tv First Up With Susan Li Bloomberg December 15, 2013 6:00pm-8:01pm EST
>> a crackdown on collisions. china takes action fixing prices. australia's government is ready to assist the turnaround at client has paired is abenomics losing momentum? economic indicators are due out later. >> coming to you live from asian headquarters. we are counting down to the opening sessions in japan and south korea. take a look at the figures in
japan on friday. about 160g to be up points higher compared to what we saw friday. signs ofr showing strength ahead of the figure that will show business sentiment. the question is whether abenomics is working its magic. business confidence is set to rise for the fourth consecutive quarter. down.break it >> a good morning. very festive. >> thank you. of three points. a fourth consecutive quarter of gains. one is the consumer spending. it is important to get them have a lot of money. that is the april sales tax rise. it is 8% or numeral five
percent. the inflation target is 2%. they're going to see the fourth gains. any row of it is a year at abenomics beginning its course. robust fiscal house spending will help as well. companies have been maintaining their upbeat cap expenditure plans. it will be the most positive outlook since 2007. they confirm the japanese economy is recovering and allow the bank of japan to hang off on stimulus. even more than the fed. a lot of manufacturing. it will go up by two points. april. coming in
>> we are really referring to the programs. when the lbd party is getting officiated. this in the 26. >> the yen has weakened significantly. the last year has seen that for manufacturers benefiting. china lost out in the u.s. to the japanese. the car companies are able to sell more at a cheaper price. that helps. it can be very important. out three points. the non-manufacturers sell sacks of consumer spending set to rise 60 points. capital expenditure is seen going up by 5.5%. >> you will be breaking those in
less than 15 minutes. >> let's go to japan to china. is widening to include tougher laws against the nation's anti-monopoly laws. we're joined from beijing. good morning. walk us through this. the push on the anti- trust fund? >> good morning. this is a part of president xi jinping's crackdown on corruption. if there is one thing all chinese leaders have been afraid of is inflation and rising cost of living expenses leading to an unsettled population. this move is aimed at both of these factors. a violation of antitrust leading to higher prices in the people getting kicked off. china is getting much more expensive. china's top planning body says
supervisegin to pricing in select industries and punish companies that break these antitrust rules. if they're going to enforce it much harder. a high-profiler investigations we have had over the past several months of a number of companies, localnd foreign. most recently we got a note a recent negotiation on qualcomm. recordckdown has seen fines on milk produces such as mead johnson nutrition company if that is the largest seller here in china of baby formula. government finds six dairy companies with $109 million for price-fixing. authorities say they tried to fix minimum resa prices of .heir products
it therefore hurt the consumer here. ndrc said it will improve mechanisms in order to mitigate the rising prices. here is the key. to mitigate the impact of rising towards, this is a move the population here. >> thank you for that. let's give you a sense on how the australian markets are opening up. they're coming out of the gate. .e are seeing downward pressure the australian dollar continuing the losing momentum we have seen this week also by a fit of 1%. when fits of 1%. we have some breaking news emerging from australia.
it is what farmers are considering to sell. like 1.8 four $5 billion. we get details on that. that is the breaking on the corporate front. what haseen marking been happening. if you take a look at the first one hundred days, the government is supporting the national airline. there's also a long expansion of the bhp line. break it down for us. been set by delays. it is about 500 kilometers north -- capital adelaide. they have been struggling with the foreign price of uranium.
it would make it at the largest uranium mine in the world. of 150bott says his max days is support for the government. last week we had the news that the carmaker would be shutting up shop in 2017. >> there's also a suggestion that there might be some government assistance for qantas as well. strugglingnd frequently appear in the same sentence. a show for it -- and foreshadows a loss between two and $50 million.
they have a pretty hefty price wall. version -- virgin are able to hire over. they have some pretty deep pockets. qantas is stacked with a foreign ownership flaw. the government is going to be meeting today. it will have a guarantee. they really want in a national airline to do well even though it is struggling right now. the government is trying to get in a lot of news. tomorrow we are expecting some very bad news from the willnment treasure that announce the midyear economic and fiscal outlook.
