the sovereignty of the islands, to avoid further complication of related issues and bringing regional instability. being said, james mattis and china of shredding the trust of its neighbors, so he did have a few barbs towards china saying the freedom of navigation remains absolute and all nations should play by the rules. rishaad: there was this sense
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that it wouldtpp be domestically focus. >> you could tell from rex tillerson's comments and senate confirmation hearings saying appear that does not necessarily mean military presence in the region. rishaad: economic interest are vital to maintaining defense. you look at donald trump's position on trade, he wants aqs-first approach to that, so how do you have a u.s.-first approach and still engage in free trade in this region, right? that is the dilemma he faces on the economic front, so this meeting in tokyo and south korea was purely on defense related including north korea, which he said the u.s. would have an overwhelming military response if pyongyang
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were to deploy nuclear weapons. we have that ballistic missile which could be launched at some stage, so things being watch closely in pyongyang. >> absolutely. that is one thing we have been hearing from south korean defense officials, that they are about to test the latest capable ofof icbm being nuclear rise. rishaad: capable of hitting the u.s. thank you for that. china may beearing stepping up economic retaliation his decision to deploy a missile defense shield. tom mackenzie has been looking into this what is going on here exactly? what do we know? growing concern in seoul, korea amongst policymakers and business leaders that china is punishing
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korea for its decision to go ahead with washington with this u.s. missile defense shield that they say is aimed at protecting south korea from north korean missiles. china of course has long said they see this as a threat to them. from theave heard south korean finance minister saying he thinks china may be using indirect unfair methods to pressure korean exports in particular, and china takes in about 25% of south korean exports, so it is significant. toilets,s, high-tech fibers, anti-subsidy taxes ramped up on those, electric vehicles that use batteries produced by the likes of samsung and lg have seen subsidies cut. travel, carriers between south korea and china, made more difficult for them to add
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capacity. also, tourism, another area being impacted. many perceive these as retaliatory measures against south korea for its alignment with washington on this missile defense shield. quickly talks about china exploiting the political crisis and south korea. is this also a case of that? >> there is this theory posited thehina experts that political uncertainty and south korea has provided china with an opportunity to drive home its advantage on this, to show the economic pain it can leverage on issues,rea over those and possibly hoping that whoever takes over from president park mindedat happens may be to scrap the missile system. on pressure we are seeing the economy of south korea is
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yet to be in the official data. most expect the tensions to continue over this issue. ♪ coming up, while two of asia's best performing currencies could be set for big reversals. ♪
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1029 a.m. hong kong, 1:29 p.m. in sydney. has reported age raab and cash earnings as rising costs canceled out a revenue increase. cash profit fell by 1% to one point $2 billion, expenses rose due to increased wages and regulatory costs. the ceo says the operating environment remains challenging. nab shares up by 1.25%. trump's travel ban suspended after a u.s. appeals court declined to immediately grant an administrative appeal and gave the justice department until monday to submit further arguments for enforcing the ban
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on people from seven muslim majority countries. the case will hinge on whether the executive branch alone has authority on matters of national security. "top has urged the u.s. to making wrong comments" on the disputed islands in the south china sea. the criticism came after the u.s. secretary of defense said it would help defend two uninhabited islands that japan controls, but china claims as its own. james mattis made the comments after meeting with shinzo abe. he also said the u.s. would use of the prophetic efforts to resolve the dispute. china's policymakers calling for quality and efficiency in the country farming sector. state media saying that come in his party central committee has published a document focusing on agricultural reform and sustainable development. and want to stabilize rice we production and reduce corn acreage.
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global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. rishaad: right, well, this is bloomberg markets: asia. these two markets could be facing the biggest reversals, let's get over to singapore. and taiwan dollar, why this two, david? bettingarkets have been that the two countries, the two central banks of the countries, would think twice about stepping in and stemming gains. now is not the time you want to standing out in that regard. you might want the risk of may be being labeled a currency manipulator. keep in mind that both
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currencies are on the watch list of the u.s. treasury. that said, analysts are saying that because of this massive move up, we are not really risksg in properly the that the economies could get hit the most come in case these trade barriers go up. jenman sachs and softer saying it's not just the currencies, but the structure of these economies. they will be likely hit the most because of their exposure to trade. biggest target, china, but that said, we all know that when you label someone a currency manipulator, it is more the optics than economics. than more about politics about the economics as well, right? in that regard, what these two are saying, in fact another note , if you are long on these
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currencies, maybe think twice despite the gains we are seeing today. rishaad: the question would then makes south korea and taiwan different from china, which could be the more obvious target? david: south korea and taiwan small economies are they can shut the door if trade barriers,. that being said, again, it comes back to the structure of the economies. output from60% of exports. china, net exports as a , muchtage of outputs smaller. it is negative in fact. in that regard again, goldman saying don't just look at the currency itself, look at the possible impact on the economies themselves in case these trade tensions do take off.
