♪ >> welcome to daybreak

australia, i'm heidi in sydney. >> i'm annabelle droulers in hong kong. at the top stories is our, a low open with the fed walking a tight rope ahead of cpi. investors awaiting economic data from china and japan. heidi: inflation returning to target by year end. an interview with jim chanos in a minute. annabelle: president biden quadrupling tariffs as a pre-election defense of u.s. workers. haidi: take a look at how we are setting up. futures on the back foot. a sx 200, third week of gains following the games of the past few sessions with the data

supporting the goldilocks scenario. sluggish set up after a disappointing china data, heavy weight when it comes to the factors we look out for. chicago nikkei futures are flat. china futures not moving much, but we got signs of slowing economy and credit data signals continuing weak demand. industrial price extending the klein. front and center is the credit shrinking for the first time since april as we see demand week in china. annabelle: a big question given we've had data points coming out of the country. as you said, sluggish on friday,

struggled to gain traction. study as well this morning. s&p was hovering around 50 to 20, third straight week of gains, longest winning run going back to february. 10 year yield advanced to 4.5% in these got a full rate cut christ in by november by fed swaps. your tracking the outlook for data and let's bring up the chart here. we can get more in a moment, university of michigan survey coming out. what we saw was u.s. consumer sentiment declining to a six-month low and short-term expectations picked up.

something that raises questions around stagflation. let's get more, inflation numbers out of the u.s. and bloomberg expects april numbers to show improvement and core cpi moderating. headline figure moderating. here in asia, china releasing economic data on friday, pboc expected to keep its one-year rate unchanged to avoid further weakness and australia's government would put the fiscal blueprint that is due on tuesday. haidi: so much of that comes down to the inflation forecast.

jim chalmers told us about the government spending priorities in his only tv interview ahead of tuesday's budget. >> we've got a finer balance between the near term in the longer term, making sure we can provide cost of living relief as we invest in made in australia. it will invest in the future and forecasting inflation is tricky at the best of times. with the budget will do is put downward pressure on inflation rather than upward pressure. we made substantial progress in the fight against inflation. it's not mission accomplished. budget will be focused on that. guest: since you've been putting the budget together, the outlook has changed. has that changed your thinking?

jim: we are in the fight against inflation, and needs to be the primary focus and that is why you'll see substantial spending restraint, cost-of-living takes the edge off inflation so that our budget will be part of the solution rather than the problem. reporter: how does future made in australia differ from the ira? jim: we try to make sure australia grabs the vast opportunities from the shift to net zero and whether it is in the united states or most of the developed world. for us trillion we have huge advantages, we've been dealt incredible cards. human capital and attractiveness

as an investment destination, this is not replacing private investment but attracting more and that will require public investment to get value for money. we got our own unique set of advantages as the global economy changes we want to create good jobs into the future and that requires us to broaden and deepen our base. reporter: isn't australia competing against other countries or partners who have had these parties in place? jim: we will get cracking. we've made substantial investments to become a superpower, that's the core, the global economy will be powered

by clean cheap energy and we have a role to play to become reliable suppliers of energy. more needs to be done. tax incentives, targeted grants, making sure that we've got architecture to attract and deploy private investment. reporter: on two critical minerals, you amassed money for exploration. should we expect more? >> more on tuesday. critical minerals are the opportunity of a century. critical minerals are one of the reason why there is so much attention from global and domestic investors. we need to deploy that. exploration is important. open-source science to map

australia is important. >> china is seeing green shoots in their economy but for australia we would like to see more. from your conversations are you expecting more stimulus as the year goes forward? jim: our budget will forecast chinese growth in the near term and that will be the weakest growth since china began opening up in the 70's. property sector has been soft, property is not the only part of that in the weakness offset strength in the u.s.. haidi: jim chalmers speaking

with ben wescott. let's talk to the director of economic research. great to have you with us. how do you assess the risk that fiscal policy is going to run the risk of undermining what the rba is trying to do? >> you hit the nail on the head, that's a huge concern for us. we need to see fiscal policy alongside monetary policy and this concerns us. no doubt segments are under pressure because of the high interest rate environment but the reserve bank is trying to cool the economy and if we see meaningful relief than it will push out rate hikes and mean households are under pressure

for longer. haidi: the huge role china continues to play, i want to throw out one chart. none of them are pretty in terms of data when it comes to credit and loan demand. borrowing dropping, credit extension dropping. financing contracting for the first time in two decades with weakness in corporate borrowing. how much correlates to what happens with australia's economy and how difficult it will be to shore up growth? >> what we are seeing is a pronounced weakness in households, surprisingly week segment post covid because they