the prime minister getting retaliation. >> ahead of that news, we have the australian dollar extending it a consecutive week of structure. thank you for that. let's talk about him and they now. has rejected synnex. it undervalues the company and is not in the best interest of shareholders. senex hasid withdrawn their altar. mario draghi has lost a key ally. they believe they joined the german government. he has been due to say until 2019. .e has been a crucial link
he will become a deputy labor minister in angela merkel's new administration. he was adamant about staying in the job even in a coalition with the spd. let's bring it back here. singapore says it will continue to tighten regulations on foreign workers following last week's street clashes. 400 people were involved. they say overseas labor has contributed to the growth of the economy but has also put a strain on infrastructure. around a third of the workforce is made up. >> we are continuing to heighten our policies. we do recognize some of the destruction. we will do that another week. weor relations are something do not take for granted.
it is led by a winning coach. whoever wins that game moves on to the finals on saturday. it is going to be a very interesting day on the 18th. it is a top decision. does he raise interest rates or curtail inflation? that is the question investors will be asking. does he perhaps keep rates unchanged at seven point 75% to help boost the growth that india is experiencing. economists are expecting no movement. on friday, china hopes it is a third time lucky. they hope to raise $3 billion to shore up the capital. it will be the largest share sale of the year. let's look at the head of economics at macquarrie.
it is so good to see you. what do you expect from the fed? the ballyou would get started? i do not think it is on. i think janet yellen has to take ownership by the fed. there will not be any move until 2014. time of year to be considering such an important shift. this has turned into a liquidity. there is a lot of the expectations. i gained a move now. >> the fundamentals are pointing toward the fact that they should taper.
>> this may well see the precipitation rate fall further. the improvements we have been seeing have been coming with the client and the participation rate. not as strong is as a lot of commentators would have you believe. we are seeing mortgage approvals. they have been a little more fractious as the 10 year bond yields have picked up. we're end of the day, going to be replacing purchases with promises. >> you don't think ben bernanke will be the grinch that stole christmas? the markets are hoping we get some for of guidance. we may not get tapering. he has to give us guidance. no? will get another cut of
the economic projections from the fed and board of governors. this has continued to fall. we will get guidance in that sense. we will get a fresh cut of the economic projections. >> let's bring it back here. tomorrow will be a big day. the rba will reduce those minutes. it will be a deficit of 50 billion australian dollars on the high end. where is the australian economy headed? >> i suspect it will take the australian dollar down a little more. it has been happening as a result of the job earning from the central bank. it is likely this is a clearing by the government.
this is what the impact has on consumer confidence going forward. balance immediately post the election in september. ebb ands started to flow. it is important the government set out where it thinks it want to head going forward. any news on the 18th when the governor is going to speak before the economic house committee? will he give us any hints on where we're headed? what are analysts looking for? thehey're still looking for $.85 level against the u.s. dollar. this is the current fundamentally justifiable fair value rate.
they really have one policy. he is very concerned about what has been happening with monetary conditions in the australian economy. this is to other parts and other demand areas. >> we appreciate your time. richard gibbs, the global head of economics at mcquarrie. withg up, singapore deals the first serious unrest in years. was it a symptom of growing discontent in a city state? our interview with the minister is next. ♪
>> welcome back. singapore is still dealing with it first serious street violence in decades. to our south east asia correspondent, singapore's acting manager said it is not a reflection of foreign worker discontent. have not had a right for a long time. for a long time. it would not be correct to generalize the behavior.
as we know so far that they have brought up. >> are using migrant workers are well protected? many foreign workers have disputes. example, we had about 3700 cases. we dealt with. we have stepped up raising awareness. we will see probably more. we have about 970,000 workers. it will come to about 1.1 million.
