Japan’s 2‑Year Yield Hits Highest Since 2008 | Bloomberg: The Asia Trade 12/1/25

Japan’s 2‑Year Yield Hits Highest Since 2008 | Bloomberg: The Asia Trade 12/1/25

THIS IS THE ASIA TRADE. THE TOP STORIES THIS HOUR. ASIAN MARKETS SET FOR A CAUTIOUS START AS INVESTORS AWAIT DELAYED U.S. INFLATION DATA FOR CLUES ON THE FED’S THINKING OIL IN FOCUS. CHINA’S FACTORY ACTIVITY STUCK IN CONTRACTION. THE OFFICIAL PMI EXTENDING ITS STREAK OF DECLINES TO A RECORD AND AIRLINES SCRAMBLE TO KEEP THEIR FEET IN THE AIR WHILE WORKING TO FIX A SOFTWARE GLITCH . THEY LOOK AT HOW U.S. FUTURES ARE POINTING TO SOME GAINS AFTER ALREADY COMING OFF A NOVEMBER WHERE THEY MANAGED TO ERASE MONTHLY LOSSES AS STOCKS EXTENDED THEIR RALLY. WE SAW TREASURIES DRIFTING LOWER WITH THE 10-YEAR YIELD MOVING TOWARD THE 403 AND A. THIS IS DIFFICULT TO DRAW A CONCLUSION GIVEN HOW FROM THE FRIDAY ACTION AFTER THE THANKSGIVING HOLIDAY WE WENT INTO THE FRIDAY SESSION DELAYED BY AN HOURS LONG OUTAGE. WE HAD THE LIKES OF KEVIN HASSETT, A SILENT NOD TO THE MARKET REACTION OF WORD TRUMP IS SAID TO PICK HIS FED CHAIR BEFORE THE END OF THE YEAR SO THAT IS SOMETHING WE ARE WATCHING AS INVESTORS CONTINUE BETTING ON A RATE CUT IN A COUPLE OF WEEKS. AND KEEP AN EYE ON OPEC-PLUS AS IT STICKS TO PLANS TO PAUSE OUTPUT HIKES AMID SIGNS OF A SURPLUS EXPECTED TO PUT MORE DOWNWARD PRESSURE ON PRICES ALTHOUGH IT SEEMS LIKE AN UPTICK FOR THE MOMENT. WE WILL BE WATCHING THE ENERGY SECTOR TODAY BUT YOU MENTIONED ALSO THE DOLLAR WEAKNESS. THAT’S BOOSTED ASIAN CURRENCIES ALONG THE WAY. AS WE HAVE THE OFFSHORE YUAN SEEING ITS BEST WEEK SINCE AUGUST. AND IN AUSTRALIA WE HAVE BEEN FOLLOWING HOME PRICES EXTENDING GAINS AND CONCERNS AROUND INFLATIONARY PRESSURES. AND IT HAS BEEN A DIFFERENT STORY FOR JAPAN WITH THREE LOSSES. WE WILL BE WATCHING FOR COMMENTS FROM THE BANK OF JAPAN CAN’T — THE BANK OF JAPAN GOVERNOR. FOR THE MOMENT WASHING ASIA AS IT BEGINS THE WEEK WITH A WAVE OF MANUFACTURING PMI DATA AND PRICE INDICATORS THAT WILL HELP TO GAUGE THE YOUR’S MOMENTUM. IN THE OFFICIAL NUMBERS SHOW CHINA’S FACTORY ACTIVITY IMPROVED BUT REMAINED IN CONTRACTION. ALSO AWAITING DELAYED U.S. PCE INFLATION READING SEPTEMBER. A LACK OF HARD DATA THANKS TO THIS LENGTHY SHUTDOWN. AND INDIA’S RESERVE BANK IS EXPECTED TO CUT ITS KEY RATE FRIDAY BY 25 BASIS POINTS. EXPECTATIONS FOR A CUT R BACK BY RECORD LOWS — BACK — BACKED BY RECORD LOW INFLATION. LET’S BRING IN AN INTERNATIONAL ECONOMIST. GOOD TO SEE YOU. WE ARE WATCHING A NUMBER OF THE CLADE — OF DELAYED INDICATORS. TALK TO US ABOUT WHAT YOU ARE WATCHING MOST CLOSELY. AT THE MOMENT WE ARE FOCUSED ON WHAT’S GOING ON IN CHINA WE SAW SOME OF THE PMI NUMBERS COME OUT OVER THE WEEKEND AND THERE’S BEEN A SLOWDOWN IN FACTORY ACTIVITY BUT WHAT CAUGHT MY EYE AND — ATTENTION WAS SERVICES THIS IS IMPORTANT BECAUSE WE SAW COMMENTS FROM AUTHORITIES NOTING THEY WANTED CONSUMPTION TO BE A DRIVING FORCE FOR GDP AND THAT WEAKNESS IN SERVICES WILL NOT HELP WE HAVE SEEN CONSUMERS IN CHINA HAVE NOT FARED PARTICULARLY WELL GIVEN THE WEAKNESS IN REAL ESTATE PRICES AND WHAT THAT HAS MEANT FOR HOUSEHOLD WEALTH. SO FOR AUTHORITIES TO ACHIEVE THEIR VISION OF HAVING CONSUMPTION BE A BIGGER PART OF GDP GROWTH WITHIN CHINA THEY WILL HAVE TO REBUILD THAT CONFIDENCE AMONG HOUSEHOLDS >> HOW CAN I GO ABOUT DOING SO? >> FIRSTLY IT IS ALL ABOUT STIMULUS BUT HAVING A TARGETED STIMULUS RESPONSE, SO PUTTING A FLOOR UNDER REAL ESTATE. THAT IS SOMETHING THEY HAVE BEEN WORKING ON. ALSO CREATING AN ALTERNATIVE ASSET CLASS CONSUMERS FEEL COMFORTABLE INVESTING INTO LAST IS PUTTING THREE MORE STIMULUS TO HELP STIMULATE DOMESTIC GROWTH — DOMESTIC DEMAND THERE AS WELL. WHO WILL BE THE MOST AFFECTED ACROSS ASIA GIVEN THE WEAKNESS WE ARE SEEING IN CHINA? >> IT’S A VERY INTERCONNECTED REGION SO IT’S HARD TO SAY IF ANY PARTICULAR COUNTRY IS GOING TO BE AFFECTED MOST MARKET WATCHERS ARE LOOKING AT JAPAN-CHINA ATTENTION AND BEING CONCERNED ABOUT JAPAN IN JAPAN WE HAVE SEEN THEY HAVE TENSIONS WITH CHINA IN THAT’S ALREADY SEEN A DROP IN TOURIST NUMBERS WITHIN JAPAN CHINA IS JAPAN’S BIGGEST EXPORT PARTNER FOLLOWED BY THE U.S.. SO FOR JAPAN IT LOOKS LIKE A DIFFICULT TRADE OUTLOOK FOR 2026 WILL THAT DERAIL THE BANK OF JAPAN? FOR THE BANK OF JAPAN, THEY ARE LOOKING AT FACTORS DOMESTICALLY AND INTERNATIONALLY ON THE INTERNATIONAL FRONT THINGS ARE NOT LOOKING TOO GOOD GIVEN THE TENSIONS WITH THEIR TWO BIGGEST TRADE PARTNERS BUT THEY HAVE PLENTY OF DOMESTIC CONCERNS AS WELL. WAGES IN JAPAN, WHILE I HAVE THROWN IN NOMINAL TERMS, IN REAL TERMS HAVE GONE BACKWARDS THAT IS HAMPERED CONSUMER CONFIDENCE ACROSS JAPAN AND HAS MEANT JAPANESE HOUSEHOLDS MAYBE DON’T FEEL AS COMFORTABLE ENGAGING IN DISCRETIONARY SPENDING. AT THE SAME TIME WE HAVE SEEN INFLATION BE HIGH AND WHILE IT HAS MEANT THAT THE HEADLINE NUMBER FOR INFLATION HAS BEEN STRONG IT IS ANOTHER THING HOUSEHOLDS ARE CONCERNED ABOUT WHEN THEY SEE PRICES OF STABLE GOODS SUCH AS RICE INCREASE DRAMATICALLY ON THE UPSIDE WE SAW A FISCAL PACKAGE ANNOUNCED BY THE GOVERNMENT AND WHEN WE GET DETAILS ON HOW AND WHEN THAT WILL BE DELIVERED IT WILL BE A TAILWIND FOR GROWTH FOR 2026 THE COUNTRY >> ASIDE FROM JAPAN, WHERE ELSE IN THE REGION DO YOU THINK LOOKS VULNERABLE IN TERMS OF CHINA MAY BE EXPORTING ITS TEPID GROWTH TO OTHER PARTS OF ASIA? WE HAVE DEFINITELY SEEN CHINA IS REDIRECTING A LOT OF EXPORTS IT HAD BEEN SENDING TO THE U.S. TO OTHER PARTS OF ASIA AND WHILE IT HAS BEEN GOOD FOR THEM IT HAS NOT MADE UP FOR THE DEMAND THE U.S. TAKES ON. WE ARE THINKING ABOUT REGIONAL GROWTH AND GROWTH IN CHINA THE U.S. IS STILL A KEY FACTOR FOR THAT. SO THE OUTLOOK FOR THE U.S. IS VERY IMPORTANT. WHAT ABOUT WHEN IT COMES TO AUSTRALIA? BECAUSE WE HAVE SEEN HOME PRICES EXTENDING GAINS. WE SAW A PRETTY HIGH NUMBER LAST WEEK ON INFLATION. HOWEVER, WHEN WE LOOK UNDER THE HOOD UNDER THAT INFLATION PRINT A LOT OF THE PRICE INCREASES CAME FROM EITHER ENERGY PRICES, WHICH WERE MOSTLY BASS EFFECTS, AND ADMINISTRATIVE PRICES THAT INCREASED DUE TO POLICY IMPACTS. IF I WAS THE RBA, FROM THEIR PERSPECTIVE, THESE SORTS OF PRICES ARE NOT LIKELY TO PERSIST FOR LONG AND ARE NOT INDICATIVE OF DEMAND SIDE PRESSURE. AS SUCH, WHILE INFLATION IS QUITE HIGH RIGHT NOW IT’S UNLIKELY TO PERSIST THROUGH THE COURSE OF NEXT YEAR. WE ARE ANTICIPATING INFLATION COMES DOWN TO THE MIDDLE OF THE TARGET BAND BY THE MIDDLE OF NEXT YEAR AND THAT WILL GIVE THE MARKET CONFIDENCE TO START CUTTING RATES MAKE NEXT YEAR. HOW MUCH DOES WHAT THE FED DO — DOES OR IS GOING TO DO MATTER FOR THESE OTHER CENTRAL BANKS? BECAUSE DOES SEEM THEY ARE MAY BE LESS SYNCHRONIZED GOING INTO THE FIRST HALF OF NEXT YEAR? QUITE CERTAINLY. AND THERE HAS BEEN A LOT OF TIMES IN HISTORY WHERE THESE ASIAN CENTRAL BANKS HAVE BEEN SYNCHRONIZED WITH WHAT THE FED DOES BUT WHEN YOU LOOK AT THE STATEMENTS FROM A LOT OF REGIONAL CENTRAL BANKS, WHETHER IT BE KOREA OR INDIA, A LOT OF IT IS FOCUSED ON THE DOMESTIC SIDE OF THINGS. THEY ARE LOOKING AT DOMESTIC DEMAND, INFLATION, AND THERE’S BEEN DIVERGING INSTANCES OF FOOD INFLATION ACROSS DIFFERENT ECONOMIES SO FOR NEXT YEAR A LOT OF THESE ASIAN CENTRAL BANKS ARE GOING TO BE FOCUSED ON THE DOMESTIC PICTURE ALONGSIDE THAT INTERNATIONAL PICTURE AND PROBABLY WILL NOT TAKE AS MUCH CUE FROM THE FED AS PERHAPS THEY HAD IN PREVIOUS HIKING AND CUTTING CYCLES. GOOD TO HAVE YOU WITH US. NOW WE KEEP OUR EYES FIRMLY ON THE FED’S TRAJECTORY AND THE WHITE HOUSE NATIONAL ECONOMIC COUNCIL DIRECTOR SAYS THEY ARE READY TO NAME THE NEXT FED CHAIR BY THE YEAR. HOWEVER HE DECLINED TO SAY WHETHER HE SEES HIMSELF AS A FRONT RUNNER TO SUCCEED JEROME POWELL. WE HAD A GREAT TREASURY AUCTION. PEOPLE CAN EXPECT TRUMP TO PICK SOMEBODY WHO WILL HELP THEM HAVE CHEAPER CAR LOANS AND ACCESS TO MORTGAGES AT LOWER RATES. THAT IS WHAT WE SAW IN THE MARKET RESPONSE. LET’S BRING IN GARFIELD REYNOLDS. THE NARRATIVE AROUND THE FED HAS CHANGED WITH THE MORE DOVISH FED SPEAK WE GOT. WHAT DOES THAT MEAN FOR ASIAN MARKETS WE HAVE SEEN CURRENCIES BE BOOSTED BY A WEAKER DOLLAR? ASIAN CURRENCIES VERY MUCH LOOKING LIKE THEY ARE HAVING A STRONG END TO THE YEAR AND PROBABLY A STRONG START TO 2026 BOTH BECAUSE THE FED HAS DECISIVELY TACKED TOWARDS THE DOVISH SIDE FOR NOW AND THIS CHATTER THAT KEVIN HASSETT