will this force the boj to change policy? capital markets are pointing out that we have seen this happen many times before, the top end of the band being tested and still no change of policy settings. japan stocks significantly lower. looking at the board, bond markets and the rest of the region, a focus on the difference between the aussie and 10-year yield, aussie bonds lower this morning, we had that jobs report yesterday, certainly being reflected in trading this morning. haidi: let's get to su keenan in new york with first word headlines. su: the bank of england raises interest rates for a fifth straight meeting, the highest since 2009. the benchmark lending rate was hiked 25 basis points to 1.25%. the boe also sent a strong signal it is prepared to make larger moves to rain and prices, peak inflation forecast raised slightly to about 11% and expecting the economy to contract in the current quarter. taiwan, the central bank has raised its benchmark interest rate by 12.5 basis points and reduced liquidity in the banking s

the boj is going to be forced to act. a lot of speculation building and cba is weighing in, saying that the case for tightening is building in japan, paul, but we are not. -- we are not there yet. paul: the world's richest person is joining a growing list of leaders speaking of recessionary risks. speaking at the qatar economic forum, elon musk said the economy is headed towards a recession in the near future. >> a recession is inevitable at some point. as to whether there is a recession in the near term, that is more likely than not. it certainly is not a certainty, but it appears more likely than not. paul: let's get over to our chief rates correspondent for asia and mliv contributor garfield reynolds. sentiment is improving. but is the sustainability of this rebound we are seeing in doubt. garfield: it is definitely in doubt. one of the concerning signs when it comes to how likely this will extend is that there were a lot of gains for the most shorted stocks. there was plenty of hedge fund shorting activity seen last w

that has box the boj in. also, they don't change their policy very much at meetings that don't have a monetary policy -- monetary policy report. the july meeting will have one but this one does not. but, speaking of the 2018 move, in 2018, the mayor having to buy lots of bonds and signaling they were not going to do anything to change y cc they were finalizing plans to do just that at that meeting. again, that was a meeting with the polyp. -- monetary policy report. it just goes to show maybe they can be moved and they can be moved today. we will see that in less than two hours. rishaad: yes, probably. thanks, kathleen hays there. you can go to bloomberg for more on the pboc decision. go to the terminal, had commentary and analysis. yvonne: let's bring in paul michael. -- mackel. is this a confidence issue for the bank of japan? >> not a policy -- confidence issue, but there's a big? . should there -- should they be joining the hawkish party for central banks? my argument is no. when you look at the bank of j

it looks like the boj could pass the 50% mark. >> it's hard for the boj to keep those deals down stuff they could make a u-turn and there is a lot of spec elation because they have tried to keep the 10 year yield below that point stuff it's becoming really hard so you can see the chart on the bloomberg. we are talking about 49.2% stuff the boj could face 50% and we have not seen any of those -- at the other central bank go through this process. this is supposed to be easing as a temporary measure. the bank of japan has become the biggest whale in its own market stop what will it mean for bank of japan holders? will they become less comfortable? the private sector in japan is pretty overweight jgb's and underweight equity markets. the boj thinks this is not sustainable also. if they go into the equity space, what would that mean for the boj who is the biggest player in this section of the market? kriti: the yen had a weakness, the first time in 24 years. how high can they go? >> the expectation is perhaps economies will hit $1.40. if you don't test that come authorities will not interve

we look at the growing pressure on the boj next. this is bloomberg. ♪ haidi: shanghai cases are crossing though bloomberg. one case of covid community transmission. the city has locked down seven districts in the past weekend to conduct testing drives. we are seeing a walking back of some restriction loosening moves across china weeks after the reopening. beijing saying there is the risk of further spread from clusters and authorities delayed the reopening of most schools in the nation's capital. shery: given all the uncertainty we continue watching the long dollar holds. greenback strength rose to the highest level since the early months of the pandemic as the traders weighed if the fed will intensify monetary tightening. the yen tumbled to a 24 year low against the greenback. let's get more from ruth carson. what are the next big levels to watch the japanese yen? >> another day, another low. it is still in dangerous territory, even though it pulled back a little. the next level a lot of people are watching for is the 140 against

but this stance has been that it's the boj's decision in the boj needs to decide this. they have stayed away from putting pressure on the boj to change the policy. rishaad: there is an old adage about how a weaker currency could cause a lot of harm and pain for particularly the middle class. ultimately, could this also damage the campaign because of this reason in this reason alone? >> it's hard to say how much damage it will actually have. there has been a pretty surprising level of support until now. but it is true that the yen weakening, we have seen it knocked off some of his support percentage points. so we could see some of the roots going against him. ultimately, no one is expecting him to lose the election. there is a healthy level. and also it remains too fragmented to be a real threat. yvonne: the latest on the political aspects of all of this when it comes to weaker yen. we take a look when it comes to southeast asia markets. the dollar strength story is dominated during the asian session against what we are counting down to the jay powell testimony where he