. it exploits everyone. it would extrapolate and say that because there are employers. we are contending to the powers. that inealing with other ways. in terms of labor relations, we do not take it for granted. >> before we get to the break, for those watching in the u.s., you may have had a chance to watch peter jackson's hobbit trilogy. it topped the box office on the jv weekend. this excavation took nearly $74
quantities as australia's government says it is ready to help check for indonesia's big things. let's get a pulse of how markets are trading right now. like.s javier a sex looks we have losses off. the australian dollar also losing steam. it is continuing its eighth consecutive stretch of declines. the australian dollar is under pressure from the decline. look at how this is shaping. we are counting down to the opening session into japan and south korea. looks like we'll be pricing up
about 140 points higher than we saw yesterday. those features are down in the session. away from what is happening with the markets. it is timely look at goals. this reached a record last year. many have pulled out. i guess you are looking at all the damage. >> this is pretty much been the worst year for investors since 1981. imagine that. this year will be the first time for drop in prices. let's look at holdings at the 14 biggest exchange rates.
investors have really gotten exposure. >> you do not have to pay for storage. that has fallen more than a hundred times. it is 31% year to date. where has this gone? it has gone into the s&p 500. >> even emerging markets all this. they're not going to have any more. seen a real business impact. we have seen billions of dollars of write-downs. not profitable to dig this up.
cost 1000tes it may 200 u.s. dollars to dig those prices out -- dig the gold out. that is where they are right now. >> you're not making money on it. it will gotions that even lower. >> the question is are we going to see more declines. that is what people are seeing. is the bull market over? >> is it over? is it a structural correction? average 1216 will u.s. dollars. 300re looking at a further from this next year. a lot people have talked about what is the reason. is it the hedge fund?
a little bit of everything. take.is a very unique whether you are a billion-dollar hedge fund or a retail investor. you are really just waiting to see where the price will set her before you get back in. nobody knows where it is going to go. >> if you can take a look at where we are at right now. >> it is a very good investment. >> it has been a good investment. last are not where we were time. >> there we go. >> it is not bad. probably the leading indicator would have to be what the fed is
doing. this is still something that will hold true. >> take a look at the 30 year chart. there's upward momentum. you would have got in. thank you for that. indonesian leaders will likely face a new risk assessment standards as the economy grapples with a fallen currency. let's get more details from our southeast asian correspondent. what will this entail? enough too longer attend if i risk only at the bank level. they will need to include the risk profile. are pretty much looking at more extensive risk
standards. they would be required to pay a levy. have been banks expanding by financing companies. others have started a brokerage business to go beyond commercial banking. with aia is grappling weakening currency. that prompted a tightening of monetary policy. the country is seen as being vulnerable to fed tapering. the bankingys sector has an appropriate buffers to handle all of that. indonesian banks are the most profitable among the world 20 biggest economies. >> that is a fast snap to know. if you look at the overall
economy, they have talked about deepening the capital market. any changes expected in the coming year? does look like indonesia wants to attract more ipos. this should help encourage more midsize indonesian companies. product development is a top priority. indonesia implemented rules just last year to limit m&a. a 40% cap on institutions buying this. this got hit by the new ruling. it is set to buy a deal that will cost $6.5 billion. we know it is not to be. >> thank you for that.
holdings plansnt to raise as much as 300 $68 million in an initial public offering. the stock is scheduled to start trading on wednesday the 18th. fromig driver will come the federal reserve. the fomc will release a statement wrapping up the two- day meeting in washington. 34% of economists expect them to announce the tapering of this bond program. following, they will release a summary of u.s. economic projections and ben bernanke will hold what could be his last news conference as fed chairman. the general electric ceo briefed investors at the outlook meeting where he will expand -- explain plans to expand industrial businesses. wednesday, earnings reports from mills, fed ex, general
nike. it will be a different story for blackberry on friday. aalysts expect them to report third-quarter loss of $.42 per share as sales continue to plunge. following the earnings release, he will provide an update on the strategy and organizational structure after high-level exits last month. we will have more right here on bloomberg television. >> we are moments away from japan's latest data. she is a japan economist at hsbc. thank you so much. anyhis is coming out minute. the expectation is with the large manufacturers. it will be at the highest level since 2007. what do you think?
