18 Burst results for "Governor Kuroda"
Bloomberg Radio New York
"governor kuroda" Discussed on Bloomberg Radio New York
"On market action Brian courtesies in Hong Kong, Brian. What do you see? It looks like a lot of shelling coming our way. This afternoon. One, it's Friday, two, you've got the U.S. jobs report looming. And we had a big sell off in banking shares as you documented very well in the past hour, Doug. It was a couple of things. One, the collapse of silvergate capital, amid a lot of scrutiny in Washington and difficulties in the crypto space. And then the other big story, the Silicon Valley based lender SVB, taking a huge tumble down 60%. It's a complicated story and we'll be taking a closer look at the impact on the broader market because it does have some people concerned about the impact of higher interest rates, not only on the banking sector, but really on all different corners of the U.S. and global economy. If you think about it, interest rates were down close to zero for such a long time. And people worried about what's happening under the hood. So hopefully during the show today, we'll get a closer look at some of that. Right now we've got the nikkei trading down about 9 tenths of 1%. The ASX 200 down 1.4% bank stocks getting hit there and in Seoul the cost be trading down 1.3%, a huge drop in yields. The 20 two year yield dropped 20 basis points to 4.82%. And down a little bit more in the Tokyo session. And yield on the tenure at 3.88%. So now it's time to get back to you, Doug to unpack some of those top stories. Yeah, let's begin with the employment report. We're braced for that number tomorrow morning 8 30 a.m. Wall Street time. Bloomberg's Michael McKee has a preview. January's jobs report turned the financial world on its head. More than half a million jobs created the government said, almost three times what was forecast. The fed, slowing the pace of rate increases, is now expected to tighten more and faster unless the February numbers reverse course, and that is possible. Economists say the January report was boosted by unexpectedly good weather and annual statistical adjustments. It might be revised lower and estimates put February's job gains back at trend. Another surprise, though, and expect a lot of market turmoil. Michael McKee Bloomberg daybreak Asia. Well, a former banker for Goldman Sachs has been sentenced in the one MDB international massive fraud scheme that story from Bloomberg's and Kate's roger Aang has been sentenced to ten years in prison after being convicted last April a conspiring to violate U.S. anti bribery laws and a launder money. The 51 year old former Goldman managing director and his one time boss were accused of conspiring with a financier to pay tens of millions of dollars to officials to win business with one Malaysia, a state controlled economic development company. The deals were arranged by Goldman, which later paid $8 billion in penalties for its role in the scam. Aang is still subject to criminal charges in Malaysia. In Washington and Kate's Bloomberg daybreak Asia. Big meeting today for the bank of Japan, the BOJ will likely keep its stimulus unchanged at the last policy meeting before governor kuroda steps down. We have a preview from Bloomberg's David inglis. Phil governor corolla is known for shock and auto tactics, many economists do not expect him to deliver one this time. The thinking is that Corona will want to give his successor kazuo ueda an open hand when he takes over in April. The BOJ will likely hold its short term rate at -.1% and continue capping a ten year JGB yield at half of 1%. Both Corona and ueda have stated that the 2% inflation target has not yet been secured. But further to the surprise angle, Goldman Sachs, HSBC, and BNP Paribas are among the few that think that Corona might just do it, that he might adjust or scrapped the yield curve control policy, we'll learn more later today. In Hong Kong, I'm David ingles, Bloomberg, Asia. Global news is next. President Biden has fired off his opening budget bid. Price tag 6.9 trillion at Baxter with more from a Bloomberg newsroom in San Francisco, Eddie. Yeah, that's right, Doug, and let's start here. Very targeted
Bloomberg Radio New York
"governor kuroda" Discussed on Bloomberg Radio New York
"Your Bloomberg world sports update, Brian. All right, thanks very much, Dan. The time here just about 15 minutes before the top of the hour. One of the data points today was Japan's economy rebounding at a slower pace than expected in the three months through December that may make the job a little more difficult for kazuo ueda if he is nominated by the prime minister to take up the BOJ governor post. Let's get to takuji okubo, managing director and chief economist at Japan, macro, advisers. So it may make the job tougher because you've already got inflation kind of high, so how do you stimulate growth without also stoking inflation, your thoughts? Right. So he does have a challenging job. But stimulating growth in 2023 isn't that hard because Japan is actually starting from a very low base. Unlike U.S. and some of European countries, Japan is just has just recovered pre COVID growth economic economic level. And there is still no foreign interest consumption in Japan. So all that is to come in 2023. So in terms of growth, I don't think we should be particularly parted by today's number. I think we are looking at a fairly slow growth of a 1.5% in Japan in 2023. Well, thank you, takuji. So taking the long view there, we want to look at the story of the hour, a lot of us had had to play catch up on who kazuo ueta is and what his background is. My colleague, Simon Kennedy and Chris Anthony the other day, wrote about his incredible MIT pedigree and the connections to all sorts of top central bankers, including Ben Bernanke. What do you think is important to know about where and how you wait a son built his economic expertise? Right, so he may be well known outside Japan, but inside he is the foremost expert, the expert academic expert on monetary policy. And on top of that, he has experience of 7 years of being over the bank with Japan's policy committee. So he really banks both practical and academic growth. So I would say appointing casual with could be one of the most notable legacy of a prime minister cashier. Was it a bold move? And if so, why was it such a bold move? Well, I think bank of Japan has a tradition of having either ex ministry of our finance office as governor or its own carrier banquet Japan Central Bank as a governor. So appointing academic person is I think it's actually the first possible World War II. Before we saw that, it has happened, but in terms of the case and heard of. But it is, it is actually very bold and important and positive appointment. I think banquet Japan is on uncharted territory as it has been in the last 20 years. So we need academic gravita to chart this choppy world. Well, certainly exciting to watch what the fate of yield curve control might be. I want to take a peek behind the curtains here when governor kuroda came out and signaled potential tweaks to YCC. He seemed to do so somewhat reluctantly after kind of standing up to the bond bullies last year. I mean, what do you think the plans were at the time in the group of the BOJ policymakers? Was there pressure for Corona to experiment with that with enough time before this next governor has to come in and maybe decide what to do with the long held policy? Well, now that Nick's governance has already been announced, I don't think governor crow that would do anything to change my policy until EBITDA is. So and I saw the next governance move. I think next governor, look, governor governor to be lita, will not attempt to say tighten my voice. I think he deeply understands the trouble Japanese in. So I don't think I expected him to say tighten the monetary policy is right expectation for him. So we saw a dollar yen move from one 50 down to we actually got below one 30 and now we're back up above it. For you, would you be long yin here or extremely cautious? How would you play the end? I think yen is still too weak from, I think, 150 was really extreme. And even at a 130 dollars, I think it is still historically at a very weak level. So I think
Bloomberg Radio New York
"governor kuroda" Discussed on Bloomberg Radio New York
"Right now in Tokyo, the market is positive, other markets showing some weakness and I would include South Korea in that. The Korean one weakening quite a bit against the dollar will take a look at markets coming up hour three of DBA. This is Bloomberg. Broadcasting 24 hours a day at Bloomberg dot com and the Bloomberg business app. This is Bloomberg radio. This is Bloomberg daybreak Asia for this Monday, February 6th in Hong Kong, Sunday, February 5th in New York and coming up this hour. The strong jobs report in the U.S. sparks concerns the fed may have to keep rapes higher for longer. Indian officials are trying to calm markets over the turmoil surrounding the adani group. And the Japanese government has reportedly approached a potential successor for BOJ governor kuroda. China threatens retaliation for the shooting down of its balloon, criticism and defense of the timing of the shootdown in the U.S., Ukraine says it can end the war with more fighter jets. I'm Ed Baxter with global news. Harry Kane makes history as Tottenham knocks off Manchester City. On Dan Schwartzman, I'll have that story more coming up in Bloomberg sports. That's all straight ahead on Bloomberg daybreak Asia on Bloomberg 11 three O New York. Bloomberg 99 one Washington D.C.. Bloomberg one O 6 one Boston, Bloomberg 9 60 San Francisco, Syria's exam one 19 and around the world on Bloomberg radio dot com and via the Bloomberg business app. And good morning from Singapore, I'm Michelle journalist. We've got a few big stories we're following in the fallout from markets thereof. I've got a balloon that's down and jobs don't know numbers that are up, up, up. Here's Bloomberg's Brian Curtis, take a look at all the action in the Asian trading day. You have got a couple of new markets trading up and running right now. The Taiwan and Singapore markets, the tye X trading down about 9 tenths of a percent. That's the flavor
