>> welcome to "daybreak

australia. " >> the top stories this hour, treasury yields hitting fresh highs for the year as the fed chief signals further delays in cutting interest rates. the dollar on his best five day run in 18 months. jay powell shifting his message after surprisingly high inflation readings, saying rates can be held as long as needed. >> more recent data shows continued strength in the labor market but a lack of further progress this year on returning to our 2% inflation goal. >> a rare sweep for the biggest u.s. banks on trading income. >> we will look at the set up on those remarks from jay powell signaling the rate cut delay. we have seen a steady streak of

inflation surprises in the fed chair saying it would be appropriate to get policy further time to work but they can stay higher for longer for as long as needed, really pointing to the lack of additional progress made on curbing price pressures. that is setting us up for a mixed open in asia. the hawkish comments are playing through when it comes to risk appetite. we see that with muted trading in kiwi stocks. a steady run that we see when it comes to the strengthening in the u.s. dollar continues to put pressure on the dollar yen. we are not far from the 1.55 level. watch out, given how concerned and the level of concern we have seen from the finance ministry --

these levels -- annabelle: even at those levels he is saying how often he is reiterating his comments, japanese officials prepared to act as needed. we have futures coming online this morning for u.s. stocks. we are looking fairly steady in this point in the trading day. overnight it was a story of equities weakness coming through . it was the story of jay powell. we have spoken about the last mile of disinflation, whether it will take longer for the final stretch to get price pressures down to the target for the fed. not enough progress has been made. that is reflected through bond yields. we see them at year to date highs across the curve. the focus is on powell, speaking at a panel discussion alongside the bank of canada governor in washington. here is what he is saying about how much more patience is needed. >> we have said we will need

greater confidence inflation is moving sustainably toward 2% before it would be appropriate to ease policy. we took that cautious approach and sought greater confidence to not overreact to the low inflation in the second half of last year. annabelle: for more, let's bring in sylvia jablonski, ceo / cio / co-founder, defiance etfs. sylvia: perhaps a little change of tune in the messaging from powell, but does it come as any surprise to you? i don't think his message is super different. the numbers came in unexpectedly hotter than the market anticipated. jobs were stronger and orders were stronger. cpi was a little stronger. pce was ok.

we think they will be data-dependent as they have settled along. we need to see the loosening of those inflation numbers to get those cuts that we want before the end of the year. what will be surprising to the market -- i think everyone is ok with two cuts but 0 -- annabelle: now it is that radical readjustment. we are at a point in this time -- sylvia: i don't think we are at that point in this time, there is evidence different prices are coming down. there is evidence wage inflation is coming down. housing is starting to loosen

up. it is not all going as quickly as we anticipated to go. we did have some seasonality that will shake off but going forward we will start to see numbers go in the right direction. it is not a situation where all bets are off the table. other unknown factors could impact the economy and markets as well. these geopolitical issues, what happens with that and government spending. i think it is possible we will see a couple of rate cuts this year, i just do not see that happening as soon as we wanted them to. haidi: at what point does the start creating issues for these economies, particularly when we look at themes around financial stability? is this different?

sylvia: i think what is different now is there is this level of hyper alertness by local governments, particularly japan to focus on intervening if the currency issues continue. it is good for exporters and importers but overall, a lot of emerging-market economies are concerned about this, and are not sure. i have been reading feedback from the president of japan saying we do not know yet. we have a little dated but we do not have enough to intervene. i think you will have infrastructure intervention in terms of currencies on emerging markets. it cannot go on forever. haidi: what about increasing optimism when it comes to china? annabelle: the last reading -- sylvia: the last reading, 5% was

better-than-expected. that will be tough to manage but the issues we see in china are around property which is falling apart, 30% of gdp. there is a lack of business and consumer confidence, and domestic travel and international travel. there are areas that need to pick up for gdp to sustain, but on the other, in japan you have the chinese government officials stepping in to back whether it is bank loans or property loans, inject funds into the infrastructure of the country. long-term it is the world's second-largest economy, one of the biggest areas for the ai machine learning boom. it will take time to shake out the near term pain the chinese economy is facing. haidi: really great to have you with us. sylvia jablonski, joining us.

