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tv   Trending Business  Bloomberg  June 19, 2016 9:00pm-11:01pm EDT

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>♪ it is monday, the 20th of june. i am rishaad salamat. this is "trending business" . ♪ rishaad: japan leading the asia-pacific higher. the markets convinced britain will stay in the european union. the pound reflecting that as the latest polls show the remain campaign gaining momentum. oddsmakers see a 30% chance of a brexit now. the rupee expected to come under
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pressure as raghuram rajan heads for the exit. let us know what you think of our top stories. follow me on twitter. greater china markets, shanghai, and hong kong underway in half an hour. our markets reflecting what is going on elsewhere? >> these are our opening levels across taiwan, malaysia, and singapore. it was a move that started on friday as markets continue to to the sudden turning in the tide in favor of the remain vote. best day in two weeks in south korea. best day in one month in sydney. best day in two months for the nikkei 225.
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were looking at gains across the board here. these gains are enough to erase the losses last week, so roughly trading on the benchmark eyes level in a week and a half. main market story, the u.k., the upcoming referendum. we will talk about developing's over the weekend. ,ave a look at pound sterling 146.14. a little bit below the session high at the moment. there we go. it is gaining against every single major. peer. also the element of short covering after being battered and all these positions created. the other market story we are following is brexit. can we have a look at these nondeliverable forwards on the
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rupee. we still don't have a spot rate on the rupee. we will get that quote in about two hours from now. a the moment, traders have way of reducing exposure to the indian currency. markets not liking the news over willeekend that mr. rajan not continue on as the rbi governor. developing story here is well, traders adjust their positions and exposure. rishaad: we are looking at the imminent departure of raghuram rajan, a lot of politics involved in this decision to say the least. yvonne: that's right. he broke the news unconventionally through a letter to employees well before the official announcement. that has raised speculation that
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the government was trying to push him out. mes could be a double when for india this week with brexit and rajan's imminent departure weighing on investors. rupee volatility is the highest since august 2, the second worst performer among asian currencies after the yen. stability the the currency has maintained since rajan took office. stability is the name of the game. in 2013, morgan stanley put the rupee under the fragile five list. to strengthen the currency from that record low. at bypee swings have been half. if you look at the one-month implied volatility in blue here, it has come down significantly and help to push the nations fx
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reserves to an all-time high. down has also brought inflation from 11.5% three years ago. with thees along inflation targeting regime has helped to build india's credibility with investors. help the country over take a slowing china as the world's fastest-growing major economy. the big question is who will replace rajan. some names have been put forward. , ifdhati bhattacharya elected first female governor. urjitarvind subramanian patel, and shaktikanta das. analysts expect capital outflows in till and new successor is announced.
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however, some still see potential long-term for india, higher growth, positive returns, as well as high carry, but monday will be a tough one. detailedwe will have a look at his impending eggs it later on in the program. tweet us your thoughts. japan posting ace of pride deficit in may as exports fell. we have a deficit of ¥40 billion. the deficit, what else stands out when it comes to this report today? think the big story today is the exports to china, which fell 14.9%, a sharp drop in exports of scientific equipment, semiconductor parts. china is japan's biggest trading
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department, and that pays of decline is twice the pace that we saw in the last few months, so the combination of slowing growth in emerging markets as well as a strong yen is taking its toll on japanese exports, and that's one reason why companies are starting to warned that they may see profits fall this year for the first time in five years. now, governor kuroda will be giving a speech later on. do you expect him to say anything new about the economic order after the bank of japan standing pat last week? speaking in front of some of japan's best and brightest, so i expect he will be up heat, try to motivate them, try to find a way to tell a bright story, if possible. it may not he possible. policy ideas and things under consideration, i don't think we will see anything today.
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we are looking ahead to friday, the brexit situation has calmed down a little bit, but we expect if that were to turn the other way and that the u.k. were to pull out of the eu that we would see a lot of central-bank action on friday, a these in terms of special meetings, possible policy moves, so friday is the big day for us in terms of central banks. angie: certainly, thank you very much indeed. to more onit out that story as we head towards that crucial vote in the u.k. on thursday. these oddse watching in the final week of campaigning. bookmakers rate the chances of britain leaving the eu at 30%. the pound to strengthening as campaigning resume following the killing of jo cox. 10 nobel laureate economist writing and an open letters, saying britain is better off in the eu.
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in the meantime, david cameron accuses opponents of trying to deceive people into for voting to leave. exports,ays listen to repeating that most economists have warned that a departure would damage the economy. president putin is considering selling stakes and rosneft 10 hopes of hitting spending targets ahead of the next election. recordones to raise a $11 billion from the sale of almost 20% of rosneft, consider the country's crown jewel asset. russia offers a deal with china and india. the deal would not only cover alsot short falls, but have the benefit of strengthening ties with asia at a time of strained relations with the uris -- the u.s. and europe. no comment from either china or india, but on friday, the indian
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oil minister said a joint deal cannot be ruled out. lg electronics looking for deals to fuel global expansion. the head of the home appliance division said the company may widen its production footprint by increasing investment in vietnam. upalso said setting factories in north america, brazil, and south africa are all options. would probably focus on business to business targets, including component makers as home appliance industry growth is unlikely to see significant growth going forward. ,> we are always open to deals and decisions usually depend on our business strategy and direction. you can divide our businesses into business to business and business to consumer. we have already secured broad business to consumer coverage. now there is a huge variety of business to businesses, and it's hard to start from scratch
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because of research and investment. we will make an acquisition to connect the missing links. said that iny he the premium segment that they see growth of around 10%. indeed forank you that. coming up later on in the show, casting the net wider, the streaming service is hoping to expand its reach in japan. where next for the yen? japan's former finance minister, mr. yen. who better to talk to than eisuke sakakibara? ♪
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.> it is 9:30 a.m. in hong kong these of the stories making headlines around the world. apple facing a new legal hurdle in china, slapped with a patent violation on some iphones in favor of a local rival.