Bloomberg Radio New York
"governor kuroda" Discussed on Bloomberg Radio New York
"United at Emirates Eddie and Katya finishing off a brace. He scores a winner in the 90th minute. Meanwhile, Erwin Holland with his fourth hat trick of the season already, he leads Manchester City to a three nil win over Wolverhampton at Etihad, Holland is scored 25 goals in 19 Premier League matches so far. It is, of course, a final playoff game of the divisional round two 40 to go in the second quarter in San Francisco forty-niners and cowboys all tied up at 6 earlier. It was the AFC reigning champion Cincinnati Bengals, they knock off the bills in Buffalo, 27 and ten they had to Kansas City to face the chiefs in the AFC conference championship game next Sunday. I'm the enforcement that your Bloomberg Bloomberg world sports update Doug. All right, Danny, thank you. We've had a lot of volatility in the Japanese yen. We're going to take a closer look now at what's been happening in currency markets with our guest mager bean zaman head of FX research at ANZ joining from Sydney. Majid, it's always a pleasure to benefit from your perspective on this and we had the BOJ minutes a short while ago, at least last month, a policy members of the bank of Japan were expecting to do more monetary easing. Boy, we saw some yen weakness here in the states on Friday, but we're seeing a mild recovery right now. We're trading around one 29 50 thereabouts, directionally, where are we headed in terms of dollar yen? Look, we think that in the near term, because the first step in widening the band has been taken in December, we think there is more to come in the month ahead. And with that, if you're going to see two way risks around the yen, in the near term, of course, we see one 29 as we speak, but we expect the yearend to end at about one 24. The other thing we have to focus. One 24, so that would imply quite a bit more strengthening here. Is that a week dollar story? Is it the reciprocal? I mean, when we consider what the fed is doing and trying to maybe slow down, it's aggression in terms of rate hikes. Yes, I think there are two or three things that will drive this and the first will be obviously the yield gap. We know that the yen is one of the most sensitive in the sensitive currencies out there in the majors. And yes, we have seen U.S. treasuries yield decline quite a bit. If this trend continues and the gap between Japanese government bonds and USD U.S. treasuries continue to narrow, that's going to drive a little bit of that strength. And secondly, and more importantly, is the speculation and the expectation of the BOJ abandoning YCC. I think that will be probably a bigger driver. And this is probably going to happen, I guess, once we have the new governor in place. And if there's a risk right now, I think in the market's view is that the new governor would be a little bit more hawkish than governor kuroda. The other thing to consider in all of the mix here is the reopening story in China. And I know it's a little tricky given the COVID situation. We're in the lunar new year festivities now and markets are prepared for maybe a lot of bumpiness between now and let's say the next couple of months. But give me your sense on where we are in dollar yen right now or at least where the yen I'm sorry, do you want dollar you want where that may be headed? Look, I think we think the CNY will continue to strengthen from here. We are looking at a GDP growth from China to be around 5.4% this year. Of course, there's going to be, as we've been through with major economies with the reopening, there is pent up demand. It's going to be a consumption led recovery in China, so we expect that to continue here in Australia. We expect to benefit out of this as well resulting from more tourism from Chinese visitors as well as obviously education as well. Our students coming in again. We had a number of speakers at the World Economic Forum that were really saying that the robust nature of the China recovery will depend be dependent on its ability to export and to my mind that may suggest that you would expect the policymakers of the PBOC to guide the currency a little bit a week to ensure on a robust export recovery, is that a stretch? I think that is because I think the ideally, yes, they will continue with easing. We do expect that to continue. But I think as a supply demand thing, I mean, these Asian currencies have been seriously undervalued in the past a year or so, especially with the dollar strike. And we have seen that reversal already taking place we continue to go expect that to continue. Of course, we think that the domestic story in China may somewhat offset the weaker export demand as well if there is a recession I had globally. So let me ask you about the direction of your country's currency. The Aussie dollar, particularly in the context of the reopening story in China and the likelihood that we're going to see a lot more in the way of raw material exports to the mainland, is are you bullish right now in the Aussie dollar? Look for Australia. Around 40% of our outbound good trades goes to China and China is one of our biggest trading partner. We had a few restrictions on imports, but we expect that there might be a little bit of thawing of those trade tensions as we have seen in press around call and other categories as well. Like that, it actually takes place. I think that's going to be a potential boost to Australia's term of trade. And that's going to drive, of course, more upside. And some of it is already in the price now. We have seen in the last month or two the Australian dollar to be showing the highest correlations against the CNY. Very quickly, maja bean in about 20 seconds or
Bloomberg Radio New York
"governor kuroda" Discussed on Bloomberg Radio New York
"Just got 9 a.m. across Deborah's I'm using commended dean in Dubai. The bank of Japan delivered very little. In fact, they did not deliver any move in terms of the interest rate and they maintained the yield curve control program. And at the moment, we're seeing aggressive repricing in dollar yen. We are off by about 2.5% to short of the one 32 handle. It was what was expected, but it's still raised the stakes in terms of how the unwind is going to happen later on in the year. We've got, of course, our reaction as well in U.S. ten year yields with three 47 76. You ten year break-even falls to a two year low after the BOJ decision. Equity futures in the United States taking this fairly in stride and Brent crude with upside of 8 tenths of 1%. I want to get to the BOJ bond buying because that's what it's all about, isn't it when you think about yield curve control? And this is the chart, the kind of tells the story. In fact, it fully tells the story because this is your daily government bond purchases, which kind of hover around the certain range for 2013 all the way to sort of the latter part of 2021. And then boom, you get the spikes, the spikes come again and they come again and ¥1.85 trillion. These are daily government purchases. Rodrigo quetzal writes that the current buying is just not sustainable. The December functionality worsened, the metrics he's looking at is liquidity and the smoothness of the JGB curve. I want to get to the commodity story as well. Another day, another move in copper. But city are not jumping on board here with the bulls call, at least in the longer term. They're making it clear that it's not a great risk reward for base metal balls. We are higher by about 2.1%. They're attributing part of copper's recent move to a short squeeze rather than a run up in the physical corporate demand, which will be closely watched following the lunar new year holiday that happens of course on January 22nd. Let's get to the bank of Japan and more color because it's maintained that yield curve control program and it defied calls to abandon the policy to restore bond market liquidity. We're now joined by our global economics and policy under the Kathleen Hayes. He's outside the BOJ headquarters in Tokyo. Kathleen talked to me about the mood following this BOJ decision. Well, certainly kind of a wake-up call that even as much as traders interpreted the decision to widen the yield curve banned from 0.25 at the top to 0.5, that was happened after the December 20th meeting a wake-up call that governor kuroda is not doing a big push now towards exiting extraordinary stimulus and taking that as