WILL LIKELY BE NAMED AS FED CHAIR. AT THE SAME TIME, IN ASIA, WE HAVE SOME STRONG DATA COMING THROUGH AND ASIA CENTRAL BANKS RESPONDING. YOU HAVE AUSTRALIA, WHERE THE RBIS — RBA IS CLEARLY CONCERNED SO UNLESS THE DATA TURNS THEY WILL GO ON BEING ON HOLD AND THAT’S ALSO GOING TO ENCOURAGE THOSE WHO ARE BETTING ON RATE HIKES TO COME IN 2026. YOU HAVE THE ROYAL BANK OF NEWS ENGLAND — OF NEW ZEALAND CALLING — HAVING AN END OF THEIR CYCLE AND OTHERS HAVING CONVERSATIONS ABOUT WHETHER IT IS PRUDENT TO LOWER RATES SO WHEN YOU HAVE THAT PICTURE ACROSS THE REST OF ASIA, NOT SO MUCH IN CHINA, THAT THINGS ARE DOING WELL AND CENTRAL BANKS ARE THEREFORE ON HOLD AND ADD INTO THAT MAKES A MORE DOVISH FED AND YOU HAVE STRONGER ASIAN CURRENCIES IS A KEY PART OF WHAT LOOKS LIKE AN OPENING TO 2026 THAT WILL DELIVER A SUBSTANTIALLY WEAKER U.S. DOLLAR. PERHAPS ANOTHER OUTLIER WHEN IT COMES TO ASIAN CURRENCIES IS THE YEN. WHAT ARE YOU EXPECTING? THE USUAL EXPECTATION FOR THE BOJ GOVERNOR IS HE WILL STICK TO HIS USUAL SCRIPT, WHICH IS THAT WE ARE MOVING IN THE RIGHT DIRECTION BUT IT’S GOING TO TAKE TIME AND WE NEED TO BE NIMBLE IN CASE THINGS REQUIRE A FASTER TURN TOWARDS HIKING BUT LIKELY WE ARE GOING TO TAKE OUR TIME. SO IF WE GET THAT SORT OF A MESSAGE OUT OF THE BOJ GOVERNOR TODAY THAT IS NOT GOING TO HELP THE YEN MUCH. IT IS SORT OF BALANCED BETWEEN 155 AND 158 IN RECENT TIMES. AND WOULD PROBABLY BE MUCH CLOSER TO 160 IF NOT FOR THAT FED PIVOT. AND WHAT MATTERS MOST FOR THE YEN NOW IS WHERE THE FED GOES AND IF THE FED STAYS OR BECOMES MORE DOVISH THAN ALMOST NO MATTER WHAT THE BOJ DOES IT WILL BE AROUND ABOUT WHERE IT IS OR MOVING LOWER. THAT IS PRECISELY BECAUSE THE BOJ IS VERY MUCH ON A GLIDE PATH TOWARDS SOME STAGE IN 2026 WE WILL HIKE RATES. THANKS. WE ARE WAITING WITH BATED BREATH FOR THE RATE HIKE. GARFIELD REYNOLDS LEADS OUR MARKETS LIVE ASIA COVERAGE AND WE ARE JOINED TO DIG INTO THE INVESTMENT LANDSCAPE AND WE WILL BE AT THE SUMMIT WITH A CIO AND THE COHEAD OF CARLISLE JAPAN. MUCH MORE AHEAD. THIS IS BLOOMBERG. ♪ AIRLINES ARE SCRAMBLING TO UPDATE SOFTWARE ON THE AIRBUS A320 CARRIERS SAY THEY RUSHED THROUGH AN EMERGENCY FIX. LET’S BRING IN ANGUS. THIS COULD NOT HAVE COME AT A WORSE TIME JUST AHEAD OF THE TRAVEL SEASON. WHAT IS GOING ON WITH AIRBUS? GOOD MORNING. YOU ARE RIGHT THIS RECALL FROM AIRBUS AND THE EUROPEAN REGULATOR FOLLOWED BY THE FAA LOOKS LIKE A POTENTIAL CRISIS IN THE MAKING, PARTICULARLY AT THE END OF A RECORD-BREAKING THANKSGIVING TRAVEL SEASON WHAT WE SAW WAS A MAD RUSH TO ADDRESS THE SOFTWARE GLITCH THAT HAD BEEN IDENTIFIED FRIDAY TO GET THE FLEET BACK IN THE AIR AND THAT WAS AFFECTING 6000 AIRCRAFT AND THAT’S A LARGE CHUNK OF THE GLOBAL FLEET WHEN YOU THINK ABOUT IT BEING ABOUT 30,000 COMMERCIAL AIR DRAFT 6000 IS A BIG HIT AND REQUIRED A LOT OF RESOURCES TO GET IT FIXED. WE ARE SEEING THAT THE MAJOR FLYERS, WHICH INCLUDE AMERICAN, INDIGO AND EASYJET IN THE U.K. HAVE LARGELY COMPLETED THIS TASK SO WHAT WAS LOOKING LIKE A POTENTIAL TRAVEL CRISIS AT THE WORST TIME OF THE YEAR HAS LARGELY BEEN ADDRESSED BY SOME PRETTY INTENSIVE ACTION FROM AIRBUS AROUND THE WORLD. SO HOW MUCH IS LEFT IN TERMS OF THE THINGS THAT NEED TO BE TAKING PLACE FOR OTHER CARRIERS AND WHAT WILL THIS MEAN FOR AIRBUS’S IN VICIOUS DELIVERY TARGET? >> IT IS LARGELY RESOLVED. WE DID SEE SOME FLIGHT CANCELLATIONS AMONG SMALLER CARRIERS WE SAW JET STAR IN COLUMBIA SOME CANCELLATIONS BUT REALLY THE WORK IS DONE SO AIRBUS HAS MANAGED TO AVOID THIS AS IT IS RACING TOWARDS END OF YEAR DELIVERY TARGETS. IT IS NEVER A GOOD TIME TO GET SOMETHING LIKE THIS WHEN YOU’RE TRYING TO HIT AN AMBITIOUS DELIVERY TARGET BUT IT LOOKS LIKE IT MIGHT MAKE IT IF THINGS GO SMOOTHLY TOWARDS THE END OF THE YEAR. BUT THERE ARE SOME KEY TAKEAWAYS. THERE ARE SOME TAKEAWAYS HERE. FIRST IS JUST THE CONCENTRATION OF ONE AIRCRAFT IN THE GLOBAL FLEET. WHEN THAT IS TAKEN OUT THAT IS THE POTENTIAL FOR BIG GROUNDINGS AROUND THE WORLD THAT IS ONE THING TO TAKE NOTE OF. AND WE CAN TAKE COMFORT FROM THE FACT THAT THE REGULATORY SYSTEM HAS WORKED. IN A WEEK IT HAS ADDRESSED IT SO HOPEFULLY WE CAN TAKE COMFORT FROM THAT >> ANGUS, THANK YOU FOR GETTING US UP TO SPEED LOOKS LIKE AIRBUS IS FOR THE MOMENT ON TRACK AND WE WILL BE SPEAKING TO ONE OF THE LARGEST OPERATORS IN THE REGION. TONY SPEAKS TO BLOOMBERG EXCLUSIVELY COMING UP ON INSIGHT LATER WE HAVE MORE AHEAD ON THE ASIA TRADE. THIS IS BLOOMBERG. HONG KONG’S GOVERNMENT. THE DISASTER KILLED HUNDRED — HUNDREDS. TALK TO US ABOUT THE MOOD ON THE GROUND, THE DEVELOPMENTS OVER THE WEEKEND. THE MOOD HAS SHIFTED A LITTLE BIT BECAUSE INITIALLY WHEN I TALKED TO VICTIMS OF THE FIRE THEY HAD BEEN DAZED IN THE PUBLIC MOOD WAS ONE OF GRIEF. WE SAW OVER 1000 PEOPLE LINING UP TO GIVE FLOWERS AND HONG KONG STARTED THREE DAYS OF PUBLIC MOURNING AND OFFICIALS OBSERVED THREE MINUTES OF SILENCE. BUT IT IS STARTING TO EMERGE THAT THERE HAVE BEEN A NUMBER OF LAPSES FROM VARIOUS PARTIES BECAUSE REPORTS SHOW RESIDENTS HAD COMPLAINED OF THE FIRE SAFETY HAZARDS AS EARLY AS LAST YEAR AND SENT LETTERS TO THE DEPARTMENT OF LABOR RAISING CONCERNS AND THE DEPARTMENT OF LABOR ACKNOWLEDGED IN A STATEMENT THAT THEY HAD ERRONEOUSLY DISMISSED CONCERNS AND LATER SAID THE MATERIALS HAD MET COMPLIANCE STANDARDS BASED ON DOCUMENTS PROVIDED BY THE CONTRACTORS. WE KNOW THE NUMBER OF PEOPLE ARRESTED HAS INCREASED. INITIALLY THREE PEOPLE WERE ARRESTED FROM THE ENGINEERING COMPANY. ANOTHER ADDITIONAL EIGHT PEOPLE ALSO ARRESTED IN RELATION TO THIS CASE AND THERE’S BEEN AN INTERAGENCY TASK FORCE TO LOOK INTO THE CAUSE OF THE FIRE AND WHAT CAUSED IT TO SPREAD SO QUICKLY. AND POLITICAL TENSION IS RISING AS WELL. WE ARE NOW JUST AHEAD OF LEGISLATIVE ELECTIONS NEXT WEEK. THAT’S RIGHT. AND OVER THE WEEKEND THE OFFICE FOR NATIONAL SECURITY PUT OUT A WARNING AGAINST ANYONE TRYING TO USE THE FIRE TO STOKE UNREST OR ENDANGER NATIONAL SECURITY. ON FRIDAY WE UNDERSTAND THE DISTRIBUTION CENTER VOLUNTEERS WERE VACATE THE AREA. THE GOVERNMENT IS NOW TAKING OVER, TRYING TO MOVE THAT ONLINE TO INCREASE EFFICIENCY BUT AT THE SAME TIME THE NATIONAL SECURITY POLICE HAD ARRESTED ALREADY THREE PEOPLE, INCLUDING ONE WHO STARTED AN ONLINE PETITION WITH DEMANDS TO THE GOVERNMENT. IT INCLUDED SEVERAL DEMANDS. AN INSTAGRAM PAGE THAT RAISED THE DEMANDS HAS BEEN TAKEN DOWN. AUTHORITIES ARRESTED AN UNIDENTIFIED VOLUNTEER AND FORMER DISTRICT COUNSELOR. SO MANY OF THE VOLUNTEERS WHO CAME OUT WITH A LOT OF GOODWILL ARE NOW FEELING PERHAPS THEIR INTENTIONS ARE BEING SCRUTINIZED AND THERE IS A LOT OF FEAR AROUND WHETHER THAT PUBLIC GRIEF COULD TURN INTO ANGER. MINMIN LOW JOINING US FROM HONG KONG WITH THE LATEST ON THAT FIRE. INVESTORS SQUARELY FOCUSED ON THE RATE CUTTING PATH. WE SAW THE DOLLAR EXPERIENCING ITS WORST WEEK SINCE THE MONTH OF JUNE, HELPING SOME ASIAN CURRENCIES, STILL LOOKING RELATIVELY HIGH AROUND THAT LEVEL. BUT LET’S BRING IN BLOOMBERG’S CHIEF CORRESPONDENT. WE ARE FOCUSED ON THE DOLLAR AND SEEING HOW IT CLOCKED THOSE LOSSES LAST WEEK WHAT IS THE PRIMARY DRIVER OF THE DOLLAR WEAKNESS AND HOW ARE INVESTORS POSITIONED? YOU HINTED AT IT AT THE START WITH THE FED’S CUTTING CYCLE AND HOW INVESTORS ARE POSITION. VERY MUCH IN FOCUS. LET’S NOT FORGET THE DOLLAR IS ON NEARLY 90% OF ALL TRADES AND IF THE FED IS ON A RATE CUTTING CYCLE THAT WOULD USUALLY DEAL MORE DOLLAR WEAKNESS. AND WE SAW THAT LAST WEEK AS WELL. LET’S NOT FORGET THERE WAS THE CME OUTAGE THAT DID NOT HELP THINGS. POSITIONS WERE LIGHT PLUS PROSPECTS OF FURTHER CUTS IN THE U.S. DOWN. WHERE DOES THIS LEAVE US? IT’S IMPORTANT TO LOOK AT THE ENTIRE MACROENVIRONMENT. IF THERE’S AN UPTICK IN RISK, FOR EXAMPLE, A SURPRISE ON THE TRADE FRONT, DO YOU EXPECT TO SEE FURTHER BIDS INTO DOLLAR? IT IS ULTIMATELY THE WORLD RESERVE CURRENCY. IN THE DOLLAR HAS BEEN SOLD RECENTLY. AND YEN HAS NOT REALLY PROVEN TO BE THE HAVEN IT IS. SO SEE POSITIONS COMING BACK. OR IF THE FED SUDDENLY SURPRISES ON THE RATE CUTTING FRONT AND IS NOT AS DOVISH WE COULD EXPECT A DOLLAR BOUNCE. TALK TO US ABOUT THE SO-CALLED HAVEN QUALITY OF THE DOLLAR. WE WENT FROM ARETE — REAL DOUBTS EARLIER THIS YEAR TO WHERE WE ARE NOW, SO WHAT DOES 2026 LOOKED HOT — LIKE WHEN IT COMES TO INVESTORS SEEKING A HAVEN IN TERMS OF THE