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intellectual property office says the iphone 6 and six plus infringe on patents because of similarities. an appeal, which means phones can remain on the market. no date for the hearing. and ubs advising 's a merger between abu dhabi two largest banks. they will become the largest lender of assets in the middle east. a portfolio combined of $170 billion, the first major banking merger in the uae since 2007. has placed five employees on leave while he conducts an internal investigation. newspaper says the staff worked on the israel desk, focusing on ipos for tech companies. the probe is linked to possible breaches of u.s. tax laws by
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israelis. the bank declined to comment beyond confirming the staff of them placed on leave. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. rishaad: the japanese currency has strengthened 15% this year, so where now for the yen? let's put the question to the man dubbed as mr. yen, eisuke sakakibara. he joins us this morning from tokyo. thank you for joining us. indeed, let's get your overall view with what has been happening with the japanese currency. the japanese currency value reflects the relative positions of the u.s. monetary policy and the japanese monetary policy. u.s. monetary tightening is
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not as strong as anticipated. this slowing down of monetary tightening on the part of the depreciate the u.s. dollar and appreciate the japanese currency. has said in 2013 is now coming to the final phase. the impact of easing of monetary policy is tapering off. that leads to appreciation of the japanese yen as well, so of theth sides because stance of monetary policy, the yen is appreciating gradually. angie: the thing is that whenever we get event risks, we see money going into the yen,
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when the fundamentals are not that strong. we don't have the inflation target or the growth target being achieved, so it seems a bit counterintuitive. well, first of all, the yen is considered by many market anticipates as a safe currency, so when you have turbulence in the world economy, slowing down of the chinese economy, and some problems with regard to europe, , money tends to flow into the yen, and that tends to appreciate the currency. forecasts of japanese growth rate this year was about super .5%, but this of before the postponement the consumption tax increase.
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because the prime minister has postponed the increase in consumption tax until 2019, probably the growth rate this year of the japanese economy will be the average of the forecast right now, 1% is quite likely for 2016. angie: the thing is about this, you have a target of 100 against the dollar by the end of the year. do you think it will reach that level been, or will it happen before? well, i don't know. it is not necessarily the target in any sense, but that is my prediction, ok? today.ow about 104 that appreciation of
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the currency is taking place, so it is quite likely that by the end of the year that the yen will reach 100. took over inda 2013, i think the yen-dollar , so it is heading towards that kind of place at the moment. is there a line in the sand in your view? lines whereprevious we get the bank of japan buying up dollars to support the yen. well, you mean bank of japan when it goes close to 100, is that what you are asking now? rishaad: correct. if it breaks 100, bank of
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japan intervention is possible, but in order to intervene in the markets, you have to get agreement from the united states, and at this level i don't think the u.s. would agree with japan to intervene in the markets. if it breaks 100 and heads thatds 90, it is possible u.s. authorities in japanese authorities agree on the japanese intervention. angie: please stay with us. we will have more right after this break. ♪
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rishaad: you are back with "trending business" and our interview with eisuke sakakibara . thank you for sticking with us.
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let's take some time to talk about the state of the japanese economy. we have talked about the yen. ay is the yen being seen as central point to revive the japanese economy? surely there is so much more that needs to be done, particularly when it comes to fiscal policy, and are we getting any of that done? policy hasnetary been utilized quite extensively , andhe last 2-3 years withinas been views both and without the government that fiscal policy needs to be enacted at this time. it's quite possible that some kind of supplementary budget will be compiled towards the end of the year to stimulate the economy. a has --aad: mr. corrode
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governor kuroda has probably been asking for that, and that's one of the reasons why they have probably not been increasingly --tting the in the system increasing liquidity in the system. if we do not get a supplementary budget, will governor corrode his stay in the job for any length of time? kuroda staying inde the job for any length of time? and bank ofnment japan did not necessarily go together all the time, and the governor knows that. a lot ofere has been debate on whether negative interest rates help or hinder the economy. the bank of japan have
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criticized the policy themselves, saying it will not make any difference, in fact it could make things worse. what is your view? , i tend to agree with governor corrod kuroda. it will eventually have some effects, but as you have just shortit has not in the term had a major impact, but we have to wait. rishaad: how long do we wait for? we have this 2% inflation target, which seems highly it elusive. yeah, 2% inflation target is really difficult to achieve. likeuld achieve something 1%, but as long as 2% is the they could continue to ease monetary policy.
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he is a good friend of mine, but i think he himself does not believe that he could have 2% inflation rate. it is a target, but as long as he canrget is wrong, continue to ease monetary policy. that is his intention i think. rishaad: some commentators have said why have a target in the first place. are almosts that you putting yourself into a corner by having one, so if he was to abandon it, would that be an admission of failure? think it is not unlikely that he will abandon the 2% target sometime in the future. he knows that it is very difficult to achieve it.