tom: daniel on the boj, looking ahead at the importance of that conference ahead of the boj. the latest moves, david, what are you looking at across all of the moves and which currencies are looking most honorable? >> everyone is vulnerable. it left every central bank open to sudden moves. the yen has definitely been a volatile one when you look at implied volatility. it has come off slightly after the boj risks being priced out. it remains elevated. you look at the one week level, markets are priced in, moving three points either way. even after that is priced out. moving forward to next week, we have jerome powell speaking. it will be a big driver for dollar-yen in the near term. dani: thank you very much. our fx and rates strategist in singapore. it's been a crazy week for markets. juliette saly is standing by in singapore. not going anywhere on friday. juliette: that is both tom and dan alluded to, -- whether or not we are going to see verbal moves to suggest they are going to look at that yield curve control because you have seen the 10 year yield dropped from the 2016 h

we saw that show down between bond traders in the boj and that selloff continuing because of the boj offering to buy unlimited bonds and sellers continuing to be active in the market there. the yen also, we saw that strength building into the currency. after that drop we saw in the dollar post fed decision. markets are trading much higher today around 1.4% after those drops over the last sessions. checking now at the open in korea, we are keeping an eye on the tech sector. the cause stack just outpacing the gains we see for the broader index. we did hear from samsung security saying that any selling in the market would be stopped around the 24th hundred -- 2400 level and we are seeing that reflected this morning. changing out to the open we have for are still your, the asx 200 also coming online to the upside here. again, the relief rally taking what we saw from the wall street session and we continue to watch the yield space tracking those moves that we see an treasury. haidi: the fed delivering its biggest interest rate hike since 1994, promised to bring down inflation even if econ

the boj doesn't seem to be in any hurry. the government seems to imply that wages need to get above the inflation rate before they even contemplate any changed policy. as you say there is a lot of pressure here. we have the icc under increasing pressure given the weakness of the yen. what we have seen as the bank of japan doubling down on its jgb purchases in the last week. there does not seem to be any sense that they are contemplating or debating shifting policy. i would not imagine we are going to see any changes at tomorrow's bank of japan. boj, governor still had several months left in his term. we may not see any changes during his term. as a go into early next year with a new government, we may see a different picture. we don't see the bank of japan rushing to shift policy. we expect it to remain as is. rishaad: i think, what they should be doing rather than what are they doing. we have had him doing the same thing, doubling down on it. this is a classic unsigned definition of insanity. number two you get the law of d

we are seeing the boj pledge further bond buying. the program was supposed to be 3.7 billion dollars of five and 10 year notes. that was to be worth nearly $6 billion. yvonne: it's about -- it's all about the fed repricing, that dilemma after that cpi shot. yesterday you had the lone wolf, barclays and jeffries at 75 basis points this week could happen, now you have goldman, you have jp morgan joining in on the call. now you have to wonder where that terminal rate is going to be, will it be 4%? it's certainly not where we are right now, a long way to go. rishaad: inversion, mainly looking at the twos intends. that happened a short while ago. it's really something with recession. it's an old saying. the yield curve predicted 12 of the past five recessions. now there's the economic indicator. it does really men the short -- mean the short-term bonds. that's a definition of inversion, and historically, it has predicted the recession and that is key here as well. we have an element of strong demand for long-term treasuries, as well as th

here is a level that he said would force the boj to take course. listen. >> if you go above 140, the boj will have to change policy and the first change will be to change the yield control curve, so i think another 10% fall in the yen will prompt a change in policy. annabelle: that is certainly one of the main levers that the boj could pull here. i wider band in which the 10-year yield could move would be positive for young prices. the boj could also shift its targets to shorter maturitiesm something like the five year. that is certainly an option. but you can see there is a lot of angst building. we have overnights already at 40%. if we see the yen slide further down to 1.4, that could breach a level we saw in the pandemic which was, at the start, 50%. shery: i think he is agreeing with a lot of other analysts at goldman sachs and socgen who are seeing their change in the boj. oil makers are making gains on confidence of sustained higher prices. we have the outlook for fuel commodities next from anz. this is bloomberg. ♪ >> we have gotten more o

the boj balance sheet continuing to expand. the market is challenging them on this, hitting 25 basis points today. so that throwdown, they do not want to see a weaker yen. the chairman saying if they get to 150, we are looking at a major financial crisis. at the same time they are trying to keep yield curve control than place. dani: it is so fascinating because you get kuroda talking about the weekend -- you have the boj saying we are going to buy more jgb's to support it. but the yen has barely moved. it is down 0.3% versus the dollar, that is not too much of a difference from before he started speaking, so does the market trust they can do this? joining us now is david savon, ceo at socgen private wealth management. it is a very volatile day. you have the yen at a 24 year low. bonds continued there were selloff on record. -- bonds continued their worst selloff on record. how much reallocation are we undergoing? >> we need to keep a significant margin of safety in the system. we need to look to safe havens. gold is something w

they're probably the most exposed after the boj. once the fed is out-of-the-way, the boj soon after, that is going to keep a lot of pressure on bonds both in japan and globally and on the yenand therefore on currency as well. yvonne: busy week. thank you very much. we talked about boj, we're going to talk about the rba as well. a rare interview that the abc did with the governor saying he will do whatever it takes to curb inflation. >> by the end of the year i expect inflation to get to 7%. that is a very high number. we need to chart a course back to two to 3% inflation. i'm confident we can do that. how fast we get to 2.5 percent, whether we get to it is going to be determined by this. yvonne: it was that interview that really got the team thinking that this whole scene is really kind of playing out in australia. goldman's saying, before it was 25 basis points and now they are thinking 50 basis points for august and september. rishaad: this is one of the central banks among 50 that have raised interest rates. at least half a point