we are also watching bank earnings. we have some news, bank of america shares falling the most in a year when it reported elevated expenses. despite joining other big lenders by beating expectations. revenue on that side was a rare sweep. the trading businesses including equities and fixed income are back in focus, why are we seeing such an outperformance for these units? >> in many ways it is the manifestation for a number of months increased activity on the equity side. the bank of america equities business is benefiting from that. the mann market as well is so active. not just in treasuries but developed bond markets around the world, and that is filtering through to the revenue lines.

morgan stanley coming in at about 2.5 billion in revenue on that front. the goldman numbers topping expectations in terms of what they are doing. jp morgan as well, fixed income and equity. really just a huge amount of activity is offering the buoyancy that they have needed to offset what is happening on the lending side, softer lending and softness around the net interest income from that lending. and the ongoing fragility about how to forecast what is happening in the u.s. economy in the coming months means those trading businesses are offering a bright spot. annabelle: the key theme over the week has been this change in expectation around what we will see for rate cuts. how are bank bosses feeling about the outlook from the fed and central banks?

>> in a way they have been positioning for this for some time. we have heard from a lot of the ceos about going into the backend of last year how they were positioning for a change in the state of the u.s. economy, and if that would be a situation where rates are cut aggressively, they were prepared for that. they have done a lot of cost-cutting front and structural readjustments they need going into an economy that is slowing. markets are looking for a more benign environment, and a sense that the fed is not in a hurry to cut. it is still in a reasonably strong position vis-a-vis what is happening in the rest of the market, so there are still a lot of people who want to own these companies in the cycle. you might continue to see softness in the lending side of these businesses, but if markets stay active as they are, and you

get a bit of an uptick in the investment banking side with some of these banks showing signs of picking up. you might be in a situation where we see that positioning reasonably well. you will get individual moves on the day as we saw with bank of america and a bit of softness but structurally through the rest of this year, most of these banks are pretty well-placed to where most of them and the outcome is that if you believe market pricing and with the ceos are telling us, the chances are rates stay reasonably stable, and we do not go into a period of aggressive cutting. haidi: it was a back to basics print that worked out for goldman but is there a shared view that the optimism is back when it comes to investment

banking, and we have come off of these depressed levels? >> no, i think the jury is still out. sullivan has a history as to many of these bankers wanting to somewhat talk up their own book, and that is understandable. he is right to the extent that there is an uptick in some areas but it is too early to draw any conclusion on the way we see the market, especially for m&a and in things like secondary issues. a little too early to tell but clearly on the right track and early signs, you are seeing a little more commentary from other areas of the market. keep an eye on that in the next few months to see if that activity level does hold up or show further building from here.

haidi: we do have an exclusive interview with jpmorgan chase ceo, jamie dimon with emily chang. you can see it here on bloomberg television 6:00 p.m. wednesday, new york time. still ahead, new stanford research tracks a massive surge in funding for generative ai topping $25 billion last year. we get more from that report later in the hour. janet yellen warning of stronger u.s. sanctions on iran within days. we get more on the developments in the middle east, next. this is bloomberg. ♪

>> i fully expect we will take additional sanctions action against iran in the coming days. we do not preview our sanction tools but in discussions i have had, all options to disrupt terrorist financing of iran continue to be on the table. haidi: treasury secretary yellen on the response to the attack on israel. the white house has fresh sanctions will target israeli's missile and drone program -- iran's missile and drone program. let's bring in kirsten fontenrose, president, red six

international. great to have you with us. we were chatting in the commercial break. you are saying the likelihood of a further retaliation is 100%, and it is a matter of when, and what this looks like, and if we hear about it. kirsten: exactly, the israeli government has announced it will retaliate, it is a matter of when. they are holding their discretion about when and where. the prime minister addressed the opposition, and there was debate that proceeds a big action on the part of the israeli government. they have several options for retaliation. the biden administration has urged them to wait, plan, respond with a cool head. they have options that even when they choose, about how big or obvious it is, how overt. they can act asymmetrically

