Speaker 1: This is the Bloomberg Daybreak Asia podcast. I'm Brian Curtis
Speaker 1: along with Doug Krisner join us each day for the stories,
Speaker 1: making news and moving markets in the Asia Pacific. You
Speaker 1: can subscribe to the show anywhere you get your podcasts
Speaker 1: and always on Bloomberg Radio, the Bloomberg Terminal, and the
Speaker 1: Bloomberg Business app. Joining us now is Market's live strategist
Speaker 1: Mark Cranfield. Do with us here on the program, Mark,
Speaker 1: we are looking at the China markets and we know
Speaker 1: that this big move by the banks is partially trying
Speaker 1: to jolt investors out of their torpor and help the
Speaker 1: property market. As you look at markets this morning, you'll
Speaker 1: see some red numbers here. Will it work well?
Speaker 2: I think there's a little bit of disappointment that although
Speaker 2: the five year loan rate was cut by a little
Speaker 2: bit more than people had expected, there was no change
Speaker 2: in the one year and we also China skip doing
Speaker 2: the one year medium term facility at the weekend as well.
Speaker 2: So what we haven't seen is any short term interest
Speaker 2: rates being lowered. And in terms of markets, especially equity
Speaker 2: markets and bomb markets, they're really a bit more interested
Speaker 2: in what happens with short term rates and long term rates.
Speaker 2: So that's probably part of the disappointment as to why
Speaker 2: Chinese equities are a little bit soft in early trading
Speaker 2: so far.
Speaker 3: Do you really believe that rate policy is going to
Speaker 3: reinvigorate the investor in the Chinese market, right? Is it
Speaker 3: going to take something more than that at this point?
Speaker 3: I mean, given the kind of desperation that people have
Speaker 3: been feeling.
Speaker 2: It's only one of many things. I mean, as you suggest,
Speaker 2: I mean, on its own, no, it probably will not
Speaker 2: turn around the Chinese markets very dramatically. It needs to
Speaker 2: be in conjunction with another and a lot of other
Speaker 2: moves as well. And of course you've got these big
Speaker 2: things like more fixes for the property market, more factors
Speaker 2: which support the lending to the right sectors of the
Speaker 2: economy as well, and you can see that've been in
Speaker 2: buying stocks via ETFs and all those kind of things
Speaker 2: will have to continue. It's not going to be interest
Speaker 2: rates on their own. It has to be some sort
Speaker 2: of a coordinated approach, and investors need to really feel
Speaker 2: the love. They need to sense that the Chinese government
Speaker 2: is pulling out all the stops to try and improve
Speaker 2: the outlook.
Speaker 1: We've seen some pretty solid gains in Taiwan and also Tokyo,
Speaker 1: but for the rest of the region it's really not
Speaker 1: been all that attractive. How much is China holding back
Speaker 1: the rest of the region.
Speaker 2: Not too much now, I suspect if we had this
Speaker 2: discussion eighteen months ago, we probably yes. But if you
Speaker 2: look at the way the world has moved on, particularly
Speaker 2: you just look at the performances through twenty twenty three
Speaker 2: as the year war on, China was becoming less of
Speaker 2: a factor for the rest of the world, even for
Speaker 2: the rest of Asia as well. So increasingly investors are
Speaker 2: isolating China as a special case. So either you're interested
Speaker 2: in China or you're not. But whatever view you have
Speaker 2: there doesn't really affect your outlook for the rest of
Speaker 2: the equity market, which is a good and a bad thing.
Speaker 2: I mean, it's interesting in terms of emerging markets because
Speaker 2: China had been such a huge waiting in emerging markets,
Speaker 2: but now, of course it's shrunk anyway, because market caps
Speaker 2: have got so much smaller. So now people have to
Speaker 2: have two views. They have to have an emerging market
Speaker 2: view and a China view.
Speaker 3: I'm curious to get your take on something we were
Speaker 3: talking about yesterday. Foreign direct investment into China last year
Speaker 3: increasing by the smallest amount since the early nineteen nineties.