GREENBACK? LIBERATION DAY WAS A DENT ON THE DOLLAR BUT THAT SAID, TALKING TO LOTS OF PEOPLE, THERE IS NO VIABLE ALTERNATIVE TO THE DOLLAR. WHETHER IT’S A HAVEN OR A LIQUID ASSET THERE IS NOTHING THAT BEATS IT. SO AS INVESTORS SORT OF FIGURE OUT THE DOLLAR’S PATH, THERE IS THAT RISK OF A BOUNCE BACK IF INDEED THE BID FOR HAVENS ACCELERATE. BUT IN TERMS OF A FLIGHT TO SAFETY, WATCH THE DOLLAR. TALK TO US ABOUT THE RUBY. WE HAD SEEN RECORD LOWS. HOW VULNERABLE IS IT? IT IS INTERESTING. IT IS SEEN AS A MANAGED CURRENCY AND WE SAW THE R B.I. PROP UP THE CURRENCY ONCE AGAIN. IF YOU LOOK AT THE FUNCTION AND ASIAN PERFORMANCE THE RUBY HAS BEEN THE WEAKEST LINK IN ASIA. IT COMES DOWN TO THE LACK OF A VIABLE TRADE DEAL. REMEMBER INDIA HAS THE BIGGEST TARIFFS OF ALL ITS ASIAN PEERS SO EXPECT FURTHER PRESSURE. INVESTORS ARE TARGETING A 90 LEVEL NOW. SO IS IT A MATTER OF TIME BEFORE WE HIT 90? THAT’S DEFINITELY A VEIN OF DISCUSSION WITH INVESTORS. BRUCE CARSON. AND IT TAKE A LOOK AT HOW ASSETS ARE TRADING. DOWNSIDE PRESSURE FOR THE KIWI DOLLAR AND STOCKS, KIWI STOCKS BEING LED LOWER BY CONSUMER STAPLES AND UTILITIES. WE ARE SEEING THE KIWI DOLLAR AT THAT LEVEL AFTER SOME GAINS THE PREVIOUS WEEK. WE ARE OF COURSE HEADED FOR YOU CENTRAL BANK HEAD IN NEW ZEALAND. PAUL ALLEN JOINS US FOR MORE. WHAT SORT OF ECONOMY IS THE NEW CENTRAL BANKER INHERITING? A PRETTY GOOD ECONOMY ACTUALLY. WE HEARD FROM CHRISTIAN HAWKS BE SAYING IT IS IN A GREAT POSITION AND SAID HER MAIN TASK WILL BE TO MAKE CENTRAL BANKING BORING AGAIN IN NEW ZEALAND. I AM PARAPHRASING BUT THAT IS THE GIST OF WHAT HE SAID. THERE’S A DESIRE TO GET THEM OUT OF THE NEWS CYCLE. THERE WERE ALSO LINGERING QUESTIONS ABOUT THAT PAUSE IN EASING IN JULY WHEN THE ECONOMY WAS STRUGGLING SO ENTER ANNA BREMEN, THE FIRST WOMAN TO LEAD THE BANK AND THE FIRST FOREIGNER TO HOLD THAT POSITION SINCE 1934. SHE IS VIEWED AS SOMETHING OF A DOVE ALTHOUGH IT’S UNLIKELY SHE WILL NEED TO CUT THE EASING CYCLE IN NEW ZEALAND. SO PERHAPS HER FIRST ORDER OF BUSINESS WILL BE BANKING REGULATION. THEY WILL BE ROOT — RELEASING THEIR REVIEW LATER THIS MONTH SO THERE’S AN EXPECTATION WE WILL SEE A LOWERING OF RISK RATING AND CAPITAL BUFFERS. THIS LIKELY TO BE THE FIRST TIME WE HEAR FROM HER LATER IN DECEMBER. WHAT ELSE DO WE KNOW ABOUT WHETHER SHE LEANS MORE DOVISH OR HAWKISH BASED ON HER TENURE IN SWEDEN? YES. SHE IS VIEWED AS SOMETHING OF A DOVE ALTHOUGH WITH THE ECONOMY IN REASONABLE SHAPE, YOU KNOW, THE HEAVY LIFTING BEING DONE ON EASING, IT’S UNLIKELY SHE WILL NEED TO DO ANYTHING IN THAT REGARD. UNEMPLOYMENT IN NEW ZEALAND IS PRETTY HIGH BUT THERE’S AN EXPECTATION THAT GROWTH WILL PICK UP, FORECAST TO BE AROUND 3% IN 2026 AND PLENTY OF SCARE — SPARE CAPACITY IN THE ECONOMY AS WELL SO THE CENTRAL BANK OF NEWS ENGLAND IS CONVINCED THE ECONOMY IS IN RECOVERY MODE SO WE ARE NOT LIKELY TO SEE THE DOVISH SIDE OF ANNA BREMEN ANYTIME SOON. THANK. PAUL ALLEN IN SYDNEY TURNING OUT TO GEOPOLITICS. U.S. AND UKRAINIAN NEGOTIATORS SAID THEY HAD PRODUCTIVE DISCUSSIONS ABOUT A FRAMEWORK FOR A PEACE DEAL EVEN AS HE STALKS FELL SHORT OF A FINAL BREAKTHROUGH. IT’S NOT ABOUT THE TERMS THAT END FIGHTING ONLY BUT ALSO THE TERMS THAT SET UP UKRAINE FOR PROSPERITY. WE CONTINUE THAT WORK IN OUR COMMUNICATION THROUGHOUT THE WEEK AND WE HAVE BUILT ON THAT AGAIN BUT THERE IS MORE WORK TO BE DONE THIS IS DELICATE AND COMPLICATED AND OBVIOUSLY THERE’S ANOTHER PARTY INVOLVED THAT WILL HAVE TO BE PART OF THE ASIAN AND THAT WILL CONTINUE LATER THIS WEEK WHEN HE TRAVELS TO MOSCOW. LET’S BRING IN MICHAEL HEATH. WE HAVE BEEN TALKING ABOUT THIS FOR A LONG WHILE NOW IN TERMS OF WHAT U.S. OFFICIALS HAVE BEEN SIGNALING, WHETHER WE ARE INDEED CLOSER TO A FRAMEWORK OF A PEACE DEAL ARE YOU RAIN AND RUSSIA ARE WE SEEING MORE OF A SIGN THAT AMONG U.S. OFFICIALS THERE’S A SPLIT GIVEN HOW THEY ARE SIGNALING MORE WORK NEEDS TO BE KNOWN? I THINK THAT’S A GOOD TAKE ON IT. SECRETARY OF STATE RUBIO IS SORT OF THE MORE TRADITIONAL REPUBLICAN HE DOES NOT HAVE THESE WARM FEELINGS TOWARDS PRESIDENT PUTIN AND THE KREMLIN AND RUSSIA IN GENERAL AND HIS CHIEF ENVOY BOTH SEEM TO BE VERY ALMOST PRO-KREMLIN WHEREAS RUBIO IS ON THE OLD DEMOCRATIC SIDE IN TERMS OF COLD WAR THINKING THAT UKRAINE MUST BE DEFENDED AND ALL SUPPORT SHOULD GO TOWARDS IT. SO IT IS COMPLICATED. STEVE WITKOFF, PRESIDENT TRUMP’S ENVOY, WILL BE HEADING OFF TO MOSCOW LATER TODAY. WHAT WE HAVE SEEN IS RUSSIA IS BOMBING UKRAINE FAIRLY HEAVILY. THEY ARE TARGETING ENERGY AND CIVILIAN INFRASTRUCTURE THEY SEEM TO BE TRYING TO BREAK THE MORALE OF YOU RAIN SO IT COULD BE WE START TO GET UKRAINE IN A WEEKEND POSITION AND MAYBE THEY CAN PUSH IT INTO A DEAL BUT WE HAVE TO SEE HOW STRONG UKRAINE REMAINS IN EUROPE AS WELL >> YOU CANNOT REALLY GET TO A DEAL WITHOUT THE RAINY INSIDE AND HOW ARE UKRAINE’S ALLIES REACTING? EUROPE AND UKRAINE WERE BLINDSIDED. IT WAS BASICALLY PUT TOGETHER BY THE U.S. AND RUSSIA THE TRUMP ADMINISTRATION SEEMS TO BE SUPPORTIVE OF THIS VIEW THAT IT DEPENDS ON WHERE UKRAINE’S REDLINE IS. THEY ARE STRUGGLING TO KEEP THEIR FORCES GOING THEY WOULD LIKE PEACE BUT IT IS JUST HOW MUCH CAN THEY TOLERATE IN TERMS OF HOW MUCH CAN THEY GIVEAWAY QUESTION AND SOME GUARANTEES RUSSIA WON’T HAVE ANOTHER GO IN A YEAR DOES THERE ARE A LOT OF MOVING PARTS. MICHAEL HEATH WITH THE LATEST ON YOU RAIN AND THE ONGOING WERE THERE A LOOK AT HOW PRECIOUS METALS ARE TRADING, ESPECIALLY SILVER. WE CONTINUE TO SEE MORE EXPECTATIONS OF A FED RATE CUT IN SEPTEMBER AND EXPECTATIONS THAT KEVIN HASSETT COULD BECOME THE NEXT FED CHAIR HE OF COURSE CLOSELY ALIGNS WITH PRESIDENT TRUMP’S THINKING WE CONTINUE TO SEE SUPPLY TIGHTNESS AS WELL AND GIVEN THE OVERNIGHT SESSION WHERE WE HAD THE CHICAGO MERCANTILE EXCHANGE HAVING AN OUTAGE, WE HAD SEEN THAT. SO KEEP AN EYE ON THOSE MINERS TODAY IN ASIAN TRADING. THIS IS BLOOMBERG. ♪ SEEING NIKKEI FUTURES SLIGHTLY TO THE DOWNSIDE AFTER FOUR SESSIONS OF GAINS ALREADY. THE YEN HOLDING AT THAT 156 LEVEL. KEEP AN EYE ON JGB’S BECAUSE WE HEARD THEY WON’T BE MAKING ANY CHANGES IN THAT BRACKET, SO WE COULD SEE MORE ELSEWHERE SO WHAT DOES THAT MEAN WHEN IT COMES TO SUPPORTING FUTURES CONTRACTS AND PERHAPS MORE CURVE FLATTENING. AND OF COURSE WE HAVE THE BANK OF JAPAN GOVERNOR SPEAKING LATER SO KEEP AN EYE ON HIS COMMENTS. BUT WE HAVE SEEN THIS FLURRY OF DEALS IN JAPAN. OUR NEXT GUEST — MANAGEMENT TEAM. JOINING US IS OUR GUEST. IT’S GREAT TO HAVE YOU WITH US. TELL US MORE ABOUT WHAT SORT OF COMPANIES YOU ARE INVESTING IN IT IS A TECHNOLOGY FUND I STARTED. WE ARE INVESTING IN PUBLICLY TRADED COMPANIES. BUT THE DIFFERENCE FROM THE TYPICAL PUBLIC EQUITY FUND THIS WE SUPPORT THE COMPANY. WHAT IS MEANT BY THAT IS AFTER WE INVEST — WE TALK WITH MANAGEMENT AND LOOK AT THE CEO WITH AN ASPIRATION TO CHANGE THEIR COMPANY PROFILE THEN WE ARE ANALYZING THE DEAL WITH THE COMPANY. AFTER INVESTMENT, WE TOUCH ON THE INFORMATION, PRIVATE EQUITY STYLE. YOU RAISED ¥130 BILLION TO DO THIS. HOW MUCH OF THAT HAVE YOU DEPLOYED OR COMMITTED? WE RAISED ABOUT $500 MILLION THIS YEAR. SO THE TOTAL FUND SIZE AS OF NOW IS ABOUT 270. WE DEPLOYED 30 TO 40% OF THAT. WE INVEST IN THE SAME COMPANY AS OUR FIRST FUND. THIS IS AVRIL IN SINGAPORE. COULD YOU TALK TO US MORE ABOUT THE TARGETS OF YOUR INVESTMENT? YOU ALLUDED TO THIS A SHORT WHILE AGO BUT OTHER SPECIFICS YOU CAN SHARE MORE ABOUT IN TERMS OF WITH INTACT, THE SECTORS AND SIZES OF THE FIRMS YOU ARE INTERESTED IN? IT IS A PUBLICLY TRADED COMPANY OF AROUND 200 BILLION. SO IT IS CONSIDERED A SECOND-TIER CORPORATION. ONE ISSUE OF THOSE COMPANIES, AS WE SAW THE TOPICS ONE UP IN THE LAST FIVE YEARS BUT THOSE COMPANIES REALLY HAD NOT CHANGED A LOT. ONE OF THE REASONS FOR THAT IS THAT THEY ARE NOT CREATING FUTURE EXPECTATIONS. SO OUR MISSION IS ONCE WE INVEST IN THE INITIATIVES AND ARE CREATING SOMETHING IN WHICH WE HOPE WILL RESULT IN THE EXPANSION. AND IN TERMS OF INDUSTRY WE ARE OPEN TO ANY KIND OF INDUSTRY. ONE COMMON CHARACTER ARE THE COMPANIES DOING BUSINESS OUTSIDE OF JAPAN BECAUSE IT IS DIFFICULT TO CREATE THAT FUTURE EXPECTATION. SO EXPANSION IS PROBABLY NOT EASY. WHAT ARE YOU SEEING IN TERMS OF HOW THESE FIRMS ARE POSITIONING FOR GROWTH, ESPECIALLY IN THE YEAR AHEAD? ONE OF THE REASONS THOSE COMPANIES ARE NOT CREATING FUTURE