, but the showdown between bond traders and the boj , what could exactly change -- force the boj to switch attack? -- switch tack? we are hearing from j.p. morgan it is not going to be the bond vigilantes. what might force boj to capitulate would be some kind of move in service inflation, which has been muted. the cost push factors pushing us above the 2% level for the national cpi, strategist, the boj does have enough firepower -- strategists at j.p. morgan saying the boj does have enough firepower, and already owning about half of the jgb's, but sharing a very big for japan eco-. >> we will be watching what business sentiment looks like especially with a weaker yen. but also a big hour in terms of hong kong and the celebration of the 20 for handover anniversary. -- 25th handover anniversary. xi jinping already in the city and the celebration kicking off in the next hour. he spoke as an hong kong declaring the city being reborn, expressing confidence in its future. stephen engle is by hong kong harbor with a special guest. >> of course he was referring when he said reborn from the ashes,

we are excited about this boj meeting. it feels different, especially when you see how the japanese yen has been moving. analysts say they will not do anything, it is too early, but you are seen currency options traders factoring in a whole different scenario. you saw the swiss national bank first rate hike in 15 years and the boe fifth consecutive move in rate hikes when inflation in the u.k. is at about 9%. they are seeing the peak around 11%. inflationary pressures around the world have really changed dynamics across the world. the central bank action is also fueling recession fears as stocks tumbled worldwide. we saw the u.k. contracting in the latest months of april. let's bring in strategist mark cranfield on the phone and our global policy analyst kathleen hayes. we saw a relief rally after the fed moved. it felt price in despite the fact it was a 55 basis point action. today feels different. what is going on. ? i think people have had the chance to reflect and decide that the initial interpretation that the fed was

we did hear the government urging the boj to rein in that drop. equity futures at the start of trade, we are seeing futures pointing higher for australia and japan. new zealand just coming online. these markets, particularly australia and new zealand, they are at or around lowe's we saw in 2020. we are going to be watching any lines from korea. we are hearing the finance ministry and boj meeting to discuss the fed. >> it was a balanced statement from the fed chair. extremely difficult, the tone to be struck in these, given how much is at stake. the fed admitted the reference to the return to the 2% objective because that suggests that the fomc sees these price pressers as -- price pressures as persisting. 3.4% is where futures are projecting at the moment. the question is what that looks like, another 75? a 50 through the end of the year? shery: we have four more meetings where we spilt -- where we will see way decisions and we will be watching. right now, the chair saying that that soft landing might be possible but it will not be easy , and inte

jp morgan is saying the boj will have to adjust policy at some point. there is a real lineup now for the so-called widow maker trade. haidi: what are implications to global rates markets if investors are proven to be right, that the boj will tweak or completely abandon yield curve control? ruth: big implications all around. we see yields rise basically everywhere. so, it would have huge implications on companies, on consumers, on government. it would put renewed stress on the global economy that is already struggling under the weight of energy prices and choked up supply traits. if these are right, they will reap the rewards for short, and they will be a big impact in many corners of the world. haidi: where do we see the direction when it comes to this uncertainty across treasuries and other sovereign markets at the moment? whether this is the end of the bear market or just a pause. ruth: look, that is the million dollar question. it is a big of a tug-of-war if i can use that phrase, depending on who you speak to. jp morgan in a couple others are saying

that is the line in the sand for the boj. if it goes past that, the boj has a massive problem. they want to stampede the market with more bond purchases tomorrow. we've got a very interesting development in the case of japan. if the bank of japan doesn't come out and raise its rhetoric and show the markets that it means business on the yen, they will see it tank even more. tom: the challenges for the boj. ven ram walking us through the repricing in the fixed income market on this fight inflation print. coming up, crypto takes a beating as the latest u.s. inflation data sours market sentiment, currently trading around $25,000. we discuss that next. this is bloomberg. ♪ francine: francine: welcome back to the open, everyone. we are 11 minutes into the european trading day and this is the picture for equities. pressure on the european stoxx 600, down 1%. let cac 40 down 1.2%. there is a global exodus from stocks as they try to look at what investors think about inflation after that cpi print from the u.s., and whether that will for central banks to squash economic growth with hi

his conference after the boj's meetingill be infocus. i am yanaka marie, repting from the tokyo stock exchange. >>> boj officials started their two-day meeting on thursday, they continue to monitor easing has been in stark contrast. kuroda repeated that he'll stay in the course to boost japan's economy. >>> the rise in shipment and steels and semiconductor. energy prices are stuck at a high level due to russia's inflation. >>> tokyo is that appears on the tail of the a airlin airliner, zipair, it will replace the design from saturday. company officials say they took into the account that the letter z appears on the russian military vehicle used in the ukraine conflict. japan airline established zipair four years ago. it flies five routes. the rest to the united states. carriers scheduled to launch the service to san jose in the u.s. and california in december. ♪ >>> nearly 20,000 children throughout children are in need of regular medical care due to intractible diseases and other conditions. robots are providing them new opportunities