Speaker 3: Is this a reliable indicator that you want to kind
Speaker 3: of play in some way? Maybe it's the longer view here,
Speaker 3: and what the story that it's telling right now is
Speaker 3: not a good one?
Speaker 2: It isn't and it probably also tells you quite a
Speaker 2: lot about some of the political differences that China is
Speaker 2: encountering with other countries, people putting on restrictions, trade restrictions
Speaker 2: and other barriers to entry. So that obviously will reflect
Speaker 2: it to some extent. It will also be because maybe
Speaker 2: people are not so optimistic on the growth outlook for China.
Speaker 2: There'll be a number of factors which affect it. That
Speaker 2: won't necessarily stop people from putting money into China, because
Speaker 2: you also, there are so many equities listed in China,
Speaker 2: and there are a number of very positive stories as well,
Speaker 2: particularly related to AI and certain parts of the tech world.
Speaker 2: But you need to be a very good stock picker,
Speaker 2: and some people are not willing to do all that
Speaker 2: much homework to find those selective stocks. But yes, it's
Speaker 2: probably a slight negative, but it won't change the views
Speaker 2: of many people who look at specific sectors of China.
Speaker 1: If your view is correct, mark that investors are separating
Speaker 1: China out from the rest of the region. Would Southeast
Speaker 1: Asia be a good target for investors to look at
Speaker 1: in that they didn't have a particularly good year last year,
Speaker 1: while you did see some gains in some of the
Speaker 1: other markets, particularly in the west and also as mentioned
Speaker 1: with Tokyo and Taiwan. Or is Southeast Asia really just
Speaker 1: too small to attract a lot of interest foreign investors?
Speaker 2: Not too small? But I think I've been in Asia
Speaker 2: long enough to understand that it's very risky to blanket
Speaker 2: Southeast Asia as one trade So you really have to
Speaker 2: go country by country. And there are some encouraging stories.
Speaker 2: So for example Indonesia, they appear to have got through
Speaker 2: these elections very smoothly without any trouble. This looks as
Speaker 2: there's going to be a gentle handover to the next presidency.
Speaker 2: That is a very much a positive because in the
Speaker 2: past Indonesia has suffered from messy handovers from one president
Speaker 2: to the next. So international investors will look at that.
Speaker 2: It's a huge market and Indonesia certainly has some potential.
Speaker 2: Now if you look on the other side. Just today
Speaker 2: we had the Thailand Prime minister trying to intervene in
Speaker 2: the currency. That's not a good thing. Foreign investors don't
Speaker 2: like to see politicians getting involved in monetary policy. So
Speaker 2: you have contrast there in South Asia.
Speaker 3: So to go to your example of Indonesia and something
Speaker 3: that you were talking about a moment ago, where it's
Speaker 3: very much a stock pickers market versus going in and
Speaker 3: buying an index. Would you apply the same kind of
Speaker 3: rationale or the same approach when putting money to work
Speaker 3: in Indonesia?
Speaker 2: Yeah, I think you probably would have to, because you'd
Speaker 2: have to try to engage which sectors have already over
Speaker 2: extended or which ones have got catch up value. And
Speaker 2: for that you probably need to have quite a lot
Speaker 2: of local value. So you would certainly need to consult
Speaker 2: somebody on the ground who's been watching that market very
Speaker 2: closely to get a real sense. You could, of course
Speaker 2: take a risk and just go across the whole index,
Speaker 2: but you will probably find your performance is not as
Speaker 2: good as it might be if you knew which sectors
Speaker 2: had the undervalue compared to other sectors.
Speaker 1: Now let's take a broader look here. I'm going to
Speaker 1: say that I think it's only a matter of time
Speaker 1: before you see Hong Kong and China stocks start to
Speaker 1: rebound because so much has been discounted. So let's say
Speaker 1: that if that premise is true, will it be hurt
Speaker 1: by a potential pullback in the US because of inflation
Speaker 1: fears and also because of valuation levels and the size
Speaker 1: of the recent rally, or in a sense, will it
Speaker 1: be helped by that people will actually take money out
Speaker 1: of US equities and plow into some of these Hong
Speaker 1: Kong China stocks.
