1 00:00:02,120 --> 00:00:04,480 Speaker 1: This is Bloomberg day Break Weekend, our global look at 2 00:00:04,480 --> 00:00:07,000 Speaker 1: the top stories in the coming week from our Daybreak 3 00:00:07,000 --> 00:00:09,960 Speaker 1: anchors all around the world, and straight ahead on the program, 4 00:00:10,000 --> 00:00:14,400 Speaker 1: tech stocks and focus again because of Apple's Worldwide Developers Conference. 5 00:00:14,640 --> 00:00:16,319 Speaker 1: I'm Tom Busby in New York. 6 00:00:16,400 --> 00:00:18,840 Speaker 2: I'm Caroline Hepkee here in London, where we're looking ahead 7 00:00:18,840 --> 00:00:22,079 Speaker 2: to Rishisu Nak's first White House visit as Prime Minister. 8 00:00:22,239 --> 00:00:26,000 Speaker 3: I'm Brian Curtis in Hong Kong. Capex is jumping in Japan. 9 00:00:26,120 --> 00:00:29,200 Speaker 3: The tourists are coming in, but all is not well. 10 00:00:29,320 --> 00:00:31,600 Speaker 4: I'm Kaylee Lyons in Washington, where we're gearing up for 11 00:00:31,640 --> 00:00:34,199 Speaker 4: two new entrants in the race for the Republican nomination 12 00:00:34,360 --> 00:00:35,280 Speaker 4: in twenty twenty four. 13 00:00:35,479 --> 00:00:38,720 Speaker 5: That's all straight ahead on Bloomberg day Break Weekend on 14 00:00:38,880 --> 00:00:41,720 Speaker 5: Bloomberg E Love the three own New York, Bloomberg ninety 15 00:00:41,800 --> 00:00:45,400 Speaker 5: nine to one, Washington, DC, Bloomberg one O six one, Boston, 16 00:00:45,440 --> 00:00:50,240 Speaker 5: Bloomberg nine sixty, San Francisco, DAB Digital Radio, London, Sirius 17 00:00:50,400 --> 00:00:53,640 Speaker 5: XM one nineteen and around the world on Bloomberg Radio 18 00:00:53,720 --> 00:00:56,040 Speaker 5: dot com and via the Bloomberg Business App. 19 00:01:00,040 --> 00:01:01,840 Speaker 1: Good day to you. I'm Tom Busby, and we begin 20 00:01:01,920 --> 00:01:06,520 Speaker 1: today's program with Apple's upcoming Worldwide Developers Conference at it's 21 00:01:06,560 --> 00:01:09,840 Speaker 1: Cooper Tino, California headquarters. And this one could be a 22 00:01:10,040 --> 00:01:14,240 Speaker 1: very important one for Apple executives and Apple investors. And 23 00:01:14,319 --> 00:01:17,399 Speaker 1: joining me to talk about why is Bloomberg's Mark German 24 00:01:17,480 --> 00:01:21,760 Speaker 1: our report around all things Apple. Mark, Thanks for joining us, Thanks. 25 00:01:21,480 --> 00:01:23,679 Speaker 6: For having me. Yeah, this is certainly probably going to 26 00:01:23,680 --> 00:01:27,560 Speaker 6: be Apple's biggest launch event in the last decade, certainly 27 00:01:27,600 --> 00:01:30,759 Speaker 6: since the Apple Watch was announced in twenty fourteen. This 28 00:01:30,800 --> 00:01:35,480 Speaker 6: is their annual developer conference, typically software focused, this time 29 00:01:35,760 --> 00:01:39,200 Speaker 6: first major new products in a decade, major software updates 30 00:01:39,200 --> 00:01:42,520 Speaker 6: across the board, as well as new max Well. 31 00:01:42,360 --> 00:01:45,120 Speaker 1: It's a laundry list of new things, but let's start 32 00:01:45,160 --> 00:01:47,640 Speaker 1: with what I think will garner the biggest headlines. That 33 00:01:47,760 --> 00:01:52,840 Speaker 1: mixed reality headset, the first major new product category since 34 00:01:52,840 --> 00:01:54,320 Speaker 1: the Watch right almost a decade. 