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tothinks it is not necessary reach the 2% target. rishaad: we have to leave things there. stepping down, reaction next. ♪
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♪ rishaad: a look at our top stories. on ass returning to risk the chance of britain leaving the european union diminishes. bookmakers putting that chance of brexit at 30%. weaker, this, yen after japanese exports fell more than expected in may. rupee forward, headed for the steepest drop after the decision of raghuram rajan to leave. the currency is the second
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worst performer this year after the yen. insidering stelling sakes india, notchina and only covering budget shortfalls, but strengthening relations with asia. the open upon us. it looks positive in the premarket auctions for hong kong. the open proper for a new trading week. >> we are seeing every single indication of risk appetite pointing to just that. you're looking at the bond space right now, yields on the way up. prices on the
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back of renewed appetite for risk. these measures of volatility in japan edging lower. you had the initial reaction on friday. we are seeing markets continue to adjust to this turning of the tide in favor of the remain vote. equities doing this at the moment. almost every market pointing north. substantial gains across the bigger market like australia. japan best date since april, south korea as well. weaker, oil is pointing to solid gains for the first time in about a week. out for anywatching sort of reaction to get a better how investors are
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viewing this new housing data out of china. were looking a cooling of the housing market. growth slowingce for the first time since october. you're looking at the big three in shanghai. the other big story, china housing data, brexit fears, and of course news out of india. that is fairly clear-cut what markets think about this. what are we looking at here? one month non-deliverable futures. if you look at six months and one year, so it is clear that markets are reacting and reducing long exposure to this. have a look at the futures on .5%, likely25, down
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a fourth of 1% underwater. right, let's get to more on the looming departure of the rbi governor raghuram rajan. ok, what does this mean for india? >> it is quite significant. indiahas good standing on and global policy making stage. stabilizeto inflation, india's economy, build reserves, push through important reforms, and the inflation target vital for a country like india. he's trying to see some
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of the loans that have been given out as well. perhaps raised the hackles of many people. >> that's right. how can you have an economy growing when you have a banking system in bad order. he was pushing through an agenda to clean up those balance sheets. popular,t universally especially on the political side of things where he was getting pressure for being outspoken, because he was not championing the indian growth story. he was saying that if we don't do these reforms, we won't keep growth going. rishaad: he was an appointee of the previous administration. what are the next moves? >> it puts the spotlight back on prime minister modi. isy are looking to see if he delivering on reform. he has been making progress, but
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it is a mixed bag. is a blowure of rajan to india's policy making machine. it will be interesting who is appointed next. it might be difficult to attract indian talent to come back and work, so they may have to reach for the bureaucrats. who prime minister modi chooses and how they go about it will be the critical thing. rishaad: thank you very much. economists to consumers have been weighing in on rajan's departure. politics in play on the speculation of what happen and led to this surprise announcement coming from raghuram rajan. prime minister modi's government was caught off guard because this was before they made any announcement of a new governor or what would happen next, but the finance chief did not do
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much. in light of the criticism we had seen against the governor, particular from one out swor outspoken lawmaker. he has cut rates five times since january 2015. some people are saying give credit where credit is due. saidormer finance minister that this government did not deserve dr. rajan. nevertheless, india is the loser. a frequent guest on our show says the replacement will be the key decision for indian investors. does prime minister modi need adherence or a sound monetary theorist? another from a prominent businessmen said globally acknowledged inflation war year,
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economic guru, independent mind. raghuram rajan leaving is a loss to the nation. his last day is september 4. we will see who his successor will be. rishaad: the malaysian prime minister has strengthened his grip on power. his coalition won a pair of elections with a greater majority. year of turmoil over funding scandals. the former leader is leading a campaign to force najib out. vanke plan to fend off a takeover is in doubt. to secure enough votes from shareholders.
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sources are telling us that vale is selling a minority stake. the world's top iron ore producer joining others and paying down debt through asset sales. raise $10 billion through 2017. last year, they reported their first annual loss in 19 years. the present joint venture isween vale and bhp exploring restructuring after the disaster at the iron ore mine halted output and hurt cash flows. 19 people died when a tailings dam collapsed and covered the area and toxic sludge. sources are saying
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russia is considering selling parts of rosneft to fund budget shortfalls. this could be russia's biggest privatization ever. >> it could be. looking to sell 19.5% of rosneft . considered one of russia's crown jewels in terms of corporate assets. billion inraise $11 the sale, a record for russia. indicated before that it would be interested in partnering with china and india on this in a joint deal. shownand india have interest in the past and privatization arrangements with russia. however, they have not commented on the chances of a joint deal. on friday, india's oil minister said eight joint deal could not be rolled out. they are ready have some cooperation. india's oil and national gas company and china have joint projects.
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china has not commented on this current move. president putin did say they were looking for that weren'ttners "cheapskates." rishaad: that's the point. they are looking to asia now because the relationship with the europeans and americans is not in a good place now. is there any reason why russia is looking for money and this part of the world? -- china arerussia the two of three fastest-growing economies in asia. plan, a tiltegic towards a jet -- towards asia.
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relations with the americans and europeans have not been so good says the military incursion into your crane -- in ukraine. india's economy growing faster than china's now, that is a cutie -- a key area for russia to look at. coming up, morgan stanley says the united states is threatened with a repeat of a recession. it is quite of comparison. we will ask why, up next. ♪
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if you thought that msci was hard to please, china may have a tougher time winning over the compilers of global bond is sees. china has made some progress when it comes to bond markets, but it's nowhere near enough. given that rebuttal from msci last week, credit where credit
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is due. china has taken steps towards greater accessibility, getting rid of quotas for institutional investors. this may not be enough when it comes to china wanting to get its domestic notes into the global bond indices. if you want to bring up the story, go to your terminal. increasingu the volumes in terms of foreign holdings of chinese bond since the end of 2013, up 70%. largely in tandem with the vines we have seen in foreign holdings of chinese equities, but the hurdles to greater access remain. they are the same kind of issues raised by msci last week, accessibility, repatriation, curbs on bringing home products -- products -- profits. they say investors are more
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likely to be driven by the need to know about technicalities. scrapping requirements gets investors excited, but it is the that is ofexit greater concern in times of volatility. billion is at stake according to hsbc, what they put the amount of government debt that china could look to raise thanks to inclusion in the major global bond indices. $30 compares to just billion when it comes to msci res, this of a-sha coming at a time when china could use the funding to attract inflows. about $1 trillion in capital outflows over the past year, and that is the concern that it could pick up now that msci has said no.
