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Speaker 1: Bloomberg Audio Studios, podcasts, radio news. This is the Bloomberg

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Speaker 1: dayba a Q, a podcast available every morning on Apple,

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Speaker 1: Spotify or wherever you listen. It's Wednesday, the thirty first

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Speaker 1: of July in London. I'm Caroline Hepke.

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Speaker 2: And I'm Stephen Carroll. Coming up today. Hamas says Israel

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Speaker 2: has killed its political leader in an air strike inside Iran.

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Speaker 1: The Bank of Japan hikes interest rates to a quarter

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Speaker 1: of one percent and cuts bond buying in a significant

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Speaker 1: policy shift.

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Speaker 2: Plus we'll have to increase taxes. Rachel Reeves concedes difficult

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Speaker 2: decisions are ahead in the UK's October budget.

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Speaker 1: Let's start with a round up of our top stories.

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Speaker 2: Hamas says Israel has killed its political leader, Ismail Hanaei

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Speaker 2: in Iran. Hanaye was in Tehran for the inauguration of

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Speaker 2: Iran's new president on Tuesday. In a statement, Hamas, an

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Speaker 2: EU and US designated terrorist group, said he was killed

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Speaker 2: in an airstrike on his residence. The Israeli military declined

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Speaker 2: to comment. Speaking from Jerusalem, Bloomberg, Dan Williams says the

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Speaker 2: incident would have come as a shock.

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Speaker 3: Hamas, really, with this unprecedented attack it's had attacks on

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Speaker 3: its leaders before. This would be the first time my

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Speaker 3: knowledge at least published of a major Hamas leader on

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Speaker 3: Iranian soil, and Hamas will certainly be doing its three calculations.

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Speaker 3: It's worth noting here that Israel so far has not

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Speaker 3: confirmed this attack.

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Speaker 2: Dan Williams speaking there. Henea was based in Katar and

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Speaker 2: had been a key go between in ongoing ceasefire talks

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Speaker 2: between Israel and Hamas. His death follows an Israeli strike

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Speaker 2: on Beyrout last night, targeting a senior Hizbula commander. That

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Speaker 2: attack was a response to a rocket assault that killed

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Speaker 2: twelve young people in the Israeli controlled Golan Heights over

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Speaker 2: the weekend.

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Speaker 1: Now to Central Bank News, the Bank of Japan has

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Speaker 1: raised interest rates to around a quarter of one percent

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Speaker 1: and unveiled plans to reduce bond buying. JGB purchases will

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Speaker 1: be reduced by four hundred billion yen per quarter, with

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Speaker 1: a target of three trillion yen in the first three

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Speaker 1: months of twenty twenty. It shows Governor caswer away Is

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Speaker 1: determination to normalize policy, and it fuels speculation that one

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Speaker 1: more hike may be coming this year. Standard Charter's head

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Speaker 1: of fixed incomes trashy Man pret Gil says it's a

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Speaker 1: hawkish move even if markets didn't respond that way immediately.

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Speaker 4: These expectations have been building. But there's also the element

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Speaker 4: that I think the inflation forecast have been trimmed a

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Speaker 4: little bit. So if we're trying to explain what happening

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Speaker 4: in the yen, I think the combination sort of works

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Speaker 4: out there. But I think longer talking is really a

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Speaker 4: signal that ares willness to hycrits. It's going in the

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Speaker 4: opposite direction of most other major central banks. So for

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Speaker 4: the end, look, the short term move might very well

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Speaker 4: be a pullback, but we think we can get a

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Speaker 4: much stronger yen from here.

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Speaker 1: Man pre Gil the discussing market reaction to the BOJ

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Speaker 1: move on inflation, the Bank of Japan notes that risks

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Speaker 1: ask you to the upside, a sign that they're seeing

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Speaker 1: that virtuous cycle coming through.

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Speaker 2: HSBC has announced a three billion dollars share buyback as

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Speaker 2: its latest results pasted estimates. The bank's pre tax profit

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Speaker 2: for the second quarter rose to eight point nine billion dollars,

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Speaker 2: more than a billion higher than expected. At going CEO

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Speaker 2: no Quinn told Bloomberg he was in a good mood

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Speaker 2: for his final earnings report in the role.

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Speaker 5: Listen, I'm pleased not only for our shareholders, were also

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Speaker 5: for the two hundred thousand colleagues around the world who

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Speaker 5: have made this possible to deliver a financial performance this strong.