the first step. In fact, besides not widening the band, they also said they will continue to buy bonds aggressively as needed. They are ready to add more stimulus to the economy as needed. These are kind of the phrases they use all the time. It underscores that no change was made. And in fact, a very key thing yousef is that the CPI forecast for 20, 20, 23, that's this year, and next year, core CPI, which takes out fresh food prices, doesn't even hit 2%, let alone get there. So this is another indication that they are taking the more cautious path. One thing to consider, of course, is maybe the reason they didn't want to move is twofold. If they moved again, if they widen the yield curve control band again, that the bond market would do just what it did over the past four weeks. It would be more aggressively pushing at the top of the ceiling. They didn't want that to happen. At the same time, more than one person has said it might have been sort of embarrassing for governor Corona. If he made a move that was intended to calm down the bond market, improve bomb market function, it instead created more bond market volatility so that they had to do something again today. Having said that, I think people are saying, this doesn't rule out some kind of tweak, another kind of tweak, maybe even a more dramatic one, like focusing on the two year note yield instead of the ten year note yield in terms of what kind of purchases you're going to control. That could happen in March, but I think a lot of people are already saying march is a live meeting. I love how you threw a punch to kind of show that the tumultuous bond market that's on the way. But in terms of the sequencing here to yearend Kathleen, if not today and if not next month, when are they going to make that big shift? Well, and that's another element here. Maybe governor kroda and the team now didn't want to take another step and make it look they there started the maybe gradual, but the steady normalization process moving out of the extraordinary stimulus that has been the policy for the last ten years. And so that would be letting you wouldn't want to do that because you want to leave it to the next governor. The next governor is going to be having his or her first meeting on April 26th. We're going to get the nominations for deputy governors and the governor, probably in the first couple of weeks of February, that's just around the corner, then the march 8th meeting that will be governor Crosby last one. And he steps down on April 8th, April 26th. You've got a new governor, perhaps that's also the thing. We work with it, we can to keep the bond market running smoothly for
Bloomberg Radio New York
"governor kuroda" Discussed on Bloomberg Radio New York
"In 2022. This is a special year end version of Bloomberg Wall Street week. I'm David Westin. Whatever else you might say about 2022, you can not can not call it boring. We began the year with the first major ground war in Europe since World War II. I would like to remind you of the words that United Kingdom already heard, we will not give up, we will not lose. We will fight till the end at sea in the air, we will continue fighting for our land. Whatever the cost, we will fight in the forests in the field. On the shores, in the streets. And inflation rising rapidly to test the resolve of central bankers all around the world. It's unconditional. Our commitment is, we really need to restore price stability, get inflation back then to 2%. Because without that, we're not going to be able to have a sustained period of maximum employment. With even the bank of Japan making moves that some took as tightening hints, though governor kuroda denied it. The BOJ intends to aim for price stability by increasing the sustainability of this monetary easing. It's not the beginning of an exit strategy. And we are ending the year dealing with the aftermath of a crypto collapse triggered by one of the biggest financial scandals of all time. As FTX is in bankruptcy, billions of dollars have gone missing. Founder Samuel bankman freed faces multiple fraud and conspiracy charges. Not sophisticated at all. Sophisticated, perhaps in the way they were able to sort of hide it from people. Frankly, right in front of their eyes. Then there were the risks left over from the year before, like climate change. We're not at a good track right now. The world is not serious enough about reducing our emissions fast enough. And we've had to deal with continuing effects of COVID as China pursued a zero COVID policy that hurt its economy. What does Euro COVID policy mean for recession and inflation? And unfortunately, it means stagflation. Not surprisingly, the
Bloomberg Radio New York
"governor kuroda" Discussed on Bloomberg Radio New York
"120 countries and leann kerens, this is Bloomberg Stephen. Leanne, thank you very much coming up next Charles caple will have his review of the year in terms of UK corporate stories he'll picking out the big themes for us next. This is Bloomberg. On the latest edition of the tape podcast, a conversation Kathleen Hayes of Bloomberg television on the bank of Japan. Kathleen, I came in here and listened to the energy John farrow and Tom Keane have about the BOJ. I'm like, I don't know. Can you tell me why this is important? Why this important? Oh my God. First of all, being surprised. I was sitting on the 6th floor in front of our camera up there, getting ready to react to this with our team in Tokyo and Asia. And when I saw the headline come across, widening yield curve control. I was shocked. Everyone was shocked. All the signals coming out of the bank of Japan, including governor kuroda, repeatedly was no we're not ready. And the expectation has been, not ready to start making this move, even with inflation rising, Corona kept saying, well, we don't know if it's sustainable. You know what? There might be a global recession, bring down prices. That's we need the stimulus. And then we're getting a new governor. The new governor is going to be in place in April. And at that point, that's been the expectation when it would start. But the BOJ has been insisting even when the shift away from extraordinary stimulus started, it would be gradual. And when koda had his press conference last night, one of the things he stressed was, we haven't changed our forward guidance. We're still concerned that inflation may not be sustainable. We just have to rise. The spring negotiations start off to the first year probably in late February early March. That it was about financial stability, keeping and there's a big concern about the weekend, right? That's been something that very unpopular with the public. So this is a step. But one thing to say, it's not clear that the regime shift has fully begun, but at the door is definitely wide open. It's clear that's where the BOJ is going
Bloomberg Radio New York
"governor kuroda" Discussed on Bloomberg Radio New York
"And Kurt says the FTC has shown it's not afraid to levy hefty fines. It did find Facebook a record $5 billion over the Cambridge Analytica data scandal and Elon Musk says he is going to step down when a new CEO is found. He has said in the past week that it's very hard to find a replacement, says he wants to stay with Twitter as overseeing the systems and the software teams. Ukraine's president volodymyr zelensky plans to address the U.S. Congress in person tomorrow. It is his first trip outside Ukraine since the beginning of the Russian invasion. In San Francisco, Ahmed Baxter, this is Bloomberg, right, Brian. Yeah, thanks very much to time now coming up on ten minutes past the hour. Let's get to our guests. I'll be losing our iron, who is senior investment strategist at standard chartered wealth management. I'll be like, thanks very much for joining us. So all of this action here from the bank of Japan, we've been canvassing clients and guests on the program today on whether or not they think that makes Japan look more attractive or less attractive going forward. Your thoughts on that level. Absolutely. If you look at the announcement yesterday, it did come as a big shock to investors and we can see that from the reaction of Bond as well as FX markets. But I think at the margin, it does make Japanese fixed income markets a bit more attractive. Now, you see two potential implications of yesterday's move. First one is it just solidifies the tighter monetary conditions of the tighter monetary policy from the various central banks. So we could see a knock on impact and high yields in U.S. and European government bond markets. So we won't be surprised if treasuries move towards 4% over the next few weeks. And the second impact is we think that we could see more flows back into Japanese markets. I mean, we know Japanese investors are large holders of fixed income globally. And with the latest Japanese fixed income is becoming more attractive. So for instance, if you look at the hedged yield of U.S. treasuries today for Japanese investors versus the JGB yield, Japanese investors get a 160 basis point pickup versus the hedge US Treasury. So it is becoming more attractive. In fact, JGB is offer a higher yield as compared to U.S. IG corporate bonds. So we could start to see incremental rotation back into Japanese fixed income markets. But that isn't a slam dunk because while we've seen