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what is the likelihood of bonds being included? barclays said in march that it is monitoring the situation. the catalyst going forward could be the yuan inclusion. chinese government bond yields are 200 basis points above their u.s. treasury counterparts. inflows may be enough to compel global central investors to get into domestic chinese bonds. rishaad: let's get more with what might be moving markets this week. it doesn't get much bigger than what happened on thursday, right? >> right, the focus is on brexit. for asia, it's more what happens to global growth rather than
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something directly impacting asia out of brexit. rishaad: the main mechanism is to the currency markets. >> yes, currency markets and trading linkages. europe is one of the biggest trading partners, so i would say more related to what happens to the global economy. currency markets will have an impact on growth from a real economy perspective. it is the trade aspect we are focused on. rishaad: the other one is what happened over the weekend, india, and ongoing slow burn, rajan does not have to step down and tell -- until september 3. when he leaves office on september 4, what is the likely impact? foreign that impact creditors or foreign investors and what they make of what is going on in the country? two ways to look at it. firstly, everyone is focus on macro stability indicators.
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at this point in time, there is little concern on macro stability management. it will take some time before the new person comes. that is the risk to watch. the fact that the government has rbi on thise it ispolicy framework, now targeting inflation and trying to keep that new monetary policy framework intact. the governmentt is going to put somebody else in relaxedho then takes a view on macro stability management. at this point in time, we are not concerned about this event causing a big problem in the macro outlook. rishaad: this week, the u.s. will be in focus, but as ever, the interest rate debate will rage on until something gets done about the cost of
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borrowing, but i'm interested in this comparison you are making between the late 1930's and present-day america. >> we actually think the most important way to compare the two times is to look at the structural dynamics. just as went of time have the problem of what we describe his 3-d issues, debt, demographic and disinflation. at that time, we had deflation in the numbers. another time when we have a demographics problem, debt problem, so that is the backdrop. there are some remarkable differences as well. response --n's in keynesian response, as opposed
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to a more right wing approach. >> that's what we were debating and the report we wrote. policy done the monetary approach, the easing, but in the last few years, the fiscal policy has been working against the objections of the fiscal policy. -- monetary policy. we need to do that fiscal easing to get that support of private sector back then. private sector will not come forward and lest we fix inflation expectations -- unless we fix inflation expectations. we need that fiscal response now to get the inflation expectations normalize. rishaad: that should be interesting to see whether that happens are not in an election year. this part of the world? , sixe same 3-d problem , the ones without 3-d
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proms are easier to count, india, indonesia, philippines, and malaysia. others have those problems. we need to fix that, but were not seeing any policy actions at this point in time to fix the 3-d problem, so we have a slow burn where growth keeps decreasing. >> the stories making headlines around the world. alright has confirmed his support for donald trump, saying that republican unity is more important heading towards novembers election. he says that as a senior republican that he has responsibility to prevent the democratic win, but will challenge donald trump at the nominee does not stick to conservative principles. rallying and oconomowoc, protesting military presence on the island. they demanded a review of the bilateral security agreement.
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grown after the rape and killing of a local woman in which an american contractor is a suspect. the yuan warning of disaster in falluja as civilians try to escape the fighting. the so-called islamic state militants seized the city two years ago, but the iraq army has now declared it liberated. more than 80,000 people have fled since the operation began last month. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. rishaad: coming up, turning japanese, netflix and global dominance, a boost in japan. ♪
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netflix is expanding its push into japan, producing more original japanese shows
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after a series introduced this month that beat expectations by drawing a global audience. me about the developments here. how is netflix and doing? mentioned, the latest original series made by netflix in japan has received half of its audience from outside japan, taiwan, hong kong , and other audiences watching the program. japan, they have been teaming up with softbank to expand their subscribers. onnterviewed the japan ceo friday, and he says it has been gradually going well and more people are subscribing to their services in japan. we have loads of other
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streaming services, hulu, amazon prime, both in japan as well. isyeah, competition here getting interesting. offers fast, which package delivery, is also attracting subscribers. , now owned by a japanese tv station, is adding a lot of local content, which japanese people who are not interviewing english programs are likely to be watching, so netflix is ,rying to offer more original made-local content to attract japanese viewers. rishaad: great. thank you so much, joining us
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from tokyo. hour, standard chartered's take on the currency atket, which could be most risk if britain decides to leave the european union. you're watching bloomberg. ♪
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is monday, june 20. this is "trending business." ♪ rishaad: we are taking you to tokyo and singapore. asia-pacific stocks on the rise. u.k. willesting the vote to stay in the european union. a tough day with the imminent departure of the rbi governor. exports dropped for an eighth consecutive month.