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Speaker 5: I'm pleased with the way that they've handled the past

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Speaker 5: five years. The work they've done, the transformation, and the

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Speaker 5: results today are testaments of the work that they've they've

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Speaker 5: put in.

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Speaker 2: Quinn added the bank's future business environment will be shaped

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Speaker 2: by the path of interest rates and the outcomes of elections.

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Speaker 1: Microsoft shares fell after its cloud revenue missed, disappointing investors

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Speaker 1: dubious about AI gains the tech chance. Cloud computing service

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Speaker 1: revenue rose twenty nine percent in the fourth quarter. That

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Speaker 1: was slower than the previous quarter and predicted to be

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Speaker 1: slow again next quarter. Many of Microsoft's corporate customers are

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Speaker 1: only just starting to use new AI assistance. CEO Satya

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Speaker 1: Nadella told analysts that the company hopes that it will

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Speaker 1: turn into a big revenue flow in future.

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Speaker 6: Corpilot customers increased more than sixty percent quarter over quarter.

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Speaker 6: Feedback has been positive, with majority of enterprise customers coming

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Speaker 6: back to purchase more seats.

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Speaker 1: Nadella has been infusing Microsoft's product line with AI technology

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Speaker 1: from partner OpenAI. Microsoft shares fell about four percent in

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Speaker 1: extended trading, pairing earlier losses of as much as nine

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Speaker 1: point one percent. It is still twelve percent higher though

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Speaker 1: on the year.

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Speaker 2: The UK Chancellor says taxes will have to go up

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Speaker 2: in her autumn budget. Earlier this week, Rachel Reeves set

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Speaker 2: out a twenty two billion pounds shortfall in the British

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Speaker 2: government's finances. Speaking to John Sopel on The Newsagent's podcast,

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Speaker 2: she was asked if that made tax rises in the

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Speaker 2: autumn in an sevitable.

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Speaker 5: I think that we will have to increase taxes in

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Speaker 5: the budget.

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Speaker 6: Book, so in inheritance tax, capital gains, tax, pension reform

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Speaker 6: are on the cards.

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Speaker 2: Well, we will have a budget on the thirtieth of October,

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Speaker 2: and ahead of that budget we will have a forecast.

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Speaker 2: The UK Chancellor Rachel Reeves. They are on The Newsagent's podcast.

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Speaker 2: She also doubled down on the Labor Manifesto commitment of

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Speaker 2: no vaight, national insurance or income tax increases.

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Speaker 1: To US politics, Kamala Harris has wiped out Donald Trump's

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Speaker 1: poll lead in seven battleground states. A wave of enthusiasm

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Speaker 1: for the vice president has swept key regions, including Arizona

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Speaker 1: and Pennsylvania, among young, black and Hispanic voters. This according

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Speaker 1: to the latest Bloomberg polling. Now, the presumptive Democratic candidate

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Speaker 1: has set her sights on a debate with her Republican rival.

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Speaker 7: I do hope you'll reconsider to meet me on the

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Speaker 7: debate stage, because, as the same goes, if you got

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Speaker 7: something to say.

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Speaker 1: Kamala Harris there speaking doing a campaign rally in Georgia.

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Speaker 1: The latest Bloomberg surveys shows her capturing forty eight percent

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Speaker 1: of voters to forty seven percent for Trump, a stronger

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Speaker 1: showing that the two point deficit for President Joe Biden

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Speaker 1: before he dropped out of the race. Those numbers suggest

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Speaker 1: that Harris has a shot at reassembling the voter coalition

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Speaker 1: that propelled President Barack Obama to the White House, but

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Speaker 1: the presidential race remains close across the surveyed swing states. Overall,

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Speaker 1: the gap between the candidates is within the poll's statistical

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Speaker 1: margin of era.

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Speaker 2: At least thirty nine police officers have been injured following

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Speaker 2: violent disorder in Southport, where a vigil was held to

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Speaker 2: remember three young girls killed in Monday's knife attack. Cars

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Speaker 2: were set on fire and Britain thrown at a local masque,

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Speaker 2: with protesters also heard chanting far right slogans. The Home

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Speaker 2: Secretary of Ed Cooper has been reacting.

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Speaker 6: Violent attacks from thugs on the street who show no

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Speaker 6: respect for a grieving community and it's a total disgrace.