overnight, the massive boj decision that some felt was and i climactic, similar to the ecb meeting. have to ask about what might break in this market, at least going in now with the concern of the potential removal of the peg would be the thing that moves leading to capitulation. we didn't see any of that, does that mean we won't? cameron: the dollar-yen has moved up to a 20 year high on an inflation adjusted basis is hiatus it has ever been. -- basis as high as it has ever been aired -- basis as high as it has ever been. prices for dollar-yen, potential for the boj to step in, that has passed at least in the short run so perhaps we will see more of eight speculative participation. the more significant margin squeeze any firm in japan imports goods or services is sustaining. japan is a major importer of energy commodities and commodity is more generally. the weaker yen is a boon for corporate japan but in this case , given the massive negative changes, it is actually negative. in the longer term, it is going to be very difficult for the boj to persist with this policy and is standin

and bloomberg economics expects a pickup in core cpi in japan, above the boj's 2% target. and of course, the weekend yen has helped support prices of imported goods, which is helped take cpi numbers a little higher. take a look at the japanese yen at the moment, holding at the 134 level, slightly stronger against the u.s. dollar after two sessions of gains. this in the broader context of things, after falling out two the 24-year low to the u.s. dollar given increasing policy isolation around the world. you are seeing nikkei futures unchanged at the moment. at the bottom of the hour, we will be breaking down the japan cp ♪ shery: we are getting inflation numbers out of japan for the core cpi numbers, which is what we follow given the be a guy's 2% target. we are giving 2.1% acceleration for the month of may, coming in line with estimates and also at the same level of growth we saw in april, the first time when core cpi actually surpassed that doj inflation target. the headline inflation number without excluding fresh food, coming in at 2.5% growth for the month of may. we

we are seeing the boj picking up their bond buying operations. today they will buy 3.7 billion dollars of five and 10 your notes. this is a yield curve control in action. where does that leave the yen? still under pressure. >> this could really be the next shock the markets will be watching. we are hearing a lot of wall street analysts saying we could see a 100 basis points from the fed on wednesday to contain the inflation purity you can kind of get -- to contain the inflation. you kind of get their point. if they want to have this vocal moment of raising any sense that they are behind the curve, why not go for the 100 basis points? others are rising their expectations. saying 50 was a big number six months ago. 75 is in the middle for expectations. they could say, if we want to show commitment, why not do 100? shery: this would constitute an aggressive hike. no wonder traders are saying, we might get recession. it is interesting that they might be precise -- it is interesting that they are pricing for two hikes i the middle of 2020 four. these

the boj's decision to further accelerate the yen's slip against the dollar. >> translator: the boj will firmly support the economy by persistently continuing monetary easing. >> occur okuroda said it was im for it to stay in line. it is making it difficult for companies to draw up their business plans. that it is necessary to pay close attention to currency market trends and their impact on prices in japan. and the yen remains volatile against the dollar in tokyo. after the bank of japan said it would keep its monetary easing policy in place. the japanese currency was traded between the 132 and 133 levels on friday morning. it weakened to the 134 level at one point after the boj announced its decision. the slide is the result of a widening gap between interest rates in japan and the u.s. that disparity is prompting investors to dump yen-denominated assets in favor of higher yields on the greenback. indications by the federal reserve that it will use rate hikes to curb inflation is causing speculation that the gap will grow. the benchmark finished below the 26,000 mark for the first time

the boj minutes. looking further ahead, eu leaders meeting on thursday over ukraine and rate decisions out of indonesia as well. who have that to look forward to. taking a look at what we can expect out of jakarta. taking a look at what the cost of borrowing is. 3.5% were interest rates are expected to stand. vonnie: it's bring in -- yvonne: let's bring in the manager of affect strategy in singapore. i'm just wondering is there any reason to actually not by the dollar at this point? >> i think in the short term, the long dollar trade is still the one to basically chase at this point. that is because the fed is so focused on inflation now. it is important to remember monetary policy reacts with a leg. even though inflation is going to get the new to fly higher, you're not going to see the fed slow prices down for a couple more months. the fed is going to have to stay with its hawkish tone in the market is going to interpret the surprises with the fed having to do more. rishaad: does it mean priced in a

just last friday the boj put out a statement expressing concern about this. governor kuroda has testified to parliament around this. but the bottom-line for the boj appointed to people who are familiar with the way they are thinking right now is they do not want to see the yen dropped to quickly but they are maintaining very weaker yen is going to help manufacturers, it will help exports out of the country because it makes them cheaper. when it comes to raising inflation, governor kuroda spurred a backlash recently when he said japanese consumers are getting more used cities price increases. on social media, people exploded they didn't like him characterizing it that way. the boj continues to believe the economy will get stronger and prices are going to raise more, maybe even wages in the second half of the year especially as they reopen up to tourists. but haslinda, we will hear more from governor kuroda and i am sure we will get questions in parliament when he testifies again later in tokyo. haslinda:. haslinda: is a big week for central banks across the wo