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those two currencies are rallying yet again, so tell me something, where are you then, well, for those two then, calome on? marketsou look at how have been reacting. these two are still gaining the most in asia, so have a look at my bloomberg. 5790, the rsi now at the lowest level, 25, oversold on the dollar. ,he last time that happened that is all to them or fall 2016 -- autumn or fall 2016, so that is a reversal. .ame chart, but dollar-won
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rs i is below 32, so more gains and expect that to drop below that 30 handle, which a lot of people look at as an indication of oversold, at least as far as the base currency is concerned. rishaad: thank you for that. now, year on from the boj introduction of negative interest rates, japan's biggest banks have managed to beat estimates for third-quarter earnings. we are joined now from tokyo to what do these tell us about how these lenders are coping with this? >> if you look at the progress they are making, full-year withts, pretty well negative interest rates. all three are ahead of this point. mitsubishi ufj leading with 93% progress. the targets are conservative, down 5% on average from their
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own results last year, but if you compare that to actual results last year, they are well ahead at this stage. so what has gone well? items. mitsui had again on the securities unit. mitsubishi ufj, ¥35 billion gained their compared to last time around. trading profits, bond and security trading, good with all the volatility in the marketplace. what does that say about negative rates? we still have negative rates in japan, and the likelihood of rates being taken deeper has gone down some what. we also have the trump factor with more volatility in the market. hard to predict what that will mean in the long term, so that has been good, the banks have performed really, really well, wheng back from the levels
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it started come up the future still little bit uncertain. rishaad: tell me something. , devoted tosui study the impact of donald trump policies, a team here. >> that's right. they have put six staff in the new york office. they are researching the regulations, working out what this means for companies. suggestede policies by president trump, renegotiating nafta, would be bad for japanese companies. butonly big manufacturers, second and third tear companies, suppliers supplying big companies exporting vehicles to the united states, so it could
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be quite bad for japanese companies. trying to geti ahead and get research out. position too in a take on individual request from companies and do bespoke research as well, so trying to provide information efficiently and quickly so companies know what to do. rishaad: thank you. now, a possible merger between two of india's mobile providers that could create a new leader in one of the world's most competitive markets. it would also benefit their rivals. airwaysl about selling at the end of the day, isn't it? >> it is. india is divided into 22 circles, and each circles have a regulatory limit on how much a carrier can hold.
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so yes, any deal that would require approval from india's authorities would require the carriers to shed airways and each of those 22 circles where they have reached the limits. rishaad: it all depends on whether airwaves are worth it at the end of the day. >> yeah, so carriers including vodafone and idea have said india's airwaves have been priced to high and previous auctions, but at the same time, given the fact they would need to share airwaves quickly when you're after the merger goes through, they would have to sell them as quickly as possible, and that might mean cheap airwaves for the rivals. naturallyight, this leads to the question that if you are a carrier, you already have band with and airwaves, so why would you need more? in case you don't have,
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because india is growing and taking off in terms of mobile broadband coverage, see you do need more airwaves to cover more people, especially as you expand offerings. rishaad: thank you very much indeed. , delving deeper into how president trump foreign policy plans will play out in asia. ♪
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right, let's have a quick check of the this is flash headlines. japan shares touching upper daily limit in their biggest intraday surge in four years, 14 percent up after third-quarter results ahead of estimates, yahoo japan.
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analysts raising price targets , earnings were the most positive element in the report. said a veryk has had public sorry. the bank put ads in german mistakes said to oft the company in addition $5.4 billion. the ads blame misconduct of a few in close ease. split continues to dominate the north american box office, collecting $14.6 million for comcast universal pictures.
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which debuted in second place. the weekend lacked a big new release. legoweek, the anticipated asman and 50 shades darker they hit the theaters. president donald trump has triggered a legal battle over his immigration ban, rattling diplomatic allies. adjunct associate professor at the university of sydney joining us now. thank you. give us a holistic view as to what donald trump is doing geopolitically speaking. shopsjust sending out across various ballots and shaking the tree a little bit? bows andacross shaking the tree little bit?
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>> it certainly seems donald trump is focused on trade. his campaign, china for him is the biggest a growingwe have situation between trade and security. we are still getting mixed messages. on the one hand, rex tillerson said two weeks ago that he would support a blockade of the islands in the south china sea as plans against china. donald trump said that he would take action to contain china. at the same time, this weekend, general mattis said that he did not see any need for military intervention yet, but it is becoming clear that the term military is being used by all , andlayers in the u.s. that is causing some anxiety within the alliance of the united states and other asian
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countries. rishaad: i want to touch on that in a second, but isn't this indicative of a pivot away from anda when it comes to trade perhaps economic interests, and itthe same time, reinforcing when it comes to the geopolitical military side of things when it comes to china? >> yes, indeed. that as protectionism strong within a trump administration, much more than the obama administration. geopolitics and security, we can see clearly that trump is focused on trade and will use security as a means to succeed in what is not yet a trade war but could develop this way in months to come.