have not been a recipient of government support. it is not surprising that we are seeing weakness because even though lending rates are low, there is no appetite for credit because they are feeling -- struggling and what it means is we've seen bearish sentiment when it comes to china so no longer was china this unrelenting growth engine, china has significant issues and ongoing weakness. still signs of hope and industrial-strength when it comes to strategic batteries and

solar panels. more broadly we know china is carrying weakness, not ongoing prosperous engine. host: when it comes to made in australia policy countries have been doing it for quite some time. how optimistic are you that this will deliver? >> the jury is out. we have mineral endowments, huge advantage. as you point out, other countries made these investments. these investments take time. i think because we are far behind when it comes to exploration i wonder whether we will catch up and cost of

capital is so expensive. >> and as well, one country is japan, they've been focused on reinvigorating the chip sector. first quarter gdp numbers or do, what are you expecting? >> unfortunately it is not good news. 0.1% contraction. softness is coming from households, they make up half of the economy and elevated inflation means gains are trailing. households don't have money. exports remain a drag in the march quarter, temporary drag driven by disruptions from the

earthquake as well as government shutdowns. overall q1 figures will be weak and that complicates the story for bank of japan gradually pulling back on its stance. >> where does the boj go if we see weakness coming through. they expect inflation to trend down. >> our expectation is we will see modest hikes. we've got one more penciled in for september and i think what is a key driver will be the stance they are delivering is aimed at finding floor for the yen which is weak and adding to

imported inflation and the pressure households are failing because of they've got wage growth not really going anywhere in the name got crimping and adding to pressure, a stable yen might help. that is the hope for the bank of japan for this bias. haidi: katrina from moody's. it still ahead, speaking with a japanese firm about challenges of investing in ai in asia and the middle east but first, president biden hiking tariffs with ev's in the crosshairs. this is bloomberg. ♪

>> the biden administration is significantly hiking tariffs on chinese goods occluding quadrupling duties on eeev's. stephen engle is here with the details and it is all ahead of the election in november but what do we know?

stephen: the election looms large on tariffs, but there are products not going into the u.s. right now. electric vehicles, solar cells, batteries, steel, aluminum. not a significant amount of imports, but china is trying to export overcapacity. it is a hot potato and i will get to donald trump's comments. fleshing out this scoop on friday when we heard biden announcing total tariffs on chinese made ev's will rise to 102.5%. that is an increase of 272% in other tariffs will be doubled or

quadrupled. it is not clear what was spared, sources say there will not be rate reductions. biden administration signaled they could move to exclude machinery made to make solar panel components but the story came out, the ipo debut of a high-end dv maker rose 35%, biggest ipo since 2021. haidi: is this an attempt to differentiate trade policies from donald trump? stephen: we have had a reaction in he mocked the move and said

biden should have done this for years ago in the chinese could be using plants in mexico to make ev's and through the u.s.-mexico canada agreement they could export that to the u.s.. trump put tariffs in mexico up to 200% so this will be political but as i said earlier, the u.s. market for chinese made ev's is small and it seems like they are going away from the trend but this is a political issue with the union so this is symbolic to protect jobs in the auto industry. >> stephen engle there and you

know, the shifting of policies comes at a time when we are seeing weakness not resolved when it comes to the chinese economy. credit numbers brought to reality the idea that because we had encouraging data, some of that was distorted, we are getting weakness on demand side. financing was contracting for the first time in 20 years. borrowing is negative, contractions when it comes to borrowing from bond issuance and property sector.

another chart takes a look at the decline in demand. this makes it clear how much policymakers have to do to shore up support. katrina from moody's was saying households have not received meaningful support. annabelle: policy support is expressed in other ways. the oil more interesting ones is china removing negative date or because historically we've been able to see the trading coming through of local stocks was going to be removed as soon as this week so china will be switching off the live feed of foreign flows and turnover

details will be provided on a daily basis. authorities are saying the practice aligns with international practices but it is an attempt to stem the impact of foreign funds because intraday readings have been blamed for worsening sentiment in the past. haidi: we will be taking a look at trading when it comes to chinese partners off the back of xi jinping's visit to europe. countries including france will be speaking about trade, geopolitics, international investment. that is at 3:00 a.m. on tuesday sydney time. this is bloomberg. ♪

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>> asia's earning spotlight shifts to china's internet giants.