35 00:01:54,760 --> 00:01:57,880 Speaker 6: Right, that's certainly going to be the entree, so to speak, 36 00:01:57,960 --> 00:02:00,720 Speaker 6: of the launch and the focus of Apple for the 37 00:02:00,760 --> 00:02:05,080 Speaker 6: foreseeable future. This is Apple trying to create an XR 38 00:02:05,200 --> 00:02:07,840 Speaker 6: or a mixed reality market. The device is going to 39 00:02:07,880 --> 00:02:12,240 Speaker 6: be the most premium, high end and powerful headset on 40 00:02:12,280 --> 00:02:15,240 Speaker 6: the market. It's going to cost roughly three thousand dollars. 41 00:02:15,240 --> 00:02:17,239 Speaker 6: Apple is not going to be profiting off this thing. 42 00:02:17,880 --> 00:02:20,480 Speaker 6: That's how expensive the technologies that go into it are. 43 00:02:20,720 --> 00:02:24,480 Speaker 6: It's going to use metal, carbon, fiber, and glass. You're 44 00:02:24,520 --> 00:02:26,440 Speaker 6: going to be able to do everything you would do 45 00:02:26,520 --> 00:02:29,080 Speaker 6: in a Mac but in a virtual three D space. 46 00:02:29,600 --> 00:02:31,560 Speaker 6: You're going to be able to move in between a 47 00:02:31,639 --> 00:02:35,240 Speaker 6: virtual reality world in an augmented reality world, which means 48 00:02:35,639 --> 00:02:38,040 Speaker 6: at one point you could be fully enclosed you see 49 00:02:38,040 --> 00:02:41,600 Speaker 6: nothing but the content in front of you. At other points, 50 00:02:41,600 --> 00:02:44,080 Speaker 6: you'll flick a dial on the top right of the headset, 51 00:02:44,080 --> 00:02:46,040 Speaker 6: similar to the dial on the side of the Apple Watch. 52 00:02:46,440 --> 00:02:49,120 Speaker 6: It'll turn on these powerful cameras. There's about a dozen 53 00:02:49,120 --> 00:02:51,959 Speaker 6: of them outside, and you'll essentially see what's in front 54 00:02:51,960 --> 00:02:54,120 Speaker 6: of you, just like you're wearing normal glasses or wearing 55 00:02:54,160 --> 00:02:59,040 Speaker 6: nothing on your face. You'll be able to do productivity, messaging, gaming, 56 00:02:59,320 --> 00:03:02,679 Speaker 6: a virtual reac version of FaceTime. So it's going to 57 00:03:02,720 --> 00:03:05,480 Speaker 6: be pretty wide ranging, and this is Apple's big entry 58 00:03:05,480 --> 00:03:06,120 Speaker 6: into the space. 59 00:03:07,080 --> 00:03:10,760 Speaker 1: Now, a sidebar before we continue on Apple is just 60 00:03:10,840 --> 00:03:14,680 Speaker 1: this past week Meta announcing a five hundred dollars mixed 61 00:03:14,720 --> 00:03:18,359 Speaker 1: reality headset. So trying to take some thunder away from. 62 00:03:18,200 --> 00:03:19,840 Speaker 7: Apple, do you think certainly? 63 00:03:19,919 --> 00:03:23,160 Speaker 6: I've used the Quest three, and at five hundred dollars, 64 00:03:23,160 --> 00:03:24,799 Speaker 6: it's going to be about a fifth at the price 65 00:03:24,800 --> 00:03:27,840 Speaker 6: of Apple's product, but I think it's more than a 66 00:03:27,840 --> 00:03:31,000 Speaker 6: fifth as good. I think it's quite impressive. The video 67 00:03:31,120 --> 00:03:33,920 Speaker 6: pass through mode they're going to be using on this device. 