Speaker 4: Well.
Speaker 2: Based on what we've seen in the past year or so,
Speaker 2: I should think a pullback in US markets actually will
Speaker 2: be a good thing for several markets around the world,
Speaker 2: because America seems to suck a tremendous amount of investment
Speaker 2: capital from other places, So maybe it will start to
Speaker 2: go back into other parts.
Speaker 1: Of the world.
Speaker 3: That would certainly tighten financial conditions maybe a little bit,
Speaker 3: and the FED might like that. When you look at
Speaker 3: the path of Fed policy, there's been a fair amount
Speaker 3: of aggressive betting that we could get as much as
Speaker 3: maybe one hundred basis points in easing this year. The
Speaker 3: market seems to be rethinking that in a major way.
Speaker 3: After those heart readings on inflation in the States last week,
Speaker 3: both CPI and PPI. What is your view on Fed
Speaker 3: action this year?
Speaker 2: Well, the Faith do their for a reason. They try
Speaker 2: to give the market an indication of where they think
Speaker 2: interest rates so heading for the rest of the year,
Speaker 2: and it's very clear their dot plots have a medium
Speaker 2: target of three rate cuts. Some FED members only see
Speaker 2: two rate cuts. Well, the market is gradually coming closer
Speaker 2: to the FED view of where interest rates are going.
Speaker 2: Of course, the Fed may revise those dot plots when
Speaker 2: they meet in March or June, but for the time being,
Speaker 2: the market is at disconnect with where the Fed is
Speaker 2: telling them they're going. So eventually the market has to
Speaker 2: get in line.
Speaker 1: We had David Einhorn on in an extensive interview on
Speaker 1: Bloomberg and he was saying that markets are kind of
Speaker 1: broken now, that value just doesn't work. There's a lot
Speaker 1: of reasons behind it. We don't have time to go
Speaker 1: into that, but are there some pockets of areas where
Speaker 1: you see value. You're not recommending somebody buy it, but
Speaker 1: you're looking and saying, you know, this has been this
Speaker 1: has really been driven to an extent in one direction.
Speaker 2: I think there's always contrarian plays around the world on
Speaker 2: a general basis, on a regional basis, on a specific basis,
Speaker 2: and it's probably that is exactly the kind of time
Speaker 2: when you see something like in the US when the
Speaker 2: Magnificent Seven stocks dragged so much a part of the
Speaker 2: investing money going in one direction. That means a lot
Speaker 2: of people are being left behind. So if you're a
Speaker 2: contrarian who can take the time to study from the
Speaker 2: bottom up, you will always find something which has been
Speaker 2: left behind. And that would apply to any part of
Speaker 2: the world. I'm sure there are dislocations like that everywhere
Speaker 2: you look, but you need to do the homework.
Speaker 1: Okay, I'm taking notes here from Cranfield. Short the megacap,
Speaker 1: then go along in the rgon on China stocks. Both
Speaker 1: have been bombed out too much in one way. Now
Speaker 1: I'm just joking, folks. He is a Bloomberg Markets Live
Speaker 1: strategist Mark Cranfield, analyzing the markets but not recommending anything.
Speaker 1: But it's always good to take a look and a
Speaker 1: listener programs like this where you get some ideas. Mark,
Speaker 1: thank you very much for joining us, and that is
Speaker 1: Mark Cranfield with US Live. This is Bloomberg. Our guest
Speaker 1: is Eric, you lumbering economists covering China and Hong Kong.
Speaker 1: So we had this adjustment in the five year loan
Speaker 1: prime rate, Eric, and the market reaction isn't great. This
Speaker 1: is something that may take a while to play out.