GROWTH EXPECTATIONS AS THEY ARE NOT USING THE CASH FOR THE FUTURE. AS YOU KNOW, STILL IN JAPAN, THERE’S A BUNCH OF COMPANIES WITH CASH ON THEIR BALANCE SHEET. IT IS TIME TO USE THAT FOR THE FUTURE GROWTH AND THEN EXECUTE IN A GOOD WAY IN CREATING A STRONGER PROFIT. IT DOES NOT CREATE THE KIND — THE COMPANY’S FUTURE. SO IT IS SUPPORTING TO USE THOSE CASH FOR THE FUTURE GROWTH I THINK IT HAS MORE COURAGE TO MOVE FORWARD BY GETTING SUPPORT FROM A BIG SHAREHOLDER. WHEN YOU SAY THESE COMPANIES ALL HAVE SOME SORT OF EXPOSURE OVERSEAS DOES THAT MEAN THEY HAVE EXPOSURE TO CURRENCY FLUCTUATIONS? THAT IS ONE WAY TO LOOK AT IT. WE ARE WORRIED ABOUT EFFECTS NOBODY CAN CONTROL. THAT IS A POSITIVE FOR THE COMPANY. BUT SOME U.S. OR GLOBAL INVESTORS — THIS IS SOME KIND OF MITIGATION. IT WORKS BOTH WAYS. THE FIRST AND SECOND FUND, ARE YOU STILL HAVING PLANS TO OPEN A THIRD? I REMEMBER YOU WERE IN TALKS ABOUT OVERSEAS INVESTORS. AS OF NOW, THE INVESTORS ARE ALL JAPANESE. HOW ARE YOU DOING GETTING TALENT? YOU ARE EXPANDING IT I KNOW TALENT IS PRECIOUS IN THIS COUNTRY. IT IS TOUGH. I USED TO WORK IN PRIVATE EQUITY FOR ABOUT 20 YEARS AND NOW NEW GPS ARE NOW COMING BACK. TRYING TO HIRE YOUNG TALENT IS EXPENSIVE. I DO NEED TO EDUCATE THEM. HOW MANY MORE ARE YOU LOOKING TO HIRE? WE HAVE A LITTLE BIT LESS THAN 20 PEOPLE NOW BUT WE WILL PROBABLY ADD FIVE OR SIX PEOPLE. MY COMPANY IS STILL TWO YEARS YOUNG. I DON’T HAVE A LOT OF BUDGET. YOU WILL HAVE TO JOIN US AGAIN TO GIVE US AN UPDATE ON HOW THE FUNDS ARE GOING. THANK YOU. CATCH THAT AT 8:40 A.M. IN TOKYO. SUBSCRIBERS CAN WATCH LIVE ON THE TERMINAL. AND WE DO HAVE BREAKING NEWS. WE ARE GETTING THE LATEST CAPITAL EXPENDITURE NUMBER IN JAPAN, GROWTH OF 2.9% YEAR ON YEAR FOR THE THIRD QUARTER, WHICH IS LOWER THAN WHAT ECONOMISTS EXPECTED AND ALSO A DECELERATION FROM THE PREVIOUS MONTH. WHEN IT COMES TO CAPITAL SPENDING, IT SEEMS JAPANESE COMPANIES ARE PULLING BACK A LITTLE BIT. THIRD QUARTER PROFITS RISING 19.7% YEAR ON YEAR. THIS IS BLOOMBERG. ♪ MICRON WILL REPORTEDLY SPEND $9.6 MILLION TO BUILD A PLANT IN JAPAN MAKING CHIPS FOR AI APPLICATIONS. A NEWSPAPER SAYS THEY WANT TO DIVERSIFY THEIR ADVANCED CHIP PRODUCTION OUTSIDE TAIWAN AND PLANS FOR SHIPMENTS FROM 2028. THE REPORT SAYS THE FACTORY WILL MAKE HIGH-BANDWIDTH MEMORY CHIPS A KEY COMPONENT. AND MEITUAN HAS REPORTED ITS FIRST LOSS IN ALMOST THREE YEARS , REFLECTING THE IMPACT OF INTENSE COMPETITION IN CHINA’S FOOD DELIVERY SECTOR. IT WARNED LOSSES WILL CONTINUE THIS QUARTER AMID THE BATTLE FOR MARKET SHARE WITH ALIBABA IN JD.COM. THEY SAY THEY REMAIN CONFIDENT OF RESTORING PROFITABILITY IN THE MID TO LONG TERM. AND SOUTH KOREAN AUTHORITIES ARE INVESTIGATING A DATA LEAK THAT EXPOSED 33 MILLION ACCOUNTS. THE ALLEGED HACKER IS A CHINESE NATIONAL WHO PREVIOUSLY WORKED AT THE U.S. LISTED ONLINE RETAILER. POLICE BEGAN INVESTIGATING AFTER A FORMAL COMPLAINT THAT SAYS IT BECAME AWARE OF THE LEAKS ON NOVEMBER 18. AND TAKE A LOOK AT HOW WE ARE SETTING UP FOR THE MARKET OPENS. JGB FUTURES UNDER PRESSURE. WE ALSO HAVE CAPITAL SPENDING RISING IN THE THIRD QUARTER. THE MARKET OPENS IN TOKYO AND SEOUL ARE NEXT. THIS IS BLOOMBERG. SHERY: WE ARE COUNTING DOWN TO ASIA’S MAJOR MARKET OPENS. WE WILL BE WHY IN THE ASIAN SESSION TODAY AFTER WE CONTINUE TO SEE EXPECTATIONS OF A FED RATE CUT. WE WILL BE WANT IN THE HEALTH OF THE U.S. ECONOMY WITH CYBER MONDAY SALES OF COURSE AFTER THANKSGIVING LAST WEEK, AND OF COURSE BLACK FRIDAY. AVRIL: IN THE MEANTIME WE HAVE SOMETHING TO CHEW ON FROM THE ASIA GIANT. WE HAVE PMI NUMBERS ON MANUFACTURING. THINGS DON’T LOOK GREAT, LONGER STREAK OF CONTRACTION ON RECORD. A COUPLE THINGS TO UNPACK TODAY. SHERY: YEAH. WE WILL ALSO BE WATCHING THE BANK OF JAPAN GOVERNOR UEDA SPEAKING EARLIER AS WE ALSO DIGEST CAPITAL SPENDING NUMBERS OUT MINUTES AGO. DISAPPOINTING TO THE DOWNSIDE AND NOT RISING AS MUCH AS ECONOMISTS HAD EXPECTED FOR THE THIRD QUARTER, NOT SURPRISING GIVEN THERE WAS A LOT OF UNCERTAINTY AROUND U.S. TARIFFS WHEN IT CAME TO THE FINAL QUARTER. STOCKS GAINING .2% EXTENDING SESSIONS OF GAINS WE ALREADY SAW FOR THE MARKET. WE ARE SEEING THE JAPANESE YEN HOLDING AT THE 155 LEVEL AGAINST THE GREENBACK AFTER THREE MONTHS OF LOSSES ALREADY AGAINST THE U.S. DOLLAR. WE CONTINUE TO SEE DOWNSIDE PRESSURE WHEN IT COMES TO THE JAPANESE CURRENCY AS WE ARE WATCHING THE 10 YEAR JGB YIELD AT THAT 182 LEVEL. WE HAD SEEN MORE DETAILS ABOUT THE FINANCE MINISTRY ISSUANCE PLANS WHEN IT COMES TO BONDS AND HOW TO FINANCE NEW STIMULUS PACKAGE HERE IN JAPAN. WATCH OUT FOR GOVERNOR UEDA’S COMMENTS LATER TODAY. TAKE A LOOK AT HOW SOUTH KOREA IS OPENING BECAUSE WE ARE NOW SEEING NOVEMBER EXPORTS RISING 8.4% YEAR ON YEAR WHICH IS BEATING TO THE UPSIDE, BUT IMPORTS BEFORE THE MONTH OF NOVEMBER DISAPPOINTING TO THE DOWNSIDE AND GROWING ONLY 1.2% YEAR ON YEAR BELOW ECONOMIST ESTIMATES. THE TRADE SURPLUS WIDENING TO $9.73 BILLION, PERHAPS NOT SURPRISING GIVEN WE HAVE SEEN STRENGTH IN SOUTH KOREAN SHIPMENTS. COMPUTER CHIPS ARE BEING SHIPPED OUT, AUTO PARTS ALSO BEING SHIPPED OUT, AT THE SAME TIME DOMESTIC DEMAND MAY NOT BE AS STRONG AS ECONOMISTS EXPECTED. WE HAVE DIVERGENCE WHEN IT COMES TO THE KOSPI AND THE KOSDAQ WITH THE COST BACK — WE MIGHT SEE THE GOVERNMENT TRYING TO SUPPORT THE MARKETS. KOREAN MOM HOLDING AT THAT 1466 LEVEL AGAINST THE DOLLAR. AVRIL: TAKE A LOOK AT HOW U.S. FUTURES ARE SHAPING UP AFTER MANAGING SOME SLIGHT GAINS FOR THE MONTH OF NOVEMBER. THEY ARE NOT GIVING US MUCH DIRECTION BUT WE ARE LOOKING FOR HASSETT WAITING IN THE WINGS. WE DID GET BLACK FRIDAY NUMBERS AS YOU MENTIONED. CYBER MONDAY TO COME. PCE NUMBERS FOR LATER IN THE WEEK AS WELL. ALL THIS CHANNELING THE ENERGY TOWARDS NEXT WEEK WHEN THE MARKET EXPECTATION IS ONE OF A CUT FROM THE FEDERAL RESERVE. IN TERMS OF THE U.S. 10 YEAR, WE ARE SEEING THE YIELD NUDGING UP TOWARDS THE 404 HANDLE. THE OTHER ASSET CLASS WE ARE WATCHING, COMMODITIES, AFTER WE GOT OPEC-PLUS CONFIRMING OF COURSE OUTPUT HIKES EARLY NEXT YEAR. SO YOU ARE SEEING THAT REACTION IN PRICES. DATA RELEASED ON SUNDAY ALSO SHOW CHINA’S FACTORY ACTIVITY IMPROVED BUT REMAINED IN CONTRACTION IN NOVEMBER, EXTENDING ITS STREAK OF DECLINES TO A RECORD AS THE COUNTRY’S ECONOMIC SLOWDOWN DEPENDS. LET’S BRING IN GARFIELD REYNOLDS WHO LEADS OUR MARKETS LIVES ASIA COVERAGE. GARF, WE’VE TALKED THROUGH CONCERNS AND THE CHINESE ECONOMY. HOW IS THAT SHAPING TRADING PERHAPS? GARFIELD: LOOKS LIKE A PRETTY TOUGH WEEK FOR CHINESE ASSETS. EQUITIES WERE SURPRISINGLY RESILIENT LAST WEEK AMID THE CHINA VANKE FALLOUT AND IN TERMS OF CREDIT MARKETS. BUT NOW WE HAVE THIS ECONOMIC DATA. THE MANUFACTURING WAS A LITTLE WORSE THAN EXPECTED BUT IT WAS STILL KIND OF EXPECTED. BUT TO SEE THE NONMANUFACTURING GAUGE FALL UNDER CONTRACTION AS WELL, IT IS THE COMPOSITE GAUGE FOR THE FIRST TIME SINCE THE END OF 2022, WHICH IS WHEN THE COUNTRY WAS LOCKED DOWN IN THE POST-COVID SITUATION. SO GIVEN ALL OF THAT, IT IS LOOKING LIKE IT IS GOING TO BE TOUGH FOR OPTIMISM TO SUSTAIN IN CHINA UNLESS OF COURSE WE GET SOME SIGNS THAT THE GOVERNMENT IS GOING TO STEP IN TO HELP STIMULATE THE ECONOMY TO COME UP WITH MORE REFORM MEASURES. CHINA LOOKS LIKE BEING A BIT OF A DRAG ON THE OVERALL RISK APPETITE PICTURE ACROSS THE ASIA-PACIFIC AS WE COME TO THIS FIRST WEEK OF DECEMBER. SHERY: A LITTLE BIT OF A DIFFERENT NARRATIVE COMING FROM THE U.S. WHICH SEEMS TO BE HELPING FUEL THAT RISK APPETITE GIVEN THE POTENTIAL OF A MORE DOVISH FED. TAKE A LISTEN TO WHAT KEVIN HASSETT HAD TO SAY ABOUT WHO BECOMES THE NEXT FED CHAIR. WE HAD A GREAT TREASURY OPTION, INTEREST RATES WENT DOWN. THE AMERICAN PEOPLE CAN EXPECT PRESIDENT TRUMP TO PICK SOMEBODY WHO IS GOING TO HELP THEM HAVE CHEAPER CAR LOANS AND EASIER ACCESS TO MORTGAGES AT LOWER RATES AND THAT IS WHAT WE SAW IN THE MARKET RESPONSE. SHERY: IS THIS SOMETHING FOR ASIAN MARKETS TO CHEER AS WELL? GARFIELD: IT LOOKS LIKE ASIAN MARKETS THIS WEEK ARE GOING TO A SERIES OF POSITIVE LEADS. PROVIDED THINGS KEEP GOING THE WAY THEY HAVE BEEN GOING, THERE IS A BIT OF A FEELING THAT THE SANTA RALLY IS BACK ON. IT WAS A SHOCK TO A LOT OF PEOPLE THE WAY THAT MARKETS WENT SOUR IN THE FIRST HALF OF NOVEMBER, BECAUSE NOVEMBER HAS TRADITIONALLY BEEN A GOOD MONTH FOR STOCKS, AND THE SAME