68 00:03:33,919 --> 00:03:35,560 Speaker 6: It's not going to be as good as Apples, but 69 00:03:35,600 --> 00:03:38,520 Speaker 6: it's much better than the existing Meta headset, the Quest 70 00:03:38,520 --> 00:03:40,640 Speaker 6: two in the market that launched a couple of years ago. 71 00:03:40,960 --> 00:03:43,880 Speaker 6: So I certainly think what you're seeing here is a 72 00:03:44,000 --> 00:03:48,920 Speaker 6: potential rematch between Apple and another player instead of Google. 73 00:03:48,960 --> 00:03:51,680 Speaker 6: This time it's Meta in terms of Apple wanting to 74 00:03:51,680 --> 00:03:53,960 Speaker 6: own the high end of the market and Meta owning 75 00:03:53,960 --> 00:03:55,680 Speaker 6: the loan in the market, just like Apple owns high 76 00:03:55,760 --> 00:03:58,240 Speaker 6: end of the phone market and Google owns the low end. 77 00:03:58,400 --> 00:04:00,720 Speaker 6: Apple and the high end of the XR market Metal 78 00:04:00,880 --> 00:04:03,360 Speaker 6: on the low end, and so Meta's really replaced Google 79 00:04:03,360 --> 00:04:05,480 Speaker 6: as the one at the frontier here. 80 00:04:05,800 --> 00:04:08,880 Speaker 1: Yeah, and when worlds collide, Well, let's go back to 81 00:04:08,920 --> 00:04:12,280 Speaker 1: some of the other exciting new products and updates that 82 00:04:12,320 --> 00:04:14,680 Speaker 1: Apple we think Apple is going to have, And let's 83 00:04:14,680 --> 00:04:17,720 Speaker 1: start with the new XROS operating system, so. 84 00:04:17,640 --> 00:04:21,880 Speaker 6: That XROS operating system is a version of iOS that 85 00:04:22,440 --> 00:04:24,719 Speaker 6: is going to run on this mixed reality headset. So 86 00:04:24,720 --> 00:04:27,200 Speaker 6: they've created a whole new operating system. They're pushing for 87 00:04:27,240 --> 00:04:29,840 Speaker 6: a whole new app store and an app ecosystem to 88 00:04:29,920 --> 00:04:30,760 Speaker 6: run on the setset. 89 00:04:31,600 --> 00:04:35,200 Speaker 1: And continuing on operating systems, there's a new iOS seventeen, 90 00:04:35,440 --> 00:04:39,120 Speaker 1: an iPad OS seventeen, and a macOS fourteen. 91 00:04:39,320 --> 00:04:41,480 Speaker 6: So macOS fourteen that's going to be the new software 92 00:04:41,520 --> 00:04:43,880 Speaker 6: update that runs on the Mac. Right not expecting major 93 00:04:43,960 --> 00:04:47,680 Speaker 6: changes there. iPad OS seventeen you'll see some minor improvements 94 00:04:47,720 --> 00:04:50,800 Speaker 6: the multitasking. You'll also see the health app on the 95 00:04:50,839 --> 00:04:54,159 Speaker 6: iPad for the first time. iOS seventeen you'll see a 96 00:04:54,160 --> 00:04:58,000 Speaker 6: new journaling app so you can journal different locations you're 97 00:04:58,000 --> 00:05:00,480 Speaker 6: at or different activities are doing and share it with friends. 98 00:05:00,880 --> 00:05:04,520 Speaker 6: There'll be updates to the wallet app on the device 99 00:05:04,560 --> 00:05:07,240 Speaker 6: as well, in a new smart home feature that can 100 00:05:07,279 --> 00:05:09,360 Speaker 6: turn the iPhone if you rotate it and put it 101 00:05:09,400 --> 00:05:12,680 Speaker 6: in lock mode, into a smart home display so to speak. 102 00:05:12,720 --> 00:05:15,280 Speaker 6: So quite a few little enhancements across the board on 103 00:05:15,320 --> 00:05:17,239 Speaker 6: the iPhone and the iPad and the Mac as well, 104 00:05:17,760 --> 00:05:20,320 Speaker 6: and then you'll also see Watch OS ten that's going 105 00:05:20,400 --> 00:05:22,599 Speaker 6: to be a pretty big update to the Apple Watch software, 106 00:05:22,800 --> 00:05:25,400 Speaker 6: will bring widgets to the forefront of the operating system. 