>> has this contributed to the success of abenomics? >> it has helped weaken the yen. is in the stimulus third quarter. it is an environment where exports are still turning weekly because of the global demand. >> what is the worst-case scenario in terms of what the economy is going to have to face? >> it is relatively smooth sailing. the only real significant risk factor is another slowdown in the overseas economy. the question is what happens after. that is a bigger risk. the big risk here is that the tax hike will create a sharp and
prolonged slowdown in consumption. >> what about the effect of the sales tax on the corporate angle. what is the head? >> it will focus on the household sector. they have also put about 1% of gdp. most is going to corporate. >> this is a big week for all the central banks. if you look at the doj, any easing? >> i think it will be a boring nondecision. it will confirm their baseline view. that is the big task.
>> what will be the impact on the real economy? a sharp slowdown will slow down the pace of the improvement in the cpi. they will focus on wage hikes. will come together and negotiate. i think the doj would be to -- the be o.j. we need to see an increase to feel comfortable core cpir baseline will continue to improve. >> how would you rate how abenomics has been? it has been one year since they have been in office. they took office on the 16th. >> he gets very low marks for the third aero. in terms of getting off the very
strong par, he has done a good job. the most important part is he has reintroduced political stability to japan. made it very difficult for government to support the economy. i think this is a positive change. >> stick around. we're going to get those figures in just two minutes time. after that you'll give us some analysis on what that means. you been speaking to the economist at hsbc. she will give us more on what we can expect right after this short break. we will have that to you live. stay with us. ♪
the 17 forecast. the main one is a forecast of 15. the actions are 16. it is really quite encouraging. the last quarter was 12. this is very encouraging. this is unchanged at the moment. it will give a sometimes to digest these figures. very good boost on abenomics. >> it looks like ms. data. let's look at the japanese open. take a look at the latest indication of futures in singapore. we will open up at higher levels. than levels are a lot less a 160 boost that the chicago futures were indicating. pulling backutures just a tad. call it a flat session. get reaction to that breaking data. she is a japan economist at hsbc.
it looks like we're pretty encouraging news on the large manufacturing figure. stronger than expected. it is in line with our expectations. economy is turning around oversees a little bit. that has been a confidence boost. >> what was the surprise? >> if there's anything disappointing it is the figure. it looks like it was revised down 4.6 year on year. previous was 5.1. they were expecting an improvement. we still do not find any evidence that corporate are starting to get confident about the sustainability. it is wrapping up investment. that means a worry where consumption will weaken. they have to pick up some of the slack. >> when you look at the small figures, they're coming in for nonmanufacturing for the month
of december. what would you say are the they faceallenges compared to the large ones? it is the increase in prices that is coming from higher oil prices due to the weakening yen. small firms typically do not have as much pricing power. when the yen pushes the spot, it hurts their bottom line. >> would you say this is indication or an that they're moderately chugging along? >> it is not really change the picture. this has been a confidence led recovery based on the weakening of the yen. we are seeing signs of that as corporate sentiment but has not really changed this. >> thank you so much for this. she is the japan economist with a positive spin on large manufacturing.
was 5.1%. it we are going to be watching softbank shares. it will open in six minutes time. reported to be considering a $20 billion offer for t-mobile. sprint is studying antitrust concerns like to push ahead with an offer in the very first half of next year. t-mobile shares surging money most in more than a year on wall street on friday. up close to nine percent on the friday session. pepco could seek $19 billion coming this way. people say it is in talks of mitsubishi about new loans. they want to limit the risk of default by tying the borrowing to project income. talks to due to begin resolve lawsuits over the claims of sudden acceleration in the u.s.. resolvedse is not
still may go to trial. they recall more than 10 million vehicles over the issue in 2009 and 2010. two months ago toyota lost its first case over the elated -- a facts. if you use twitter, it is easiest to stay in touch with us. i would love to hear you. i'm active on the twitter sphere. make sure you send me your tweets and questions. we're going tor talk about what is happening to the futures in with gold. it is losing its luster as investors turned away. for more details, we're counting down to the opening session in japan and korea.