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rishaad: exactly, but the thing are the options available to donald trump in confronting china? i'm talking in a military sense right now. sense, he would have the upper hand. china's military is powerful, but it could not match the force of the united states. it would take some time for the the islandskade should that be the case, and in any case, it would have to do it u.s.terally because the allies would want to engage immediately in such an action, so from a strategy point of view, the u.s. would have a clear advantage, but at the same time, it is very important that , there will be a reaction even though they cannot face the
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might of the u.s. army. ok, we moved to the ande-economic perspective, donald trump buried tpp and is in favor of bilateral trade accords. out of those, japan has to be by far the most, well, most pressing and and most important -- press event how would that be playing out in china? >> it would be seen and a bad way by china. the relationship between china and the u.s. is based on an enormous trade deficit between the two. china would want to keep it that way. to have japan as a key player to compete against china would be seen and a very bad way by is part of the
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crises currently developing. it is not just in the u.s. and china. it is china, japan, the u.s. on one hand, but also the rest of ean countries like the as countries are key players and do not want to be seen as proxies in that potential trade were, if not in the conflict altogether. more settled he is in, how much of this will be shotss bluster out there, across the bow, and how much will change in 1-2 years in your view? next few months will be decisive. it is clear that president donald trump, who is up populist, will act quickly, and we have seen that with mexico, iran, and so on. so whether this situation will be contained in the next few
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months will tell us what is likely to happen later. looking atot really 3-4 years ahead. we are probably looking at six months, and the first test will be what the u.s. administration will decide to do with regards to the islands, especially those in the south china sea, but we also have an issue in the east china sea, because during the weekend, general mattis met with shinzo abe in tokyo and said the u.s. would support japan in this part of the world and is part of the asian pacific, so we are at two different conflicts still connected vis-à-vis china and the united states, so it is a complex situation and we must be very aware that any sudden decisions
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could trigger a reaction from both parties. rishaad: thank you very much indeed. right, coming up, with the economy struggling, pollution looking set to add to woes for mongolia. why the people there are taking to the streets. ♪
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rishaad: mongolia's capital
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isn't just the world's coldest capital. it is also one of the most polluted, and with the economy struggling, many are concerned that it will also turn away outside investors. there is growing frustration. they reinforce the point that small and has reached hazardous levels. black balloons symbolize children dying of pollution. .hildren are dying i want to breathe. they are putting up with increasingly toxic air. >> when a woman was pregnant, they used to wonder whether -- past.s in the
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now parents prayed that their child's heart will even beat. ar pollution is caused by combination of factors, including man-made emissions come a geography, and climate. the city lies in a valley and has grown rapidly within influx from rural areas, setting up their homes on the outskirts. the harsh winters mean that half rely onents living here burning plastic and rubber tires to stay warm and cook food. even the president admits this is killing the city. >> it has become a city not worth investing in. it has become a city with no future. no results can be expected from here. the people who live here are being poisoned. >> businesses have added their voice, expressing fears the bad air will drive away investment. >> one thing we have to do to
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attract investment is to clean air pollution, but a bigger lose theay be to not people we already have. warns of an impending crisis if smog levels are not reduced. that said children under five mb are thein the wo most from apple and the consequences of air pollution can last a lifetime. soon the winter gives away to spring, and the need to burn coal will decrease. it may be reduced, but not forgotten. banks,: well, japanese some of them stand to benefit from the donald trump presidency. that is something shery ahn will be looking at. what else is on the way? financials continue to gain because of global bond yields soaring, also a weaker
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yen, but the trump effect being felt as financial regulations are expected to ease in the u.s. analysts think that will help japanese banks. we will look at key themes lead toswith better. all strained banks facing pressure from slower lending and increased competition. nab profit declining on higher expenses. we will have the details when bloomberg markets asia starts in two. ♪
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shery: it's 11:00 here in hong kong. 2:00 p.m. in sydney. i'm shery ahn. we are the middle of the asian trading day. welcome to bloomberg markets: asia. ♪ shery: banks that lead asian markets higher. financial markets rallying on u.s. plans to roll back regulation. file a and twittered joint legal action against trumps trouble bands. takata shares set to punch by
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the limit. -- plunge by the limit. have philippines, thailand, on sri lanka deciding monetary policy this week. it is all about the market. nothing has happened so far. we are seeing markets in the green mostly. taiwan, new zealand, all gaining grounds on the back of those banks rallying after that rally in the u.s. we're also saying that south korean won gaining at 10 1% and expending those gains we saw. it is been the largest weekly advance since july. that has been a big game for the south korean won. that comes on the back of the dollar just continuing to slip. we saw those u.s. drops report not really showing so much strength for wage growth. we continue to see the dollar index is slipping.