especially as we have the boj overnight, earlier this morning, a lot of these questions are does this continue to be the trend? let's circle back to the equity story, devon further. we just mentioned our equities reporter, i'm curious about what all of this means in terms of capitulation and how much farther we can actually go when it comes to finding a bond. >> right now, looking where the s&p 500 is trading, not far from where bloomberg intelligence is pricing in an potential recession. the s&p 500 driven by risks about the recession, market trading, inflation and how that affects corporate earnings. trainer say nothing really changed after the fed meeting, more of -- yesterday. kriti: it almost seems like going into the meeting, stocks were very comfortable with the 75 basis points ideal. maybe this might be the fed claiming control. the new factor in these other central bank decisions, ecb, bank of japan after the close, pick your poison, pick your central bank. i have to ask how all about factors into the equity investors. >> exactly, because this is not just a u.s. problem we're

there's a lot of concern about the boj. do they have the capacity to really cap these yields as we see rates surge globally. hitting 4.8 trillion yen. rishaad: let's try to make sense of this and make sense of the impact of the yen as well. the research into two chairman, he is also a former vice foreign minister for international affairs. finance minister and asian development back. -- bank. vicki for joining us. what is the immediate impact of what's going on with the yen, on this there a line in the sand as to how low it can go and what the authorities there are actually comfortable with? >> i thick it's difficult to tell where it goes. what it creates for this yellow -- this level of yen to dollar and also to the rates, it's almost 50 years old. it's a great negative, but the activity has further depreciated only could be coming back. yvonne: we just had the central bank governor talk about how low it could go now is actually posing a negative impact on the economy or do you think that this is the reflation that japan h

that is backing that boj easing policy. now we have the nikkei 225 coming up. a big boost for us here. we did see that sector have its worst weekly performance since march of 2020. it is back above the key 2400 level that it hit. that is the lowest level since november of 2020. a lot of selling by the foreign names. something that could provide a boost here. it is that government plan we have over the weekend to slash taxes further. 1300 is the key psychological level here. turning to the open in australia. we saw a pretty rough week for the asx 200. dropping around 6.6%. we are seeing it on the downside. what this means for the banking stocks. the aussie dollar looking a little bit higher against the greenback. there is the value we are seeing. that is because pressures are pointing to the downside. particularly sharing with those particular covid docked as we are seeing in china. >> we will continue to watch the markets there. this is just before another onslaught, repricing starts again. good to have you with us. tell us a little bit about how you are managi

>> it is that the boj will close 1.25% yields. given the global inflation trend and hydrates we are seeing. the deficits of banks that we have to do the same. we are currently seeing investors make bets against them. at other investors have been against the boj, and come out with -- manus: a lot of the nuances are going to come down to what happens with dollar-yen. we've had various people talk about that. what is the bank stance? they seem committed, you said 148, despite the window. at the boj doubled down on this? >> the been pretty rocksolid. they will not budge on rates. he said speaking opportunities, they are not to pre-pandemic highs, what they are seeing is a lack of real wage growth. the yield curve hasn't changed. they will keep that 1.25% line. manus: let's see who will break the bank of japan. thank you. there is a talking head on a stick. i love the oil stories. you know what i learned today? dani: please enlighten me. manus: don't tell your secrets. dani: i don't think i'm in danger of doing that. manus: you never k

to what degree are lower yields providing relief for the boj ahead of that read? greg: they will be pleased to see global yields from down a tad. but if you look at what is going on with the japanese bond market, there are clearly concerns, particularly in the very long end of the market. it appears that although the bank of japan is controlling the 10 year sector very well, you can see that there have been difficulty controlling the 20-year year and 30 year sector of the market. we have seen analysts saying that that is where foreign money is placing big pressure on japan. they kept everything and changed week at their policy meeting, but more pressure is heaping on the bank of japan -- they kept everything and changed nothing last week at their policy meeting, but more pressure is heaping on the bank of japan. particularly with inflation numbers already getting to 2%, the bank of japan has to consider whether this policy is out of date already. shery: mliv strategist, mark cranfield. always good talking to you. stay with annabelle. we are hearing that bond trade

then, the boj will have to do something. widening the tenant year jgb trading range, that is going to be the next step in that could be on the table if the yen depreciates further. dani: fred, thank you very much for joining us. that is the cohead of economic asian research at hsbc. we're going to focus on commodities, potentially even more pressure should the chinese infrastructure spending really boost the economy to what -- we have rum material gauge, that soared to a fresh record -- raw material, that soared to a fresh record. this is bloomberg. ♪ dani: welcome back to bloomberg daybreak: europe. bloomberg's commodity spot index hit a fresh record high. the gauge track rices for 23 raw materials last pete -- rises for 23 raw materials last in april. this time, it for -- is all about oil. let's bring in bloomberg's energy commodity editor in singapore. gravity does not apply in this index. >> that's right. we saw a very large gain on monday. we saw gains in u.s. natural gas. those have been the immediate things in the l

beating the boj f the fst time in seven years. the governor intends to stick with the current stimulus policy as the japanese economy is still recovering from the effects of the pandemic. >>> let's have a look at the markets. >>> from the newsline team biz in tokyo, i am geno otani, thank you very much for being here with us. wÑcÑcÑcÑc ♪ >> you're watching al jazeera, these other top stories now. the summit of the americas is getting underway in los angeles but without key regional leaders. the u.s. refused to invite cuba, venezuela and nicaragua citing their human rights record. the timing of the summit coincides with the movement of a migrant caravan that's heading north towards the u.s. border. the migration crisis at the united states will be higher on the agenda.