which iran and israel are good at doing, which means the entire globe is there boardgame for action. it would keep iran on its toes and require vigilance, which would keep them resource poor even more than they are, and would require intelligence gathering. even a threat of asymmetric retaliation anywhere in the world can make the government expecting this kind of attack really preoccupied at a time when they would like to see iran preoccupied. israel could take conventional airstrikes on missile production facilities or where houses in the east of iran. if you are israel conducting a conventional strike, you would only spend a small amount of time in iran's airspace, which could be critical. you could use cyber, covert

operations, this could be on defense production facilities, communications networks, nuclear sites. there are a lot of options for covert and cyber. the good thing is generally this does not panic investors or the public, it generally does not threaten civilians in any way, it is meant to send the signal, we can reach you. we can reach you if we want to without causing civilian casualties or the like. the one risk israel is weighing about their retaliation choice is the risk that iran uses retaliation as a pretext for weaponizing its nuclear program. it is looking for excuses to do this, and it could claim that a greater threat requires a greater deterrent, so they will be having a lot of conversations in tel aviv with u.s. and european partners about whether this risk is worth taking.

that would put us into a nuclear escalation cycle that would potentially be more dangerous. haidi: how close are we to that in terms of iran's nuclear capacity? kirsten: quite close, they want to keep the nuclear program below the weaponization level. prior to current times, we talked about iran building one nuclear bomb. they have taken the material, their enrichment to a level where they are not passing it into weaponization but instead of building one, they would have enough material to build maybe up to four down the line. they are staying short of that level that would kick into action, a lot of unleashing cyber and covert operations. international censure, actions by the u.n. when you weaponize, you invite a

lot of negative attention. if you stay under that level, should you decide to weaponize, you have the material to do quite a bit more damage than previously but you are keeping under that radar. you have some leverage negotiating but you are not attracting that punishing attention. annabelle: the other argument would be israel should focus on gaza, we are hearing 8500 fighters are stationed. a victory against hamas would be a victory against iran, is that a longer term view? kirsten: a lot of the government hallway talk in israel is about whether or not it is worth fighting this victory against one tool or whether or not it is worth going to the root of the problem. this is a hot topic. do we bother taking out these

proxies one at a time or go for the head of medusa and teach israeli that this proxy strategy is one we will not tolerate. in some cases, some arab states are concerned israel is using this new escalation with iran to distract the world from gaza to conduct operations to prepare without the world paying such close attention. if you are israel, you have to weigh your priorities. the u.s. has said it will not support retaliation against iran. they will do something small-scale and focus on finishing off hamas, or do you go to where the origins lie and take care of the problem and send the deterrent message to iran, pullback on this game you are playing, or you will personally pay the price inside

your own country. we will no longer allow you to fight to the last palestinian. annabelle: part of this response to iran's attack has been a renewed warmth between relations of the u.s., key allies in israel. given israel's actions in gaza, how long do you see this new dynamic, or that shift persisting? kirsten: i think it will depend on what retaliation they choose. they feel their decision to side with the u.s. pushing back against the missile and drone programs, they feel this has paid off. the u.s. has proven this umbrella and partner of nations

really works, it is 96% successful defeating a barrage of missiles and drones but they are getting criticism for protecting israel when a lot of the public feels israel has been heavy-handed and gaza. they have to walk this tight rope. the retaliation israel carries out will help define how close these arab governments can be perceived as aligning themselves with israeli goals. you sell the jordanian foreign minister say after their country used f-16s to help take down these munitions, he came out and said, we don't want to see this be a distraction from gaza. he is trying to prove we are a part of defense, and we would knock these out of the air if they came from israeli airspace, this is about jordanian sovereign territory. many countries are saying that, we will knock things out of the

sky when they come into our airspace because half of these things fail and fall in our citizens. that is the reason they are giving, not saying this is the unified defense of israel or claiming it is aligned but it is about sovereignty. annabelle: thank you so much for your time, kirsten fontenrose, president, red six international . this is bloomberg.