a lot of policy normalization in the U.S., it's just starting in Japan to be honest. Yeah, and to your point, what's going on here in terms of the bigger picture is the ground being prepared for a new bank of Japan governor in April and that kind of relates to our Bloomberg question of the day, a win will Japan exit negative rights. When's that going to happen? Well, that's tough question to answer. I think one thing we know about bank of Japan is unlike the fed and the ECB, which the tend to favor giving forward guidance to markets, bank of Japan has been one of the banks where the price has been at the order of the day. So it's difficult to predict, but it's likely that we won't exit the negative rates in Japan. At least till governor kuroda's term ends, but it's still early days. While going to Corona did emphasize that this was a one off technical move. We'll get a better picture of better clarity in the next meeting from bank of Japan on 18th of January. In any case, we're coming into a year that will probably be nervous times for a lot of people. I see from your notes that you think it's a good time to play it safe and you like exposure to high quality bonds. Where would you be targeting some fresh money at the moment? Well, you're absolutely right. So we have turned overweight on bonds, both government bonds as well as IG corporate bonds. And we think that given the backdrop that there is an elevated risk of recession from a risk management perspective, it does make sense to turn a bit more defensive. Within bonds, we do have a preference for Asian dollar bonds. And we also think that US Treasury yields should decline in 2023. So you could see a bit more capital gains from U.S. trade fees as well. So we wouldn't take very concentrated meds. We still favor diversification, but at the margin, we do favor Asian dollar bonds for developed market counterparts. Two teams still deeply inverted when do you see that changing? Well, it's unlikely to go back into the positive territory anytime soon. At least until we start seeing fed cutting rates in a more aggressive fashion. But we do think that the inversion could soften so while we are at close to 80 basis points in the inverted territory in 2023, we should start to see that normalize a bit. And one of the key reasons why we think that is going to happen is because we expect the fed to cut rates accumulatively by around 75 basis points in the second half of 2022. So that should be a major factor in bringing the two year yields lower and reducing the inversion that we are seeing right now. So we often talk a lot about China on this program, but I have to say that the bank of Japan has kind of stolen the thunder from China, talking so much about Japan this morning. Let's talk a little bit about what's happening with the Chinese economy here as they change policy on their approach to COVID. Sam Paz Elia, a Bloomberg intelligence analyst that she pharmaceutical analyst is saying that the death toll likely could hit 700,000 now because COVID will be running through the population, and a study by another team of researchers in Hong Kong puts the figure at almost 1 million. Are these numbers significant enough to really, really disrupt the reopening or are we going to see the Chinese economy, you know, really changed before our very eyes in the shorter term. That's a great question. I think this is something we've been debating a lot as well. Now, in our assessment, we think that the path to reopening is unlikely to be a linear one. We will see some bumps around the road. And as far as the
Bloomberg Radio New York
"governor kuroda" Discussed on Bloomberg Radio New York
"We've got the yen, something like nearly 4% up from where it was yesterday we got at the moment also bonds under pressure. The U.S. ten year yielding 3.68%. This is Bloomberg. On the latest edition of the tape podcast, a conversation with Kathleen Hayes of Bloomberg television on the bank of Japan. Kathleen, I came in here and listened to the energy John farrow and Tom Keane have about the BOJ. I'm like, I don't know. Can you tell me why this is important? Why is this important? Oh my God. First of all, being surprised, I was sitting on the 6th floor in front of our camera up there, getting ready to react to this with our team in Tokyo and Asia. And when I saw the headline come across, widening yield curve control. I was shocked. Everyone was shot. All the signals coming out of the bank of Japan, including governor kuroda, repeatedly was no we're not ready. And the expectation has been, not ready to start making this move. Even with inflation rising, Corona kept saying, well, we don't know if it's sustainable. You know what? There might be a global recession. Bring down prices. That's we need the stimulus. And then we're getting a new governor. The new governor is going to be in place in April. And at that point, that's been the expectation when it would start. But the BOJ has been insisting even when the shift away from extraordinary stimulus started, it would be gradual. And when koda had his press conference last night, one of the things he stressed was we haven't changed our forward guidance and we're still concerned that inflation may not be sustainable, we just have to rise. The spring negotiations start off to the first year probably in late February early March, that it was about financial stability, keeping and there's a big concern about the weekend, right? That's been something that very unpopular with the public. So this is a step. But one thing to say, it's not clear that the regime shift has fully begun, but at the door is definitely wide open. It's clear that's where the BOJ
Bloomberg Radio New York
"governor kuroda" Discussed on Bloomberg Radio New York
"News on title 42 and something important left out of this budget, the Afghan resettlement act. Not this time, we'll have more on that next with the panel. This is Bloomberg. On the latest edition of the tape podcast, a conversation Kathleen Hayes of Bloomberg television on the back of Japan. Kathleen, I came in here and listened to the energy John farrow and Tom Keane have about the BOJ. I'm like, I don't know. Can you tell me why this is important? Why is this important? Oh my God, please. First of all, they surprised. I was sitting on the 6th floor in front of our camera up there, getting ready to react to this with our team in Tokyo and Asia. And when I saw the headline come across, widening yield curve control. I was shocked. Everyone was shot. All the signals coming out of the bank of Japan, including governor kuroda, a repeatedly was no we're not ready. And the expectation has been, not ready to start making this move, even with inflation rising, Corona kept saying, well, we don't know if it's sustainable. You know what? There might be a global recession, bring down prices. That's we need the stimulus. And then we're getting a new governor. The new governor is going to be in place in April. And at that point, that's been the expectation when it would start. But the BOJ has been insisting even when the shift away from extraordinary stimulus started, it would be gradual. And when koda had his press conference last night, one of the things he stressed was we haven't changed our forward guidance. We're still concerned that inflation may not be sustainable. We just have to rise. The spring negotiations start off to the first year probably in late February early March, that it was about financial stability, keeping and there's a big concern about the weekend, right? That's been something that very unpopular with the public. So this is a step. But one thing to say, it's not clear that the regime shift has fully begun, but at the door is definitely wide open. It's clear that's where the BOJ is going now
Bloomberg Radio New York
"governor kuroda" Discussed on Bloomberg Radio New York
"Marcus, thank you so much for being with us. You have got column on the Bloomberg right now about why this decision will affect the world. Take us through why that is. Because thank Japan, although they still have negative interest rates at -0.1%. Also have the single yield curve control with a capped at ten year bonds and only 25 basis points. That will now go to 50 basis points. The Japanese bond market is very heavily controlled by domestic Japanese institution and indeed the bank of Japan which owns at least half of them. And they have kept a lid on it and they've slowly led a bit of a steam off. That means that they are understanding that their battle to breed inflation into a very deflationary Japanese economy is starting to come to an end. They have a replacement of the current backed bank governor Corona coming up in April and everyone expected the decision to wait till then, but they've got ahead of themselves in a quiet market surprised, particularly foreigners you may have taken Japanese positions off and I think they'll be pretty happy because they've controlled the explosion in the sense that the stock market did drop the neck age of two and a half percent, but the much more banks intended bigger index the topics. There's only down one and a half percent and that's because banks were the best performing sector up over 5% on this news because in their net interest margins as the curve steepens was ten years allowed to go higher and Julie did whilst