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>> welcome to daybreak australia. markets just have come on line. paul: the top stories, the u.s. stocks and bonds lower with strong factory data reinforcing the view a rate cut may not happen this quarter. >> hurting the yen, it's a potential intervention level. paul: we look at the future framework, speaking live with chris kent. >> inflation policy numbers top of mind as we ask are they more or less online with expectations when it comes to the price index at .10%, softening from half a percent we saw in february. the year end number is hotter, 3.1% at a faster clip than the 3% that was the consensus survey and matching the same pace we saw in february as well.

energy prices year over year coming at 2.4%, a little lower than 2.5%. more progress towards the 2.4% with the bank of korea but has a way to go and we see the increase in fresh food policies and a the price by the government leading to that slowdown and saw a rise in retail gas prices pulling in the other way. these readings according to bloomberg economics likely to change the b.o.k.'s narrative the final stretch to 2% will be bumpier with inflation level still fairly elevated and private sector debt risk continuing to build for the economy poll as well. we're watching the shift in policy guidance in its may meeting but expectations that will stay on hold for the bank of korea to the rest of the year. paul: two minutes into trade here we have a staggered open and will wait to see how things unfold. a lot of stocks going

ex-dividends but at the tune of 1%. we'll watch treasury lines a bit later with china lifting the trade talks on australia wine before the long weekend and we see oil price recovering a bit after sinking to 10-month lows. we had pretty decent p.m.i. numbers out of china, also. looking at the bonds face, yields edging a little higher. we did see yields gaining across the curve in the u.s. after that strong i.s.m. factory data but in australia we've been hearing from the assistant governor chris kent who will join us on set saying the i.b.a. is not ruling anything in or out when it comes to the future path of rates in australia. let's look at futures for the nikkei in the meantime sitting up for a slightly down day. the yen is something to watch on the back of that u.s. data as well and the finance ministry still making noises

about possible intervention. we have 151.63. around the four year low highs. >> and when it comes to the u.s. futures, given renewed focus on how the last stretch of the inflation fees through federal expectations as well and the futures looking flat by .10%. if you look at the bond trade, they're pricing in less monetary policy easing by the fed and potentially even set the odds of a first move below 50% after that u.s. manufacturing activity showed expansion for the first time since 2022. that has really been really top of mind this it comes to how we've seen things fold since the last meeting. we're watching oil markets rising on tightening crude supplies in america as well as israeli with syria threatening to widen the middle east conflict and this accumulating in the fact we've seen the upward momentum in crude prices all hitting the october highs as we see the

export cuts in various markets. new york crude currently trading at just under $84 a barrel. as we continue to look at fed cut odds, take a listen to chair powell. chair powell: the report was pretty much inline with our expectations. we're making progress but need to see more. the decision to begin to reduce rates is very important one. the economy is strong and we see strong growth. we had growth last year over 3%. we don't need to be a in a hurry to cut and can be more confident. i don't think rates will come down at the low levels it was before the pandemic. this economy doesn't feel like it's suffering. >> let's bring in nicholas brooks, let me get your opinion on each release has the potential to reposition market expectations a

bit. nicholas: absolutely. i think we're highly data dependent right now and for good reason. i think markets are priced to perfection, very much focused on the soft landing and the goldie lock scenario. investors are trying to gauge which way to go and there are concerns in fact we won't even see a landing in the u.s. and obviously that will have implications for u.s. bond yields. we saw them push higher today on the stronger than expected i.s.m. on the flip side, we are seeing the p.c.e. coming down, so we're seeing inflation moving in the right direction in most countries but slowly. i think everyone is just trying to understand whether we're really going to get away with the soft landing and markets can keep

performing or if we're going to see a no landing scenario and perhaps the inflation remain very sticky and therefore a reassessment of rate cuts i think would be quite negative for risk assets. haidi: the consensus trades seems to be u.s. exceptionalism. are you seeing better opportunities outside the u.s.? you see there are is an underperformance from europe and asia and i assume even with the underperforming structure of china. nicholas: the u.s. equity markets have had an incredible run, particularly tech and the so-called magnificent seven. but there have been a lot of laggards so small cap stocks have lagged and europe and asia have lagged as well. so my own view would be from and as et al. occasion point of view, i'd be looking a lot more europe. i also would be looking at certain markets in