>> manufacturing confidence improves on the prime minister's watch. china takes action on fixing prices. one of the most dependable investments of the past decade did not work well this year. what is well for gold. coming to "first up" you live. straight to the market action. this is how the markets are looking like. they a sx 200 has pretty much
given back some of the losses. the australian dollar extending the eighth decline for those weeks. flipping the boards and showing you how japan is shaping up. declined.e a flat session. were thech below futures were indicating. we were at 15,400 levels. showing signs of weakness. over and korea, the cost be -- kospi coming out of the date. we have been watching exactly what has been happening with the figures. we have a nice gain when it comes to what is happening on the actual figure for the manufacturers. we have a mix when it comes to the future. it looks for the leading
pipeline. let's bring in john dawson that has the latest. a big boost indeed. the main figure at 16. there is a four-point difference in the last one which was 12. this is the figure they really look at. the yen has weekend. you see a lot of stimulus again. how could the goods be more competitive against korea and china. is for the fourth consecutive quarter of positive readings. this is the best outlook since september 2007. that is a little bit lower. and you've got the nonmanufturing in the service area.
monday. large corporate go back. a lack of trust right across. for japan we are seeing more or less firing on all different cylinders. shapinge how they are up after this came out for the fourth quarter. this is off by four tens of 1%. you can see that it had it off. mitsubishi heavy off. the smaller data was a little more compelling. that is reason why you're seeing some of these manufacturing.
let's talk about china. they are widening the area to provide tougher laws. correspondent joins us from beijing on what is behind the latest push on this antitrust fund. par for the course of what the new leadership has been all about. that is used in king on corruption. all the eras of chinese leadership have been afraid of inflation and it possibly losing unpopularading to an population. he is saying he will start to this.ise
it comes after a number of high- profile investigations on a number of companies, local and the most.t qualcomm was named in an investigation. is also seeing record fines on a number of the ,ilk producers on me johnson the largest seller of baby formula. it is a sensitive industry following all the melamine crimes about five years ago. they alleged price-fixing in august. they find six of dairy companies for price fixing that was a record amount in china under these anti-monopoly laws that xi jinping is trying to toughen. they're trying to fix minimum resale prices of their products.
up on the summed it overall reason. they're going to improve subsidy mitigates in order to the low income population. a minimum population. >> thank you for that. some other stories making headlines. expandve won backing to this in australia. the administration had discourage large projects. hate -- help bhp. world'smake it the largest uranium mine, boosting copper output and helping a region that is facing the end of carmaking. space, awethe m&a
said it is not in the best interest of shareholders. look at how the shares are trading. we are up a little over 7%. the push to create a goldman sachs of korea is on. they want an investment bank good not to compete globally. how? by encouraging consolidation. it is expected the sale of investment to spark that. it is the biggest takeover and a broker. final bids are due today. they're looking like this in the trading session. ok. let's switch gears and talk about gold.
they're losing faith in the precious metal. >> they're looking at the damage. >> i was wondering when people start to rethink taking the precious out of the precious metals. it was only silver and corn. >> is a confluence of factors. they were there to push it up, whether it was inflation or the crisis. you have holdings of central bank. be, itr the reason may is that gold has been easier to get into. i mentioned etp. are in terms of
-- tons.rm >> debar a look at what is happening with some of the big players. you would think that would carry into some of the etp's which are ruled by some of these non-hedge fund players. >> you can look at it for something to think. by half. cut we're looking for this. they have this complete. if you look at the forecast for next year, 14 survey.
sprint is studying antitrust concerns but could push ahead with an offer in the first half of next year. t-mobile shares were surging by the most in one year. they are in talks with things including mitsubishi for new loans. they want to reduce the risk of default by tying it to borrowing. you can see tokyo electric power is up about 3.5%. they may still go on trial. less than two months ago, they lost the first case over the alleged defects.
the flick of the yen is trading. take a look at how the nikkei 225 is trading. we're seeing a decline for that session, a lot worse than what futures are indicating. is also seeing declines. this is a senior strategist in tokyo. thank you so much for joining us. what do you make of the figures for the large manufacturing it is a bit 16? >> unexpected. this will certainly give some confidence.