>> stocks in asia looking pretty mixed ahead of the open. hawkish comments from jay powell feeding in. you have a stronger dollar, higher treasury yields. that is all part of the treating dynamic for today. dynamic for today. -- life's daily battles are not meant to be fought alone.

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>> take a look at some of the kiwi assets we are watching. quite a bit of fluctuation when it comes to the new zealand dollar but the trajectory is quite clear, particularly given the upsides that we continue to see in the u.s. dollar. dollar kiwi trading 58.93 at the moment and that is expected to be broader downward pressure going forward. we have cpi data that slowed to the weakest in three years for the first quarter even as we see domestic price pressures persisting. annual inflation easing to 4% from 4.7% in the fourth quarter and that is the lowest reading since the second quarter of 2021. in line with expectations though. cutting government spending will be a key part for the prime minister's upcoming budget. he discussed his spending priorities for us in singapore where he is meeting a trade delegation to southeast asia. >> new zealand has fantastic potential and it is the best country on earth. it is without doubt beautiful and we have a fantastic future ahead of us. we have two things we have got to do.

one is in terms of rebuilding the economy, making sure we get the cost of living crisis under control for people. you have seen is a huge amount of government spending that has slowed the economy up and obviously puts pressure on unemployment so we are working incredibly hard to bring inflation down. we made some good progress already in the 150 or so days i have been in power. you have actually seen the rise of interest rates, inflation trending down, and we hope to have it back by the end of the year as well and that will make a huge difference for new zealanders who are struggling with the cost of living crisis. inflation under control, interest rates coming down, the economy growing, and obviously, people securing employment and the exciting work is how do we turbocharge growth in new zealand? that for as is making sure we invest in a world-class education system, embrace science and technology and make sure we build out modern, reliable infrastructure, get rid of red tape, and have smart regulation. get rid of red tape and green

tape and have international connections to the world both in a trade and an investment sense. that is why i am hearing southeast asia this week, 10 underscore how important southeast asia is to new zealand going forward. >> can inflation continue to decline given what is happening in the u.s.? >> new zealand, we are very focused as a government. we have a budget coming up at the end of the -- of may to make sure we are generating good financial discipline and a good culture of financial discipline. we will not repeat everything that happened in the previous six years but we are very determined to have a very consistent approach to managing our finances and getting our fiscal books in order so we have got a major exercise with respect to our government spending, making sure we are getting rid of wasteful spending. we think that is the way to support certainly lowering inflation, domestic inflation, which gets the economic growth happening as well. we also think it is important that we are able to offer tax

relief as well after 14 years of not having any tax relief and that is an important thing as well. >> you talked about wanting to boost growth yet you are considering cutting spending at the upcoming budget. how does that help to revive growth? how does that help the economy? >> we have had an 84% increase in government spending and what we have acknowledged and identified is that actually, there is a lot of wasteful government spending. what we want to do is prioritize and protect our front line public services that we expect every taxpayer dollars to make sure it generates a return on investment for the new zealand people and what we identified as inefficiencies in savings and wasteful programs and making sure that we actually direct that money into repairing our books but also protecting from my services. -- frontline services. >> that was christopher speaking with our cali, haslinda amin.

the monetary fund has inched up expectations for global growth this year. it sees it expanding 3.2% worldwide. the report cites strength in the u.s. and some emerging markets while warning the outlook remains cautious amid persistent inflation and geopolitical risks. they are urging china to find ways to offset headwinds from its property crisis. >> with an economy that is -- that has potentially still relatively weak domestic demand but is growing, then there will be an increased reliance on the export sector and that is something that in the context of their a tight trade tensions could be complicated and so certainly, that would be in the interest of the chinese economy to develop ways of sustaining domestic demand. >> xi jinping has told olaf