asia as well. mainly because i think that those seven stocks in particular but tech in the u.s. has really had a run and looking very expensive on any measure, any traditional measure one might use, whereas if you look at the smaller mid caps, you know, they actually look relatively attractive relative to history or at least in line with history in the u.s. and in europe the discounts, p/e, price to book, in some cases historic lows. so i think that's quite attractive in the environment we're in. just to add in one interesting change is a pickup in the industrial cycle. one who covered asian markets or europe for a while recognizes that asia and europe do tend to outperform while we see a pickup in the

industrial cycle given the nature of their economy. so this may be the time to make that kind of switch. paul: sickling back to the fed, the environment you're describing doesn't look like a need for rate cuts. does more pricing need to be done in terms of market expectations here? nicholas: i agree completely and the clip you showed earlier of the fed chairman speaking, the u.s. economy last quarter, 3.4%, first quarter looking like it's running around 2%. so the u.s. economy does not seem to be slowing a lot. obviously we can always find some indicators that point to slowdown and expect the economy will moderate. the u.s. economy is going along very strongly and what worries me most, frankly, is the u.s. inflation, the services

inflation is not coming down as quickly as i think the fed would like to see. if we look at the core p.c.e.x shelter it did improve from january and if you look at a year on year end basis it's elevated and that to me is a critical indicator for what underlying domestic inflation pressure is in the u.s. there is no rush for the fed to stop cutting rates. paul: is there another risk to consider. and we heard from another expert he is worried about u.s. national debt. is that in the risk column and any other risks you're looking at as well? nicholas: yes. it all plays into this. the biggest risk is not the base case scenario but the biggest risk markets face this year and probably into 2025

is the backup in u.s. government bond yields which has a ripple effect through other markets. on top of the pickup in the usism and the industrial p.m.i.'s and the stickyier than i think the fed would like to see underlying inflation, on top of that of course is the u.s. government is issuing huge amounts of debt and will continue to do this going forward. we're running in the u.s. a deficit of 6% for 7% of g.d.p. when the economy is doing well. so far, you know, we haven't had a kind of u.k. liz trust in the u.s. and wouldn't say that's going to happen any time soon but at some point the bond vigilantes come out again and is a risk and needs to be watched quite carefully. paul: you mentioned how the a.i. valuations are looking a little stretched. do you see opportunities

in this space in asia maybe going a little bit unappreciated at the moment? nicholas: yeah, if you look generally at valuations across most of asia, they look attractive, certainly relative to the u.s. and within that, of course, there are a number of tech segments that look very attractive. i would also jump in with we are looking at the most recent p.m.i. out of china we mentioned earlier and indications, not just indications, actually, the authorities in china have been easing, not as quickly as they might have in the old days, but we are seeing monetary easing coming through in china. and you know, stocks in china are pretty beaten down. i think there are probably a lot of interesting investments in the chinese stock market and tech would certainly stand out. paul: all right. nicholas brooks, head of investment research at i.c.g. we'll have to leave it there. thanks for joining us. still to come, we're going to be speaking

with assistant governor christopher kent on australia's future frame york for monetary policy and joins us live next. this is bloomberg. starting a business is never easy, but starting it 8 months pregnant... that's a different story. with the chase ink card, we got up and running in no time. earn unlimited 1.5% cash back on every purchase with the chase ink business unlimited card. make more of what's yours. wealth-changing question --