THING GOES FOR DECEMBER BY THE WAY. NOW THAT WE HAVE HAD THAT FED PIPIT AND WE ARE GETTING A BIT OF EXTRA FUEL FOR THE IDEA THAT THE FED IS GOING TO BE MORE ACCOMMODATIVE, GOING TO BE MORE HELPFUL FOR RISK ASSETS, WITH THE HASSETT RUMORS, WITH THE DETERMINATION OF PRESIDENT TRUMP TO PUSH FOR LOWER INTEREST RATES. OVER THE LONG TERM THAT MIGHT BRING SOME VOLATILITY INTO THE SITUATION. IN THE SHORT-TERM, THERE IS A VERY STRONG CHANCE THAT INVESTORS WILL DECIDE IT IS TIME TO ENJOY THE SANTA RALLY THAT THEY THOUGHT WAS ALREADY GOING TO BE HALFWAY THROUGH. INSTEAD, WHAT THEY DO HAVE IS A VERY STRONG MOMENTUM MOVE OUT OF LAST WEEK, LAST WEEK AND A HALF. WE ARE ABOUT TO GO INTO A QUIET PERIOD WITH THE FED. IT WILL BE A LITTLE PARTIAL AND A LOT DELAYED. THAT IS VERY UNLIKELY TO KNEECAP THE CONCEPT WE ARE GOING TO GET LOWER RATES IN DECEMBER. THE HOPES THEN WILL BE THAT THE FED DOESN’T SOUND TOO CAUTIOUS ABOUT CONTINUING RATE CUTS IN THE COMING YEAR. THAT WOULD BE THE RISK. BUT THAT IS A RISK THAT IS MORE THAN A WEEK AWAY. BY NOW WE ARE LIKELY TO SEE EQUITY INVESTORS REGAIN THEIR MOJO, BOTH IN THE U.S. AND FOR MOST OF THE REST OF THE WORLD TOO. AVRIL: GARF, ARE WE LIKELY TO SEE TREASURIES AGAINST THE BACKDROP OF THOSE FED PIVOT EXPECTATIONS LIKELY TO REGAIN THEIR MOJO? I ASK THIS BECAUSE IS THERE A DISCONNECT BETWEEN WHAT CENTRAL BANKS ARE LIKELY TO DO AND WHAT THE DEBT MARKETS ARE TELLING US? WE ARE LOOKING AT THE TWO-YEAR YIELD IN JAPAN RISING TO 1% FOR THE FIRST TIME SINCE 2008. I MEAN, WHAT IS YOUR SENSE OF THE DYNAMIC THAT HAS EMERGED? GARFIELD: WELL, THE DYNAMIC THAT IS EMERGING IS THAT THE FED IS HEADING IN ONE DIRECTION TOWARDS RATE CUTS, MOST OF THE REST OF THE WORLD IS HEADING TOWARDS EITHER STAYING ON HOLD OR EVEN HIKING INTEREST RATES. SO, THAT’S WHY YOU’VE GOT SHORT AND YIELDS IN JAPAN RISING. ALTHOUGH I TEND TO THINK THE BOJ DOES NOT HIKE THIS MONTH, AND THEY WILL HIKE IN ONE OR BOTH OF THE FIRST TWO MEETINGS NEXT YEAR. AND YOU LOOK IN AUSTRALIA WHERE TRADERS ARE NOW VERY CONFIDENT THE FED WILL CONSIDER RATE HIKES IN THE SECOND HALF OF 2026. YOU HAVE THE POTENTIAL THAT THE ECB IS DONE WITH CUTTING RATES. YOU HAVE THE RBNZ DEFINITELY DONE WITH CUTTING RATES. A LOT OF CENTRAL BANKS AROUND THE GLOBE ARE NOW GOING TO BE ON HOLD OR CONSIDERING RATE HIKES. THE FED IS HEADING IN THE OTHER DIRECTION. THAT IS A POSITIVE FOR TREASURIES. FOR GLOBAL BONDS, IT IS A MORE FRACTURED AND FRAGILE PICTURE BECAUSE OF THAT CENTRAL-BANK DIVERGENCE. AVRIL: GARF, THANK YOU SO MUCH. GARFIELD REYNOLDS, WHO LEADS OUR MARKETS LIVES ASIA COVERAGE. WE ARE ALSO TALKING ABOUT COMMODITIES, SPECIFICALLY OIL PRICES. OPEC AND ITS ALLIES HAVE DECIDED TO STICK WITH PLANS TO PAUSE PRODUCTION HIKES DURING THE FIRST QUARTER AMID GROWING SIGNS OF A SURPLUS IN GLOBAL OIL MARKETS. LET’S BRING IN STEPHEN STAPCZYNSKI WHO LEADS OUR ASIAN ENERGY COVERAGE. WE HAVE JUST COME OFF THIS WEEKEND WHERE OPEC-PLUS SEEMED TO DO WHAT MOST OF THE MARKETS ANTICIPATED. WHY ARE WE SEEING THIS REACTION IN PRICES? PUT THINGS IN PERSPECTIVE FOR US. STEPHEN: SURE. YES, THEY HAD SIGNALED LAST MONTH IN NOVEMBER THAT THEY WERE GOING TO OF COURSE PAUL IS THIS INCREASE BETWEEN JANUARY AND MARCH. NOW THEY REAFFIRMED THAT AND THERE ARE A FEW WAYS TO READ THIS. WITH OIL PRICES UP MORE THAN 1% TODAY. YOU NEVER REALLY KNOW WHAT OPEC-PLUS IS GOING TO DO. THEY SURPRISED THE MARKET MULTIPLE TIMES. THAT THEY REITERATED THIS CALL, THEIR VIEW IS THAT FOR SEASONAL REASONS THEY DECIDED TO STICK WITH THIS. THAT DOES HELP TO TAKE SOME HEAT OFF OF THAT BEARISH ELEMENT IN THE MARKET. THEY ARE NOT FLOODING ANYMORE, THEY ARE REASSESSING THE SITUATION. THAT IS SOMETHING THAT COULD HELP PRICES GO UP A LITTLE TODAY. ANOTHER THING OF COURSE IS RATCHETING UP OF PRESSURE ON VENEZUELA FROM THE TRUMP ADMINISTRATION. HE TALKED ABOUT HOW FLIGHTS SHOULD NOT BE GOING THROUGH AIRSPACE. VENEZUELA, WHILE STILL NOT A MAJOR EXPORTER, AND WHAT THEY DO EXPORT GO ON SHADOW FLEET VESSELS TO COUNTRIES LIKE CHINA, ANY OTHER RATCHETING UP OF PRESSURE ON THE COUNTRY, THE GOVERNMENT, OR THEIR OIL SECTOR, WOULD BE SOMEWHAT BULLISH FOR PRICES. I THINK YOU ARE SEEING BOTH OF THE REACTION IN THE MARKET TODAY IS NOT JUST OPEC-PLUS REAFFIRMING, BUT ALSO DIGESTING TRUMP’S COMMENTS ON VENEZUELA OVER THE WEEKEND. SHERY: HOW DOES THE DEMAND OUTLOOK LOOKING RIGHT NOW? THE DATA WE ARE SEEING DOES NOT LOOK GREAT. STEPHEN: YEAH, NO, I THINK THAT IS THE BIG THING IN THE MARKET. NOT ONLY ARE YOU FLOODING THE MARKET WITH PRODUCTION FROM OPEC-PLUS THROUGH THE END OF THIS YEAR, BUT YOU ARE ALSO HAVING OUTPUT INCREASE FROM THE UNITED STATES, OR AT LEAST STAY QUITE STRONG FROM THE UNITED STATES, WITH THE BACKDROP THAT DEMAND IS NOT TERRIBLY STRONG IN CHINA. SO I THINK THE MARKET WAS EXPECTING CHINESE DEMAND A MUCH STRONGER THIS TIME OF YEAR A FEW YEARS BACK. I THINK THERE WAS THIS EXPECTATION THAT POST-COVID, CHINESE DEMAND WOULD REALLY PICK UP AND HELP TO DIGEST THE MARKET. THERE HAS BEEN A LOT OF CHINESE BUYING EARLIER IN THE YEAR BUT THAT WAS MOSTLY FOR STOCKPILING. NOW THAT THAT STOCKPILING HAS ESSENTIALLY FINISHED, YOU ARE SEEING A SOFTER PICTURE FOR CHINA AND THAT DOES ADD TO THAT GLUT SITUATION. YOU HAD THE IEA AND BANKS WARNED ABOUT HOW WE ARE ENTERING A SITUATION IN 2026 WHERE YOU ARE GOING TO CONTINUE TO LIKELY SEE WEAKNESS FROM CHINA AND OTHER MAJOR BUYERS AS WELL AS INCREASED SUPPLY, WHICH WILL OVERALL ADD TO THIS FROTHINESS IN THE MARKET AND HELP PUSH DOWN PRICES. SHERY: STEPHEN STAPCZYNSKI THERE, WHO LEADS OUR ASIAN ENERGY COVERAGE. TAKE A LOOK AT SOME BIG MOVERS ACROSS ASIA. PRECIOUS METAL STOCKS HAVE RISEN TO RECORD HIGHS, ESPECIALLY SILVER AND COPPER. WE HAD SEEN THAT OUTAGE IN THE CHICAGO MERCANTILE EXCHANGE ALREADY GIVING TO SOME DISRUPTION AND THIN LIQUIDITY IN THE OVERNIGHT SESSION. THE SILVER PRICE IN ASIA JUST TOUCHED A RECORD HIGHS OF DO KEEP AN EYE FOR THOSE MINING STOCKS. ALSO WATCH FOR SOME OTHER IDIOSYNCRATIC MOVERS IN THE AUSTRALIANS PASSION — AUSTRALIAN SESSION. SCRAPPING TALKS ABOUT A POSSIBLE TAKEOVER OFFER. ALSO WATCHING TREASURY WINE, SHARES SLUMPED TO A 10 YEAR LOW AFTER THE COMPANY ANNOUNCED THEY WOULD WRITE DOWN THE VALUE OF THEIR U.S. BUSINESS. WE HAVE MORE AHEAD ON “THE ASIA TRADE.” THIS IS BLOOMBERG. ♪ SHERY: TAKE A LOOK AT HOW JAPANESE ASSETS ARE TRADING WITH EQUITIES FALLING FOR THE FIRST TIME IN FIVE SESSIONS. WE ARE HEARING FROM THE FINANCE MINISTERS SAYING THAT THEY ARE CONSIDERING REVISING CORPORATE GOVERNANCE CODES, THAT CORPORATE GOVERNANCE REFORM IS A PRIORITY, AND THAT JAPAN WILL ADD SUPPORT FOR FIRMS BEFORE AND AFTER LISTING. OF COURSE THIS TEAM HAS PROPELLED THE JAPANESE EQUITY MARKETS. WE ARE ALSO WATCHING JGB’S BECAUSE HE FINANCE MINISTER RECENTLY ANNOUNCED PLANS TO INCREASE THEIR ISSUANCE OF SHORT-TERM BONDS. WE WERE EXPECTING SHORT-TERM YIELDS TO FIRM UP AND THAT IS HAPPENING WITH THE TWO-YEAR YIELD RISING TO 1% FOR THE FIRST TIME SINCE 2008. AVRIL: THE PRIORITY SUMMIT MEANTIME IS TAKING PLACE IN TOKYO AND IT BRINGS TOGETHER KEY LEADERS AND POLICYMAKERS FROM SAUDI ARABIA AND JAPAN. THE FOCUS WILL BE ON ROBOTICS, AI, TRADE AND GLOBAL SUPPLY CHAINS. LET’S BRING IN OUR FIRST GUEST FROM THE EVENT, VICE CHAIRMAN AND CIO AT INVESCO ARE. REALLY GOOD TO SEE YOU. WE HAVE JUST BEEN TALKING ABOUT JAPAN AND SOME OF THE STIMULUS NEEDS AND A PUSH. TALK TO US ABOUT WHAT YOU ARE SEEING THERE. HI, GOOD MORNING, AND THANK YOU FOR HAVING ME. WHAT WE ARE CLEARLY SEEING FROM OUR VANTAGE POINT AS A GLOBAL PRIVATE MARKETS-FOCUSED INVESTMENT FIRM AT INVESTCORP IS THIS EMERGENCE OF A CORRIDOR, IF I MAY CALL IT THAT, OF TRADEFLOW AND INVESTMENT FLOW BETWEEN JAPAN AND THE MIDDLE EAST, WRAPPING ITSELF THROUGH INDIA IN PARTICULAR WITH ASEAN BROADLY SPEAKING. AND THAT CORRIDOR OF TRADE AND CAPITAL AND INVESTMENT FLOW IS VERY INTERESTING FOR FUNDS LIKE OURS TO TAP INTO. BECAUSE FOR THE FIRST TIME, LIKE I SAID, IT IS BIDIRECTIONAL. MORE IMPORTANTLY IT IS OPENING UP A WORLD OF OPPORTUNITY FOR US TO DEPLOY CAPITAL BEHIND IN AREAS AND SECTORS OF HIGH CONVICTION AND POTENTIALLY HIGH RETURN IN THE FUTURE. AVRIL: IS THIS FLOW THROUGH THE CORRIDORS THAT YOU SPEAK OF GOING TO BE AGNOSTIC OF THE BOJ’S PATH? DO INVESTORS NEED TO SEE HIKE FOR MORE CONVICTION? RISHI: I THINK THAT IS A