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russia considers selling part of its corporate crown jewels as vladimir putin tries to meet spending targets i had of the the election -- ahead of next election. follow me on twitter at rishaadtv. let's have a look at what is going on. let's see how foreign exchange markets are behaving themselves. we have sterling, a bit of a recovery taking place. perhaps on a view that we could be seeing the u.k. remaining tied with the eu. >> absolutely. look at the conviction we are seeing. getting back into the positive. the market seems more convinced the polls will hold until thursday. take the gains today with what
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we saw on friday, that is the biggest two-day gain going back to 2009. mathematically, that is what you get percentage-wise. wednesday, we were trading at 141. we are close to 146. he high for the session was 1.4614. that said, you are seeing the pound gain against every single one of its peers. let's have a look at how the pound-sterling is gaining. euro,ve the aussie, pound-yen, 139.66. goldman sachs coming out with a just in casethers,
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britain votes to leave the eu, you might see pound sterling dropped 11%. again, a basket of developed market currencies. "if," but we are just drawing a line of how much volatility is in store as we head closer to the vote. let's not take anything away. fairly good day at the markets. a sea of green across the asia-pacific. back gainsare paring from last week. gold on the back foot, oil on the way up. appetite, one thing to note, the kurodaor of the boj,
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speaking later, at 3:50 hong kong time. we will see what he says on the economy. speaking of central bankers, our other big story, raghuram rajan not continuing on as chief of the bank of india. , obviously nots liking that decision. futures down .6 percent. 8115 on friday. have a look at non-deliverable forwards on the rupee. we are seeing weakness there. 12-month forward. rish, a lot in the forex markets. digest: indeed, as they raghuram rajan's possible
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departure. departure, in september, if he is not persuaded to keep the job. yvonne, what is going on? jan broke the news unconventionally, through a which to rbi employees, has raised speculation the government was trying to push him out. this could be a double whammy for india with brexit and his possible departure. we see rupee volatility. it will also potentially rattled the stability that currency has tookince 2013 when rajan office. at that time was when morgan stanley put it under its fragile five list with the lira.
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he was able to strengthen or stabilize the currency of it. take a look at the divergence when it comes to ruby swings. -- rupee swings. he was able to cut one-month volatility by more than half. that has propelled the nation's reserves to an all-time record high. in terms of inflation, he brought that down big time from a high of 11.5% three years ago to about 5.7%. we are still far from the target of 5%, but these moves have really helped build india's credibility with investors and helped the country overtake a slowing china as the world's major economy. who replaces rajan? arundhats put forward,
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i baracharia, who would be the first female governor. also, the advisor of the finance ministry. others include the deputy governor, one of the key anditects of the policies, the economic affairs secretary of the finance ministry. capital say expect outflows from india until a successor is announced. rajan's last day. others see long-term returns and high carry. today may be tough. rishaad: we will have a more detailed look at the story throughout the program. tweet us your thoughts. include the #trendingbusiness. japan has exports dropping for an eighth straight month.
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we have a deficit of 380 million. bloomberg economy editor joins us now. was there anything that stood out in this report? >> thanks. the export numbers really did stand out. eight straight months of decline for japanese exports. notably, we saw shipments drop in three regions -- to china, the u.s., and the eu. china was almost 68%. there is a lot of weakness in emerging markets, which is the biggest trading partner for japan. that is quite a hit. a lot of the pain was felt by felix, and semi-conductor manufacturers. the rest of the hit does not look good when we see the strength in the yen.
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governor kuroda is making a speech later. i am sure he will be talking about the numbers here. anything lined up yet? >> he will be speaking to a university audience. we can expect broad topics. the economy in general, no doubt. he will mention monetary policy. he is speaking at one of the most prestigious universities in japan. that is his audience. as usual, the press corps will to see what kuroda he says, particularly anything that might have an impact on the currency or looking forward to the brexit vote. perhaps a broad statement. he did say a great deal last week when it was time for the bank of japan's policy meeting. the focus will be anything we might affect the
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currency market, which is what everyone is watching this week. rishaad: we were talking to mr. yen an hour ago. he is exciting intervention at the currency hits 100. what is the general feeling? >> not getting any indication we will get intervention right now. japanese authorities are in "wait and see" mode throughout this week. it is likely to come at the end of the week on friday, asia time , when the brexit vote is through. japan wantsseems coordinated intervention. anything less could be fighting an uphill battle for japan. we will wait and see. rishaad: thanks for that, brett. we turn our attention to events on thursday. britain is going to the polls. it is a decision currently on a knife-edge.
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it is the last week of campaigning before the brexit vote. we are watching these numbers closely. of britain leaving the eu are at 30%. campaigning resumed followed the killing of jo cox. an economic laureate said britain is better off staying in the eu. david cameron accused opponents of trying to deceive voters. he is urging people to listen to experts, repeating his message that most economists warn quitting the eu would damage the u.k. economy. apple is facing another legal hurdle in china, being slapped with a patent violation on iphones. intellectual property office says the iphone 6 and 6 plus infringe on a chinese
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smartphone maker. apple has filed an appeal that has been accepted. the phone can remain on the market. no date has been set for the hearing. it is another sign that officials in china are watching apple closely. china shut down a movie service in april for violating foreign policy. and a little-known accessory maker could use the iphone label for a range of wallets and purses. hispril, carl icahn sold apple holdings because of concerns with the company's relationship with china. lg is looking for deals to seal expansion. the head of the appliance division says the company may widen production footprint by increasing investment in vietnam. they also said setting up factories in brazil and south america were options. lg will probably focus on the
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business to business targets, such as component makers. home appliances, the industry as a whole, growth is likely to see in significant expansion going forward. >> we are always open to deals. decisions usually depend on our business strategy and direction. you can divide our businesses b2b.b2c and coverage anded b2c there is a wide variety of b2bs. it is hard to start from scratch. we will make acquisition to restore missing links. 's rival samsung is trying to capture more of the affluent consumers. there is increasing competition from chinese rivals like h aiyao. malaysia'sboost from
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bute minister victory, which asian currents he is perhaps the most at risk if we have a brexit scenario? that is coming up. ♪ ♪
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>> it is 10:15 in hong kong. these are the stories making headlines. vladimir putin is considering selling a stake in russia's state oil company to china and india to hit spending targets ahead of the election. russia wants to raise $11 billion from the sale. the deal would not only cover budget shortfalls, but also stem during strain relations with the u.s. and europe.