Speaker 1: What's your initial assessment.
Speaker 4: Yeah, I think if you look at both one year
Speaker 4: five year, actually I think it's a mixed signal this morning.
Speaker 4: So the five year cut is bigger than expected, and
Speaker 4: it's the biggest ever I think on record, So clear
Speaker 4: to signal that the government is worrying about housing market.
Speaker 4: You know, five years linked to the mortgage rate, so
Speaker 4: it's clear signal that the housing market is still deepening
Speaker 4: the declients and the government wants to, you know, step
Speaker 4: up with more supporting measures. But it's the same time.
Speaker 4: But you have to remember that last year when PBC
Speaker 4: cut to the MF in August, actually banks held the
Speaker 4: five year rate. So so part of the twenty five Yeah,
Speaker 4: the headline number is big, but part of it probably
Speaker 4: that's just catch up you know, of last August, so
Speaker 4: it's not every of the twenty five points then new cut,
Speaker 4: I would say.
Speaker 3: So when you get a cut like this. The magnitude
Speaker 3: obviously is we just said it's greater than expected. Is
Speaker 3: there a lag period some a period of time where
Speaker 3: you would really kind of expect to see an impact
Speaker 3: in the real estate market.
Speaker 4: Obviously if you look at to what we had at
Speaker 4: the second half of the last year, lots of measured
Speaker 4: by the government, you know, trying to relax from purchase
Speaker 4: down lowering the down payment, even including lower and market
Speaker 4: rates in big cities. It's I would say it's helping
Speaker 4: on the margin, but don't really change the big picture, right.
Speaker 4: We still if you look at the macro housing market
Speaker 4: data until December, what's the official data we have the latest,
Speaker 4: the market downto and is still deepening. There's no big
Speaker 4: sign of the market turning around it anytime soon. So
Speaker 4: I think that the big problem now is not really
Speaker 4: the market rates are too high, right, It's not really
Speaker 4: the big factor. Yeah, it's preventing.
Speaker 1: One of the trends that we saw of late was
Speaker 1: buyers being more attracted now to used homes rather than
Speaker 1: new homes. A couple of reasons. They can get a
Speaker 1: bigger discount there, and plus they're not buying from the
Speaker 1: developer then, so I'm just curious whether or not we
Speaker 1: think that we just really need to see lower prices
Speaker 1: and once we see and that's not the end of
Speaker 1: the world. I mean, that's just something that markets do.
Speaker 1: I mean, you get a repricing and prices come down,
Speaker 1: people will come back in. That takes time and it
Speaker 1: means probably lower stock prices for the developers.
Speaker 4: Yeah, but the thing is nobody knows when to the
Speaker 4: bottom right people, if who is buying, they would expect
Speaker 4: the price to go down even further. So unless they
Speaker 4: really need a house right now, they can just hold
Speaker 4: hold off until later. And another factor you mentioned why
Speaker 4: people are more interesting second home is get the risks
Speaker 4: that they'll worry. If I buy a new apartment, it's
Speaker 4: probably well the developer being able to deliver it, right,
Speaker 4: that's a key risk, So they have to be very careful.
Speaker 3: What is the one thing that you're going to be
Speaker 3: looking at in a week ahead. I mean, now we're
Speaker 3: coming back from the lunar New Year. We've talked about
Speaker 3: some of the high frequency data that was stronger than expected.
Speaker 3: Is there a data point that you're keeping your eye
Speaker 3: on this week?
Speaker 4: I think next week probably the most important in the
Speaker 4: channels PMI data, both official and enter tighting PMI. But
Speaker 4: you know, given the seisonal factors, we would expect PMI
Speaker 4: to show some weakness. It's understandable. We have a long
Speaker 4: holiday in February. Although the consumption data looks good holiday spanding,
Speaker 4: but we actually we had a closer look at the data.
Speaker 4: It's probably a bit not as strong as the headline
Speaker 4: suggests because we have one more day d year at holiday.