i think ultimately that will be the case that we have to get into a scenario where the boj may need to consider recalibrating their yield control. that could be a catalyst which could be a better way to try and stem this significant depreciation. tom: there is also the differential when it comes to ecb and the fed. the yields, particulate and greece, are going up. what about spread threshold on the euro? jeremy: the issue of fragmentation is a concern. it's notable the number of questions madame lagarde had to deal with in terms of the context of fragmentation policy. she was very explicit they would not tolerate that to happen. it is happening. how far can work it pressure the ecb before they come back in? i think that is going to cause greater concern in terms of the valuation of the euro against the dollar. alix: we've seen this movie before. the market pushes around the politicians and central bank. they do the right thing and everything is ok. are we looking at parity again as the spreads continue to blowout? do we see that for your dollar? jeremy: i don't think we see parity yet.

the boj's stance is in sharp contrast to tightening measures by other major central banks around the world that's meant to tackle inflation. the increasing dvergence has caused the yen to decrease among other currencies. japanese consumers were already facing higher prices, a trend that's been made worse by the weaker yen. pressure is mounting on the central bank to change course to curb the currency slide. analysts will be watching to see if policymakers express such a view during the meeting. >>> toshiba will hold its shareholder meeting on tuesday. the troubled conglomerate has been locked in a number of battles in recent years. now, it has another potential headache on its hands. one of toshiba's external directors has objected to the nominations of two activist hedge fund members in the board. the director said that the board already has activists and investors, adding more investors could undermine its impartiality. the list of nominees will be put to a vote next week. thursday sees the purchasing manager index for june. the industries for manufacturing and nonmanufacturing sec

from the boj perspective, in isolation, it is inflation. they are still low, and hard for them to offer rationale for why they are giving steps or talks of a tightening phrase -- face. tom: this is important, all of a sudden, or i should say, suddenly, philippine peso, there is a distraction on the election in the philippines. gives way. is em in the heat of june giving way to a new velocity, a new weakness? daragh: eh. i think volatility is part of the global deal at the moment, emerging currencys struggle when you got the stronger dollar and a fed that is tightening. a lot of the ingredients are there on a macro scale, to pressure em lower. philippine pesos, they are currencies we see that have been much more cautious. there are potential outliers in emerging markets. i think you have got to pick your battles in em, there is not a one-size-fits-all there. the macro backdrop is challenging. tom: thank you, a great brief to get us started today. i want a brief on the william dudley column, you have taken a look at it, lisa. he has been heat

yen weakening, the dollar after the boj maintained its stance. diebold ching for now from its global peers, joining us now, geogg. off. geoff: pick a number from these levels. if the yen cracked, already, it is under inflation measures. today, you need to reconcile the comments. he said after bad inflation he is worried about, more bad inflation will come. without action, you can separate the currency from the monetary policy, if he wishes to. right now, this kind of divergence, especially what happened with the s&p is unsustainable. kriti: in terms of a sustainable, the weakness in the yen, how much longer can it go? are we inviting currency intervention? geoff: a month ago, we were talking about new records that we went against this idea, that required a lot of the coordination and valuations. we would rather about -- talk about the course, a single japan issue. are there ways in terms of financial communication? start on the communication side, the u.s. expressed concern about yen valuation. that is the first step, we could start to hear more

they are not like the boj. they do not have that kind of commitment. both the bonds and equities selloff hard. it is not a problem -- there measure of neutral may be too low. no one knows where neutral is. it is not a question of how restrictive they might have to become. people start to ask the question may be inflation is too long. tom: the mother of all textbooks in the united kingdom is john bag and his one volume economic textbook. all of this is not in bag. this is original territory. what is the level of yen where this unfolds? when dollar-yen it's to such and such weakness, where the pieces begin to fall apart? dominic: for japan the issue is wage inflation that drives price inflation. it is a similar issue across the major economies. the inflation is bad inflation. wages are barely keeping pace with inflation. japan is the same situation. they will not react to inflation unless wages are going up. dollar-yen can keep on going down. they will try to push back on it. it is more about stabilizing the global bond yields and that will make the boj