scholz that a surge in cleantech exports have helped cool inflation. -- terrain in chinese manufacturing capacity. our greater editor is with us. when it comes to energy transition related products, it's only a good thing. it is sort of in the camp. >> that is the case xi jinping made in beijing. he came out quite strongly defending china's industrial policy. he presented the success they have had in manufacturing cheap goods in the green sector as a force for good in reducing climate threats and coming down inflationary pressures which has been a big challenge for policymakers in the e.u. and the u.s., which are the two biggest critics of this industrial policy so this is the first time

we heard xi jinping sort of directly responding to this bearish oath criticism his -- barrage of criticism. >> of course, what else has come up in this visit has been russia's war in ukraine. did we get any sense that xi is going to be perhaps putting any sort of pressure on moscow here after this visit? >> i think china's position on russia's war in ukraine has been consistent all along. in terms of the peace conference that countries are trying to rally china to engage with, they have repeated again this week the position that they would engage when all parties are engaged. that means russia would have to be at the table as well, but it is interesting if you look at some of the export data. china's exports from russia dipped in march for the first time since mid 2022 in this sort of comes after a lot of pressure on china to not support russia's

war machine and supplying materials. yellen warned that if chinese banks are forcing russia's war machine in any way, they could face sanctions. diplomatically, i think xi jinping's stance has not changed . in the trade relationship, we are in some type of moderation in how much china wants to be seen as propping up russia's economy. >> that moderation is interesting because we know that these engagements by germany, by the u.s. government at a time of vulnerability for china's economy, is there a sense that there is more willingness to compromise from beijing? >> this is a heightened sense that china needs foreign investors right now so both yellen and schultz have come with this very coordinated message that the companies do

not feel fairly treated in china and this is something they are trying to take seriously. they need foreign investors and companies from these big economies to want to invest in china so i think, you know, they really are trying to put forward this very accommodative message that, you know, foreign companies are welcome here and they are more open so that means, you know, the big investment forum in china recently, you know, leaders were really kind of sending that message to xi jinping himself who came out to meet ceo's. there is more willingness to present a better message to private sectors abroad. >> that was our greater china editor there. as we said, really, that focus is very much on those economic financials between what we see in china versus the u.s. and that economic strength we are getting from the u.s. is also what is helping prompt such dollar strength, such

expectations around the fed. off the back of that, actually, it has been a huge slip in what we are seeing for currencies across the board in emerging markets and really, the dollar, what we are hearing, perhaps it is even bulldozing its way through this currency group, really as well being aided by the moves that we see in the chinese yuan. it is helping or adding to that selling pressure even though china has moved to weaken its daily reference rate but that is the state of play there. what we are seeing and currency markets this morning is not too much change at this point in time. a little bit of strength coming back into the kiwi. a little bit of strength back into the aussie but certainly concerns around dollar strength that we are hearing reflected from different finance chiefs. korea and japan, for instance, they are concerned about their local currencies and that depreciation versus the greenback over the course of this year, but as we said, really, it is that story of king

dollar, best five-day run we have seen going back to 2022. coming up, we are going to shift the focus on little bit to ai because we are going to speak with the deputy director of stanford institute for human centered intelligence. funding for generative ai saw an almost eightfold increase last year. we will have more insights, next. this is bloomberg. ♪ you know what's brilliant? boring. think about it. boring is the unsung catalyst for bold. what straps bold to a rocket and hurtles it into space?

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>> taking a look at what is our mliv pulse survey of the week, is looking at the upcoming earnings that we have got from the u.s. tech sector in particular and what traders are really wanting to see is if the numbers can provide a fresh boost to markets. you have got the likes of amazon, nvidia, some of the names we are going to be hearing from in the coming days. we have ai investments which have caused another key focus given that we saw the ai frenzy persisting into 2024. we want to know whether the investments that they have made are starting to actually deliver higher profits but let's stick with the ai theme and bring in our next guest, institute for human centered ai, it has released a new report focused on technological advancement, public perceptions, the geopolitical dynamics surrounding the development of ai as well as institute's deputy