Speaker 4: And also if you look at the spanding per capture
Speaker 4: by every travel alerts, it's actually still quite relatively low,
Speaker 4: if compared to pre COVID level or even a few
Speaker 4: years ago. So that means, yeah, more people are traveling,
Speaker 4: but they're not really you know, spending every person.
Speaker 1: So you calm, you're measured. But let's do a little
Speaker 1: swash buckling here, because you're talking about falling prices and
Speaker 1: it seemingly calls for a catalyst. Okay, so if you're
Speaker 1: swashed buckling, what's a catalyst? What can be a catalyst?
Speaker 4: I think people are looking forward in a few weeks.
Speaker 4: It's the coming National People's Congress, right, the usual, and
Speaker 4: you're gathering, so we would like to hear what's the
Speaker 4: plan of the gunment for this year and especially the
Speaker 4: key focus will be the fiscal budget this year. So
Speaker 4: are they really, you know, going to have a larger deficit.
Speaker 4: They're willing to spend more, whatever you want spending, but
Speaker 4: I think that the key thing and now the consumer's household,
Speaker 4: you know, corporates, their low confidence, they're not willing to spend.
Speaker 4: So the only way to proper economy is the gum
Speaker 4: needs to spend. So that's a key thing I think.
Speaker 3: I know you're an economist watching, but I'm going to
Speaker 3: go out on a limb here, because there was a
Speaker 3: Bank of America survey the one of the most popular
Speaker 3: trades continues to be being short China. Do you think
Speaker 3: that's increasingly risky that at some point we're going to
Speaker 3: get the big bazooka that's going to create a big squeeze.
Speaker 1: Yeah.
Speaker 4: I cannot come at the market. It's a decision. But
Speaker 4: I think markets have been quite disappointed over the past
Speaker 4: year since the reopening. Everybody expecting some bazookap but they
Speaker 4: never delivered. And I'm cautiously optimistic that the government is
Speaker 4: willing to, you know, have a big splash bazoo cup,
Speaker 4: but I think more you know, incremental or whatever you
Speaker 4: called small steps or some easing. It's still going to
Speaker 4: going to be seen this year. But if anyone expecting,
Speaker 4: you know, like for tralling they have done in the past,
Speaker 4: I don't think that's that's that's like.
Speaker 1: Okay, final question probably time, if time permits. What what
Speaker 1: part of the Hong Kong or the Chinese economy is
Speaker 1: actually working right now? What's looking good?
Speaker 4: I think some sectors like electrical vehicles right some some
Speaker 4: high tech sectors, chips, you know, some sectors the government
Speaker 4: is willing to it's a so called restructuring. They're moving
Speaker 4: away from property, but they're moving you know, those resources
Speaker 4: into this that the what they believed would to be
Speaker 4: the future growth engines for China. But they're growing fast.
Speaker 4: But we also did some an acid but so far
Speaker 4: the share of like EV is still readily small so
Speaker 4: compared to property market. So I think this will still
Speaker 4: take time for them to grow. But right now we
Speaker 4: have to you know, it's a period that in the
Speaker 4: transition period, we have to suffer some pain from the
Speaker 4: property market down siding.
Speaker 1: Eric, thanks very much for joining us here in our studios.
Speaker 1: Eric Q. Bloomberg economist looks at China and Hong Kong.
Speaker 3: Let's take a look at global fixed income now with
Speaker 3: our guests too, how Chao had to fixed income for Asia?
Speaker 3: At Robico joining us from our studios in Singapore. Nice
Speaker 3: of you to stop by, Thanks for joining us, Thank
Speaker 3: you for having me. Yeah, we've been talking about the
Speaker 3: decision and of the big banks in China to cut
Speaker 3: a long primarate the five year by twenty five basis points.
Speaker 3: A bit of a surprise. Did it take you by surprise?