107 00:05:25,600 --> 00:05:27,920 Speaker 6: I think that will be pretty interesting to consumers as well. 108 00:05:28,600 --> 00:05:31,400 Speaker 1: And as for hardware, not just the mixed reality headset, 109 00:05:31,400 --> 00:05:33,719 Speaker 1: but also new MacBooks. 110 00:05:33,240 --> 00:05:36,360 Speaker 6: There's going to be multiple new Macs. I'm expecting a 111 00:05:36,480 --> 00:05:39,080 Speaker 6: new version of the MacBook Air, a fifteen inch MacBook 112 00:05:39,080 --> 00:05:42,560 Speaker 6: Air with an M two chip, so it'll operate similarly 113 00:05:42,600 --> 00:05:46,400 Speaker 6: and look the same as the thirteen inch Air introduced 114 00:05:46,560 --> 00:05:50,120 Speaker 6: last year at WWDC, but obviously it'll be bigger with 115 00:05:50,200 --> 00:05:52,479 Speaker 6: that bigger fifteen inch panel. That's something that people have 116 00:05:52,480 --> 00:05:55,679 Speaker 6: been clamoring for for over a decade, and so Apple 117 00:05:55,760 --> 00:05:57,960 Speaker 6: is going to be delivering there. They'll also see the 118 00:05:57,960 --> 00:06:01,279 Speaker 6: company's first M two Ultra chip. That's an extremely high 119 00:06:01,400 --> 00:06:04,839 Speaker 6: end chip with up to seventy six graphics scores, essentially 120 00:06:05,200 --> 00:06:08,000 Speaker 6: ten x what you're getting on a low end Mac 121 00:06:08,120 --> 00:06:11,000 Speaker 6: right a low in MacBook Air, and that machine will 122 00:06:11,040 --> 00:06:14,960 Speaker 6: be its highest performing chip for machines like the Mac 123 00:06:15,040 --> 00:06:18,719 Speaker 6: Studio and potentially the Mac Pro. So really something for 124 00:06:18,800 --> 00:06:20,520 Speaker 6: everyone across the board at this launch. 125 00:06:20,920 --> 00:06:21,839 Speaker 5: Wow. Wow. 126 00:06:22,160 --> 00:06:27,920 Speaker 1: Now, and preceding this week's upcoming conference, last week, Apple 127 00:06:28,080 --> 00:06:32,160 Speaker 1: announced the plans for its retail stores and a big expansion. 128 00:06:32,480 --> 00:06:33,680 Speaker 1: What did you tell us more about that? 129 00:06:34,400 --> 00:06:38,800 Speaker 6: Yes, so Apple actually didn't announce these stores. We're reporting 130 00:06:38,800 --> 00:06:42,840 Speaker 6: on these stores based on my insight sources. Apple is 131 00:06:43,040 --> 00:06:46,320 Speaker 6: proposing or working on or developing over fifty new stores 132 00:06:46,640 --> 00:06:50,000 Speaker 6: for opening across the next four years, including new stores 133 00:06:50,000 --> 00:06:54,480 Speaker 6: in China, India, stores in Detroit and Miami, new store 134 00:06:54,520 --> 00:06:58,280 Speaker 6: in southern California and Orange County, and upgrade to its 135 00:06:58,360 --> 00:07:01,760 Speaker 6: Opera store in Paris that's a very famous shopping district. 136 00:07:02,480 --> 00:07:06,480 Speaker 6: New stores in Canada, across Europe, a new store in 137 00:07:06,520 --> 00:07:09,880 Speaker 6: Abu Dhabi, a relocated store in Perth, Australia. So really 138 00:07:10,120 --> 00:07:13,000 Speaker 6: an across the board expansion on the retail segment. 