alibaba and tencent could support growth according to estimates. bloomberg expecting better margins and megabanks could see it drop in profits. softbank will report trimmed losses as the vision fund returns. softbank one of the key ones. let's bring in our tech reported. causes for optimism? reporter: yes, paying recovery upon the level so after posting a big loss we expect losses for that to have narrowed. this is thanks to technology

valuations which helped the fund recoup some losses and there was a significant one-time gain from t-mobile options. a recovery. haidi: what are the implications for softbank? >> they have been selling quite a bit of their assets, looking at u.s. listed assets. we see that the total value of those assets have been reduced by about 29 million. share price declines of impacted the value drop, but the vision fund has also been offloading shares in key assets like coupon, doordash and grab. we're seeing a shift in focus as more attention is paid to greater emphasis on ai technology and new strategic

investments are being executed for the group level and not vision fund, so it be interesting what happens here going. annabelle: is that something we should look out for? what are you looking for? reporter: a lot of investors are paying attention to any details about softbank's next big investment because they have been relatively quiet for several quarters. so people think that maybe there could be an announcement about their new project, billions of dollars in investments reported in february. also interest in an announcement about their next asset to go public. quite a few things could come

out, we will see if there are announcements. haidi: technology reporter in tokyo. turn to bloomberg for analysis by expert editors. japan's megabanks reporting results. russell joins us from tokyo. tell us what we are expecting from these numbers and what you are watching. russell: what we are expecting is banks to post record profits for the fiscal year and the focus will be on their outlook and whether they will be forecasting profits. megabanks are in a sweet spot. interest rates are rising, benefiting from higher interest,

weaker yen and then half revenue comes from of the rod. those are higher benefiting from japan stockmarket, banks have holdings they are selling that a fitting market activity in trading so they are in a sweet spot. we'll be looking for commentary from chief executives about the yen which affects their businesses. annabelle: we've seen many banks returning capital to shareholders. will we see that in japan? russell: yes, high expectations for them, they're are probably going to announce buybacks. capital ratio is lower so they

may hold off, but the sheer prices of japanese banks are up more than 25%. the rate threshold is hoping all companies can benefit from and look back to four years ago, the ratio was 0.3. shares have risen a lot on high expectations for returns. haidi: russell ward in tokyo. israel risks fueling insurgency in gaza with thousands remaining in the territory. israel has evacuated one third of the city as it expands military operations.

the u.s. said it would withhold weapons and cited evidence that israel breached laws protecting civilians. vladimir putin has replaced a defense minister. sergei had been in the post since 2012 and the reshuffle is the first shakeup since the ukraine invasion as russian forces seek to capitalize on their advantage. below to me or people not to panic. he called the situation extremely difficult after orders were given for a mass evacuation. russia reported multiple deaths after the collapse of a residential building struck by a missile. china has deployed vessels and uh, to explore the south china

sea. the coast guard said it sent a patrol ship to deter china's activities. the area is close to the philippines and it adds to growing tensions. more ahead, this is bloomberg. ♪

annabelle: look at what we are seeing, the weekend was dominated by weakness there's been increasing concern despite what it looks like, evidence of two interventions. the gap between the daughter and the yen they would consider a

hike. watching the impact and the weakness of the end. haidi: something we are tracking continuing to see a slide. even though we had bouts of intervention. let's get to our next guest covering fintech and ai, targets include japan, asia and middle east with plans to invest in 30 names. joining us from singapore's rate , venture partner and let's just get started with where you are at establishing this firm. you had a first fund and what is the size?

ray: right, so we've announced in march 2 invest in early stage companies in south east asia, we actually infest our own capital, family office based out of singapore. we plan to invest in 20 or 30 startups depending on the macroenvironment. haidi: we do not know the amount of capital and were looking to invest in startups, so what is the time horizon? rei: we have just started to invest and we are looking to spend a few years supporting our companies but in terms of the timeline, we started investing. annabelle: which sectors are you interested in?

rei: it depends on the region. especially with japan, we will focus on ai because we see issues where the aging population, these issues will create disruptive technology. japan has to improve efficiencies so were looking at ai and within asia can be different but for indonesia we will focus on fintech, infrastructure for the country. haidi: can you elaborate? what about the middle east? rei: right, so we are looking

into our main focus, japan and southeast asia but we also have a market where if we see other opportunities we would invest and middle east would be third region we will look into. within middle east we are quite excited about ai as the government in middle east has decided to invest in infrastructures of ai within middle east. they have special barrier to entry so for middle east we will focus on ai. annabelle: what returns are you targeting? guest: can you repeat the question? heidi: what returns are you targeting? rei: right, yeah.