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Speaker 2: Five children remain in critical condition following the stabbing. Last

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Speaker 2: night's disorder is believed to have been fueled by speculation

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Speaker 2: around a seventeen year old suspect currently in police custody

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Speaker 2: at the moment. We'll bring you more on that, news

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Speaker 2: of the killing of the Hamas leader in Iran, plus

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Speaker 2: more on the Bank of Japan decision as well. But

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Speaker 2: just an update on a story we've been talking about

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Speaker 2: all week from the Olympics in Paris. The triathlon will

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Speaker 2: go ahead with the swimming in the send today. There

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Speaker 2: was testing of the water at three twenty am which

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Speaker 2: determined that the water quality had improved enough to it

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Speaker 2: to take place, So the women's race will happen first

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Speaker 2: this morning at eight am, and the men's race, which

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Speaker 2: had been scheduled for yesterday, but postponed until today, will

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Speaker 2: go ahead at ten forty five am. Parastharities have spent

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Speaker 2: one point four billion euros cleaning up the sen for

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Speaker 2: this event, so that is something that will be much

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Speaker 2: anticipated by those organizing the Elms.

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Speaker 1: There was huge disappointment yesterday when it wasn't going to

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Speaker 1: go ahead, and real worries in that community of triathlons

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Speaker 1: that it would have a real dent actually on their

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Speaker 1: revenues and on their kind of I suppose fame or

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Speaker 1: what they take away from the Olympics. So there was

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Speaker 1: a lot of disappointment.

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Speaker 2: Yeah, that's one event that will be going ahead in

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Speaker 2: Paris today. Let's bring you more now in the breaking

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Speaker 2: news this morning that Hamas says Israel has killed its

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Speaker 2: political leader Ismail hanae Na airstrike on Iran. Our Horizon's

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Speaker 2: Middle East anchor Jamana Rossetti joins us now for more. Jamana,

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Speaker 2: good morning. What do we know?

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Speaker 8: Yes, well, a lot of events have happened in the

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Speaker 8: Mid least in the last twenty four hours, but let's

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Speaker 8: just stick to the killing of Ismail Hanie. So early

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Speaker 8: this morning, Hamas announced that Israel had killed its political

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Speaker 8: leader Ismail Hanie in an airstrike at around two am

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Speaker 8: local time. Local media reporting that both he and his

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Speaker 8: bodyguards were killed in the attack. And hani is usually

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Speaker 8: based in Kutar, but he happened to be in Iran

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Speaker 8: for the inauguration of Iran's new president, mister Preseshkian, who

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Speaker 8: was accepting the inauguration yesterday. Now, per local Iranian media,

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Speaker 8: Iran says it's still investigating the assassination of Haniye, the

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Speaker 8: results to be announced soon. We have had no official

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Speaker 8: commentary yet from Israel regarding the air strike, but the

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Speaker 8: reactions from some of the regional leaders are coming through. Turkey,

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Speaker 8: for example, have put out statements saying they're condemning the

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Speaker 8: killing of Hamas's political leader, saying that the hani murder

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Speaker 8: aims to regionalize the war in Gaza, and the Palestinian

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Speaker 8: Authority President Mahmudabas has also come out with this statement

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Speaker 8: strongly condemning the assassination, considering it a coward lead. This

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Speaker 8: is a quote, a cowardly act and a dangerous development.

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Speaker 1: Yeah. Indeed, we're following all of these breaking news lines,

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Speaker 1: especially from the Foreign Ministry spokesman in Iran, saying that

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Speaker 1: Hania is blood will never go to waste, that the

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Speaker 1: Israeli attack is being investigated by authorities, This according to Iran.

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Speaker 1: So as you say, the reaction now coming in and

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Speaker 1: the bigger picture, what might this mean for Garza cease

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Speaker 1: far talks that have been ongoing. Obviously Hanair was this

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Speaker 1: key figure, key go between what do we extrapolate from it?

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Speaker 8: Well, Caroline, I think there are two things that you

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Speaker 8: need to consider. The first is that this happened on

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Speaker 8: Iranian soil, So that's something to bear in mind. Given

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Speaker 8: the rhetoric and the increasing amount of hostility in words

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Speaker 8: between Israel and Iran. It wasn't that long ago that

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Speaker 8: we were talking about that tit for tat retaliation between

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Speaker 8: Iran and Israel directly, So one of the big questions

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Speaker 8: is whether or not Iran feels the need to respond accordingly.