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the bloomberg dollar index capping six straight weeks of decline. more.losses, losing 3% or we're seeing a bit of a softer trading for chinese futures after coming back from the lunar new year holidays. we are also seeing for japan's thirty-year losing ground. that is really incredible to see seenwild trading we have in the jgb market. japan is still not deterring those bears. we will not does we will give you details later in the program. let's head to the first world news. president trump's travel ban remains suspended after a u.s. appeals court declined to immediately grant an administration appeal. he gave the justice department until monday to submit further
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arguments for enforcing the ban on people from seven muslim majority countries. it will hinge on whether or not the executive branch alone has a hand in matters of national security. the former number two at goldman sachs has joined the conversation over deregulation at the administration -- as the administration waits to seat a new treasury secretary. they will attack all aspects of dodd-frank as it works for jobs first. >> we want to get the banks working again very we want banks to be back in the lending business. what we think dodd-frank has done is it has stopped banks from lending. the small and medium-size businesses, it has stopped businesses lending to entrepreneurs. iran carried out further missile tests saturday after new sanctions were imposed on individuals and companies.
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>> a commander of the revolutionary guard said a range of land to land met -- land to land missiles was successfully fired. among those targeted by u.s. sections are companies based in tehran uae and china. i am haidi lun. this is bloomberg. shery: thank you. the legal challenges to president trump's immigration order looks set to intensify. netflix into twitter are now expected to file a brief in the coming hour. our managing editor for technology joins us now. what are these tech companies hoping to achieve? a group of technology companies including twitter, lift, netflix and quite a few others. we are financial and this amicus brief.
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they are intensifying their opposition to the idea that the u.s. is going to put more restrictions. it is conjuring to the country as a whole but also technology industries specifically. there are many immigrants and children's of immigrant who dost children of immigrants who participated in the founding of these countries. us the details of this process. the company originally planned to file the brief later this coming week. tojust heard there trying move this process along, and that that intensified over the weekend. that is right. they were planning on filing to the amicus brief later on this coming week. instead, they decided to step it up as the trump administration appealed to the judge's order to block this man. they have accelerated the effort
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and are collaborating to get the response along a bit more quickly. shery: where does the debate go from here? >> they will be one of the voices in this appellate court hearing for they're going to decide whether to enforce the president's proposed ban on immigrants, or whether they're going to side with the judge in this case, who decided they would block the ban. you will hear more about this in the coming days. shery: peter, thank you so much. oppositionect on the to president trump's policy. peter ahlstrom, our editor for technology joining us from tokyo. all morning we have been getting reaction to president trump's controversial policies and his increasingly difficult relationship with other nations. --versity of melbourne's believes tension with china is a number one concern.
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>> my fear is that it could well , at least some of the hawks in mr. trump's cabinet, there is the view that if we take china -- or if america takes on china right now, militarily, it would be in a strong position. that is probably true. it would be disastrous for the asia-pacific if that kind of military thinking is dominating what the cabinet is moving towards. shery: deutsche bank wells management believes there is putting positive to come out of the president's economic policies, including more growth in the u.s. >> we really think the u.s. economy is on the right track. not only because of president trump's potential policy, but we also think the u.s. consumer shows strength quite a bit this year. we're expecting the economy to grow quite substantially.
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inflation expectations show also to be on the rise. two,pect the fed to hike maybe three more times this year. this should be positive to the u.s. dollar. enthusiasm for the president is waning and the effect will be seen in the dollar. >> we are not at an inflection point. we were somewhat to go. we do think the dollar will weaken throughout 2017. while the main rationale is a lot of strength to two trump before. that is starting to be priced out. second, we're looking at two rate hikes for the u.s. that is probably fully priced in. outside the u.s., the world actually looks much better. that is a big difference in 2017 from 2016. shery: as the latest word on president trump from asia. one year on from that boj
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negative interest rates, japan's biggest banks have managed to be estimates for third quarter earnings. that spring in bloomberg's banking reporter. that negative interest rate was in january of last year. that hit those lenders, but now comes president trump. , it has gonection in a u-turn for these lenders. >> that is very right. especially in terms of share prices back in november. japanese banks have just soared. perhaps that is not anything to do with the original negative interest rates, but it is positive. the last quarter, the three .anks are doing well there are all ahead of the 75% mark. one is 93% toward their you
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goal. there are a little more concerned over the production last year. if we look at the progress from last year's full-year results, they are still 75% of the way there. they should look at the potential for the japanese banks to outperform this time around. , theret recent results are a couple of one-off gains that have boosted. credit costs are nice and low. the volatility in the markets has allowed customers to trade more. they have been strong. , all of these banks and everybody else trying to gauge the impact of president trump's future policies. specialstand there is a study on this. what can you tell us? >> in the new york office, they