GREAT QUESTION. TO BE HONEST, I THINK THE BOJ’S PATH IS ACTUALLY ONE OF THE UNDERPINNINGS FOR THIS CORRIDOR TO EMERGE AND CEMENT ITSELF THE WAY I DESCRIBED IT. BECAUSE FOR THE LONGEST OF TIMES FOR MANY DECADES, THE GROWTH TRAJECTORY FOR JAPAN IN GENERAL WAS RELATIVELY MUTED IN TERMS OF NOMINAL GDP. AND WITH THE EMERGENCE OF SOME DEGREE OF ACCEPTABLE NORMALIZED INFLATION IN THE JAPANESE ECONOMY WAS A CONTINUING, RELATIVELY LOW INTEREST RATE BEHIND IT. IT MEANS THE PROSPECT FOR STRONG, ATTRACTIVE RETURNS FOR EQUITY INVESTORS IN PRIVATE MARKETS, BUT ALSO ARGUABLY IN PUBLIC MARKETS, ARE VERY STRONG OVER A MEDIUM TO LONG-TERM HORIZON. THAT REALLY IS WHAT IS GIVING RISE TO THE INCREASING INVESTOR INTEREST. THAT OF COURSE IS SUPPLEMENTED BEYOND WHAT THE BOJ DOES, BY THE EMERGENCE OF A LARGE SET OF OPPORTUNITIES WITHIN CERTAIN SECTORS, MANY OF THEM RELATED TO TECHNOLOGY AND INNOVATION BUT ALSO RELATED TO ENERGY TRANSITION AND INFRASTRUCTURE, BOTH DIGITAL AND PHYSICAL, THAT SUPPORT THIS INCREASE IN INTEREST FOR CAPITAL FLOWS BETWEEN THE MIDDLE EAST AND JAPAN. AND LAST BUT NOT LEAST, THE WORK THE BOJ IS DOING IN TERMS OF ENHANCING GOVERNANCE IN PARTICULAR, AND REGULATORY REFORM, IS AN IMPORTANT PILLAR OF HOW WE SEE THIS MARKET EVOLVING. SHERY: HOW DOES THE WEAKNESS OF THE JAPANESE YEN FACTOR INTO YOUR CALCULATIONS OF INVESTMENTS IN JAPAN? RISHI: WELL, LOOK, THE WEAKNESS OF THE JAPANESE YEN TODAY OBVIOUSLY PROVIDES AN ATTRACTIVE ENTRY POINT FOR NEW INVESTMENT ACTIVITY INTO JAPAN. THE KEY HERE IS WHAT HAPPENS IN THE FUTURE. IF THE YEN CONTINUES TO WEAKEN, THAT WOULD OBVIOUSLY NOT BE A GREAT THING FOR A FOREIGN INVESTOR DENOMINATED IN A DIFFERENT CURRENCY. SO I THINK SOME DEGREE OF EXPECTED POLICY STABILITY AROUND THE CURRENCY AS WE LOOK OUT OVER A MEDIUM-TERM HORIZON WOULD BE GREATLY HELPFUL AND POSITIVELY IMPACTFUL FOR INVESTORS AS THEY CONSIDER INVESTMENT OPPORTUNITIES IN JAPAN, FACILITATED BY THE CURRENCY AND WEAKNESS, AS YOU SET — THE CURR ENT YEN WEAKNESS, AS YOU SAID. SHERY: WE CONTINUE TO SEE THE ECONOMIC SLUMP IN CHINA IN THE ECONOMIC DATA WE ARE GETTING RECENTLY. WHAT ARE THE OPPORTUNITIES IN THESE COUNTRIES AND DO YOU HAVE A RATIO OF HOW MUCH OF YOUR INVESTMENTS GO INTO THESE TWO ECONOMIES? RISHI: WELL, TODAY, LOOK, ASIA IN AGGREGATE DURING THE MIDDLE EAST IS A RELATIVELY MODEST PART OF OUR OVERALL PORTFOLIO, ABOUT 10%. BUT IT IS 10% FROM A VERY SMALL, VERY LOW LEVEL, OVER A VERY SHORT PERIOD OF TIME. SO IT’S GROWING REALLY FAST. NOW, AS WE LOOK OUT INTO THE FUTURE IT WOULD NOT BE SURPRISING AT ALL FOR US TO SEE A CONTINUED GROWTH TRAJECTORY IN OUR NATIONAL INVESTMENT PORTFOLIO IN ASIA, INCLUDING INDIA, JAPAN, AND CHINA. ALL OF THESE ECONOMIES, BY THE WAY, THERE ARE CERTAIN MACRO CHARACTERISTICS THAT ONE CAN DEBATE ALL DAY LONG. WHAT IS MORE IMPORTANT IS THE MICRO CHARACTERISTICS. CHOOSING THE RIGHT SECTORS WHERE THERE IS GOING TO BE A FLOW OF CAPITAL, THERE IS GOING TO BE AN APPROPRIATE BALANCE OF RISK AND REWARD WHERE WE CAN EXPECT TO ATTRACT GROWTH. THOSE SECTORS RELATE TO BUSINESS SERVICES, TECHNOLOGY INFRASTRUCTURE. IN CHINA THE ENERGY TRANSITION IS A VERY INTERESTING THEME AS IS DOMESTIC CONSUMPTION. INDIA IS ALMOST ALL ABOUT DOMESTIC CONSUMPTION ACROSS A VARIETY OF SECTORS. SO WE SEE A LOT OF OPPORTUNITY THERE. LAST BUT NOT LEAST IN THE MIDDLE EAST, THE VERY SIGNIFICANT IMPULSE THE LOCAL GOVERNMENTS ARE PROVIDING TO INFRASTRUCTURE AND ENHANCING DOMESTIC CONSUMPTION AS CONSUMER SERVICES PROVIDES A VERY INTERESTING BACKDROP FOR INVESTMENT AS WELL. AVRIL: WHAT WOULD YOU SAY IS THE BIGGEST RISK FOR BOTH PUBLIC AND PRIVATE MARKETS IN 2026? RISHI: I MEAN, FROM OUR VANTAGE POINT, WE THINK SOME OF THE KEY RISKS IN 2026 FROM PUBLIC AND PRIVATE MARKETS ARE REALLY GOING TO BE AROUND THE DEGREE OF STABILITY, OR UNCERTAINTY RELATED TO INTEREST RATES, PARTICULARLY IN THE U.S. BECAUSE THERE IS A BIT OF A TUSSLE RIGHT NOW BETWEEN WHETHER THE FED IN PARTICULAR IS MORE WORRIED ABOUT THE INFLATIONARY IMPULSE RESULTING FROM SLIGHTLY MORE STICKY INFLATION, STICKY WAGE INFLATION IN PARTICULAR, BUT ALSO TARIFFS TO INFLATION. ON THE FLIPSIDE, SLOWING EMPLOYMENT GROWTH IS THE OPPOSITE SIDE OF THAT SAME COIN. I THINK THE DEGREE OF UNCERTAINTY AROUND THE FUTURE TRAJECTORY OF INTEREST RATES IS PROBABLY AN OVERARCHING CONCERN FOR US. TO A LARGE EXTENT, WHAT THE MARKETS HAVE UNDERWRITTEN OR DISCOUNTED CURRENTLY IS A CONTINUED TRAJECTORY OF LOWER INTEREST RATES. TO THE EXTENT THAT DOES NOT MANIFEST ITSELF AT THE LEVELS THE MARKET IS ANTICIPATING THAT COULD BE SOMEWHAT PROBLEMATIC FOR MARKET LEVELS. SHERY: RISHI KAPOOR, REALLY GOOD TO HAVE YOU WITH US. VICE CHAIRMAN AND SEE I YELL AT INVESTCORP. WE HAVE MORE HAD AT “THE ASIA TRADE.” THIS IS BLOOMBERG. SHERY: HONG KONG’S GOVERNMENT HAS MOVED TO STAMP OUT MOUNTING PUBLIC ANGER AFTER THE CITY’S DEADLIEST FIRE IN NEARLY A DECADE. LET’S GET TO OUR CHINA CORRESPONDENT MINMIN LOW. WE HAVE NEW DETAILS ON HOW THE FIRE STARTED. MINMIN: THAT’S RIGHT. AT A PRESS CONFERENCE LAST WEEK THE AUTHORITIES SAID THE FIRE HAD STARTED WITH THE GREEN MASH, THAT PRELIMINARY TESTING THEY SAY SHOWED THE MESH MET FIRE RESISTANCE STANDARDS, AND THEY ARE NOW PUTTING THE BLAME ON THE STYROFOAM BOARDS THAT ARE COVERING THE WINDOWS, BECAUSE THAT IS HIGHLY FLAMMABLE AND IT HAS MELTED, OR CAUSED SOME OF THE WINDOWS TO BURST, WHICH CAUSED THE FIRE TO MOVE INTO THE BUILDING. IT WAS SPREADING BOTH INSIDE AND OUTSIDE THE BUILDING. THE FIRE DEPARTMENT EXPLAINED WHY THEY COULD NOT USE HELICOPTERS TO THROW DOWN WATER BOMBS, BECAUSE THEY SAID IT WOULD ONLY DOUSE THE EXTERIOR OF THE BUILDINGS WITH WATER, BUT THE POWERFUL DOWNDRAFT WOULD CREATE MORE OXYGEN TO CAUSE THE FIRE TO SPREAD EVEN FASTER. AN INTERAGENCY TASK FORCE HAS BEEN SET UP TO INVESTIGATE BECAUSE OF THE FIRE BECAUSE NOW THERE IS SPECULATION ABOUT HOW THAT HAPPENED. WHETHER PEOPLE WERE SMOKING. THE TASK FORCE IS LOOKING INTO THAT AND AS TO WHY THE FIRE SPREAD SO FAST. AVRIL: THERE WERE ALSO SOME FURTHER ARRESTS MADE. WHAT CAN YOU TELL US? MINMIN: ADDITIONAL EIGHT ARRESTS LINKED TO OTHER CONSULTANTS AND CONTRACTORS RELATED TO THE SCAFFOLDING. BUT ALSO THREE MORE ARRESTS HAVE BEEN MADE ON NATIONAL SECURITY GROUNDS, INCLUDING AN UNIDENTIFIED VOLUNTEER, A FORMER DISTRICT COUNSELOR, AND ONE PERSON WHO STARTED AN ONLINE PETITION DEMANDING FOUR DEMANDS FROM THE GOVERNMENT TO TAKE CARE OF THE VICTIMS, TO TAKE ACCOUNTABILITY, AND TO START AN INDEPENDENT INQUIRY. THERE SEEMS TO BE CONCERNED THAT PUBLIC ANGER NEEDS TO BE CONTROLLED. AVRIL: MINMIN LOW IN HONG KONG. THIS IS BLOOMBERG. ♪ SHERY: WE ARE SEEING A BIT OF A DIVERGENCE WITH THE NIKKEI AND THE TOPIX DOWN AT THE MOMENT AFTER FOUR SESSIONS OF GAINS. WE CONTINUE TO SEE A WEAKER JAPANESE YEN, STRENGTHENING A LITTLE TODAY BUT AFTER THREE MONTHS OF LOSSES AGAINST THE GREENBACK. JGB’S IS WHAT WE ARE WATCHING GIVEN THE FINANCE MINISTER’S PLAN TO ISSUE MORE SHORT-TERM BONDS. TWO-YEAR YIELDS RISING TO 1% FOR THE FIRST TIME SINCE 2008. IN ABOUT HALF AN HOUR WE DO HAVE THE BANK OF JAPAN GOVERNOR UEDA SPEAKING TODAY SO WE DO WANT TO WATCH OUT FOR WHATEVER COMMENTS WE CAN GET ABOUT A POTENTIAL RATE HIKE IN DECEMBER. THIS COMING AT A TIME WHEN THE KOSPI IS HOLDING STEADY, THE KOSDAQ IS GAINING GROUND, CONTINUING FROM THE FRIDAY SESSION. THE GOVERNMENT WILL ANNOUNCE TAX INCENTIVES AND OTHER MEASURES TO BOOST THE MARKET. AVRIL: WE HAVE BEEN TALKING ABOUT TODAY HOW THE CHINA FACTORY ACTIVITY NUMBERS WILL BE SHAPING TRADING IN THE 80’S SESSION. LET’S BRING YOU UP TO SPEED WITH WHAT WE ARE GETTING ON THESE GLOBAL PMI’S BASED ON MANUFACTURING FOR THE MONTH OF NOVEMBER OUT OF MAJOR ECONOMIES ACROSS THE REGION INCLUDING JAPAN. WE ARE SEEING IT VERSUS THE PRIOR MEETING OF THE DEEPER INTO CONTRACTION TERRITORY AT 48.7. AND OF COURSE WE ARE ALSO TRACKING WHAT CAME OUT OF SOUTH KOREA BELOW THE 50 LEVEL AT 49.4. SOME OF THESE OTHER PERHAPS A BIT IMPROVED READINGS FROM THE LIKES OF TAIWAN AS WELL AS INDONESIA THAT HAS PICKED UP TO 48.8 FOR TAIWAN AND 53.3 FOR INDONESIA. OF COURSE THIS IS ALL COMING AGAINST THE BACKDROP OF INVESTORS AND ECONOMISTS TRYING TO FIGURE OUT THE PAIN GIVING TRADE TURBULENCE — GIVEN THE TRADE TURBULENCE WE HAVE SEEN OF LATE. SHERY: LET’S HEAD TO OUR NEXT GUEST WHO HEADS JAPAN’S