Speaker 5: I mean a little bit in terms of timing, But
Speaker 5: I think you know, the situation is just, yeah, looking
Speaker 5: pretty dire, and a lot of the other policies are not,
Speaker 5: you know, stimulating the market. But that is actually in
Speaker 5: line with the fact that we expect it's a general
Speaker 5: econop malae that that is a problem in China and
Speaker 5: that can't be fixed by pure monetary policy.
Speaker 1: I'm afraid, I feel about liquidity and whether or not
Speaker 1: some developers will have to sell assets to create more
Speaker 1: internal liquidity. Uh and if not, where else could it
Speaker 1: come from?
Speaker 5: I mean they can, but I think that it needs
Speaker 5: to actually come from sales, and that's what's really going
Speaker 5: to be that's been the difficulty, which is why I
Speaker 5: think these policies are meant to stimulate demand, and demand
Speaker 5: is very weak for all the reasons. I think your
Speaker 5: previous guess has talked about the this this is a
Speaker 5: this is an adjustment that's going to take several years,
Speaker 5: and I don't think that the market nor the policy
Speaker 5: makers can expect that, you know, some changes in policy
Speaker 5: rates will change that. But however, having said that, it's
Speaker 5: been near, you know, more than two years of this
Speaker 5: uh this property allies and hopefully we're hitting some bottom,
Speaker 5: although I think a rebound, a quick rebound is probably
Speaker 5: not on the cards at the moment.
Speaker 3: So if we're near a bottom, maybe they're a little
Speaker 3: bit more restructuring. I mean, we've had a couple of
Speaker 3: attempts at restructuring a couple of these developers and that failed.
Speaker 3: Haircuts I think would be in order. If you're holding
Speaker 3: credit here, what's the risk and how do you do
Speaker 3: you hedge that in some way? Like in the CDs market.
Speaker 5: I think restructuring of the companies that need to be
Speaker 5: restructuring is already kind of there, so I think it's
Speaker 5: very hard to hedge that risk, and they're very they're
Speaker 5: going to be very much case by case. I think
Speaker 5: the biggest problem within the restructing market within the Chinese
Speaker 5: is that just there is no presidence and then the
Speaker 5: fact that the participants you know, are not acting in
Speaker 5: a concerted manner that actually helps the restructuring process. So
Speaker 5: it's taking longer, it's probably costing more because there is
Speaker 5: just no presidence of how to actually deal with you know,
Speaker 5: these bankruptcy like that we have in more established markets.
Speaker 1: Some of the markets are not seeing the same stresses
Speaker 1: as China. Where are you seeing the best value in
Speaker 1: credit now throughout your coverage area of Asia?
Speaker 5: Yeah, so I think away from China and actually even
Speaker 5: within the China ig kind of space, the companies that
Speaker 5: are surviving and stuff, you know, it's actually not too
Speaker 5: bad for them, and the fundamentals actually holding up quite
Speaker 5: quite strong. So our investment grade is actually fine. And
Speaker 5: away from and I mean India Indonesia partially is you know,
Speaker 5: they're all actually pretty holding up pretty okay. China seems
Speaker 5: to have its own dynamics, but it's actually just the
Speaker 5: Chinese property segment. Right even away from Chinese property, the
Speaker 5: industrial how your names are actually holding up Okay, financing
Speaker 5: is available on shore at relatively cheap rates, so netnet
Speaker 5: things actually away from China. Property for the credit market
Speaker 5: actually has been pretty good, and spreads are quite tight
Speaker 5: to reflect that.
Speaker 3: It's interesting. I am sure you're aware that we have
Speaker 3: the main it's from the Australian Central Bank meeting, and
Speaker 3: I think they considered raising rates earlier. I mean, it
Speaker 3: would seemed to be a pretty hefty debate. And we're
Speaker 3: talking about now that the possibility that there's going to
Speaker 3: be far fewer rate cuts in the US than the
Speaker 3: market had been braced for. Do we have to rethink
Speaker 3: this narrative that we've been talking about with you know,
Speaker 3: we've beat the inflation dragon and now we can look
Speaker 3: forward to rate cuts.