looking at the outcome. they are getting to be more confident. this seems to be a little more positive than for the large any fractures. the first time in decades. the majority of the people here in japan is employed by the company. that should be backed up with the consumption over the next year. >> last time we talk to you on bloomberg, you thought the neck a would have between 17,000 and 18,000. they make a two to five has been
up 48%. where are we headed from here -- been up 48%.s where are we headed from here? >> the past round of abenomics has been discounted. we have to see what will happen for the u.s. and japan. this would be fair for japanese stock markets. overcoming for the high is quite high within this calendar year. this is quite possible by the end of the fiscal year. >> if you struck down abenomics in the u.s. recovery, what other factors are guiding the japanese stock market higher? expecting is over
the monetary policy. i started to combine it with the tabling of the qe sites. would give it more direction over the currency site. >> what does this look like over the april increase question is how should they position themselves? >> after we have been probably the companies on the markets will appear. has been debated and debated. the impact is rather limited. it will come out within this quarter. that should be small. leavere going to have to it there. thank you for sharing your insights.
>> let's start things off with the british pound. level this weakest month. it is about a 116 level. expectationsed that they will raise rates sooner. let's bring you back into this. this is based on the forecast. they are expecting the inflows to top $2 billion for the month. about a 10th of the country's population earns their living abroad. let's turn our attention to japan. this was released this morning. this rose to 16 in the fourth quarter. business confidence is at its highest level in japan in six years. let's take a look at the japanese yen. there we go. high as the dollar
yen. this is at 137. this is trading at its weakest against the euro in about a month. those were the stories driving gear markets. >> singapore is still dealing with its first serious street violence in decades. they were revealing some deep- seated issues. then said this is not a real election of this. >> we're looking back as to which will be the last time to write on the scale. i do not think it will be correct to generalize the
behavior of some. what we have found was how they contributed. they are hard-working. much like their forefathers. >> there have been reports that there is more than meets the eye. substandard to workers. are you denying such allegations? is no denying that this is on record. we share the situation. it is improving. it is important not to draw quick completions --
conclusions. there are certain standards to be met. we regularly check them. we are not living in a decrepit shack. there are no particular display -- employment disputes that may have been a contributing factor. >> are you suggesting measures are in place to ensure it will be in the safety? >> many come to see us. year we had about 3700 cases. some are more serious. some less so. that is what we deal with. we have stepped up raising awareness. we will see more. about 970,000 to go. would you then extrapolate that
and say the whole labor seemed is egregious and is exploiting everyone? just as you would not extrapolate from the rises, neither would i suggest that you would extrapolate and say that because there are others. >> how about if you could reassess that? >> we do want to move to a linear approach. with this and other ways. in terms of labor relations, we don't take it for granted. >> all the days top stories on our website is your online source for business and market news. check it out on bloomberg.com.
if you use twitter, it is easiest to stay in touch with us. @miasaini.s break, i take a quick have some news and what is happening on the front in china. their lunar rover has sent back the first texture from the moon. on sunday. separated it began to explore its surroundings. it is the first successful landing on the lunar surface in nearly four decades. it is the latest stage in the ambitious plan to eventually send an astronaut to the moon. stay with us. we will be back in two. ♪
>> welcome to all of our viewers. you are looking at my views of victoria harbour. make sure you have all of your rain gear. they do not leave all of your rain stuff at home like i do. it is going to be a wetland. we are expecting heavy rains, a high at 15 degrees. a 30 a.m. we are an hour away from the opening of trade. you are watching "first up." >> qantas takes off in sydney as australia's government said it
is ready to help. japan strength ens ties. health check for in the nation's big banks. resolutions are on the way. markets trading in the asia pacific. we are seeing declines for the benchmark despite pretty positive sentiment coming from japan's large manufacturers. this benchmark is off about 7/10 of 1%. the sx 200 declining ahead of the rba minutes which will be released tomorrow. they are expecting a trade deficit close to 50 billion australian dollars. the australian government has marked the first 100 days in office by announcing support for the national airline. it is pretty much a delaying the mind.ion of the olympic let's bring in paul allen who joins us from sydney.
let's talk about where we are at. extension olympic dam has been the falling prices. this is set to be something like 33 billion dollars. it would have become the world's largest uranium mine. it has become mired down. they are marking the first 100 days in office. said he wanted everything to make sure this project goes ahead. they could use a big infrastructure project right now. last week we had the news. they're going to department 2017. it deftly will be some good news.