director joins us now from san francisco so this is a really significant report for the industry as a whole, but talk to us about what was perhaps your biggest take away from the numbers where the findings this time around. >> naturally, every year, you will get more and more of an increase in we are seeing this hockey stick just slide up and in that case, we are seeing a lot of interesting things here. a couple of them that i find most interesting is that ai does beat humans in some tasks and we are starting to see that gap get closed more and more. and one other key important thing that i think we are seeing is that ai is really being dominated by industry. the frontier models are coming from industry and just one interesting anecdote that comes from this, in 2017, the transformer model that was created by google that has really led to this explosion in the gpt aspects of some of these

models and has helped create generative ai, that was 930 dollars to train in 2017 and if you go to last year, the latest model that just came out, gemini altria, worth 194 million dollars to train, so just in that short amount of time, you can see the difference of how much money it costs to really build these models. >> its really wild numbers, actually, russell. when you had that sort of dynamic going on where you have got some clear leaders in the market and they have so much in terms of resources and so much in integrating new models, how hard doesn't make it for others to play any sort of catch up and what does that mean then? russell: it is not just hard for an industry to industry competition for them. it is also hard for other stakeholders. i work at an academic institution and this is where we see a large struggle for this. not one major university in the world could train a chatgpt

model today if it wanted to because it does not really have the resources possible to do that. so you are constraining not just stakeholders within an industry, you are constraining stakeholders within academia and even to some extent, government not having the resources to do this and that has a lot of implications. what does it mean for a select few companies that are doing this and who do we want setting the rules of the road and who is at the table? we need to start thinking about how robust this ecosystem is and how much we want to have it exclusively within one area. the industry does great work but it is not the only type of work that can be done here. >> i want to ask about ai decoupling and sort of the different pursuits by the likes of the u.s. and china. for example, when it comes to regulation, you talk about this 50% plus increase in regulation that we are seeing just last year. is that mostly in the u.s. and do we face a reality eventually where there's going to be a

divergent regulatory environments for similar ai technology? >> the question is whether there's going to be interoperability within some of the territory environments, but in terms of who is leading the pack probably on this, it is the e.u. with the most robust regulations and that is from the e.u. ai acts. china does have some strong regulations in place. there is a question in terms of enforcement and the u.s. is lagging in terms of regulations specific to ai. that doesn't mean there's not regulations in place in u.s. law that could easily be applied to ai and that is really important to understand that distinction. furthermore, there are a couple of ideas in congress that are being talked to val and of course, there is president biden's executive order on artificial intelligence that has been quite helpful and will guide companies, but it certainly is not the same in terms of regulation and there is not parity between states on

regulation which will be a challenge. >> where do you see -- i don't know if it is even possible to predict to be apex when it comes to investment enthusiasm for generative ai. russell: that is really interesting because this year, we had some kind of fascinating findings that came out from this. so overall, in terms of ai investment, it kinda has been down for the last two years. from a global perspective, and we might say that is probably related to interest rates and where they are at but if you look in the u.s. specifically, there was a 22% increase last year in private investment in ai, putting the u.s. global share at about 67%. if you are china, this is quite surprising but there was a -44% from previous years and that is giving them about an 8% total in private market share, which is frankly was a surprising finding. >> and russell, just quickly,

what do you think is sort of the attitude toward ai? i think there has been quite a high level of nervousness from a lot of people that their job, for instance, will be replaced. is that subsiding or is there more of an awareness of the shape or the role that ai will take in people's lives? russell: there is an awareness but it also depends on where you are geographically located. and what your attitudes are. those are not across-the-board views and actually, people in a very western industrialized state have a more pessimistic view towards ai than those who are not and you know, there's some hypotheses that this is a heavily data focus report and does not necessarily give inference and/or a strong analysis. to that end, i think one reason might be there is more of a fear factor within industrialized countries that some of these jobs can easily -- be more

easily replaced van they might have expected at the industrial level. >> really great to have you with us and what is a fascinating report. russell is a deputy director at stanford institute for human centered artificial intelligence. more ahead here on "daybreak australia." this is bloomberg. ♪