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have a signed six analysts, macroeconomists, market people. a sickly full-time studying what trump is doing and the likelihood. basicallyy full -- full-time studying what trump is .oing and the likelihood japanese carmakers, manufacturers, export them out to the united states. tier two and tier three companies for parts and support. if trump does achieve some sort of tariff war adjustment, the that could be disastrous for japanese companies operating in a go. mexico.ting in analysis ofical what impact on the companies will be. shery: i can't wait to see the
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results and their conclusion. thank you so much for joining us, our bloomberg banking news reporter. we are seeing the japanese yen gaining ground, trading at 112 .40 right now. it is looking pretty 40. were up. and topix that's right. just about every single market, if you consider .01% -- .1% to be higher for australia, then yes. we have seen gains the past few weeks or so. the asia-pacific one year chart, we're basically back to levels of june, july of 2015. we are 18 months high. how much have things improved
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from this time last year when basically things bottomed out? trillion. it is the same track -- same chart but we are tracking market cap. we're looking at $2.5 trillion from this time last year. we are roughly at about 11.8 trillion u.s. dollars -- 11.8 million dollars u.s. -- $11.8 trillion u.s. if you get a drop of normalcy, you could consider this a very good peak. let's have a look at the markets , have a look at hong kong and singapore. you mentioned japan. australia as well. what do these markets have in common? have a fairly heavy waiting on these indices. you look across the big for here -- a four in australia, hong kong, singapore, the reason
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we're seeing gains there. seeing isr drop we're deepening still. is about currency space, just about everything will currency up aside from the aussie dollar. the dollar index -- just look at the color. that tells the whole story. shery: thank you. the dollar index in the red below the 100 levels. we will keep an eye on that. , some of asia's best performing currencies could be in for a reversal. we will have the details a little later. next we will stay with currency. can the dollar downtrend run out of steam? this is bloomberg. ♪
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shery: banking shares are
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leading a rally across asia. the prospect of the trump administration rolling back financial regulations. joining us now for more on how this week is likely to play out is the managing director of perry international. thank you for joining us. we are seeing this rally in japanese banks. ofcourse it was because rising to bond yields, also a weaker yen. we are u.s. financial regulations ease on a good help these financials as well. how much upside to these companies have? >> what hasn't been mentioned the fact that boj has been directly helping the japanese banks. the was in relation to negative interest rate environment they had and the fact they needed the money multiplier effect in the japanese economy to increase lending. that has been one benefit for the japanese banks has been the long yieldf the curve there it -- the targeting
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a long the yield curve. it will be coming it also lending that looks a get will be coming up against regulation in the u.s.. jgb, the market there has seen. prospecteing again the of more blg intervention does not seem to actually deter these bears. the jgb market, the ten-year jgb slipping back into that range seen amid friday's wild moves when we had the boj stepping into the cash market. what is happening here? >> you need to go back to the trump comment about deregulation. while trump made the comment at the end of the week, you had ubs come out last week. what is coming on here is you
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have a situation where the bank of japan but less than was the fact that the friday -- that was expected of them friday. the market reacted to that and he saw a jump in the yield, then had the blg come out and took a special fixed purchase which moved the yields. it dropped the yen. we don't want to connect to many dots. there is very much a direct connection between the jgb yields and the assumed impact on the dollar-yen cross as well. shery: what is your call for the dollar right now? it seems evenly divided. there is ally think broad index for the u.s. dollar. your bloomberg and it is far more narrow. all back in the 80 come 85
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level. that was what had a massive appreciation. we get the feeling that thatally until at least weighted currency indexes down until a 100 handle, we will see more depreciation. still bullish on the u.s. for the long-term. shery: what about abandoning for the yuan? they're coming from the lunar new year holidays and have already started to tighten the market. the patent funding, what is that mean for the direction of the markets going forward? how much pressure will that put on equity markets? >> what is being missed here is the growth in profitability and activity of china that is going on in the background. you are seeing a good we wereent, just as
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talking about the u.s. increased environment for growth. same thing is going on in china. this is a driver for markets. haswholesale inflation rate moved into inflationary environment from a deflationary environment. corporate china is seeing real mixed interest rates. . true increase in activity he could be micromanaging this. you could have a situation where corporate china gets to active -- the pboc could be micromanaging this. you could have a situation where corporate china gets to bring active. shery: we do want to talk about trump when we do have our full discussion. he is the managing director at. national trading. at now a quick check headlines. the upperan touch