139 00:07:13,720 --> 00:07:14,960 Speaker 5: Got it? Got it? Wow? 140 00:07:15,560 --> 00:07:17,520 Speaker 1: Now let's talk a little bit. Let's shift gears talk 141 00:07:17,560 --> 00:07:21,800 Speaker 1: about artificial intelligence chat GPT, the latest technological tool for 142 00:07:21,960 --> 00:07:25,840 Speaker 1: so many companies, so many consumers. AI getting Wall Street 143 00:07:25,840 --> 00:07:29,040 Speaker 1: excited too, and Apple CEO Tim Cook says it has 144 00:07:29,080 --> 00:07:33,480 Speaker 1: its risks, but Apple is all in on artificial intelligence. 145 00:07:33,560 --> 00:07:34,320 Speaker 1: Let's go a listen. 146 00:07:34,560 --> 00:07:38,160 Speaker 8: I do think it's very important to be delivered and 147 00:07:38,200 --> 00:07:43,120 Speaker 8: thoughtful in how you approach these things. And there's a 148 00:07:43,200 --> 00:07:46,280 Speaker 8: number of issues that need to be sorted, as is 149 00:07:46,320 --> 00:07:49,480 Speaker 8: being talked about in a number of different places. But 150 00:07:49,600 --> 00:07:55,840 Speaker 8: the potential is certainly very interesting. And we've obviously made 151 00:07:55,960 --> 00:08:01,240 Speaker 8: enormous progress integrating AI and machine learning throughout our ecosystem, 152 00:08:01,720 --> 00:08:05,840 Speaker 8: and we've weaved it into products and features for many years. 153 00:08:06,520 --> 00:08:06,840 Speaker 5: Well. 154 00:08:06,920 --> 00:08:09,240 Speaker 1: Based on what we heard Tim Cook say last week, 155 00:08:09,320 --> 00:08:11,760 Speaker 1: how does AI fit into Apple's future? 156 00:08:11,760 --> 00:08:12,000 Speaker 3: Mark? 157 00:08:12,080 --> 00:08:14,480 Speaker 6: You know, I think AI or applied AI as a 158 00:08:14,560 --> 00:08:17,320 Speaker 6: call it is very key to the company's future. I 159 00:08:17,320 --> 00:08:20,360 Speaker 6: think this is certainly something that they're trying to implement 160 00:08:20,400 --> 00:08:23,400 Speaker 6: across their product lines, from taking a picture to using 161 00:08:23,640 --> 00:08:26,800 Speaker 6: handwa washed detection on the watch, to using some of 162 00:08:26,800 --> 00:08:29,240 Speaker 6: the health features on the iPhone and the iPad. Right, 163 00:08:29,560 --> 00:08:33,680 Speaker 6: But I don't think that we're to expect a major 164 00:08:33,840 --> 00:08:37,199 Speaker 6: chat GPT like product from Apple or an overhaul of 165 00:08:37,320 --> 00:08:39,640 Speaker 6: Siri this year. I think that's something that's probably going 166 00:08:39,720 --> 00:08:41,560 Speaker 6: to come next year or the year after at the earliest. 167 00:08:42,600 --> 00:08:46,280 Speaker 1: Now, all the things we talked about today that looking 168 00:08:46,320 --> 00:08:50,240 Speaker 1: forward to this coming week, let's talk about Apple's big 169 00:08:50,280 --> 00:08:54,160 Speaker 1: money maker, the iPhone, and what does all this mean 170 00:08:54,679 --> 00:08:58,120 Speaker 1: for the iPhone? Is it you know? Is it moving 171 00:08:58,160 --> 00:09:01,960 Speaker 1: it forward? Are we expecting more from the iPhone this 172 00:09:02,080 --> 00:09:02,880 Speaker 1: year or soon? 173 00:09:03,800 --> 00:09:05,800 Speaker 6: So there'll be a pretty big iPhone hardware update in 174 00:09:05,840 --> 00:09:10,079 Speaker 6: the fall. That's the iPhone fifteen line one. Big change there. 