the short end has been kept at -0.1. As widen and that's great for banks. So and best of all was the yen itself. It raised best part of 4% to the U.S. dollar, Japan is still in a very weak currency environment compared to probably the best performing currency of all this year. So it's chlorine bit back and it's good to see the actual policy as in changing the policy behind or previously was a currency intervention of the Mac Japan. Does you burning out reserves? You can't do that forever. So it's shows the tide is starting to turn. So Marcus, how much of the significance of this move is based on what is expected to happen next because if you listen to governor kuroda, I think he went to some links to say, oh no, this is not that big a deal. As he would. But bear in mind, this is the gentleman who was basically telling the market that nothing was going to happen. And was implacable in denying anything would change. And then one part he's changed is something. As he has done before in over his ten year career, he said a surprise interest rate change on Christmas Day of all things and indeed he's done currency interventions when he said he wouldn't. So this is the master of surprise and stealth and I think the way he's done it the timing ahead of when people were expecting the earliest April has had a big impact in psychology, but I think you'll be very happy with the controlled ish market reaction. But clearly, the point is that this is the last standout Central Bank. It was refused to stop QE refused to rate interest rates off negative and indeed have kept credible lid on their bond yields are up to now and they just let that slip a bit. Bear in mind where U.S. treasuries have jumped to yield over 4% in the front end. It's quite a massive difference to compare to Japan. And that's why the yen has been so weak with the dollar has been relatively so strong and this just takes back some of that and it shows the direction of travel, which will be very slow. That's what corrode is trying to tell us. They actually increased the amount they're buying Q each month just to defend this new higher level of 50 basis points. But in that sense, I think we know the next move will be higher again in yield on that yield cap. But it won't be for quite a while and I think that the bank Japan has impressed us all with their professionalism and skill. And in doing what we're looking will be impossible for any other Central Bank. Marcus, as you say, this is part of a larger effort over many years and it's a massive effort to re inject a bit of inflation in the Japanese economy. Is it fair for the bank of Japan more or less to declare victory? Because I guess they're core consumer prices are now up around 3.5%. Yeah, I mean, I think the fourth forecast is for inflation to be come back below. With energy prices dropping away, like a lot of central banks are looking at forward forecast inflation at dropping quite sharply. They expect inflation to be below 2% in the year's time and that's really what they care about. Nonetheless, with inflation expectations they've noted are higher and the fact that you say core is at 3.5 higher in the last meeting was around three, they know that they've got to act now. They had a very nasty scare in October the markets really came after this yield curve cap and it came off the yen and pushed it out to over a 150 against the dollar. They weathered that and then by the time when everything's got quite and they've reacted, so they're not impervious, I think the fact that inflation is clearly about their target at present is a big boost for them and they are there any Central Bank of the world that really wants this. However, you can have too much of a good thing in the inflation Genie comes out of the bottle. It's almost impossible to get back in as the rest of the world we all know about. So I think they are able to perhaps these things now as far as the cap they'll may consider at some future time raising interest rates. But by that stage, the rest of the world will be stopped raising interest rates and possibly be cutting them, which means the overall need for package plan to height rates will be so much less. They've got their timing right. It would seem. Marcus I recall, and you'll correct me if I'm wrong, the extraordinary monetary policy was part of a two pronged approach that included fiscal as well with abenomics. What message if any does this monetary move perhaps send the fiscal side of the house? Very interesting question, it was technically with three arrows, though not really. Well, the reform one didn't get done, did it? Exactly. It sort of never quite got out of the holes for that one. But and that's the point here. That's what the bank depends is happy to let it's still incredibly easy relaxed monetary
Bloomberg Radio New York
"governor kuroda" Discussed on Bloomberg Radio New York
"Kind of what we're seeing here today joining us here on a Bloomberg interactive broker studio. All right, let's move on and get into what this really means from a Central Bank's perspective from a bond market perspective. You know, I woke this morning and when I saw this news, I have to admit I did not have the BOJ tightening on my 2022 bingo card, but here we are. So I said, we need to talk to some smart people here. So we rounded up a couple. We got plenty to choose from here at Bloomberg Kathleen Hayes. Bloomberg television correspondent joins us. Ira Jersey interest rate strategy for Bloomberg intelligence also on the phone and Kathleen is here in our Bloomberg interactive broker studio. So Kathleen, I came in here, I'm listening to the energy John farrow and Tom Keane have about the BOJ. I'm like, I don't know. Can you tell me why this is important? Why this is important. Oh my God. First of all, big surprise. I was sitting on the 6th floor in front of our camera up there, getting ready to react to this with our team in Tokyo and Asia. And when I saw the head like a macross, widening yield curve control. I was shocked. Everyone was shot. All the signals coming out of the bank of Japan, including governor kuroda, repeatedly was no we're not ready. And the expectation has been, not ready to start making this move, even with inflation rising, crota kept saying, well, we don't know if it's sustainable. You know what? There might be a global recession, bring down prices. That's we need the stimulus. And then we're getting a new governor. The new governor is going to be in place in April and at that point, that's been the expectation when it would start. But the BOJ has been insisting even when the shift away from extraordinary stimulus started, it would be gradual. And so when crota had his press conference last night, one of the things he stressed was, we haven't changed our forward guidance. We're still concerned that inflation may not be sustainable, we just have to rise. The spring negotiations start off to the first year probably in late February early March, that it was financial stability, keeping and there's a big concern about the weekend, right? That's been something that very unpopular with the public. So this is a step. But one thing to say, it's not clear that the regime shift has fully begun, but at the door is definitely wide open. It's clear that's where the BOJ is going now. Well, I think what's so significant about this particular move is that a lot of people don't really read about the Japanese economy, but deflation has been an issue for the Japanese economy for what decades. Well, they got out of in 2014, after they signed the accord in 2013 that set up all this extraordinary easing. But yes, they still had it inflation has not gotten to 2% in state there. Right, exactly. And I think what's crucial here is that, I mean, so many people would call this, right? They said that the market was going to break at some point at some point, which is why you're seeing a lot of the likes of UBS, blue banks, after a really cash out on shorting these JGBs. But I have to ask, why so soon? Because that was the surprise here. It was going to be this eventuality. Why so soon? Why so soon? Financial stability, perhaps he was a bit concerned about having to defend the yen so aggressively. Remember in the just a couple of months ago, the extraordinary bomb purchases. And that's one thing they also did in the last meeting was increase the amount of the money for intervening for buying the bonds, et cetera, to 9 trillion from 7.3 trillion. It might be one of our guests overnight said politics that high inflation is so unpopular in Japan kroda gave a speech a couple of months to parliament a couple of months ago where he said, well, he knows that the Japanese people can understand inflation. He got so much pushback. That made people very angry. Kishida and the new prime minister relatively new prime minister is approval ratings have been crushed. This may be a sense of Anita show that yes we know it's going on. This is where we're heading and let people know now. I want to bring you in here. What is your reaction to what we saw out of the bank of Japan? How do you think the U.S. Federal Reserve will react? What was your take? Well, I don't think the fed's going to react directly to this. But I do think that it surprised everyone. I think a lot of people thought that if the BOJ was going to increase the ban for its