we are targeting three or four in terms of the return in 10 years. more than 30% irr because we are just using our own proprietary capital rather than fundraising from other externals, we will have flexibility into investing longer-term. so we will be very flexible without we keep our portfolio companies. haidi: courageous quickly, what size are you planning to make? in each of the different companies? rei: when it comes to the stages, we are investing from the sea stage to the series a stage. 500 k through $1 million for

each company would be the first. over time if we believe companies will grow we will probably do another follow-on investment on top of that. haidi: are you looking to -- it seems like capital is coming from family investors, are you looking to get outside investment? rei: we are just a firm, an arm of the family office, so the money is coming from my family office. your investing our own capital. in the future we are open to long-term strategies to think about fundraising. as of now, we are accumulating our own pipeline as a family office. haidi: tokyo stock exchange is trying to work with outside

companies. would you recommend any companies to list in japan? can you give us your assessment in terms of how you feel japanese markets are? rei: right. when it comes to vcs, we are supporting portfolio companies. to be connected to japanese partners for fintech in southeast asia, japanese investors have become one of the most important. japanese investors invested 1.4 billion u.s. dollars in 2022 which accounts for 15 or 20% of the funding and we believe this will continue. japanese investors will be the most important so our unique approach is connect these companies to corporate partners

in japan to facilitate partnership or market entry or even exits. that is a unique approach for vcs and when it comes to corporate governance, it is a different topic in japan. when it comes to public market, japanese public market has been performing well because of contribution of corporate governance. since tsc announced companies to improve their price ratio, listed companies has entered into the trend to return shareholders by increasing dividends and buybacks. shareholders receiving better return are reinvesting into the market. this has created a positive cycle of recycling the money and i feel for public markets, that

will stay strong for the next few years. haidi: we do have some breaking news when it comes to anz. the bank is cooperating with a probe on a 2023 bond issuance, investigating the asset act and corporations act. regulator is investigating australian bond issuance after media reported they were under investigation over concerns that traders manipulated the sale of debt for the second time in a decade. the second time they've been accused of profiteering. they've made a statement saying they are in full cooperation in the investigation and that we are seeing.

when it comes to the 2023 bond issuance is 10 year treasury bonds. they were appointed as a risk manager in relation to issuance of bonds. thanks understand and are investigating contravention's. we continue to bring more details as they come to us. coming up, talking all things ai. we will speak with sce and capital partner zhu scott at half past 11:00. this is bloomberg. ♪

haidi: shares of chinese electric car brand zeekr gained 35% following the latest listing since 2021. the ceo told us about the ipo. >> we never try to time the

market to the latest trend, we follow our own strategies. if you remember the first half of april, new energy vehicle penetration rates of more than 15%. if you look at the pipeline, earlier this year, first of january started the rate cuts of the top line is strong. we started selling cars to international markets since last october. sorry? we are going to sell more cars. we need these transparencies and we think it's a good sign. headwinds we are seeing long-term and trying to make

sure we make a very good business case. reporter: as you talk about expanding considering the tariffs in place, and a potential tariffs that go higher, are you listed in a market that you may never enter because of those? >> we are not entering this market because we want to enter into the market, we are thinking about transparencies, public companies and global regulators. that is basically very good global corporate citizen, we see that as more important. >> the reality check in your

prospectus, the chinese government could intervene to further its own regulatory goals. why would a u.s. citizen ever invest in a chinese company? yuan: the u.s. capitol market is transparent in the most liquid capital market in this world. we want to see if we can tap this type of market and see if we will have access to capital. it's more about long-term rather than short-term headwinds. haidi: that was jing yuan speaking with kailey leinz and joe mathieu. these are stocks we are watching when trade opens in about five minutes or so. watching honda forecasting

record profit on solid demand for hybrids in the u.s. and two wheelers in asia. tokyo electron missed estimates in their keeping and i on softbank ahead of results. the market opens in sydney in tokyo are next. a mixed start to trading. modest weakness across the board as we get into the first few minutes of trade. not much of a carry through in wall street and that is disappointing china data over the weekend as well. this is bloomberg. ♪ and using workday to put finance and h.r. on one platform. tim, you are a rock star. using responsible ai doesn't make you a rock star. it kinda does. you are not rock stars. (clears throat) okay. most of you are not rock stars.

oooh. data driven insights, and large language models. oh, that's so rock roll. it is, right. he gets it. yeah.

annabelle: this is "bloomberg daybreak: asia." counting down to asia major market opens. u.s. inflation front and center for us especially following university of michigan survey results on friday, but numbers coming out of china as well. haidi: really dire numbers when it comes to credit demand, but you look at households and corporates, just the difficulties that beijing policymakers are working with even as some parts of the market have run with the narrative that we have had a few good prints on certain parts of the economy, but the challenges still front and center there. annabelle: the open of japan, south korea, watching the nikkei225 coming online this morning. fairly flat so far, so tracks dissociated we had a wall street