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ubs is said to be advising on a abi'sr between abu dh largest banks. they are in talks become the largest lenders by assets with a combined portfolio worth an estimated $470 billion. it would be the first major merger in the aue since the bank of dubai combined with emirates in 2007. five employees have been placed during an internal investigation for credit suisse. the probe is linked to possible breaches of u.s. tax laws by israelis. the company declined to comment beyond confirming employees have been placed on leave. this is bloomberg news. let's have a look at
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what is going on in the foreign exchanges. sterling on the rise with polls and bookmakers seeing a reduced chance of written leaving the european union -- britain leaving the european union. where are we with this? we cannot be held hostage by every poll that comes out. >> i would say the polls are evenly balanced. there is a bit of a status quo bias. particularly with the quebec referendum, scotland as well. we should not be complacent. get a leave,e did let's just say, how does brexit affect currencies in this part of the world? what are the mechanisms? sterling couldt
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fall 20% against the u.s. dollar. o, around 10%. the big winner would be the yen. orhaad: is that a big win, bad result for japanese authorities? particularly not good for the japanese economy. there are powerful crosscurrents. a lot of it washes out for asian currencies on the whole. the big thing would be risk aversion. it is negative for the european economy. that is about risk appetite. is, up tohe thing thursday and on thursday as well, we will be looking at atement.anced st that will cause volatility.
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is the strategy to stay out at the moment? >> it is tricky. one thing that is stressing is the value of options in asia fell abruptly after the weak report. we are looking for options in the environment. is of the things to realize market conditions, because of the referendum, there is plenty of opportunity towards thursday and friday this week. rishaad: what is your currency du jour? >> in terms of outperformance for the year, we still see value in the rupee. rbin was a fantastic governor. rishaad: absolutely. rupee, which the was declining rapidly before he
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took the helm. >> the forward curve is steep. we see malaysia as a cheap currency because of the exchange rate. vietnam as well. given the healthy export performance. those are the areas we're looking at value. rishaad: in terms of what happens in the asia-pacific, we were talking to mr. yen about an was a lineaying 100 in the sand. does it have to come to that? n will be athe ye natural beneficiary. the we have to be careful about where we expect the bank to intervene. is not yet a particularly strong currency. so, there are certainly
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downsides to the dollar-yen, significant downsides, if we get a brexit vote. rishaad: they have been trying to talk the yen down. is verbal intervention enough? >> i think the market would expect something more substantial. there is a bit of a credibility issue developing as far as central banks are concerned, that reserve as well. the market is less willing to believe rhetoric. rishaad: so what are we talking about? what is swirling around? >> i take the view that, as with tightening,terms of the market is becoming more they arened to what actually doing and what they say they're going to do. the bank of japan intervention would be pure rhetoric. it is probably not going to be enough.
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it will take actions from the central banks to stabilize. rishaad: have to do something, not seem to be doing something? >> exactly. rishaad: let's tell you about what we have coming up with a new challenges facing china. trying to open up what is the world's third-biggest market. trials and tribulations details coming up. ♪
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♪ rishaad: this is "trending business." we have a look at what has been going on with the chinese bond rocket. china may have -- market. china may have a tougher time pleasing compilers of chinese bond indices.
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third-largest bond market in the world. is it enough? >> size is one thing. accessibility is another. getting your money in and out is a problem. if you want to bring up this explainerre is a good of the problems on bloomberg go. china has been moving towards greater accessibility. they made some reforms when it comes to the currency exchange protocols. this may not be enough. china wants to get its domestic notes added to bond indices compiled by the like of jpmorgan . we have seen an increase in volume from 2013 to this year, of about 70% in holders of chinese domestic bonds.
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there are hurdles to , repatriation of funds, curbs on profits, and tax issues. they look over $1.5 trillion worldwide and say bond investors are more likely to be driven by concerns of technicalities yet to be resolved, scrapping all entries of clients gets thestors excited, but it is ability to exit of greatest concern during volatility. we are talking about potentially $150 billion when it comes to if theyc is estimating were to be included in major bond indices. time for the needy chinese government. we have outflows that could be seen to accelerate with the msci
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deferring. next, russia hoping to slice of its corporate count jules. ♪
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♪ appetite returning to asian equities. the regional benchmark climbing for a second day with a weaker yen helping tokyo stocks to jump 2%. in that the highest so-called breads a debate. japan exports dropping in may, undermining hopes of reviving the economy. slumping as exports
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declined 11.3%. was a 10%e estimate drop. imports falling 14%, a deficit equivalent of $389 million. rupee forwards heading for their steepest drop in a month 's noting raghuram rajan to seek an extension. the currency is asia's second-worst performer after the yuan. the former imf chief economist help to strengthen the rupee. , every single major group is in the green right now. >> that is the story. it is a broad-based rally. japan entering its lunch break. on days when japan lead gains across the region, when it does go into the lunch break, that's
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where we see softness filter through. at the moment, 1.5%. 80% to 85% stocks on the regional benchmark on the way out. were still looking at gains of out. you strip japan it's hard to imagine a better start to the week. argue to weak spots, consumer services and health care. notghai is the only market doing well so far. we were looking for initial reaction to the property data, the housing data, which showed a cooling of sorts in the housing market. it is a fairly broad-based tech line for stocks in china,
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consumer services down 1%, basic materials and where we are as far as the property is concerned, real estate down for tens of 1%. big story is brexit, pound sterling consolidating at these levels, 145.81. it has started to come down a little bit. the story across currency markets has been first hour, flat, we, then more weakness coming through. not only the pound. have a look at what is happening on dollar-yuan, a 1164, and malaysia's ringgit. bloomberg strategists coming out with a note, very interesting. if you did have to pick two big upside, or two big
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andrs, it is the ringgit the south korean won. they are showing the highest beta to the msci, the two most sensitive currencies to the regional benchmarks, which is a gauge of risk sentiment. something to watch towards the close. we are seeing some strength filter through both currencies. rishaad: right, let's check on some other stories with china's plan to fend off takeover and its plan to buy assets from shenzhen metro failed to secure enough votes. the plan would have made shenzhen metro vanke's biggest shareholder. sources telling us that vale is