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♪ haidi: bloomberg has just hosted the australia briefing in sydney where the assistant governor spoke. they'll pass to a new system as there is a decline in the reserves in the banking system. joining us is christopher kent at the reserve bank of australia. great to have you with us and at bloomberg. just upstairs you were talking about this change in the monetary policy implementation system, is about the piping and not about the temperature of the water rushing through the pipes. can you elaborate a little bit more on that? chris: what we've announced is a new system for implementing monetary policy, what we'll transition to in the future. but it really is about the plumbing, the nuts

and bolts of moving money around and us achieving our cash rate, close to the cash rate target but it's not what that target is. what that target is, is monetary policy. this isn't about monetary policy but just how we achieve the target at any given time. haidi: it's about responding to perhaps the imbalances in the system structurally coming from the last few years? christopher: it's about responding to the running down of the very large level of reserves. we call that excess reserves in the system because we and other central banks pursue unconventional monetary policies and it puts a lot of money in the banks accounts and gradually unwinding as the bonds mature and the tsf gets paid and it's about looking to the future and thinking about what we need to do as far as what system we need to transition to. haidi: when it comes to the moderation, you obviously depend on underlying demand but do you have an idea of scale, of timing of how that framework will play

out? christopher: we don't and why we've picked the system we've picked and what we have chosen is a full allotment allocation system. that means the banks come to us and for a fixed price they can borrow reserves, pledge collateral for 28 days at the moment and take what they want as long as they have sufficient collateral. what it means is the supply of reserves will depend on the bank's demands. the banks have their own estimates and we can come up with some rough ones but until we get there, we won't know. but it should transition fairly seamlessly from excess to ample and we'll know we're there when banks start showing up in larger numbers and quantities at our operations on a weekly basis. haidi: until we get there we won't know probably is a good phrase to describe a lot of aspects where we're at at the moment in terms of monetary policy. upstairs you asked, to

give one word to describe monetary policy and directory and will give you a few more words. can you elaborate. christopher: the boards made it clear and think the 9 interest rate path that will best bring inflation down in a timely manner is uncertain. and so they've not wanted to rule anything in or out with regards to interest rate changes. we're in a better place than we had been, inflation has come down a long way and does look to be moderating but our path according to our forecast is a gradual moderation from here. and market pressures are easing, they're still tight but easing because growth is slowing and that brings demand into a better balance with supply. so all those things are in place. our central forecast is it sort of predicated on good things happening, including productivity growth but there's a lot of uncertainties around there and the key point

is those about reasonably well balanced as best we can tell and because of that, the path is uncertain. the next rate change, the effort is higher, don't know if it will be a lower interest rate. haidi: when you talk about the ability to rule out shocks, what are the risks might be geopolitical or election driven policies of other countries, and how much of it is domestic or structural macko economic aspects perhaps we haven't seen in the data sets yet? paul: it could be both. we just don't know. but as a small open economy we're always subject to developments offshore. we talked quite at length about what's happening in china. china is a major export market for us and there are concerns there about their property sector and the problems they're trying to deal with there. so that can have an impact for key commodities like iron

ore and move our economy around. but domestically things can be moved by what people here in the australian economy is doing, particularly households at the moment and how they'll behave at the moment. that will be a key point where the economy goes. haidi: i wanted your views on savings data i know you look at quite closely. there are concerns about global debt, household and private debt. in australia we know the latter dwarfs government debt levels. what are you seeing in the data at the moment when it comes to household saving and spending and are you concerned? christopher: i'm not. i think what you can see in a number of places is household savings holding up a bit more than i would have thought. we know household consumption is very weak and households have built up a fair -- not all households but many built up a big buffer during the pandemic and they're running it down but running it down quite slowly.

and households with mortgages are still paying extra overall, not all mortgage holders but overall households with mortgages are paying extra into their accounts, into their offset and regional accounts and that's holding up around the sort of average levels, even picked up in the last sort of six months. i think that's a sign monetary policy is working because one of the things that monetary policy does is when interest rates are high it provides an incentive to save so maybe it's telling you monetary policy is working. haidi: the same sort of rhetoric you're hearing from a lot of central bankers trying to navigate this last trickier leg of this policy cycle, how difficult is it to be a central banker in this environment at this point in time after everything that's happened in the last few years? christopher: look, i think they always sort of want to look with fresh eyes at all of the data that comes in but central bankers need to take a slightly longer perspective and think