175 00:09:10,280 --> 00:09:12,880 Speaker 6: On the pro models, they're going to be moving from 176 00:09:13,200 --> 00:09:19,600 Speaker 6: a stainless steel and glass frame to more of a 177 00:09:19,720 --> 00:09:23,160 Speaker 6: titanium frame, which I think is going to be quite interesting, 178 00:09:23,480 --> 00:09:26,120 Speaker 6: make the phone a little bit more durable, potentially make 179 00:09:26,160 --> 00:09:28,480 Speaker 6: it lighter as well, and so I think that new 180 00:09:28,520 --> 00:09:30,640 Speaker 6: design is something people are going to be looking forward to. 181 00:09:31,400 --> 00:09:33,800 Speaker 6: On the highest end model with the biggest screen, you're 182 00:09:33,840 --> 00:09:36,000 Speaker 6: going to have what is known as a periscope camera. 183 00:09:36,520 --> 00:09:38,560 Speaker 6: What that is going to do is allow the camera 184 00:09:38,679 --> 00:09:43,080 Speaker 6: to have a wider range of zoom, but optical zoom, 185 00:09:43,080 --> 00:09:46,360 Speaker 6: which means that the camera itself, the scope is actually 186 00:09:46,400 --> 00:09:49,280 Speaker 6: longer and twisted in the frame, and that actually can 187 00:09:49,320 --> 00:09:52,040 Speaker 6: get a much more detailed picture than the digital zoom 188 00:09:52,280 --> 00:09:54,760 Speaker 6: that the iPhone on other phones today really rely on 189 00:09:54,800 --> 00:09:58,000 Speaker 6: for that wide range of zoom. So big change is there. 190 00:09:58,280 --> 00:10:00,680 Speaker 6: And then on the lower end iPhones, they're going to 191 00:10:00,720 --> 00:10:03,480 Speaker 6: add the dynamic island, which is that new pill shape 192 00:10:03,480 --> 00:10:06,360 Speaker 6: at the top where you can control some of your alerts, identifications, 193 00:10:06,400 --> 00:10:08,600 Speaker 6: and your music and maps. On the high end iPhones today, 194 00:10:09,120 --> 00:10:11,240 Speaker 6: that'll be coming down the line, as well as some 195 00:10:11,280 --> 00:10:13,240 Speaker 6: of the camera upgrades that you saw on the high 196 00:10:13,280 --> 00:10:16,200 Speaker 6: end iPhones last year coming down the range as well. 197 00:10:16,679 --> 00:10:19,760 Speaker 6: And also on the high end phones, you'll see a 198 00:10:19,800 --> 00:10:23,640 Speaker 6: faster processor that'll be like the A seventeen processor, whereas 199 00:10:23,800 --> 00:10:27,400 Speaker 6: the lower niphones will get last year's pro processor. So 200 00:10:27,520 --> 00:10:29,080 Speaker 6: that's going to be a year of a year upgrade 201 00:10:29,080 --> 00:10:29,440 Speaker 6: as well. 202 00:10:30,000 --> 00:10:30,160 Speaker 5: Well. 203 00:10:30,200 --> 00:10:32,640 Speaker 1: There is a lot to look forward to this week 204 00:10:32,720 --> 00:10:35,240 Speaker 1: and in the near future. And thank you Mark. That 205 00:10:35,360 --> 00:10:38,760 Speaker 1: was Bloomberg's Apple reporter Mark German. And coming up on 206 00:10:38,760 --> 00:10:42,920 Speaker 1: Bloomberg day Break weekend, British Prime Minister Rishi Sunak's big visit. 207 00:10:43,000 --> 00:10:43,720 Speaker 7: To the US. 208 00:10:44,280 --> 00:10:57,720 Speaker 1: I'm Tom buzby you and this is Bloomberg. This is 209 00:10:57,720 --> 00:11:00,720 Speaker 1: Bloomberg day Break weekend, our globalk ahead of the top 210 00:11:00,760 --> 00:11:04,040 Speaker 1: stories for investors in the coming week. I'm Tom Busby 211 00:11:04,120 --> 00:11:06,920 Speaker 1: in New York. Up later in our program, a growing 212 00:11:07,000 --> 00:11:12,520 Speaker 1: number of Republicans challenging former President Trump's reelection efforts. But first, 213 00:11:12,520 --> 00:11:15,520 Speaker 1: the British Prime Minister gets his first White House meeting 214 00:11:15,559 --> 00:11:17,960 Speaker 1: with President Biden in the coming week, and for more, 215 00:11:18,440 --> 00:11:20,959 Speaker 1: let's head to London and bring in Bloomberg Daybreak europe 216 00:11:21,000 --> 00:11:23,520 Speaker 1: Banker Caroline Hepger Tom Rischie. 