>> we are getting our japan trade data coming through for the month of march. the trade balance coming at three under ¥66.5 billion there. a little bit higher on whiter than expectations or 345 point ¥5 billion. imports are contracting for .9%. the estimate was a contraction of 5.1% and we are seeing exports rising 7.3% that beat expectations with a gain of 7%. we did expect brisk growth when it comes to exports that would have been supported by a pretty good demand for japanese autos in the u.s. and e.u. and a positive turnaround for the semiconductor cycle as well. we are seeing boosted demand for 70 related items and we did see in the early data from march showing that rise export numbers and the decline in import numbers as well. very interesting to watch out for the impact of the yen which is really of course seeming to benefit trade and export oriented names that yen is sustaining weakness and a lot of

traders saying 160 is now the threshold to be looking for. >> it certainly seems to be the next level in play but let's stick with tokyo or japan because stocks have surged so much since last year that expectations from investors for corporate earnings could be getting a little bit out of hand . some companies have seen stock sales in the past week despite recent quarterly results or decent let's bring in our senior a showstopper reporter, joining us from tokyo. it is a really interesting dynamic. better-than-expected members but there is still this risk that investors are going to get disappointed. >> hi, there. exactly. it is probably not surprising to see that kind of reaction there. if you look at what happened during the first quarter, the japanese stock market has risen almost like 20%. and at the same time, the

expectations of earnings have basically risen just like 3% so basically, it has been driven by multiple expansions and i think there is always a bit of a euphoria after the nikkei rose above the peak. it's quite unusual to see the market rising for the first time above the 33 year high, so yes, there's higher risk at the moment of disappointment for the upcoming earnings season. >> how far? hideyuki: -- how would you rate earnings season so far? hideyuki: we have earnings from retail companies and market reaction has been quite harsh. even one company is are reporting decent reports, so they did not really have any sort of support -- big, positive

surprises, but on the whole, companies like that seem to be doing ok but market reaction was quite tough. for instance, it fell more than 5% i think and also department stores, i mean, their sales have been doing great because of inbound tourism and it shows some signs of recovery and high-end consumption but their shares have tanked in the recent few days and that seem to reflect that the businesses are having elevated expectations and one thing to know is that the retail sector is not particularly the best sector in the past few months. they have underperformed topix so this is an example of what to expect, then probably, it is not hard to imagine the risk for the

other sectors could be even higher. >> our stock reporter there. take a look at how we are setting up when it comes to global bond markets it and of course really following the moves that we saw in u.s. treasuries in particular, taking a look at the moves we saw across the two year, the yield plumbing past 5%, the highest level since the bar, but broadly, really across the spectrum, u.s. yields are sitting at 2024 highs even as we continue to see shortenings being dominant in this market but all of this after fed chair powell signaling that policymakers will wait longer than previously expected to cut rates. the market opens, next. this is bloomberg. ♪

her uncle's unhappy. i'm sensing an underlying issue. it's t-mobile. it started when we tried to get him under a new plan. but they they unexpectedly unraveled their “price lock” guarantee. which has made him, a bit... unruly. you called yourself the “un-carrier”. you sing about “price lock” on those commercials. “the price lock, the price lock...” so, if you could change the price, change the name! it's not a lock, i know a lock. so how can we undo the damage? we could all unsubscribe and switch to xfinity. their connection is unreal. and we could all un-experience this whole session. okay, that's uncalled for.

>> we are counting down to asia's major market opens. we have spoken so much this year about this so-called last mile for disinflation and now it seems that is something being acknowledged by fed chair jay powell. haidi: the stickiness of a very positive and robust labor market numbers and broader eco-numbers we are seeing from the u.s.. what jay powell said overnight was not much of a surprise but any more clarity to the willingness of the fed to hold rates as long as they need to be at these levels to combat inflation. so we are seeing of course that big reaction across global bonds in the u.s. dollar passing through to asia fx in particular today. annabelle: absolutely. tracking the japanese yen very closely. very close to the 155 mark. a lot of different analysts in the market,