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limits in the biggest surge in four years. advertising revenue jumped 10% on the year. they have both raise their target prices above ¥600. the earnings were the most positive element in the report. yamaha is down, the most since 2013 after disappointed earnings. it was $.47 a share. --lysts production of $.62 predicted $.62. to $373 million. the stock is down 15% so far this year. samsung electronics appears to be the latest company to sign up to president trump american manufacturing drive. homell start producing appliances in south carolina
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with a new plant that could make 2 million refrigerators and washing machines every year. last week, trump thanked the south korean company on twitter after it was revealed it was considering building a new factory in the u.s. coming up, a front-runner emerges in the race to find a buyer for takata. it is still undecided. we will have the latest. this is bloomberg. ♪
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shery: takata remains untreated this session. airbag makers leave bitter. they have been looking for buyers to help them through a costly restructuring process. rosalind chin has the latest on this. why has this original is a why has this-- company emerged as a
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front-runner? >> they settled on key safety systems as the preferred company to buy. bloomberg sources are saying the for key safety systems was more interested in purchasing parts of takata if takata files for bankruptcy. it is more instant perhaps in buying the company as a whole. key safety systems is the world fourth-largest airbag maker. they had a global market share of just 4% with revenue of $1.6 billion. is owned by a chinese company. they bought key safety last year. they have been involved in the talks with takata and have been
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working with being capital -- bain capital. shery: we have been hearing this could bolster china's auto ambitions because this is a company held by a chinese billionaire. possibility of restructuring? >> this is something takata has said it is not envisioning. at this point, takata says it has made no decision. it is making noise, but it is still leaving it open to possibly happening. takata says this would disrupt the supply of parts. for takata, this is a priority going forward. move issee that any pretty unpopular. reports coming out that this might happen, and you see the shares dropped short -- dropped sharply there. they say the key customers have a say.
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shery: think you so much. takata expected to raise -- rise by the limit as they start trading. the morning session in japan.
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♪ it is 11:29 a.m. in hong kong and manila. i am shery ahn. philippine police stop antidrug operations. officers are being order to focus on other crimes such as murder, robbery, and rate. police have carried out contract killings as part of the war on drugs, accusations say. u.s. tos urged the "stop making wrong comments on the sovereignty of the disputed islands in the east china sea."
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the criticism came after u.s. secretary of defense said the u.s. would defend two uninhabited islands in the east china sea that japan controls, but china claims as its own. the commentsmade after meeting japanese prime minister shinzo abe. the u.s. would use diplomatic efforts to resolve the dispute. policy makers calling for quality and efficiency in the farming sector. the communisty party's central committee has published a document focusing on andcultural reform sustainable development. they want to state allies week rice and reduce corn acreage and reduce pollution. global news 24 hours a day powered by more than 2600 journalists and analysts in more than 120 countries. this is bloomberg. shery: the msci regional benchmark index gaining .5%,
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most markets in the region in the green. david english is here to break that down for us. david: you know what they say, when in doubt, go all out. feel the love, i guess. all of that seemingly not ideal in the world, risk on. midday, session highs for the benchmark. have a look at the major ones. australia, banks, gold-mining stocks leading the index higher, keeping that index of float rather. about thistalking all morning, rising yields, rising interest rates, net interest margins that is, mitsubishi ufj, bank of china hong kong, westpac in sydney, all seeing substantial gains. for aishi profit growth
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third quarter, and the boj shoulder yields on the , almost a direct correlation between the steepening in the curve and those margins that the market perceives that japanese banks may benefit from. commodity prices, the dollar continues to weaken. monday morning, also i left for gold and oil. oil at an 18 month high. december 2017, $56 $.34 on the long end for wti. korean wonsouth extending the biggest weekly advance since july, the dollar index continues to lose ground. you are saying the taiwan dollar and the won could be candidates
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for sharp reversals. why is that? david: there is a great story on the bloomberg, the website. at a fundamental perspective, two of asia's best currencies, the emerging markets measure from j.p. morgan and the dollar index as well. you look at how much these currencies have gained on bets that the market was essentially expecting not a lot of intervention from central banks given the fact you don't want to stand out in that regard, given the political environment. that said, we got a bit extreme, and when you look at what goldman sachs is saying, don't just look at the currencies, look at the potential impact on the economies. small open economies like south korea and taiwan, where trade goes, that's where you look at the impact. asia has nots,
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quite discounted or priced in the potential downside for this ratcheting up if you will of trade barriers, so that is something to watch, a reversal, if you will. that's said, you look at the charts, have a look at the won against the dollar, poised for the best week. whatever it is, 32, some very close to entering what people oversoldsider as dollar against the won. you do have to factor in president trump's policies, don't you? othery are saying all the currencies are undervalued, i mean that could get factored in. thank you so much for that insight. let's head over to australia, national are strained