about the trajectory and weighing all the bits of information the markets get very excited about but only adds incrementally to what we really know. i think all central bankers are looking, are we really on this path where inflation will come down, labor markets which have been very tight willize but not too much so the unemployment rate won't rise too much and hold on to the employment gains we saw during the pandemic particularly here. it's always a challenge. but that's the job. that's what they're doing. haidi: and financial markets have still remained very sanguine about the potential risks what this next part of the journey looks like, right? are you comfortable with that optimism and do you think australia will stick another soft landing and keep being the lucky country because of better monetary policy? christopher: that's what the board is focused on, trying to bring inflation down but in a gradual way so as to maintain many of those

gains in the labor market as possible. one never knows. private markets, equity markets, private bond markets are fairly richly priced at the moment and made references to that in a financial stability review and central bankers will watch for those markets and could be a period of adjustment. as i said upstairs in response to a question, financial conditions in australia, those sorts of things are important and what's happening in private markets is a lot of what matters is what's happening, what's happening to bbsw rates and the yield curve is the nature of our markets. haidi: a pleasure to have you here. we appreciate your time. that was christopher kent, the assistant governor at the reserve bank of australia. can you catch up to us live at tvgo and dive into the securities and bloomberg functions we talk about and join us on the conversations as well and send us messages. for subscribers only, tv go.

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paul: wool look at what's tracking on the a.s. is x. one of the top performing stocks in australia, better by more than 3%. treasury saying it welcomes the removal of tariffs on australian wine and that's dropped just after the close of yesterday of last week's, a shortened trading week when china announced it was removing all tariffs and other barriers against australian wine and is not the first opportunity australian winemakers had to react to that and seeing they're taking it pretty well, treasury up by 3%. other strong performers, the mining sector, all of australia's major mining companies in the green, b.h.p., better by

1.7%. iron oil prices are recovering and did touch a 10-month low, and prices are $100 a ton and are pretty decent numbers out of china. p.m.i. coming in a bit better than expected and the property sector in china still pretty weak but iron ore miners liking the news out of china. ok. we've got the price there as you see, better by 1.35% out of singapore. plenty more to come on daybreak australia, this is bloomberg. ♪

♪ paul: let's look how the yen is doing and firmed

a bit after approaching 152 per dollar. that's a key level for potential intervention by japanese authorities. the currency did slip on strong u.s. factory data that reinforced bets the fed will take its time when it comes to lowering rates. let's bring in our g-10 reporter. what's next for the yen, is the jawboning going to be enough to put a floor under things? anya: each next verbal intervention is bringing less and less support for the yen. so at some point they will have to do something. but i'm afraid it's a little bit more weakening for the yen. the base of japan will not hike this year and all eyes turn to the federal reserve and monday in the u.s. we had data surprising to all economists so higher data than expected,

meaning that markets started rising how many cuts they see by the federal reserve, that together it weighed on the yen again. haidi: anya, what is enough for japanese authorities to jump in and conduct a intervention? anya: that's the million dollar question. basically right now the yen continues slowly moving towards, say, 1352, which is the line in the sand that many observers and traders are watching because last time they intervened close to that level and when yen got to that level last week, everyone got very nervous. so now if they get close to that level and break through, it's a lot of resistance there and of course it's not set in stone but just a level the traders are watching and of course bank of japan and minister of finance in japan is watching. once it gets through, there can be some time

of nervous reaction, and it then can move quickly. if that happens, if the move is quick, then they can step in. they are very aware they don't want to make an impression they're targeting a certain level is what they say but if the move is fast, which can happen as soon as tomorrow and tuesday in the u.s. they have new data about economy in the u.s. if it's getting hotter or not, how many cuts. so then we have another report of inflation next week, so for the several days going ahead, it will be a nail-biter. haidi: intervention has to be futile if you're looking at the long term impact. [anya: yes, that's another big thing for the bank of japan, for their reserves, for the minister of finance to decide to intervene, they need to be sure that this would bring a

certain result because it is, as you said, futile for the market and maybe they'll decide to wait for this nervous reaction when the yen would get weaker for some time and then support it with intervention. but just going out straight in front of the market, there would be not a smart move and market likes to prod regulators and central bankers, so they will try to see how far they can go. so this is an art howe to make intervention last even though japan has resources to do intervention, they would be very caution in actually stepping in. haidi: thank you, anya, an art form when it comes to f.x. intervention and we'll look out for that as we tend to get jawboning from markets and the