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seeking to sell a stake in its iron ore asset, fetching as much as $7 billion. they are joining glencore and anglo american to pay down debt through asset sales. vale wants to raise $10 billion through 2017. last year it reported the first annual loss in 19 years. reports from tehran say iran has signed an agreement to buy 100 planes from boeing, the deal the first in the country since u.s. sanctions were lifted and follows iran $27 billion agreement to buy planes from airbus. they still need a license from the u.s. treasury, iran saying more details will be revealed once washington gives its approval. ,s steelmaker arrium
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that turnbull coalition will provide money for new machinery and new mines. described it as a no regrets investment that would support more than 2000 mining jobs. sources saying rush is considering selling part of the energy giant rosneft to help fund budget shortfalls made worse by falling oil prices. according to bloomberg sources, officials in moscow expect to raise $11 billion from 19.5% of rosneft. india are the strategic partners they would like to deal with on this matter. they have said they would be interested in buying stakes in rosneft, but no comment on
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whether they would be amenable to a joint deal. india saying a joint deal could not be rolled out. president putin is reported to have been saying in april that they need the money and are looking for a strategic partner that is in a "cheapskate." rishaad: i guess they're having to look at asia simply because they have such bad relations with the u.s. and europe. the economiesso in asia are growing fast, and russia looks at china and india as being two of the three fastest growing economies in asia, so it would make sense. the strategy does focus on china, looking at hosting oil and gas supplies to china, and china being the region's biggest consumer of energy, and also a big financier for rosneft. it has provided more than $100
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billion of preorders and loans to rosneft, which has helped to build it into the oil giant it is now. india,also looking to whose economy is growing faster than china, so it makes sense. rishaad: thanks. let's take a look at what's been going on in malaysia, where the embattled prime minister has enjoyed victory into elections over the weekend, helping him to tighten his grip on power. one with bigger majorities than expected despite turmoil and allegations of corruption. this was widely expected, but the result, it's really quite incredible. the majority and the magnitude of his victories. >> that's right.
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it is significant because it is seen as a litmus test. the first test to see if allegations surrounding najib would diminish his support. it is pretty much in tact. he has not been hurt by the 1mdb scandal. validate his position at the top. rrmers and rule voters -- ural voters are still behind him. he says he is grateful. several factors did help najib secure the win. one, the opposition is divided. in fact, to opposition groups ran for both seats. there was even an independent candidate, making it much easier for the ruling party to win. najib was also visible in the lead up to the polls, his cabinet ministers making daily
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trips, shaking hands, handing otherce and necessities, and that strategy worked. it has been incredible with all the scandal surrounding the governing coalition, the thing is that you would think the opposition would have been able to capitalize on that. they have been losing ground. >> that's right. the opposition could not get its act together. is in disarray. there has been political infighting within the opposition from the start. there are squabbles over leadership, split on policies, clashed on whether or not to implement the islamic penal code. there have been a lot of differences. it does not help that the key opposition leader is behind bars , so needless to say the ruling coalition capitalized on all of surprisingly, some
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political observers say the young voters who would have voted for the opposition just did not cast their vote and did not turn out, so here we are. shored up his hold on power, building support for the next general election by 2018. rishaad: thank you very much indeed. up next, the decision to quit currencyas sent the diving. we have more when "trending business" continues. ♪
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>> it is 10:42 a.m. in hong kong. these other stories making headlines around the world. house speaker paul ryan has confirmed his support for donald trump, saying republican unity is more important. he says that as a senior republican that he has a
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responsibility to prevent a democratic win, but will challenge donald trump if the nominee does not stick to conservative principles. ryan has already rebuke to the tycoon. thousands of people joined a rally in okinawa, protesting military presence on the island. they demanded a review of the bilateral security agreements. anger at perceived crimes by u.s. personnel has grown after the local killing of a local woman in which an american contractor is a suspect. the former marine was arrested last month, but has not been charged. of ad nations is warning humanitarian disaster in falluja as thousands of civilians tried to escape the fighting. so-called islamic state militants seized the city two years ago, but the iraq he army has declared it liberated. the united nations says more than 80,000 people have fled, 10,000 in the past three days.
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northern city of moles o is now the only urban area under a islamic state control. mosul is now the only urban area under islamic state control. powered by over 2400 journalists and 150 bureaus around the world, this is bloomberg news. social media has been awash with comments about raghuram rajan's departure. what hasy critical of been going on in terms of government policy there. >> you talk about policy and politics at play, the government was trying to push rajan, because this was a curveball from the rbi governor. employeesletter to before the government made an announcement. some say this is an unfortunate loss. economists as well as investors are commenting on this. this is in light of the fact that we did see the prime minister and the finance
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minister did not do much to rein ,n the attacks on the governor predicting from an outspoken lawmaker who did criticize rajan , saying he was mentally not indian enough because he was keeping interest rates high. he has cut rates five times in 18 months. this is what the former finance minister speaking out said. sometime ago, this government did not deserve dr. rajan. nevertheless, it india is the loser. losser economist says the extends beyond india, global banking losing one of its best. another user saying that we will miss his courage to go against consensus. great loss for india. september 4 is the governor's last day, and the finance
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minister saying they will announce his successor soon. rishaad: thank you very much indeed. let's get more analysis on this. is, i mean, did he jump or was he pushed? did he jump before he was pushed? >> it is probably the latter. he made it clear that he was open to staying on. sinceprevious governor india's economic liberalization began has gotten an extension of his term. he seems to have expected one himself and left because he was not sing support from the government for that extension. rishaad: absolutely. what do we do next? how badly do you think indy's credibility is going to be affected by this? is it going to lead to a loss of confidence? >> in the short-term it will. it can't help but do so.