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bank trading like this after on audited cash profit for the first quarter, $1.2 billion. we are talk about shares gaining 1.25%. for more, paul allen in sydney. this is broadly in line with market expectations though? that's right. pretty much what the market was expecting come although cash profit was down 1% on year. , not aike earnings light full set of results. $164s where down 23% to million, much better than the market was expecting, so that's why shares are trading as well as they are today. inenses have risen for nab the quarter, up 5%, mainly due to regulatory costs and staff wage pressures as well. the banks most of
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facing downward pressure, now two more australian banks announcing results, what can we expect? ceo said funding costs remain elevated, competition intense, the sort of issues that competitors will be we will hearl, so from commonwealth bank wednesday ar the first half, anz trading update two days after that, and yes, they face the same challenges, increased regulation, profit more difficult, loan growth pulling back as well, so it would not be a huge surprise to see similar sorts of rhetoric coming from those two. shery: thank you so much. between two ofer india's mobile providers could create a new leader and one of the world's most competitive markets. ideal between vodafone and
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cellular would also benefit the rivals. telecoms reporter joins us now from mumbai to explain. this has all to do with selling airwaves. yes, indian rules are clear about market share, as well as spectrum. india is divided into 22 circles, and in each circle, there are limits on how much a company can hold in terms of spectrum. if vodafone and idea do merge, give away have to get some of those airwaves. shery: what are they worth? >> $890 million, but at the same time, the companies may have to sell them cheap because they want to get rid of them in the one year time limit that indian rules allow before they can
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approve a merger. shery: thank you so much for joining us. challenges mount against his travel ban, president trump has been blasted by republicans and democratic lawmakers for his latest comments about vladimir putin. ramy inocencio has the details from new york. ramy: with the donald trump's latest words on russia, it is a question of moral equivalency. is u.s. action in the world morally quick meant to russian action? many people would saymany peoplt least hope not, but mr. trump says yes. >> we have a lot of killers. do you think our country is so innocent? ramy: that was an excerpt from a fox news interview airing sunday. the reaction was passionate pushback. mitch mcconnell said the u.s. is not the same as russia. senator marco rubio florida tweeted "when has a democratic
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political activist been poisoned by the gop?" to therkens back poisoning of the ukrainian president in 2004. vice president mike pence did come to the aid of mr. trump, take a listen. >> look, president trump through out his life, his campaign, and his administration has never hesitated to be critical of government policies by the united states in the past, but there was no moral equivalency. ramy: no moral equivalency from yet fromo word donald trump. the white house losses bid to reinstate that travel ban after the u.s. ninth circuit court of appeals based in san francisco told washington and minnesota, as well as the white house itself, to file more arguments by monday. at the core of the white house argument, does the executive branch have a loan authority on
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national security. by's president pence said yes, saying it is quite clear and we will win this argument. the whitend that house must sway a liberal appeals court in san francisco, and dianne feinstein said "there is no doubt this will go to the supreme court." but wait, there's more. investors over the weekend digested the signing of executive actions on friday that starts to strip away it financial regulations. foras blamed dodd-frank keeping loan origination down, but loans have risen 75% since dodd-frank was enacted, and ending is at a 70 year high. the s&p financial sector got a trump bump friday on the news. up, trumpht, coming takes aim at tokyo, saying the yen is too weak.
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we look at what it means portions obvious meeting with the u.s. president later in the week. this is bloomberg. ♪
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shery: this is "bloomberg markets: asia" i am shery ahn. honda shares rising after it boosted profit forecast for the second time this fiscal year. it sees operating profit at $7 billion, an increase of 21%, thanks largely to a weakening yen. trump has slammed japan's currency moves and called trade between the tubing countries unfair, but honda hopes prime minister shinzo abe will settle the issue this week. a chinese veteran dealmaker one step closer to buying a warehouse owner. he has won the backing of google logistics properties in his bid
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to buy the company. it would be the biggest buyout deal and asia. madetors are said to have nonbinding bids. glp shares jumped to a 20 month high. deutsche bank said a public sorry for what it calls serious bankrs that cause the billions. it printed ads in german newspapers over the weekend and said cases dating back years cost the company reputation and trust in addition to $5.4 billion. the ads blamed the misconduct of a few employees. welcome back. to talk about the yen. we had a finance minister in
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japan saying one of the goals of the government was to weaken the yen. has toancial ministry rectify that statement, but it is clear to everybody who is watching the boj and abenomics that it is about a weaker yen. you have donald trump trying to weaken the dollar, who will win? they have been flogging that horse for a long time. one aspect is that i'll the nymex really hasn't worked. one thing that has come out of this meeting between shinzo abe and president trump is there in the u.s., investment into infrastructure, and you have to think to shinzo hobbyt what is trying to do with abenomics as well.