finance ministry at some point and see how they're setting up for the rest of the market and australiaian stocks up about .10% and we had many markets coming under pressure after the u.s. data that came in stronger than expected and that big climb we saw in 10-year yields in particular. and looking at new zealand, we're seeing that on the back foot of half a percent and 'nique aye futures are up .10%. we're discussing heavy, heavy pressure when it comes to the downside of the yen but that will provide some of those japan equities, particularly the export oriented or sensitive names to trade quite well and the s&p futures looking softer and the marking poll, clearly dollar yen will be key focus and still under the 152 level as we see is the threshold for potentially real intervention. paul: let's change gears and talk about the global i.p.o. market and saw a shift in

geographical composition in the first part of the year. volumes down 7% on year and the latest survey by e.y. include as sharp decline in mainland china and hong kong. joining us to talk about this is george chen, global leader at e.y. thanks for joining us. let's talk about some of the trends you found in your reports. you have global i.p.o. volumes falling but proceeds are rising. can you explain this trend first? george: basically, if we look at the i.p.o. trends for the first quarter in 2024, we need to break it down in different regions. the trend is what it is because europe and the u.s. are doing pretty good. but overall, the statistic has been dragged down by poor performance in china and mediocre performance in hong kong as well. this is why we're seeing i.p.o. numbers increase and then the i.p.o.

himself increase because more small deals there are across the globe. paul: so you're anticipating -- or bloomberg has been doing reporting and a lot of what you found, particularly in terms of a pickup in south korea and you mentioned japan there as well. what's the environment for i.p.o.'s in japan in particular right now? george: i think the japan market is quite unique because the economy is growing ok but lots of government policies stimulating the redemption policy which leads to the very booming i.p.o. or the stock markets. when the b.o.j. now ends the negative interest rate era but as we can all agree the strength is quite moderate at this point in time so i would expect a lot of the i.p.o. candidates, they will adopt a wait

and see approach to see if they have any effect on the i.p.o. plans. so i would expect the japan i.p.o. market to be still active for quite some time through at least the third quarter of this year. haidi: in terms of sectors and themes i'm surprised tech is showing such leadership, is it down to chip and a.i. related names? george: a.i. would be another very important category of companies because from our report, we found that a lot of a.i., they're pretty much in the p.e. and p.g. stage. we've seen white a bit of pevc in fact company going to the i.p.o. market which is an indication of pevc and find valuation is right at this point in time so i do expect apart from the tech companies, the

a.i. related company would be another major source of i.p.o. candidate throughout this year. haidi: i wanted to ask about hong kong. obviously this has been such a struggle for the market and while the withdrawal was not a surprise for those watching developments, how much of a sentiment hit is that for the pipeline? george: from my perspective, i do have a cautious optimistic for the i.p.o. market activities in hong kong because we are expecting a interest rate cut although there are some uncertainties but the market, i think they have already factored in and we also have seen the application increasing in the first quarter when compared to last year and also for those listed companies in the first quarter, the after market performance of those companies, they've been pretty impressive, even up to today. so i think the market sentiment is there. and we have adequate

candidates just like the manufacturing company, the consumer industry company coming from china as the chinese market has been placing on a very tough scrutiny on i.p.o. candidates and this candidate will probably land in the hong kong market. it is now a matter of whether the i.p.o. candidate and investor can agree on the valuations so the market sentiment can continue into the second half of the year. paul: want to circle back to those remarks you're making about a.i. related i.p.o.'s. obviously the hot topic of the moment. i'm just wondering if you found any evidence of 1990's dot-com style exuberance in this space? george: at this point in time we have to adopt a wait and see approach because most of the a.i. company, they're still in the early stage but from our data, we see a lot of them -- yeah, we

have also talked to lots of them and from their representative, it is actually, they really want to tap in to the i.p.o. market to expand their operations. so we would expect to see quite a bit of the a.i. company going in the i.p.o. market as well. paul: george, thank you for joining us, george chen is global i.p.o. leader at e.y. here are developments in the corporate space we're tracking. nippon steel has made a formal commitment to expanding jobs. and includes a $1.4 billion in capital spending as well as a promise of no layoffs before 2026. anybodyon steel new president has pledged to track ahead with the takeover with the opposition of president biden and said nippon steel should be american