yield curve control that it would come much later next year. So I'm not surprised given the news how the U.S. markets reacting. I think what's going to be fascinating is whether or not the DoJ is actually going to deliver on what the market is currently pricing in terms of interest rate moves because there's a large part of the market and I've even had conversations this morning with investors who think that the BOJ is not going to ever move interest rates off of the negative ten basis point level where they are now. But the market continues to price for the BOJ to potentially increase interest rates a little bit in the middle of next year. So I think this is kind of almost a necessary step in order to pave the way for potential interest rate hikes in the future. How many and how aggressive the BOJ can be, I think, will be very much determined like Kathleen said about what the economic landscape ends up ends up being there. But generally speaking, it is part and parcel of this global policy tightening that you've seen out of just about every Central Bank in the world, even those who traditionally have been majorly dovish. So just Kathy, that's kind of where I want to go. It feels very coordinated to me. The central banks around the world raising rates, is this typically how it happens? Well, I'm not sure it was coordinated. Now they do we know that they communicate with each other frequently. I will say this that very recently, my sources close to the BOJ were indicating that nothing was going to change yet as recently as late last week when I spoke to somebody. So it's still a mystery to me, too. Why now? Why this meeting? And another thing, the BOJ has 8 meetings a year. Four of them have a monetary policy report. That's when they usually make any kind of shift in policy. This was not one of them. Again, why now? Why the movie? Do they communicate with the public with the markets like the fed does? It seems like we're here from fed presidents every other day. Well, they test a governor classifies parliament all the time. The
Bloomberg Radio New York
"governor kuroda" Discussed on Bloomberg Radio New York
"Bahamas courtroom catching his old lawyer off guard. So it's gone in 9 a.m. across yammer. So I'm used to commending demon Dubai. It's tear up the script Tuesday. This one from the bank of Japan delivering a surprise to global markets. The ramifications are going to be felt far and wide and beyond borders of Japan. Currently on the S&P 500 mini, we are down about 9 tenths of 1%, the consequences are going to be massive and they're going to play through multiple reinforcing channels. S&P futures get whacked lower on U.S. tents, we're up by almost 11 basis points, a short of 3.70. Dollar yen is off by 2.7%. That is the biggest move in a month and then Brent crude just inching under $80 a barrel in the last 15 minutes. But I want to get to dollar yen as it cuts through key technical levels like a hot knife through Swiss cheese. This is a blow up that we've seen nothing of like throughout this year. And nobody really considered this as an option as we got to December 31 or getting to December 31. The last major holdout in a global monetary tightening shift, and that can blow up some of the big cross asset funding trades in the world. That's how interconnected the story is. And I want to also give you a better sense of the move we've seen in U.S. tenure yields because that is really at play here in terms of the tightening of financial conditions as we get closer to 3.7%. The treasury markets already been suffering from liquidity issues. The last thing the treasury market needed and treasury traders was capital getting sucked out from there and we deployed in Japanese assets. So that Titan's conditions, it also raises the discount rates for future cash flows. I want to add a little bit more color to the story. We've got it all covered here on daybreak Middle East. And again, the bank of Japan surprised. They said they're going to widen their ten year bond trading band and basically what you saw is quite a bit of momentum in some of the currency trades as well. And it is really a question for Central Bank to consider because our global economics and policy out of the Kathleen Hayes joins us now for more. So Kathleen just talked to us then about what some of the items were under the main lines as it were. Well, certainly, this was a surprise and I'm so happy in the last hour to see everyone we had on your show say that because everything we've reported and it's been led by governor kuroda head of the bank of Japan is going to step down in early April and that's one of the things that opened the door for discussion about what's going to change now. When is it going to change? Not at this meeting. That's what everybody expected. There's talk of that the government led by prime minister kishida has been making plans to start a policy review when the new governor is in place in April. But today, what were we hearing? Well, inflation is rising, but corot is view was, but it's driven by import prices. And it may not be sustainable. We've got to see what the spring wage negotiations bring to see if that's going to help support this. What if the fed pushes the U.S. economy into recession? And we have even a global recession. That could put downward pressure. That's another reason why people were looking for any change here. Widening the band has probably a couple of reasons. And one of them is to give the BOJ more flexibility to control movements in the yen. There was a terrible route of extreme yen weakness, more could have been in the works. And furthermore, this whole question of bond market functioning going into this, this was another concern that the BOJ now has. It owned 49% now it owns more than 50% of all the bonds out there. That's a problem for the secondary market potentially. And one of the things they did mention today is that bond market punching functioning was one of the considerations today. They, in fact, aren't going to increase their potential bond purchases for the first quarter to 9 trillion won from 7.3 trillion. Beyond that, will there be more changes like this in the coming meetings? January March, march will be last meeting. I think that now becomes one of the big questions for investors, the big questions for the markets, having done this going from zero .25 to 8. That's a big change and you've all been saying it's true. It's going to reverberate through the markets. It's reverberating today. Will he think it's necessary to do more? Will he wait for the next governor to take over? I think that's the thing people are going to be debating now, and of course inflation continues to rise. It's very unpopular with the Japanese public. And this is another thing that people say, maybe there was some political impact here from the prime minister on governor kuroda and his team to start making these changes now and not wait until the next governor's in place. Kathleen now, we leave it there. Thank you very much for that. That is Kathleen Hayes with the initial analysis on the bank of Japan a reminder that we're going to have the news conference at 6 30 a.m. GMT. I want to head out to the equity market reaction at about drew's joins us now from Sydney with quite a bit of green on the screen. This time from the lenders. Yeah, that's right. You said that there's really just two sectors that are moving higher in Japan today and they're the ones that actually benefit when you have a rising rates environment. So more sensitive to yields are the lenders here because we are seeing the likes of Mitsubishi uf J climbing the most, for instance, in 6 years, but the topics banks index it tracks in 17 9 lenders in Japan every single one of them is trading high today and something that we had really been expecting of course given we have seen already that app performance of Japanese banks on bets that the BOJ would be forced to make a pivot in its program of yoga of control at some point, even though today of course as Kathleen was explaining there was a huge surprise to markets, but if you change our now and taking a look at what we're seeing for broader Japanese stocks, we have really seen them slumping in their extending their slide into afternoon trading. What is really leading the drop here again of those sectors that do not benefit in a rising rate or more sensitive to yields at higher yields environment as well. And then it's the likes of real estate and also tech stocks as well, but lenders rather real estate down around 5% that index there at this point in session. Let me change it on now as well taking a look at what's happening in the ten year yield because again we have seen that spike there of around 20 basis points at this point, but really that is not seeing such a big move at this point even though this is a story that's going to have a huge ramifications across funding channels, the flow movements for long-term investments and that's something yousef that's going to be playing out over the course of not just weeks, but also months to come. Absolutely. Jaw dropping moves there intraday and the chart, thank you for that and about rulers. Now let's shift gears just for a moment and talk about a House committee that is recommended Donald Trump be prosecuted for his role in the January 6th assault on the U.S.