. >> if the yen keeps on falling, it will fall more given the boj policy. at some point, inflation will become a problem for the boj and they will give up on the zero policy rate. if you go above 140, the boj will have to change policy, and the first thing will be the yield curve policy. tom: it is what we try to do each and every day on bloomberg surveillance. when news breaks, we can go worldwide to doha, qatar economic forum, nouriel roubini modeling out 140 weak yen. someone who has helped us out so much over the years. helping out with the visual, kriti gupta on weak yen. >> we are already at 136, the highest level for dollar-yen going back to 9098 when we had that coordinated currency intervention. the u.s., europe was in on it. do we see that coordinated action again? you are looking at a $4 trillion daily turnover in markets. you are also looking at a race to a strong currency payment that brings me to my chart of the day. that is what is making traders extremely nervous. implied volatility for dollar-yen. it is a straight shot up when you look at t

with the boj is saying, having little effect on the market this morning. is the boj hamstrung, unable to influence these markets considering all the bond buying they have done? >> the bank of japan is clearing their intention to have a more diverse policy-setting. globally across the g10 we have seen rate rises being bought earlier. but japan, inflation may be above 2%, but underlying inflation is much lower. they do not under any measure have the wage pressures we are seeing elsewhere. we know the bank of japan is very much insistent that they are going to stick to their current policy-setting. whenever there is someone diverging from the direction of travel of markets will test it. that is what they are doing at the moment. the intention is clear. whether they can deliver it will be another thing. tom: just briefly, the boe tomorrow, how far do they need to go? it looks like they are going to be hiking into a recessionary environment here. >> at the boe it will be 25 basis points tomorrow. like last time it will be a split decision with two or three memb

until there is a firm tone taken by the boj, how they are looking at the monetary policy. you can can send you to see pressure on the yen. david: euro-yen. 141. >> speaking with the head of trading earlier this morning who basically said the first thing i look at is cell yen orders whether is the aussie, euro or emerging markets. david: ruth carson. yvonne: pouring fuel. let's recap what we are hearing from hong kong. talking about the government, having internal meetings, we have seen cases rise to six-week cause, the line we continue to see is hong kong is going to be keeping covid measures unchanged until the end of june. rishaad: india is eager to take on discounted crude from russia. these are on top of existing shipments. justin trudeau condemns china. he called actions irresponsible and provocative. in the u.k., boris johnson keeps his job as it is prime minister. it exposes a bigger rebellion. pressure has been building on johnson for week. twitter saying it will hold elon musk accountable for his takeover. must believes twitter is breaching the agreement. shares f

can the boj do the same thing? tom: it is not in isolation, but the german 10 year, i'm absolutely fascinated how the various blocks at ecb has lagarde speaks, what did they do with the acceleration of a higher german nominal yield? jonathan: lisa, the growth outlook is not getting better. you heard from the world bank yesterday, we heard from the oecd about 30 minutes ago. lisa: which is one reason why people think the oecd will get some relief to raise rates. however there was that economic growth picture out of the euro region for the first quarter, and it was better than expected. so, fuzzy data. how much are we looking at the fed and ecb hiking until something breaks, as brian weinstein was saying? jonathan: what does it take to break something in the european economy? italy has got to be the one to watch. the italian 10 year, can they take a whole rate hiking cycle from this ecb? have you seen some of the numbers out there? anywhere from 150 basis points, 200 basis points plus. lisa: are you surprised we have

it won't have much of an effect if there's not a change of policy by the boj. manus: we've been getting a lumen doom -- gloom and doom on bitcoin. i look at it in terms of it is cathartic, it is good, it will allow a market to re-base and formulate. does that commentary have any merit? nouriel: in my view, the value of most cryptocurrency is zero and we are pretty far away from that. i am still very bearish about them. manus: what is the one thing we are perhaps underpricing? the biggest tail risk in the world right now for you? nouriel: i think there is the series of geopolitical risks of course, the war between russia and ukraine could get worse. we don't know what will happen between israel and iran, and there's tension in asia over taiwan. it's the geopolitical risks am most worried about. manus: great to have you with me. nouriel roubini, my guest on the markets. dani, a little later on, they will speak with elon musk in just under about an hour. dani: that will be really great. plenty to pay attention to at the qatar economic forum. more conversations to

one boj member continuing to double down. we are seeing all of those concerns about the weakness of the japanese yen. take a look at the korean kospi. we have come off from that november, 2020 low. we are seeing an upside. watching the korean won, it is strengthening a little bit, it topped the 1300 level against the u.s. dollar and it is that topic of policy divergence, capital outflows from asia that is having a huge impact on the market. haidi: take a look at the staggered open. here getting the staggered open in the green, 4/10 of 1% as these stocks continue to come online. it of weakness in energy, that loss in crude resulted in the pullback from some of these inflation worries. bonds rising in the morning, the aussie dollar inching higher. finishing to tenths of a percent snapping two weeks of declines. of course this push and pull of factors, the commodities demand, with is not farewell when it comes to downside of risk and there is plenty of that. shery: no wonder our next guest is underway on equities. good to have y

we have the doj policy decisions -- the boj policy decisions. is there anything we can expect from them given the yen's trajectory? mark: the comments we heard on friday and over the weekend suggest that for now the japanese authorities don't see it as an urgent situation to support the yen, but i suspect we will soon be entering the window where they will have to change their tone. the rest of the g10 will be looking there as well and saying, look what is happening to your currency. we would like to see some slowdown in the weakness. we are definitely getting closer. this week's bank of japan meeting might be too early for that to be addressed. it is a question for the ministry of finance. we could see some hints from the bank of japan that they are ready to change yield curve control, which already would be a support for the yen. we might get some language that suggests the bank of japan is getting closer to the point where they can change the yield curve. paul: mliv strategist mark cranfield and policy editor kathleen hays. taiwan took center