owned. tesla boosted head count by 86% and has more than 22,700 employees in the region and tesla turns out its model y's and cybertrucks and officially makes elon musk, austin's largest private employer and multiple musk firms including the tesla giga factory and the launch site for space x. citigroup has a round of job cuts in the investment last week. technology, media and telecom were among the coverage areas hit hardest with senior bankers and junior roles effected and comes as citigroup said it concluded the major actions around its reorganization plan. mckenzie is offering nine months pay and career coaching services to some u.k. staff who would like to leave and the move comes after the firm earlier wants some -- warned some u.s. consultants they were running out of time to win promotions and they slowed the pace of

hiring over the past year as demand from clients declines. and you can get a roundup of stories you need to know to get your day going in today's edition of "daybreak." terminal subscribers can go to dayb go and customize your settings so you're only getting news on the industry and assets you care about. this is bloomberg. the future is not just going to happen. you have to make it. and if you want a successful business, all it takes is an idea, and now becomes the future where you grew a dream into a reality. ♪

haidi: we have breaking news when it comes to what japan's ministry of economy industry is doing to support the company. this is a japanese company offering to aim for mass production of its two ships according to tv tokyo, they'll offer as much as $950 billion yen in additional support and brings the total amount of financial support from the government to $1 trillion yen and $55 billion would be sent on packaging technology and the rest allocated to manufacturing equipment and construction. we have been reporting rapidis will do business in america with the semi conductor expected to expand across that market later this year and have been working when it comes to being a part of a $10 billion of additional subsidies for a couple of key semi

conductor projects and one of them has been the one for rapidis. we'll get more details on that story as it develops. shifting gears, the oil and gas sector appears to shift away from renewables in its decarbonization efforts. new data from bloomberg n.e.f. said it turned to clean molecule technology such as carbon capture and the e.t.g. looks at analysts. talk us through these trends and is it something to be concerned about? luxi: i wouldn't say it's something to be worried about but i'd rather say that the organization effort for the industry is becoming more diversified. previously renewable power was the dominating technology in investment for the sector with solar and wind alone accounting for 60% of all the investment from 2015-2021. since then the dominance has diminished and we're seeing investment in renewable fuels and

carbon storage and advanced materials hitting all new highs in the past two years. actually last year was the first year when clean molecules take a lead in investment. in general we're seeing oil and gas companies enter transition investments switching away from clean electrons to technologies that create greater cinergys to the fossil fuels and and renewable fuel production and plastic recycling, etc. paul: so let's talk about some names, which oil and gas firms are leading these charges in the low carbon investment trend? luxi: there are two group of companies i like to highlight here. first is the u.s. oil companies, such as exxonmobil, chevron, occidental and some u.s. refiners and have prioritized clean molecule technologies in their energy investment such as renewable fuels with very little interest in renewable power whatsoever. the other group of companies, the european

oil majors such as b.p.n. shell and previously have led the energy transition invest ment chain with very big bets on renewable power and we see some of them slowing down the previously very aggressive expansion in renewable power and focusing more on other low carbon segments such as biofuels, e.v. charging or, like, green hydrogen production. haidi: what are the main drivers behind these companies' change of focus? luxi: obviously each and every company would have their own consideration when it comes to any energy transition strategy. the overarching themes are money. the u.s. have renewable investment because the country has very encouraging policies for such investment and have

tax credit or funding opportunities, etc., for the european oil companies, they have slowed down their previous expansion in renewable power. i believe the lower returns of renewable energy projects are the possible drivers behind such change. both b.p.n. and shell have lowered their return targets for a renewable portfolio from 6% to 8% and is lower than the return for other segments. b.p. is targeting 15% return of investment in bioenergy and shell is targeting a i.r. hurdle rate for 12% in investment in lower fuels and e.v. charging portfolio. paul: downstream oil analyst in change high, luxi. let's look at the geopolitical developments we're tracking. iran and syria saying and is really air strike on tehran's energy compound in damascus killed several people including two military