Bloomberg Radio New York
"governor kuroda" Discussed on Bloomberg Radio New York
"6 30 in the morning here in Hong Kong and in Singapore it is a 6 30 in the evening on the Atlantic seaboard of the United States of Rashad salad. And I'm Ryan Curtis looking at numbers here in the Asia Pacific, a little bit mixed. It's not a slam dunk to follow Wall Street higher, maybe some musing over whether or not it's too soon after that hot inflation report to start thinking about buying stocks for the longer term. We'll take a closer look at the action with Doug Chris or in a few moments, but for now some of the top stories. Hollywood can breathe a sigh of relief Netflix is growing again. The streaming giant adding about 2.4 million customers in the third quarter exceeding internal forecast as well as expectations on Wall Street. Netflix also expected to sign up another four and a half million globally this period. The picture though, it's not all rosy. The company is still on pace for its slowest growth in years, Netflix will announce an ad supported version of its streaming service in November to boost revenue earlier. Dan Morgan at cenovus trust broke down what that will look like. They got kind of forced to do it because Disney+ and HBO have both done that route. My understanding is it's going to be between roughly 6 to $8 per month. They're only going to do advertising breaks maybe three to four times during an hour programs. Meantime, Netflix saying that it once investors to consider more traditional financial metrics like revenue and operating income while looking at earnings as a result, the company said it will no longer provide subscribers forecasts, starting in the fourth quarter. And we'll have dietary enough in coming up from Bloomberg intelligence, and that's one of the questions we'll put to whether or not some will look askance at that plan to stop giving subscriber forecasts. Well, the Biden administration is moving toward a release of at least another ten to 15 million barrels of oil from the nation's emergency stockpile. We're told it's in a bid to balance markets and keep gasoline prices from rising further. The move represents the tail end of a program announced back in the spring to release a total of a 180 million barrels of crude from the strategic petroleum reserve. The Biden administration is set this week to provide details on plans to replenish. The stockpile, The White House also said that President Biden will speak on this tomorrow and we will bring those comments to you. The majority of Asia fund managers expect weaker corporate profits in the region over the next year, that's according to a Bank of America survey. 56% of those polled said that the zero COVID strategy is the most significant risk in China while about 22% of respondents voted geopolitics as their biggest risk, despite the forecast for slowing growth, there are three quarters of these that respondents, anticipate returns from the Asia Pacific ex Japan equities to be higher in the next 12 months. Okay, 33 minutes past the hour, let's get to Doug Krishna. I had this feeling last week with the CPI report. The reaction afterwards was kind of like, whew, that's glad that's over. We won't get another one of those for another month. But this is kind of wild. It is, I think right now a lot of the psychology has been driven by the earnings, particularly from the banks right out of the gate yesterday. It was the Bank of America's story today. It was all about Goldman Sachs, the numbers topped estimates, and once again, traders over at Goldman helped to rescue the shop from a sharp slowdown in investment banking, though shares today picking up about 2.3%. So we had the S&P rising by more than 1.1%. The best two days of gains in about two weeks over the last two sessions, the S&P is up about 3.8%. Yuan packed the Netflix story moment a short while ago. We also heard from United Airlines after the bell, the stock right now is up by more than 6 and a half percent in the late session, adjusted EPS well above the average estimate. The carrier sees profit. In the final day, are the final quarter of the year. So this is guidance now, very, very positive, well above what the street was looking for fueled by a rebound not only in corporate travel, but in leisure travel as well. And we also heard from JB Han transport services. This was seen as a window into the economy, at least on the macro side since you're talking about the tentacles of the transportation system and hunt delivered not only sales but earnings that were above forecast in those shares higher by more than 4% in the late U.S. session. Also looking at the end a little bit weaker in New York, not by much a one 49 20 right now. Governor kuroda overnight reaffirming a dovish monetary policy from the bank of Japan, obviously the big issue for the currency market is the prospect of intervention that would be triggered first by the finance ministry and then the BOJ would be tasked with executing. In the bond market right now, ten year treasury at 4%. Today's economic news stateside was somewhat mixed on the positive side factory production in September up for a third straight month, and then on top of that capacity utilization increasing to a level of 80%. But the home builder sentiment survey showed weakness for a tenth straight month in October. If you look at the shorter end of the US Treasury yield curve, four 42 on the two year were just two weeks away from the next fed meeting, I think it's safe to say rich 75 basis points baked into the cake. That would certainly seem to be the case, and it is now just coming up to 24 minutes to the top of the hour
Bloomberg Radio New York
"governor kuroda" Discussed on Bloomberg Radio New York
"Know, in the last week we've had policy decisions from the bank of Japan and the European Central Bank and the contrast here couldn't be sharper. The BOJ remained on hold and it said it will need to persist with easing. On the other hand, the ECB Titan conditions for the first time in 11 years as it confronts soaring inflation, and now, in the week ahead, we get a decision from the fed. 75 basis point rate hike is widely expected, so let's take a look at what fed tightening means for the rest of the world, especially Asia. Joining me now is Bloomberg's global economics and policy editor Kathleen Hayes. So Kathleen, we know that in many parts of the world, economies are in the grips of rising inflation. It's not just the U.S., it's not just Europe, we've got South Korea, Australia, New Zealand, as you know, all facing higher prices. It seems to me like the fed has got no choice, but to be aggressive and be less concerned about the consequences in terms of the potential for even wider rate differentials, wouldn't you say that's fair? Absolutely. And of course, classic Federal Reserve policy strategy and they say this over and over. If you ask them about the ramifications of their policy moves on their countries, we have to respond to what's going on in the domestic economy. That is our number one goal. And I think another thing they would probably add right now, the more we can get our inflation under control, the more that will help the rest of the world. The bottom line, they are cognizant of the impact this is having on wagging yield differentials, the potential for capital outflows for many emerging market countries. But that's something they can't control. I think to make things really more interesting here is the story in China. We've seen a lot of the recent data that I guess would argue in favor modestly of a little bit more easing. Perhaps the PBOC wants to wait and see what the fed is going to do, how much more aggression is required to get inflation under control in the U.S., where do you think China is in all of this Vis-à-vis fed policy? Well, number one, they don't have much of an inflation problem, certainly not compared to the rest of the world. So you don't have to worry about raising rates. Second of all, their economy is weakening and they keep saying they're going to provide more fiscal stimulus. They say they'll provide monetary stimulus, but they're not rushing to do that. And I think it's because they realize that maybe monetary stimulus isn't their issue so much. It has much to do with these structural problems in the economy or these changes they tried to make in housing, for example, that blew up in their face. And now that's an even, once again, a growing stressed economy. Well, you mentioned capital outflows. That's a rate differential story as it relates to the dollar, and we've been seeing the behavior in the yen and I go back to the BOJ meeting because it seems like governor kuroda was saying, at this point, I'm not so much worried about defending the currency, even if it gets to the level of one 40, let's say, against the greenback, which I don't know, maybe a little risky, but at this point, where does the dollar factor into the conversation around fed tightening and the negative impact that it could have? Do you think the fed is concerned about the dollars appreciation? I'm sure they're watching it. I'm sure they're realizing you'd have a negative impact on the rest of the world. On the other hand, a stronger dollar helps make overseas imports. What we buy from overseas in the U.S., if a dollar stronger, that cost less money, right? But I would say that U.S. multinationals have already said in this earnings season, hey, we're beginning to feel the pain from a stronger dollar because it's making our goods our services more expensive. But ultimately, isn't that the fed's endgame? They've got to hit they've got to slow down demand of all kinds. Certainly domestically. And they want to see financial conditions Titans. Those stocks sell off. Bond yield tries. This is all what they have to do because they had made it very clear. The worst mistake they can make isn't tightening too much. It's not doing enough to bring down inflation. So that's why they can be mindful. And I'm sure they want to stop raising rates as soon as they can. But the stronger dollar isn't going to stop them now. Let's say we get the 75 basis point rate hike. The outlook here from fed chair Jay Powell is going to be very critical. What do we know? What do we feel that he may say about where we're headed in all of this? Got a dependent. They are waiting. They're waiting for signs that inflation is stabilizing and sustainably coming down on a monthly basis. I think the question is going to be will he ease up on what we give us some signal that maybe we can see after doing two 75 basis point rate hikes in a row, will we will keep that on the table, but maybe a 50 basis point rate hike is it will be more likely. But again, it will depend on the numbers. Well, where does this leave the fed in terms of trying to engineer that so called soft landing? They are hoping that they hit it hard, hit it fast, they'll slow down the economy, slow down demand, supply chains. You've got to have some help from supply chains that maybe they'll have that kind of release coming down on inflation that they want, and they can ease up on rate hikes. But again, they don't want to stop hiking rates now and let inflation stabilize and start moving up again because that will have to come even back even harder in the future and have a worse problem. Always a pleasure. Thank you so much, Bloomberg's global economics and policy editor Kathleen Hayes. I'm dad Krishna. You can join Brian Curtis and myself weekdays here for Bloomberg day break Asia beginning at 6 a.m. in Hong Kong