a group is warning the boj to pay closer attention to monetary policy. the chairman says it's time to weigh other factors after the you want hit a 24 year low. president biden says he would support changing the filibuster rules to pass legislation ensuring privacy rights and access to abortion. he called recent supreme court decisions including the overturning of roe v. wade destabilizing. joe biden has been under pressure to respond more aggressively to the courts rulings. >> we have to codify roe v. wade and the law and the way to do that is to make sure congress votes to do that and if the filibuster gets in the way, it's like voting rights, we should provide an exception for this. a federal judge in manhattan has thrown out a lawsuit alleging a conspiracy to destroy his reputation by a former colleague. i next model had accused him of sexual assault. the judge called the racketeering claims glaringly deficient. he said he will contest the decision. haidi: oil markets first monthly decline since november as opec-plus completed the return of output it

however, they held off, both the government and boj. they held off and now they seem fairly convinced and perhaps somewhat convincing that this is the right way to go. i think it probably helps that japan is experiencing moves toward reopening in hopes tourism will come back. that is another key part of it because tourism benefits a weaker currency. back when it was first meeting, it was not coming back online because of covid. now they are convincing people of this tray that we cannot only handle a yen at 130 or 140, we could potentially welcome it. haidi: let's get you to first word headlines with su keenan in new york. su: we start with the fact that bloomberg has learned a biden administration is posing a plan to wean the u.s. off of russian uranium imports. sources at the white house say they are pushing lawmakers to push the plan with officials from the energy department leading -- meeting with key congressional staff to plead their case. the proposal would boost uranium purchases from domestic producers and require approval from

the major question is when does the boj go? it is not coming in the next month or this week, but we should be priming ourselves that $1.35 is coming and what medium or longer-term do we get? the biggest long-term trade is dollar-yen and is the most overvalued currency. things over corridors, a level that is important is $1.15 to $1.25. tom: how do you and the asian team think you will migrate to $1.15 or $1.12? can it be smooth or is it junk conditions? mark: definitely junk conditions. there are interesting things driving yen that i do not think people are focusing on. japan is a massive importer of energy and other commodities around the world. there is a tremendous amount of foreign investment by japanese corporate side of japan which is weakening the yen. the question is whether moving boj policies -- people in the u.s. are looking for things that are cheap, undervalued, under positioned. this can turn ship for the yen in the next six months. this is not immediate risk but the nonlinear effect. people are looking for other

that is why there is such pressure on the boj, we saw record bond purchases today to maintain their yield curve control. as we heard our guest in the last hour, there is an expectation that boj will have to capitulate on yield curve control because of pressure globally. in november, everything a one of these yields was below 1%. it's about where we have come from this which is really dramatic. all of the moves have done 200 basis points apart from the u.k. the u.k. was at the higher end back in november and it has only moved a hundred 50 basis points. that may force the bag a big write more than expected -- bank of england to hike more than expected. final vote, we are still not very high. francine is falling hers -- we are talking about this really excited move and in many markets yields are close to light. bank of japan, all these markets still have negative yields. even still we are only talking about 1%. we have a long way to go. francine: it is not so much polling because i know that is your expertise in mliv. they drop in for tea. they have flipped through interest rates over 17%. m

in the context of yen, it seems like the boj wants to earn credibility on inflation. if five-year inflation expectations are higher, maybe push wages higher, they need to get past the july upper house election. what is interesting is, we are focused on the internal drivers, what is happening in china, the external drivers, which relate back to oil, terms of trade and rates during what we are seeing is the markets worried about recession fears, 50% chance priced in of u.s. and other countries. if rates are starting to turn over, we'll rates are cap in oil prices are down 10% from the peak, the question around the yen is, what is going to push dollar-yen higher is the market has to push away from the boj has done, they continue to try to weaken the yen. there is more volatility, more uncertainty. fading dollar-yen is a deepened trade in the short run. tom: on the pacific remark, all of a sudden, i got dollar thai baht. weaker thai baht. i got a 10% depreciation from february. does that matter for chairman powell today, and the crucible of the capital? mark: what matters

the ecb, boj didn't come along for the ride. this is different. i don't know how long the ride will last but it will try. the boj is trying to sit it out. you see what is happening in the fx market consequently. tom: weaker yen. let's get this thing going on italian paper. it speaks to not faith and credit, but the idea of the mix of the bond market. it is price down, yield up. lisa: why isn't yield further up for those italian bond yields? the ecb has had the back of the proverbial markets for so long. how do they support the areas that are most at risk while also allowing a tighter financial monetary policy at a time of high inflation? this is the shift in the dynamic. central banks have a different calculus than they have had for the past decade or more. tom: your view of friday's cpi, core cpi? lisa: i'm less interested in the headline numbers. i want to see underneath how much there are gains within the rental markets, the gas component, what there is in disposable spending. how much does the consumer start to pull back, what does that mean f