LARGEST BUYOUT FUND. JOINING US EXCLUSIVELY IN TOKYO IS CARLYLE JAPAN COHEAD. ALWAYS GREAT TO SEE YOU. SO, YOU RAISED ALMOST $3 BILLION LAST YEAR. HOW MUCH OF THAT HAVE YOU DEPLOYED OR COMMITTED SO FAR? THIS YEAR WE MADE TO INVESTMENTS SO FAR AND ALSO WE ARE DOING DUE DILIGENCE. WE EXPECT TO HAVE ANOTHERTO COMMITTED BY THE END OF THE YEAR. SHERY: WHAT IS IMPORTANT IN THESE DEALS TO YOU? KAZUHIRO: LOTS OF GOOD QUALITY BUSINESS. ALSO RESOURCES. THOSE OPPORTUNITIES HAVE GREAT POTENTIAL TO GROW. SHERY: ARE THERE ANY SPECIFIC SECTORS YOU ARE MORE FOCUSED ON? KAZUHIRO: YES. WE HAVE THREE SECTORS WE ARE KEEN ON. ONE IS THE MANUFACTURING SECTOR. THE SECOND IS HEALTH CARE, ALSO A GROWING SECTOR IN JAPAN. THE THIRD IS MAYBE SO-CALLED SOFTWARE. THE KEY WORD FOR OUR TARGET, ONE IS GREAT BUSINESS, GOOD BUSINESS, QUALITY BUSINESS, BUT UNDER MANAGED RESOURCES. THE OTHER IS GREAT TECHNOLOGY AND INCREASING PRODUCTIVITY. THOSE ARE KEY FOR US. AVRIL: AVRIL IN SINGAPORE. IN TERMS OF THE MORE SUCCESSFUL PLAYS YOU HAVE HAD, THIS INCLUDES YOUR EXIT IN ORION. CAN YOU TELL US ABOUT WHAT THE STRATEGY IS GOING TO LOOK LIKE GOING FORWARD, ESPECIALLY WHEN IT COMES TO EXITS? AND WHY ARE PUBLIC MARKETS THE RIGHT ROUTE? KAZUHIRO: YES. THANK YOU VERY MUCH. ORION IS A GREAT BRAND AND A GREAT QUALITY OF PRODUCT. WE MADE SEVERAL INITIATIVES AFTER INVESTMENTS. ONE HAS BEEN THE MANAGEMENT LAYER. CEO, CMO, AND ON TOP OF GLOBAL SALES. THE SECOND IS INCREASINGLY PRODUCT LINEUP TO LIQUOR. THE THIRD IS GLOBAL SALES. AFTER WE INVEST IN GLOBAL SALES, WE MAKE FOUR TIMES LARGER THAN THAT. A SIGNIFICANT IMPROVEMENT ON THE PROFIT SIDE. GROSS OVER REVENUE AND R.O.E. IS TOP OF PEERS. ALSO, A CAREER EQUITY STORY. WE THINK IPO IS DUE FOR EXIT. BEFORE WE INVEST WE COMMIT TO FOUNDERS FAMILY AND ALSO IF WE TRIED TO HAVE THIS COMPANY IPO. WE HAVE IPO FOR THE EXIT. CARLYLE IS ALREADY A 10 GLOBAL OFFERING. IT IS THE HIGHEST IPO EXIT. AS A RESULT WE HAD 80 TIMES FROM THE MARKET SO I THINK IT IS A VERY SENSIBLE IPO. AVRIL: ARE YOU THINKING OF DOING A BIT MORE OF THE SAME WITH OTHER FIRMS YOU HAVE IN THE PIPELINE? CAN YOU TALK US THROUGH THE THINKING BEHIND THAT AS WELL? KAZUHIRO: YEAH. WE HAVE THREE INDUSTRY THEMES IN HEALTH AND MANUFACTURING. I MENTIONED BEFORE THIS PROGRAM. EACH TEAM HAS ABOUT 100 POTENTIAL OPPORTUNITIES. WE REALIZE THERE IS A SIGNIFICANT OPPORTUNITY AND THE LISTED CORPORATE. LOCAL NETWORK IS IMPORTANT. SHERY: SOUNDS LIKE A VERY BUSY TIME FOR YOU. DID YOU HIRE EVERYONE YOU WANT TO DO AT THIS POINT? KAZUHIRO: IT IS THE TOP OF MY MIND AND IS VERY DIFFICULT TO HIRE A TOP TALENT IN JAPAN. NOT ONLY FOR THE HIRING, RETENTION OF EXISTING PROFESSIONALS IS A CHALLENGE. MAYBE 40% OF MY TIME IS SPENT ON HUMAN RESOURCES. SHERY: 10 MORE INVESTMENT PROFESSIONALS THIS YEAR. IS THAT STILL THE TARGET? WHAT ABOUT NEXT YEAR? KAZUHIRO: NOW WE HAVE 30. WE ALSO COMMITTED TWO MORE. BY THE END OF NEXT YEAR WE WILL BE AT 35. ONE OF OUR ICONIC THINGS IS 10 OUT OF 35 WILL BE FEMALE. DIVERSIFICATION IS QUITE IMPORTANT FOR A BUSINESS. SHERY: WE HAVE HEARD OF THESE DRIVES IN ORDER TO IMPROVE CORPORATE GOVERNANCE AND OF COURSE DIVERSIFICATION IS KEY. HE FINANCE MINISTER JUST NOW SPEAKING AT THE INVESTMENT FORUM SAYING THE SAME THING. ARE YOU SEEING THOSE TRENDS CONTINUING HAVING MOMENTUM HERE IN JAPAN THIS YEAR AND NEXT? KAZUHIRO: YES. IT IS ONE OF THE KEY FOR GROWING THE JAPANESE ECONOMY. AND DIVERSIFICATION IS VERY IMPORTANT. OUR SOCIETY FACES DECREASING POPULATION. SO WHY DON’T WE LEVERAGE FEMALE CAPABILITY? IT IS SIGNIFICANTLY UNDERUTILIZED. I THINK IT IS A TREND THAT WILL CONTINUE. AVRIL: TALK TO US ABOUT WHAT YOU ARE SEEING IN THE M&A LANDSCAPE MORE SPECIFICALLY INTO 2026 AND PERHAPS IN THE YEAR AHEAD AS WELL. KAZUHIRO: YEAH. THIS YEAR COMPARED TO LAST YEAR, THE NUMBERS ARE SIGNIFICANT. TOTAL M&A IS MORE THAN 3.6 TIMES AND THE BUYERS MARKET IS OVER FOUR TIMES. IT IS NOT A ONE-TIME TIME PHENOMENON. THERE IS A SIGNIFICANT OPPORTUNITY OF CORPORATE ACTIVITY. I THINK THAT TREND WILL CONTINUE AND NEXT YEAR WE WILL BE MORE BUSY. SHERY: HOW DOES THE WEAKENING JAPANESE YEN FACTOR INTO YOUR CALCULATIONS WHEN IT COMES TO FACTORING VALUATIONS? KAZUHIRO: IT IS NOT A SIGNIFICANT IMPACT FOR CONSIDERING SO-CALLED INVESTMENT CRITERIA. BUT THE YEN DEPRECIATION, ITS IMPACT TO OUR PORTFOLIO LEVEL IS QUITE HIGH. WE ARE CAREFUL ABOUT THE SUPPLY CHAIN AND ALSO PRICE INCREASING OPPORTUNITY. THAT IS OUR MAIN CONCERN. SHERY: DO YOU HAVE A BASE CONSUMPTION OF WHERE THE YOUNG GOES FROM HERE? KAZUHIRO: IF I KNEW I WOULD PUT ALL MY MONEY INTO A FOREIGN EXCHANGE. [LAUGHTER] BASICALLY WE HAVE A SO-CALLED BEST CASE AND WORST-CASE AND WE MAKE OUR BEST CASE AND WORST-CASE TOWARDS EACH TRANSACTION. SHERY: I GUESS IT ALL COMES DOWN TO TRYING TO GUESS WHAT THE BOJ WILL DO NEXT BUT AT THE SAME TIME JUST BECAUSE RATE HIKES COMING FROM THE BOJ IS NOT NECESSARILY HELPED BOOST THE YEN. WHEN DO YOU EXPECT POLICYMAKERS TO MOVE AND DOES THAT MAKE A DIFFERENCE FOR HOW THE BUSINESSES YOU ARE LOOKING AT IN JAPAN OPERATE? KAZUHIRO: YEAH. THE FOREIGN EXCHANGE RATE IS VERY DIFFICULT TO CONTROL. WHILE IN JAPAN, THE TAKAICHI CABINET HAS A GREATER DEFICIT. IT IS NOT EASY FOR THE YEN TO APPRECIATE. IN THE END THE JAPANESE ECONOMY IS GROWING UP. I THINK ANY THE END IT WILL APPRECIATE. SHERY: LONG-TERM JUST BECAUSE OF THE STRENGTH OF THE JAPANESE ECONOMY? DO YOU THINK THE NEW ADMINISTRATION IS HELPING IN THAT PUSH TOWARDS ECONOMIC GROWTH? KAZUHIRO: YES. THE CURRENT CABINET IS SUPPORTING ECONOMIC GROWTH. IN A VERY SHORT TIME TARGET INTRODUCES SEVERAL INITIATIVES. FIRST WE WILL SEE THE ADMINISTRATION CHANGE. I EXPECT A LOT. SHERY: KAZUHIRO YAMADA, REALLY GOOD TO HAVE YOU BACK, COHEAD OF CARLYLE JAPAN. WE HAVE MORE AHEAD ON “THE ASIA TRADE.” THIS IS BLOOMBERG. ♪ AVRIL: AS WE COUNT DOWN TO THE START OF TRADING THE GREATER CHINA REGION WE ARE WATCHING MEITUAN AFTER THEY REPORTED ITS FIRST LOSS IN ALMOST THREE YEARS, REFLECTING THE IMPACT OF INTENSE COMPETITION IN CHINA’S FOOD DELIVERY SECTOR. OUR ASIAN EQUITIES REPORTER JOINS US FROM HONG KONG. WHAT ARE YOU EXPECTING? THE MEITUAN SHARES ALREADY THE WORST PERFORMER AMONG THE HANG SENG TECH INDEX THIS YEAR. IT IS STILL SLUMPING 30% YTD. IT IS BECAUSE OF THE INTENSE COMPETITION YOU JUST MENTIONED IN THE DOMESTIC ON DEMAND AND FOOD DELIVERY SECTOR. IT WAS ALWAYS THAT MONOPOLY, ALWAYS THE FIRST AND ALWAYS THE BEST IN TERMS OF THE DELIVERY SERVICES. AFTER JD.COM AND ALIBABA ALL CAME INTO THE SECTOR IT IS STRUGGLING A LITTLE BIT AND THE CFO FRIDAY HAD SAID THAT IT IS BECAUSE OF THIS BRUTAL COMPETITION IN PRICE WARS THAT THEY ARE SEEING THESE BLEAK EARNINGS RESULTS. BUT IT IS A SIMILAR STRAND WE ARE SEEING IN ALIBABA AND JD EARNINGS AS WELL. MORNINGSTAR ACTUALLY PREDICTS THAT FROM 73% ACROSS TRANSACTION VALUE FOR MEITUAN IN 2424 IT IS GOING TO SLUMP AND LOSE THAT SHARES TO 50% IN 2027. SO NOW, LOOKING AT THAT, ALIBABA PREDICT THAT IT WILL ACTUALLY GAIN MORE SHARES FROM ABOUT 21% TO 40%. SO WHAT WE ARE EXPECTING IS GOING TO BE SOMEWHAT MORE OF A DUOPOLY. SHERY: YOU MENTIONED THE PRICE WARS REALLY DEPRESSING EARNINGS. WHAT DOES THIS MEAN FOR INVESTORS SUFFERING FROM LOSSES IN CHINESE MARKETS AT THE MOMENT? SANGMI: THAT’S CORRECT. THE MSCI CHINA INDEX MEMBERS HAVE SEEN 1.1% NEGATIVE EARNINGS SURPRISE FOR THE JULY AND SEPTEMBER QUARTER. AND BECAUSE OF THIS, A LOT OF THE ANALYSTS ARE SAYING THAT THIS IS BECAUSE OF THE ANTIEVOLUTION PUSH BEIJING HAS HAD FOR MONTHS, THAT IS NOT REALLY WORKING TO CURB THAT COMPETITION AGAIN WITHIN THE MARKET. IT IS THE SAME STORY THAT GOES BACK TO THE PRICE WARS IN THE DELIVERY MARKET. BUT MOST OF THIS WAS BECAUSE OF THE REAL ESTATE MARKET AND SOFT RETAIL SPENDING. SO THE CONSUMER DRAGGING DOWN THE INDEX. OF COURSE WE HAVE SEEN GREAT SECTOR MOVES FOR MATERIALS AND FINANCIALS. SO MATERIALS COMPANIES HAVE BENEFITED FROM THE GOLD RUSH, REALLY. THE LIKES OF MINING AND COPPER HAVE DONE REALLY WELL. THEIR NET INCOME ROSE BY MORE THAN 50%. ALL OF THIS DOES POINT TO BRIGHT SPOTS IN THE MARKET. BUT THE ANTIEVOLUTION PUSH, FOR US TO SEE THE RESULTS, ANALYSTS SAY WE HAVE TO WAIT UNTIL NEXT YEAR. SHERY: ASIA EQUITIES REPORTER SANGMI CHA. SOME OF THE OTHER STORIES WE ARE TRACKING, MICRON WILL HAVE REPORTEDLY SPENT $9.6 BILLION TO BUILD A PLANT IN WESTERN JAPAN, MAKING MEMORY CHIPS FOR AI APPLICATIONS. THE NIKKEI NEWSPAPER SAYS MICRON WANTS TO DIVERSIFY ITS ADVANCED PRODUCTION OUTSIDE TAIWAN AND PLANS FOR SHIPMENTS FROM 2028. THE REPORT SAYS THE FACTORY WILL MAKE HIGH-BANDWIDTH MEMORY CHIPS A KEY COMPONENT FOR WORKING WITH AI PROCESSORS FROM THE LIKES OF NVIDIA. SOUTH KOREAN AUTHORITIES ARE INVESTIGATING A DATA LEAK AT COUPANG THAT EXPOSED SOME 33 MILLION ACCOUNTS. THE ALLEGED HACKER IS A CHINESE NATIONAL WHO PREVIOUSLY WORKED AT THE U.S.