Bloomberg Radio New York
"governor kuroda" Discussed on Bloomberg Radio New York
"Hour. This all bleeds into the broader picture, which is perhaps investment banking has been suffering on the deal side, but trading very much and interesting moment, given all of the volatility, Jeff U has been tracking all of it as senior market strategist at BNY Mellon and Jeff, taking a look at the soup of this week. What will emerge to you as the most important data point amid earnings amid retail sales amid consumer expectations. Retail sales plus U.S. corporate earnings equals U.S. continues to outperform. This is a view which somewhat goes against our expectation that the dollars valuations were starting to look a bit expensive and the like, but the fact is, if you look at where you're a dollar is trading, you look at where cable is, you look at Asia struggling, China's gross struggling, the U.S. is still where they add. So those asset allocation flows will probably still continue to favor the U.S. for selectively. Jeff had been dying to talk to you. You and I have read James Hamilton of the university of San Diego, and we understand brownian motion, which is the back and forth, the randomness of a trend, and these two odd words drift and trend. Japanese yen is looking like a zombie. I was thunderstruck on yen weakness that the way it was weak. What do you make of the mathematical lethargy of weaker Japanese yen? Well, governor kuroda will very respectfully and politely tell you that this is still not the right kind of inflation that Japan is getting. It's irrelevant as far as he's concerned. He's
Bloomberg Radio New York
"governor kuroda" Discussed on Bloomberg Radio New York
"The Emirates I'm used to Germany dean in Dubai And I'm managed granny ride alongside moments of bottom fishing or desperation That's the question you need to ask yourself in the stock market years of have a look at this We got the little bit of a bunch The S&P 500 is down for its 6th week in a row So even though you have this binds this morning everybody's grasping at straws that maybe the fed is perhaps the fed put is gone but maybe there's desperation the fed will show some mercy Down for 6 weeks in a row dine four and a half percent You're looking at a market which is 30 basis points away from a full burr market of 20% drawdown from its highs this year Citigroup say caution on equities we're exiting bubble territory growth stocks have further to fall They prefer value Let's roll it over and have a look at where do you want your haven to be Well yeah No Do you want Swiss No that went to parity Parity baby What is next Starting a priority you're a parody Swiss friend to the dollar went to parity because the haven trade is the dollar The dollar is king And that is pretty clear Sterling is down one and 8% this week a shrinking in the GDP Saunders say inflation expectations are uncomfortably high and this morning the finance minister in Japan talked about the rapid fluctuations a whiff of it more intervention Yeah so in the meantime the fragility you're talking about in stocks led to quite a bit of support flows into some of these treasury names and that includes U.S. tense curly at two 88 O four the biggest drop since March on haven capital making a move At the same time I'm looking at where we're placed in terms of future expectations on inflation That picture is beginning to build for potentially a more aggressive fed A 30 year bond auction missed obtaining the 3% coupon rate and you start thinking about liquidity Where is it Well the treasury secretary Janet Yellen is concerned about the functioning of the treasury market and comments the lawmakers Let's get to this chart GTV go for our clients The great bull run and bonds Let's in jeopardy These remarkable support and resistance lines for ten year yields at the moment we've broken out a little bit but that is likely to come back down according to the market's life team the Goldman Sachs team sees treasury ten year yields rising to 3.3% by year end Let's get to the energy markets gaining a little bit here as investors weigh the Russian band and the China outlook The Europeans are considering a delay in oil sanctions at the moment Brent crude is up by 1.7% governments are still aiming to do a deal for a full package with an oil ban as soon as Monday When that sees the risks are to the upside here the range of a $116 a barrel and the IA is also telling us that you know what Saudi Arabia and Iraq are producing a little bit more oil Let's get across the GSI She's got the very latest from Singapore Jules Hey man yeah some encouraging news out of the region today and we just got some breaking news from Malaysia to just showing you how this reopening theme is helping a lot of these Southeast Asian nations Malaysia's first quarter GDP year on year rising 5% above estimates of 4% quarter on quarter coming in at 3.9% above estimates two of two and a half percent They did though revise lower Their fourth quarter GDP to 4.6 from 6.6% bank Malaysia also saying that they will remain accommodative with their policy The good news continues as we see a rebound in Asian equities they're having their best days since late April really led by Japan China Hong Kong Beijing saying that they are denying the capital city will be locked down giving a boost there But have a look at what we're seeing in Indonesia This market nearing correction territory it's had its worst week since March 2020 when borders were shot remember it resumed trade after the aid holidays Also looking at some moves coming through in the currency markets the yin giving back some of that very strong rally at had during Thursday's trade bank of Japan governor kuroda saying that it is important rather for FX to move in a stable manner They've indicated a need to support the economy with powerful easing and we saw a stronger reference rate for a 9th straight day from the PBOC the Hong Kong monetary authority intervening once again with their dollar pig and having a look at the Aussie trying to recoup some of those very hefty losses they saw in the U.S. session use of that was on the back of that slump in gold when we saw the Aussie test June 2020 levels I mean relative to the first three months of the year what we're seeing at the moment in terms of currency moves is nothing short of spectacular jewels Thank you very much for that Well it sounded there Let's get to the treasury secretary Janet Yellen because she has given the U.S. government's most forceful response yet to the meltdown of Terra USD saying that the crypto stablecoins rose underscore the risks that are associated with the asset class I wouldn't characterize it at this scale as a real threat to financial stability But they're growing very rapidly And they present the same kind of risks that we have known for centuries in connection with bank runs Let's get out to Bloomberg's Garfield Reynolds in Sydney Garfield the interplay between cryptocurrencies and the stablecoin and the finer details with the broader financial system I mean that is as clear as day line just run us through some of the size and scope Give us a bit of quantity on what's at play Well just to jump briefly away from cryptocurrencies out we're just looking at how the ten year treasury yield is down this week by the most since the beginning of March 2020 So I'm not saying we're in the same sort of nervous situation we were back then But there was obviously a lot of nerves going on And a focal point for that nervousness has been what's been going on in crypto And I think a lot of people who are outside that space when they looked across they first looked across not at what was going on with terror But what's going on with Bitcoin and ether and that whole universe over there where suddenly everything was dropping all at once And that has to raise the fear that this is a regime change The buy the dip mentality has taken a lot of body blows recently and to see your crypto down as far as it was and then to discover that it was because of this difficult to understand stable coin based on algorithms that were supposed to stay at a dollar and was dropping to 20 cents or beyond I think that just added to the free thought of panic that we had across a range of asset classes And not a complete coincidence that there are other causes too But the crypto space is settling down today and so assets more generally and those treasury yields are up slightly Though that weekly decline is still very impressive It's certainly got big questions around the liquidity flow coffee isn't it I just stable coins the things like tether stabilizing and Bitcoin So let's see where that story actually ends on the stable coins I don't think we're done yet Thank you very much Garfield Reynolds there in Sydney Well we were just talking about the bond market with that market in mind the fed church a pump Endorsed a 50 basis point hike again as the Senate finally confirmed him for the second four year term Bloomberg's global economics and policy editor Kathleen Hayes is with us now So San.
Financial Issues
Governor Kuroda, Bank Of Japan And Europe discussed on Financial Issues
"Europe and turning to central banks. The Bank of Japan says it will keep interest rates extremely low through at least the spring of twenty twenty if four costs it won't hit. It's two percent. Inflation target for at least another three years that would be nine years off to governor Kuroda launched the banks radical