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Speaker 8: As well, given that it is a new president today

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Speaker 8: is President Position Kan's first day in office, he will

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Speaker 8: have to think about the formulation of that response. The second,

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Speaker 8: to your point, is that Ismaar Hani was one of

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Speaker 8: the leading spokesmen on Hamas's side in these ceasefire negotiations.

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Speaker 8: He would have played a very active role over the

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Speaker 8: last couple of weeks, as we've been reporting and talking about,

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Speaker 8: there's been a lot of push diplomatically from the US,

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Speaker 8: from Cutter, from Egypt to get the ceasefire deal over

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Speaker 8: the line. With the absence of Ismai Heni, that raises

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Speaker 8: a big question about who exactly will be representing Hamas

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Speaker 8: and speaking on behalf of Hammas as these talks continue,

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Speaker 8: And whether or not these talks are going to continue

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Speaker 8: is a big question. We just don't know at this point.

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Speaker 2: Okay, Jamana Brassechi, Horizon's Middle East an ker, thank you

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Speaker 2: very much for joining us with the latest on that story.

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Speaker 1: Now, let's go to Japan next, where the central Bank

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Speaker 1: has raised interest rates by fifteen basis points to a

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Speaker 1: quarter of one percent. It has also cut its bond

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Speaker 1: buying program in half over the next couple of years.

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Speaker 1: Bloomberg's a Paul Jackson, who leads our team of economists

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Speaker 1: and government reporters in Japan, joins us now from Tokyo.

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Speaker 1: Good morning, Paul, Good to have you on the program.

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Speaker 1: Markets had been expecting a hike from the Bank of

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Speaker 1: Japan or there there'd been some uncertainty. Talk us through

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Speaker 1: the details of the decision.

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Speaker 9: Well, I think in the run up to today's decision

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Speaker 9: that been a kind of split view among markets and

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Speaker 9: economists about whether they would go ahead with the rate

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Speaker 9: hike or not. And I think really the centers on

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Speaker 9: the idea is of Governor Uda. Is he Governor auDA

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Speaker 9: the economist or is he Governor Huda the normalizer of policy?

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Speaker 9: And let's face it, Japan's policy has been out on

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Speaker 9: the experimental fringes of global central bank policy making. Over

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Speaker 9: the years, all kinds of experimental measures have been in use.

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Speaker 9: And since Uida took the helm last year, he's been

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Speaker 9: leading a march back to normality and this is the

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Speaker 9: latest example of that. And he hasn't just done one

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Speaker 9: thing today, He's done two things. Both the cutting of

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Speaker 9: the bond program, which I would say is largely in

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Speaker 9: line with expectations, the initial pace perhaps a bit slower,

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Speaker 9: reaching the destination of three trillion a little bit faster

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Speaker 9: than expected, and then the rate ig. We did have

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Speaker 9: some local media reports overnight suggesting that the rate ig

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Speaker 9: was in the work, so I think by the time

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Speaker 9: we got to the decision this morning, I think the

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Speaker 9: scales had tipped in favor of a rateyke. Coming.

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Speaker 2: We also got new inflation and GDP projections from the

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Speaker 2: Bank of Japan as well. What do they tell us

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Speaker 2: about the path ahead for the Japanese economy and the

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Speaker 2: hints of what happens to rates next.

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Speaker 9: Well, I think those forecasts really keep us on the

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Speaker 9: path of further interest rate hikes because inflation is seen

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Speaker 9: staying around two percent over the coming years. We did

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Speaker 9: see a slight bumping down of the forecast for this

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Speaker 9: fiscal year. That's because government energy subsidies are going to

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Speaker 9: be reintroduced, so that's going to obviously bring the inflation

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Speaker 9: rate down a little bit this year, and then consequently

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Speaker 9: when they stop next year, the inflation will go up

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Speaker 9: a bit. But you know, putting the technicalities to one side,

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Speaker 9: essentially we are over the boj's two percent target or

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Speaker 9: around there for the next three years or so. So

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Speaker 9: the BOJ said if the forecasts, if the forecast materialized

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Speaker 9: as expected, it can keep raising interest rates. So I

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Speaker 9: think there's more to come, and this double move today

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Speaker 9: suggests that Uida is very much interested in getting back

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Speaker 9: to normality.

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