>> there's also some suggestion that the government might step in and assist qantas. that would not be in the form of direct funding. some discussions he cap it might be talking about maybe a day guarantee. qantas is certainly in trouble. it could use some help. stepcularly for competition from virgin which is not there yet. have a veryies all deep pockets and have really been taking the fight to qantas to must agree. marking the first 100 days, the
government has certainly gone to the headlines for a couple of friendly stories. tomorrow we are expecting some pretty horrible news. we are expected to see the between $40re billion and $50 billion. they're trying to hang the blame for the labour government. we will find not just how bad the situation here is in australia. >> it could be really bad. the sx already declining ahead of what could be sad news. at some otherok corporate stories we tracking today. are selling the insurance business to iag for $1.6 million. the retailer is forecasting a profit of $600 million in the second half of 2014. they look to expand the presence
after selling the u.k. business. this may open the door for asian buyers. senate -- cnet is interested. shares will be sold with three dollars 98 cents a piece which is below the middle range. it may sell 30% more. >> i am john dawson. >> let's look at indonesia now. lenders will most likely face new risk assessment standards as a fallen currency. let's not forget this strange growth. good morning to you. what are we expecting here?
walk us through it? assessed used to be only at the bank level. that is no longer enough. re will be more scrutiny. they will help decide a bank's capital adequacy. we are looking at a more extensive risk assessment. on top of that banks are required to pay a levy. expanding byeen quarreling financing companies. asia started a brokerage business to go beyond commercial banking. the quality of the assets will have to be monitored closely. with aia is grappling weakening rupee up. it prompted a tightening of monetary policy. foreign funds have been spoofed.
there is no fear. it has to buffer to handle all of that. there are most profitable among the world's 20 business -- biggest economies. >> that is need. >> there are talks that they can defend the capital markets. are the changes going to happen soon? will they happen next year? like indonesia wants to attract more ipos. they are looking to ease the procedures. it should help encourage more midsize indonesian companies to sell shares. development is a top priority. it cited opportunities in the market as well as real estate investment trust.
rules andimplemented are not here to limit m&a. this is a deal that will cost $6.5 billion. >> thank you so much for that. japan has an anger response to china by calling the defense zone "unjust" and saying it should be lifted. they say beijing is very dissatisfied at the comments, calling them malicious slander. >> this is increasingly severe. we are working on defense.
we are determined to protect the lives and property of the people of japan under any circumstances. >> let's look closer at the prime minister's comments and the reaction from china. it was a pretty frustrating situation. >> why he said over the weekend was basically as we have seen. this is a line that japan has been taking since november the 23rd. the context in which he was speaking. japan hosted the summit, inviting all 10 members of the association of southeast asian nations to celebrate the 40th
anniversary. they took the opportunity to talk about issues at that summit. they raise the issue of china's news earned and whether china is trying to change the status quo by force and how undesirable this would be. they have this angry response from china. >> to spend a long time speaking of his minister did -- plan. what is next on that front? cracks that was a very important item. been talking about this plan to take a more active role.
the results that have been going on have to be improved by the cabinet tomorrow. howave seen them talk about japan can take this a more active role. they also referred to china's behavior over the past few years into the zone in the east china sea. there is the reaction from china this week. hold has been offering to defense ministers with the oz asean region. et is not clear whether alb succeeded in getting what he wanted. >> thank you. thats our bloomberg government reporter from tokyo. still to come, we're going to
>> ime is saying he -- i am mia saini. clamping down on companies. they will begin supervising prices in certain companies and punish companies that break the rules. findovernment found 60 -- 60 producers. this is the nation's bailout program. a $100has relied on billion loan from the eu and international monetary fund since back in two thousand 10. this is all to stave off the
government has raised taxes to rebalance the economy, hitting every major target imposed by predators. abenomics has enjoyed a boost. it shows confidence among the manufacturers in japan. report from the bank of japan shows sentiment climbed more than expected. say it is paying off. >> monetary policy and stimulus has helped weaken the yen. it has given this to porters. -- to supporters. this is help but a floor in an environment whe exports are still trying because of tepid global demand. yen reaction to that data. joining us is the global head at
. good morning to you. if you take a look at that yen rising from a five-year low, where are we headed with the yen? >> i think the path of least resistance is going to be at. it is probably behind us. we are targeting around when 10 or 111 for 2014. theas very evident in latest positioning data published on friday. this is a very crowded traded. think theres to will be another pullback toward the 100 level. of our trades one for next year, we do think there will be another opportunity for lower levels. >> least take a look at what is expected this week?