Speaker 5: I think I was here a month ago, I mean
Speaker 5: on the TV kind of saying that, you know, I
Speaker 5: think the market had got far too carried away about
Speaker 5: the march, you know, rate cuts. I mean I think
Speaker 5: that the cuts will come. They may just come later,
Speaker 5: and they will, and I think that's partly going to
Speaker 5: need as some of the geopolitical issues that are leading
Speaker 5: to inflatory pressure being a little bit longer and higher
Speaker 5: than we're expecting but eventually we'll get there, so we
Speaker 5: probably expect cuts later, but more.
Speaker 1: I tend to set aside these, you know, more considerations,
Speaker 1: because when we thought that we might get a cut
Speaker 1: in March and markets were doing well, and then when
Speaker 1: we found out that we probably wouldn't get a rate
Speaker 1: cut in March, markets were still doing pretty well. It
Speaker 1: seems like there's a balance between investors caring about growth
Speaker 1: versus caring about interest rates. Where you fit on that spectrum.
Speaker 5: Yeah, so, I mean the rates are they're to support growth, right,
Speaker 5: So they're actually two of two different size of the argument. Right, So,
Speaker 5: as long as the economy is staying strong, there's less
Speaker 5: need to cut, right, And that's actually should be a
Speaker 5: positive dynamic. And of course one of the other positive
Speaker 5: dynamics is that the ability to be able to be
Speaker 5: slow about those cut, not having to rush them because
Speaker 5: you're dealing with a disaster in the economy, and I
Speaker 5: think those are actually very constructive for the economy generally.
Speaker 3: Do we need to rethink BOJ policy? Everybody was thinking
Speaker 3: that the Bank of Japan had the wind at its back,
Speaker 3: so to speak, move would be to titan. I mean,
Speaker 3: do we need to rethink that as well.
Speaker 5: I mean, I think that Japan is quite unique. I mean,
Speaker 5: I think again we're looking for what happens with the
Speaker 5: wage inflation. I think if we just take a look
Speaker 5: at the US as an example, we were really worried
Speaker 5: about wage inflation, and actually we've had wage inflation in
Speaker 5: the US, and actually it's been quite a good, good,
Speaker 5: good backdrop actually, and I think maybe here the lesson
Speaker 5: could be learned is actually maybe not to be too
Speaker 5: worried and actually higher wages, higher kind of pricing power,
Speaker 5: particularly as you might look to the domestic consumption that's
Speaker 5: been a driver of growth. That shouldn't worry people too much.
Speaker 1: And so in Japan, should we not worry about recession,
Speaker 1: you know, technical recession, but not likely stick.
Speaker 5: Yeah, I think it's a technical recession. But I think,
Speaker 5: you know, there are other things that are going quite
Speaker 5: well for Japan, particularly as the market looks away from
Speaker 5: from China, the Japanese market, which has actually not had
Speaker 5: much of attention, will get more and more attention, and
Speaker 5: as a diversific trades. So I think there are more
Speaker 5: stuff to be going and I think the quicker the
Speaker 5: Bank of Japan starts to normalize rates the more attention
Speaker 5: that is going to get from the international markets.
Speaker 3: We'll leave it there to Hot Chow. Thank you so
Speaker 3: much for being with us. Enjoyed the conversation very much
Speaker 3: to how Chow had it fixed income for Asia at Ribko,
Speaker 3: joining us here on Daybreak Asia. This has been the
Speaker 3: Bloomberg Daybreak Asia podcast, bringing you the stories making news
Speaker 3: and moving markets in the Asia Pacific. Visit the Bloomberg
Speaker 3: Podcast channel on YouTube to get more episodes of this
Speaker 3: and other shows from Bloomberg. Subscribe to the podcast on Apple, Spotify,
Speaker 3: or anywhere else you listen, and always on Bloomberg Radio,
Speaker 3: the Bloomberg Terminal, and the Bloomberg Business App.