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this morning, we did have some real wage growth. >> labor cash earnings -- >> going back to the whole aspect is based the comparative advantage. you see trump during verbal intervention. at some point in time, if he corporate capital expenditures to increase as well as wages and employment, he needs some sort of comparative advantage, so there is a tussle, but the japanese are well ahead of the curve. if you're having people like softbank, panasonic doing more, expansion, it looks like the japanese are getting ahead profitsurve to ensure
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are coming out of the u.s. if these protectionist policies are imposed. rishaad: the war if you will between japan and the u.s., one of the most important deals to make, isn't it? implications, and how does beijing look at that? >> japan is the number one chinaor for the u.s., -- is the number one creditor for the u.s. and beijing has been selling down its holdings. they are talking about the connections, as we mentioned mitsubishi ufj is 20% of morgan stanley, so there is cross-pollination among industries. thatu talked about impossible trinity that beijing faces, and you say they will have to have a one-off depreciation for the renminbi,
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or a semi-free flow. with china, you set a possible trinity come we can't have capital flows and control be currency. -- controlled the currency, so at one point in time they will have to let one side of that triangle go. they have stepped out of the open market operation, but the medium lending in the friday increasing by 10 basis points, they are market managing the monetary policy side, so domestic monetary policy is important to them because you now have an inflationary environment that could get hit with additional activities. >> i'll reporter noted this about the moves this year in the
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the, but if you look at basket of currencies, it has weakened 1.5% in the last seven sessions, so it is a signal to trump, trying to undermine him in a way? sentiment toave the u.s. dollar they have decreased the waiting for the u.s. dollar 25 percent, so even if the trump haveistration are able to further depreciation in the u.s. dollar, in the short-term, we think so, but beijing will continue to be able to have depreciation because they can decrease the waiting of the basket. g of the basket. rishaad: is it time for a new accord? >> history does repeat itself. rishaad: the notion was japan
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was keeping its currency artificially low. henceot of the world was, appreciation of the u.s. dollar, and a 51% depreciation. things have changed a little bit because you have china in the mix, and china has a fixed exchange rate. a trinity of 3-4 countries in this, that's the thing. >> you still have strong linkage between european union-u.s., and japan. has to have a seat at the table if you're going to talk about that. lack then, it was a percent in comparison to u.s. gdp, where us now they are fast getting to the level of being the second largest economy in the world. >> we have about 100 companies
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reporting on the topix this monday. we have earnings season they can fast. will earnings be able to be the driver of markets this year instead of politics? >> you have to remember that japanese equity markets are dysfunctional in relation to underlying fundamentals, but we do think he was see 20,000, and technically the 50 day moving average is holding resistance as it has done since june-july last year, so we think you will see a lot more return on equity coming into japanese markets. so not just a growth in exposure to the u.s., you also see a lot more share buybacks. shinzo abe has tied the national rowing vote to that as they've nationalized the bond market. >> buying equities. >> and the pension fund.
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you will see a lot more carrot and stick for the return on equity ratios to go up. >> thank you so much for that. coming up, we look at why mongolia's pollution problem is making the outlook for its stock market more murky. this is bloomberg. ♪
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shery: longoria's capital is not just the world's coldest capital. during the winter, it is one of the most polluted, and with its economy struggling, many are concerned it is not only affecting people's health but will turn away outside investors. there is growing frustration with the worsening air problems. gas masks reinforce the point.
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black problems symbolize the lungs of children dying from pollution. let's save our children from the smoke, children are dying, and i want to breathe. up with putting increasingly toxic air. when a woman was pregnant, they used to wonder whether the child would have a likeness to its mother or father, but that is in the past. now parents pray that their child's heart will even beat. ar pollution is caused by combination of factors, including height man-made emissions, geography, and climate. the city lies in a valley and has grown rapidly with an influx of migrants from were rural areas setting up their homes on the outskirts. the harsh winters mean that nearly half of the residents living in these districts rely plastic,g raw coal,
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and rubber tires to stay warm and cook food. if in the president admits this is killing the city. inefficientcome an city. it is not worth investing anymore. it is a city with no future and no result can be expected. the people are being poisoned. >> businesses have added their voice, expressing fears that bad air will drive away investment. is tot we have to do clean the air pollution, but the toger question may not be lose the talented people we have in mongolia. impendingwarns of an crisis if smog levels are not reduced. it says children under five and those in the womb are the most vulnerable, and the consequences can last a lifetime. soon, mongolia's freezing winter will give away to spring and the
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need to burn coal, concerns over pollution would decrease, but not forgotten. the new england patriots have pulled off one of america's football's greatest comebacks to win the super bowl. they trailed atlanta by 25 points going into the fourth quarter, but managed to score 31 without reply to claim the trophy in the first super bowl to go into overtime. it is a record fifth championship for tom brady. president trump has already tweeted his congratulations. bloomberg markets: middle east is coming up at the top of the hour. good morning. there are so many elements to story.s off
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that is at the top of the hour. this is bloomberg. ♪
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♪ yousef: president trump who loses the first battle to reinstate his travel ban, but he says they will win the war. callsael's prime minister for a united response to iran's missile tests ahead of the visit to london and washington. u.s. dollarave the testing technical support after six weeks of losses, that's now on the fed hike easing. >>

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