will taper. what is the impact of that on the u.s. dollar going forward? very ambiguous at the moment. it does look like it is evenly divided. are probably 60 or 70% priced for an initial taper. i think if we get a 10 billion dollar taper announcement, i don't think that has dramatic short-term implications. what will be interesting if there is any tweaking of the forward guidance. you started to see expectations for the first fed tightening. month ago the market was saying no change into late 2015. it will be up by 50 basis points. if the fed tries to push back against that recent rise, even if we do get a taper, the net
result could be the u.s. dollar actually softens rather than strengthens. beket positioning appears to pretty long running into the fomc. onto your expertise, it looks like the rba made a strategic decision to push down the oz even further. where is the australian dollar has it? to come.is more that is one of the currencies we think we would rather be sure -- short than long of. i think the rhetoric has been so successful in seeing the currency lower. it is played with a grain that is particularly negative. an urgent needs
to rebalance the economy through the exchange rate. they are clearly cutting interest rates further for fear of over stimulating the housing market. we were in a little bit of the step up in the rhetoric. not many central bank governors get what they want to when it comes to the currency. that says a lot about sentiment. he is putting -- pushing on the door at the moment. >> does it surprise you that he said a weaker currency is probable at this point? >> i think that is exactly right. rates isnterest probably not going to do that much to the currency. it is going to provide that much released rectally to the trade exposure. manufacturing more broadly has been under the pump as well as
real wages. these are allaid those fellas stand to benefit was something of a time lag. dois not obviously going to anything to directly support those sectors. it is a very strong preference for an exchange rate reduction. heads off to 6.5% next or which we think is the risk. it may still be the case that the rba will still come to the table. >> sure. >> you mentioned the rhetoric. he said a level of $.85 would be closer. is the risk of saying $.85, is that what the markets are already comfortable with? >> no. the market is where the market is at. it is just below 90 in terms of expectations.
we tweaked our number slightly. it would be around 84 by the end of next year. we were saying 86. this is just one measure of valuation which i think the rba uses what is happening with the terms straight. there are other models we can use. -- the australian dollar is undervalued here. seconds, we're short on time, what is the corporate impact? the strength of the australian tolar has forced borders shut down. >> absolutely. that is why a weaker currency has been weaker. a lot of the problems, some of the sectors face these inner
more structural in nature. wages are appreciably higher. it is not just an exchange or a problem. other things need to happen as well. the weaker australian dollar is the easiest. >> thank you so much. you are looking at the global national fx at australia bank sailing against the tide of austerity. it is all aboard after a trip to the paris boat show. stay with us. ♪
indicating that the benchmark will indicate lower. most of the benchmarks are following on this monday. malaysia will open in the next hour. it kicks off the session. major airplane order for this week. let's see how shares react. >> the boat show is one of the longest-running in the world. it draws to a close today. they have been along to see what is on the offer. these are the boats of the boat show. and maybe one of the biggest and oldest boat shows around the dish or it is occupying less space. the demand for luxury boat is shrinking. not everything is getting smaller. more to work comfort
onboard and greater maneuverability, both becoming bigger and bigger. clients are not looking for big cruise. what is on our fair? and is 1600 meters long cost more than $800,000. the sailboat is 18 meters long. the exercise comes in at an extra cost. it is not just what is on the outside that counts. tech is increasingly important. totoday we use ipads navigate. we can see currents and weather reports for the next two hours. there are a lot of things that have come often from competitive sailing. >> with demand for motor boats and yachts growing in asia in the u.s., organizers say the show may be taking up less space but it is still very buoyant.