-LISTED ONLINE RETAILER. POLICE BEGAN INVESTIGATING AFTER A FORMAL COMPLAINT WHICH SAID THEY BECAME AWARE OF THE LEAKS NOVEMBER 18. AIRLINES ARE SCRAMBLING TO APPLY — UPDATE SOFTWARE ON THE MOST WIDELY PHONE COMMERCIAL JET. CARRIERS SAY THEY HAVE RUSHED THROUGH AN EMERGENCY FIX AT THE AIRBUS STUNNED THE INDUSTRY FRIDAY, CALLING FOR SO-CALLED PRECAUTIONARY FLEET ACTION. FOR MORE DETAILS LET’S BRING IN GLOBAL — BLOOMBERG GLOBAL BUSINESS REPORTER ANGUS WHITLEY. WHAT A SURPRISE DURING THE HOLIDAY SEASON. IS THIS A DONE EVENT OR ARE WE EXPECTING MORE FALLOUT? ANGUS: ON FRIDAY THE AS YOU SAY, THIS WAS LOOKING LIKE A SERIOUS CRISIS BECAUSE IT WAS A SOFTWARE UPGRADE THAT WAS GOING TO AFFECT 6000 AIRBUS’S, WHICH IS THE MOST WIDELY FLOWN COMMERCIAL AIRLINER EVER, AT THE END OF THE PEAK THANKSGIVING TRAVEL PERIOD. WE SAW A FRANTIC EFFORT TO ADDRESS THE SOFTWARE UPGRADE, THE GLITCH. AN REMARKABLY, WITHIN 24 HOURS AFTER THE EMERGENCY DIRECTIVE, OPERATIONS WERE BASICALLY BACK TO NORMAL. IT WAS PRETTY REMARKABLE. BUT IF WE AVOIDED A CRISIS, I THINK THIS ISSUE DOES HIGHLIGHT SOME KEY FACTORS WHICH REGULATORS AND AIRLINES PROBABLY HAVE TO ADDRESS. FIRST I GUESS IS HOW MUCH CONCENTRATION THERE IS OF THE A-220 ON THE GLOBAL FLEET. GLOBAL FLEET IS ABOUT 3500 AIRCRAFT. IF YOU HAVE AN AIRCRAFT AFFECTING ABOUT 6000 PLANES, THAT IS 20% OF THE GLOBAL FLEET THAT NEEDS TO BE RECTIFIED AND THAT IS A SERIOUS ISSUE. THE SECOND QUESTION IS, HOW COULD SOPHISTICATED FLIGHT SOFTWARE BE EFFECTIVELY BE FRIED BY RADIATION WHICH IS WHAT HAPPENED IN THIS CASE? HE THINGS REGULATORS HAVE TO LOOK AT IN THE FUTURE. AVRIL: IT ALSO RAISES THE QUESTION GIVEN HOW IT WAS A BIT OF A SHOCK HOW RADIATION WAS AS AN ISSUE. ARE WE LOOKING CLOSELY AT THE GAPS? HOW ARE PLANE MAKERS LOOKING TO ADDRESS FUTURE GAPS? ANGUS: THAT IS A GOOD QUESTION. THIS IS A TRIED AND TRUSTED AIRCRAFT. FLIES MILLIONS OF PASSENGERS A DAY. IT HAS SOLD UPWARDS OF 10,000 MODELS. SO, REGULATORS WILL HAVE TO LOOK AT THE UPGRADES THAT GO THROUGH THIS AIRCRAFT. THEY ARE FAMOUSLY FLY BY WIRE WHICH MEANS THEY ARE EFFECTIVELY DIGITALLY CONTROLLED FOR THE MOST PART. AND SOFTWARE UPGRADES STILL HAVE TO BE SCRUTINIZED. BOEING KNOWS ALL TOO WELL, THE 737 MAX SUFFERED HORRENDOUS TRAGEDIES IN LATE 2018 IN EARLY 2019 DUE TO SOFTWARE MALFUNCTIONS. SO THEY WILL HAVE TO BE AWARE THAT EVEN THOUGH THESE ARE TRIED AND TRUSTED AIRCRAFT WITH YEARS OF VERY SAFE PERFORMANCE, THEY STILL HAVE TO BE LOOKED AT AND QUESTIONED HOW THESE UPGRADES CAN BE AFFECTED BY EFFECTIVELY NATIONAL — NATURAL PHENOMENON LIKE RADIATION. AVRIL: SOME CONTINUED SCRUTINY GIVEN THIS LATEST INCIDENT. OUR BLOOMBERG GLOBAL BUSINESS REPORTER ANGUS WHITLEY. WE WILL BE SPEAKING TO ONE OF THE LARGEST OPERATORS OF A-320’S IN THE WORLD. TONY FERNANDEZ SPEAKS TO BLOOMBERG EXCLUSIVELY ON INSIDE WITH HASLINDA AMIN. WE HAVE MORE AHEAD ON “THE ASIA TRADE.” THIS IS BLOOMBERG. ♪ SHERY: YIELDS REACHING RECORD HIGHS ACROSS JAPAN. WE ARE SEEING THE TWO-YEAR YIELD TOPPING 1% FOR THE FIRST TIME SINCE 2008. THIS, AFTER WE GOT MORE INSIGHT INTO THE FINANCE MINISTRY’S ISSUANCE PLAN IN ORDER TO SUPPORT TAKAICHI’S GOVERNMENT EXPENDITURES. THE ISSUANCE WILL BE IN SHORT-TERM BONDS TO YEAR AND FIVE YEAR JGB SO WE ARE EXPECTING FIRMER SHORT-TERM YIELDS AND PERHAPS MORE CURVE FLATTENING THROUGHOUT THE WEEK. JGB ISSUANCE IN THE 10 TO 40 YEAR BRACKET IS NOT HAPPENING. WE WILL CONTINUE TO WATCH THE LATEST DEVELOPMENTS IN THE JGB SPACE AS WE ARE ALSO WATCHING THE YEN, A LITTLE BIT MORE STRENGTH IN TODAY’S SESSION BUT AFTER WEAKENING FOR A THIRD CONSECUTIVE MONTH AGAINST THE U.S. DOLLAR. CARLYLE SAYS THEY SEE THE YEN GAINING IN THE LONG RUN GIVEN A STRONGER JAPANESE ECONOMY. OF COURSE WE WILL BE LOOKING FOR CLUES COMING FROM THE BANK OF JAPAN GOVERNOR KURODA IS DUE TO SPEAK IN JUST A FEW MINUTES. AVRIL: WE ARE ALSO WATCHING OUT FOR HOW GREATER CHINA MARKETS REACT TO THE WEAK DATA OVER THE WEEKEND WHICH SHOWED US MANUFACTURING PMI’S ON ITS LONGEST CONTRACTION ON RECORD. AND THE LIKES OF BLOOMBERG INTELLIGENCE ACTUALLY HIGHLIGHTING THEY EXPECT BROAD ECONOMIC WEAKNESS AND THAT THE NUMBERS ACTUALLY HINT AT A FURTHER DOWNDRAFT IN CONSUMPTION. IF YOU LOOK AT SURFACES, THAT DROPPED SHARPLY INTO CONTRACTION. THIS IS A SHARP CONTRAST TO A FLAT READING IN 2024. PUT THAT TOGETHER WITH WHAT WE SAW FROM MEITUAN, THE FIRST LOSS IN A COUPLE OF YEARS. THIS IS COMING WITH INTENSE COMPETITION AGAINST THE LIKES OF BABA AND JD. ALL THIS EATING INTO THEIR MARGINS AS WELL. WE WILL WATCH HOW THAT PLAYS OUT IN TRADE TODAY. THAT IS IT FROM “THE ASIA TRADE .” OUR MARKETS COVERAGE CONTINUES AS WE LOOK AHEAD TO THE START OF TRADING IN HONG KONG, SHANGHAI, AND SHENZHEN. THIS IS BLOOMBERG. ♪

“Bloomberg: The Asia Trade” brings you everything you need to know to get ahead as the trading day begins in Asia. Bloomberg TV is live from Tokyo and Singapore with Shery Ahn and Avril Hong, getting insight and analysis from newsmakers and industry leaders on the biggest stories shaping global markets.

Chapters:
00:00:00 – Bloomberg: The Asia Trade begins
00:04:32 – Westpac’s Illiana Jain on economic data out of Asia, US
00:11:33 – Traders cautious amid Fed rate cut bets
00:16:27 – Airbus enters last weeks of 2025 facing a cosmic distraction
00:20:25 – Hong Kong acts to quell anger after deadly fire
00:24:16 – Dollar extends losses to a fifth day; Indian rupee declines to fresh all-time low
00:28:50 – l-time low (7D)
00:31:06 – Rubio calls Ukraine talks productive as Witkoff heads to Russia
00:36:41 – Japan Activation Capital’s Hiroyuki Otsuka on Japan’s investment landscape
00:44:08 – Japanese firms scale back investment as tariff headwinds hit
00:47:03 – Market opens in Japan and South Korea
00:48:46 – BREAKING: S. Korea’s exports extend momentum on solid chip, auto strength
00:54:33 – BREAKING: Japan two-year yield hits highest since 2008
00:56:45 – OPEC+ sticks with plans to pause production hike
01:01:34 – Investcorp’s Rishi Kapoor on investment opportunities in Asia
01:09:44 – HK police arrest man over fire petition: Reports
01:12:52 – BREAKING: Asia Manufacturing PMIs released
01:14:11 – Carlyle Japan’s Kazuhiro Yamada: Two more Japan deals by year-end
01:24:27 – Meituan records first loss since 2022 after price war toll
01:28:19 – Airlines limit disruptions from Airbus A320 software glitch
——–
More on Bloomberg Television and Markets

Like this video? Subscribe and turn on notifications so you don’t miss any videos from Bloomberg Markets & Finance: https://tinyurl.com/ysu5b8a9
Visit http://www.bloomberg.com for business news & analysis, up-to-the-minute market data, features, profiles and more.

Connect with Bloomberg Television on:
X: https://twitter.com/BloombergTV
Facebook: https://www.facebook.com/BloombergTelevision
Instagram: https://www.instagram.com/bloombergtv/

Connect with Bloomberg Business on:
X: https://twitter.com/business
Facebook: https://www.facebook.com/bloombergbusiness
Instagram: https://www.instagram.com/bloombergbusiness/
TikTok: https://www.tiktok.com/@bloombergbusiness?lang=en
Reddit: https://www.reddit.com/r/bloomberg/
LinkedIn: https://www.linkedin.com/company/bloomberg-news/

More from Bloomberg:
Bloomberg Radio: https://twitter.com/BloombergRadio

Bloomberg Surveillance: https://twitter.com/bsurveillance
Bloomberg Politics: https://twitter.com/bpolitics
Bloomberg Originals: https://twitter.com/bbgoriginals

Watch more on YouTube:
Bloomberg Technology: https://www.youtube.com/@BloombergTechnology
Bloomberg Originals: https://www.youtube.com/@business
Bloomberg Quicktake: https://www.youtube.com/@BloombergQuicktake
Bloomberg Espanol: https://www.youtube.com/@bloomberg_espanol
Bloomberg Podcasts: https://www.youtube.com/@BloombergPodcasts