generals. iran's foreign minister says israel should be held accountable for the attack, while the country's envoy to syria promised a decisive response. israel wouldn't confirm it carried out the strike but said it will take any steps that serves its war on hamas. the u.s. and israel have agreed to an in-person meeting to discuss their dispute over an expected israeli invasion of the gaza city of rafah. the statement said israel will take u.s. concerns into account and appears to marked concession by netanyahu who earlier scrapped a planned visit to washington. the indonesian president-elect has met the chinese leader in beijing and state media said xi told them china is willing to boost strategic cooperation and help with poverty relief. and boeing heads to japan for a meeting with the prime minister admitting he will continue the centrist

strategy in navigating the u.s. rivalry. tune in to bloomberg radio to hear more from the news matters and get in depth analysis from the daybreak team and forecasting live in our studio and hong kong and listen to the app or bloombergradio.com. plenty more to come. ♪ to me, harlem is home. but home is also your body. —last one everyone. i asked myself, why doesn't pilates exist in harlem? so i started my own studio.

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haidi: take a look at how currencies are trading and of course the biggest focus is where we'll see the yen travel in the day. japan intervention would potentially come at that 152 level which is shy at that level at the moment and would target that yen rally and could see employees employing several trillion yen when it comes to targeting that rally against the dollar if they do in fact decide to intervene in u.s. markets. and we could see more job earning as well. as we see really the dollar impact, the dollar nearing its year end data high after the surprising i.s.m. readings and the dollar tracking those treasury yields higher looking to the strongest levels we've seen since mid february. the march report showing manufacturing activity in the u.s. unexpectedly seeing a significant expansion in price pressures remaining high as well and seen the

bloomberg dollar .4% reversing the earlier loss, 125121 is where we're at had in the year to date high and up about all of its g-10 peers as well. let's look at some of the stocks we're watching in the session. paul: a few to keep an eye on when we git-going at the open top of the hour in south korea and japan and the stocks to watch when we get trade underway, nippon steel is one to keep an eye on looking to build support for the u.s. takeover and has made a formal commitment to the united steelworkers union for an additional $1.4 billion in capital spending, making a promise there as well there won't be any layoffs until 2026. a record one we're watching as well, rakuten returning to the high yield bond market with more than $1 billion with a strong rally it sold earlier this year. asian tesla suppliers

will be back in focus as well. analysts are rapidly lowering projections for this week's delivery reports from tesla. some are seeing a first decline since the early days of the pandemic. as always, chipmakers are going to be in focus after japan as we were just reporting, approving up to $3.9 billion in subsidies to chip venturer rapidis with more ambition to catch up to semi conductor manufacturing. haidi: chipmaker a.i. which is up with positivity as we get the weakness in the yen that will be supporting a lot of those trade and export related names as well. we saw japanese equities folding earlier in the week. investors are taking a bit of profit unsurprisingly on the first day of the fiscal year. the nikkei 225 having the strongest quarter in almost 15 years. we saw weakness across automakers and watching to see if that continues after we saw a survey

showing sentiment for largemakers of cars, actually seeing declines there as well. a lot of the top performers seeing a bit of profit taking in the previous section and see if that reverses as we get into the open. australian stocks at this hour a in and health shares among those lagging and new to the start as we saw wall street edging lower on the back of investors trying to make what they will of the very solid u.s. factory data and expectations that perhaps they'll not be in a rush to cut rates. the market opens in seoul and tokyo are next. this is bloomberg. ♪

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>> this is "daybreak: asia." we are counting down to asia's major market opens. we are looking ahead to central-bank reaction as we get more data to percolate through. also the divergence between the fed and the boj continuing to be a pain for the bank of japan. paul: we saw the yen move higher, stronger than expected factory gate from the u.s.. we are hearing from chris, from the rba. he is not ruling anything out when it comes to the future move of rates in australia. haidi: he said uncertain when he was speaking upstairs earlier at bloomberg offices in sydney. uncertain is also what we are looking ahead to in terms of how the yen plays out, in where the intervention comes. we are under that, but looking pretty close with the dollar at its highest, pretty much its highest levels we have seen so far this