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rajan was so hugely respected internationally especially. at a time of great global uncertainty for emerging markets in particular, credibility matters more than anything, and rajan gave india that credibility. skills,nown for his temperament, independence, and autonomy. it will be hard to recover from that in the short term. can one man make such a huge difference in such a huge country as india? >> it's a very good question. the government can and will hopefully find a replacement who is as qualified and respected within india. any single person is not bigger than the institution, but what raghuram rajan brought to the rbi is this international credibility.
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he was well known, well respected all over the world. he brought something bigger than himself to the institution, and also the fact that unlike previous governors that he was willing to speak out on issues that went beyond the central bank, social issues, honest about india's economic numbers, the narrative about india. that will be hard to replace no matter how skilled or polished a bureaucrat you find to replace him. what does the government now need to do in order to rebuild credibility with the investment community? the first thing they need to do is find a replacement that has credibility with the community. there are several people to choose from. it would be better to make the decision sooner rather than later to clear up this uncertainty. the government should immediately be coming out and reiterating its support for the autonomy of the rbi.
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monetary policy committee, a new innovation that needs to be set up with three members of the government. it will be important for those members to be widely respected and have credibility as well. beyond that in the bigger picture, the government needs to rejuvenate its own reform efforts. there has been a bit of a slowdown. in a recent interview, prime minister modi talked about not intending to engage in any sort .f big picture reforms i think that's a mistake. i think that something the government needs to look at again, and they need to convince investors that india is still a place worth putting their money into. rishaad: great stuff. the chinese economy, new home prices rose in fewer cities last month. cities inmbing and 60
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may compared to 65 in april. prices slowing, local governments introducing restrictions, including shanghai and shenzhen, where prices have been surging. bookmakers raising the chance witheaving the eu at 30% sterling climbing is campaigning resumed after the murder of the mp jo cox. leaders from both sides of the debate visited talk shows, while analysts say britain should stay. leave, we cane to leave, but let's be clear that if we do leave, that's it. we are walking out the door. we are quitting. we are giving up on this organization, which even if we leave, will have a huge effect on our lives, our children, our opportunities, our businesses. i don't think britain at the end is a quitter. i think we stay and fight your
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that is what we should do. rishaad: we have to take a break. up next, what makes a green bond green, questions about some of china's notes. ♪
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♪ is "trending
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.usiness" china has overtaken the u.s. is the largest issuer of green bonds. the inclusion of some cold projects suggest that china may not be as green as it appears. we have some element suggesting that it's not quite as ecologically friendly as perhaps it would seem on the face of it. >> that's right. green bond is a new phenomenon globally. greenonly started issuing bonds last year, and has now become the world's biggest issuer. billion ofas $8.8 issuance, one third of global issuance. with.s. is a remote second $3 billion. a number of european issues -- countries also rank high.
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they have relatively high awareness of environmental production. rishaad: we are halfway through the year and we are catching up with the whole of 2015. why do international investors have doubts about these green bonds? >> one thing that is different for green bond guidelines in china versus the international powerred is clean coal stations qualify for green bond status. environmental investors globally would not touch anything related to fossil fuel. rishaad: that's just it, isn't it? it may be clean coal, but it is still cold. -- coal. how many have been sold on the international market? >> only two or three out of china so far. bonds, aboutreen 95%, are seldom mystically, so a lot of investors don't really play in the market as you know.
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analysts are saying that if chinese companies want to sell green bonds overseas, they would to adopt more widely accepted rules, otherwise they would find it a hard sell to international investors. muchad: thank you very with the latest on green bonds and questions about them in china. netflix,e a look at expanding its push into japan, producing original japanese content. this after a series introduce this month beat expectations by drawing a global audience. investing $6 billion to produce content. newlix is adding 130 markets this year, although it does face regulatory issues in china. a lot of japanese consumers are watching japanese content, so we want to add more and more japanese content, but just like with our great new drama created
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here in japan, we are finding a bigger audience for that show outside of japan as well. we think there are tremendous opportunities to satisfy japanese consumers with japanese content, but to connect them with the amazing stories we are creating around the world, england, brazil, italy, france, all over the world. james and then cleveland cavaliers becoming the first team to try and win the nba. decades ofnding cleveland being in the sporting wilderness.
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♪ it is the middle of the asian trading day. that is a beautiful day we are seeing in asia. we are live in hong kong. this is "asia edge". ♪ >> i am angie lau. it's all about currencies. facing a tough day. slightly, buted recent rises hurt exporters.
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rising with polls suggesting the u.k. will stay in the european union. a 30% chance now of so-called brexit. china and india it may take a stake in russian to plug ant rosneft budget black hole ahead of the election. >> i'm watching the markets today. risk? what risk? in thel about the rally pound today at the core of these gains we are seeing in the asia-pacific. abovechange rate just 106. as you can see at the bottom of your screen, it has been pushing top endthe high end or of that range. i will f


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