217 00:11:23,520 --> 00:11:27,680 Speaker 2: Sunak will travel to Washington for talks aimed at enhancing 218 00:11:27,800 --> 00:11:30,880 Speaker 2: cooperation and coordination between the UK and US on the 219 00:11:30,960 --> 00:11:35,040 Speaker 2: economic challenges that will define our future, so we're told, 220 00:11:35,400 --> 00:11:38,560 Speaker 2: and Bloomberg's UK Government editor Alex Morales will be on 221 00:11:38,600 --> 00:11:39,920 Speaker 2: the plane with the PM. 222 00:11:39,960 --> 00:11:42,280 Speaker 9: He joins me. Now, so Sunak's. 223 00:11:41,840 --> 00:11:44,160 Speaker 2: Visit to the States, I mean it's not going to 224 00:11:44,440 --> 00:11:50,560 Speaker 2: deliver this long touted, hope for but unlikely trade deal 225 00:11:50,640 --> 00:11:52,000 Speaker 2: between the UK and US. 226 00:11:54,000 --> 00:11:57,920 Speaker 10: Well in a short answer, No, I mean, first of all, 227 00:11:57,920 --> 00:11:59,520 Speaker 10: it's important to say it's his first visit to the 228 00:11:59,559 --> 00:12:02,160 Speaker 10: White House as Prime Minister. I mean he's met Joe 229 00:12:02,200 --> 00:12:05,520 Speaker 10: Biden a number of times already. I think the first 230 00:12:05,600 --> 00:12:09,440 Speaker 10: time was back in Bali at the G twenty, but 231 00:12:09,520 --> 00:12:12,920 Speaker 10: he also met in San Diego earlier in this year 232 00:12:12,960 --> 00:12:16,400 Speaker 10: for the Big Orchest deal, and then more recently in 233 00:12:16,440 --> 00:12:19,160 Speaker 10: Northern Ireland. And I guess they would have also spoken 234 00:12:19,160 --> 00:12:23,319 Speaker 10: at Hiroshima, but there was no official Bilab that's the 235 00:12:23,400 --> 00:12:28,440 Speaker 10: g Sevon meeting in May. But yes, he's visiting to 236 00:12:28,440 --> 00:12:32,079 Speaker 10: the White House. Number ten have been pretty clear they're 237 00:12:32,120 --> 00:12:36,200 Speaker 10: not going to bring up the topic of a trade deal, 238 00:12:37,600 --> 00:12:40,240 Speaker 10: and that's largely because the Biden administration has really made 239 00:12:40,240 --> 00:12:43,200 Speaker 10: it pretty clear that it's not a priority for them. No. 240 00:12:43,480 --> 00:12:47,080 Speaker 2: Indeed, I mean the UK has tried to secure these 241 00:12:47,280 --> 00:12:50,800 Speaker 2: deals with individual states which have you know, sort of 242 00:12:50,880 --> 00:12:53,360 Speaker 2: tried to ramp up ties between the UK and the 243 00:12:53,480 --> 00:12:56,800 Speaker 2: US on that basis. I mean, it's interesting, isn't it 244 00:12:56,840 --> 00:12:58,599 Speaker 2: that this will be the first White House visit And 245 00:12:59,040 --> 00:13:01,000 Speaker 2: you mentioned north in Ireland. I mean, that was the 246 00:13:01,080 --> 00:13:06,480 Speaker 2: last time that we saw President Biden here. He was 247 00:13:06,520 --> 00:13:09,800 Speaker 2: in northern Ireland and in the Republic of Ireland. Is 248 00:13:09,840 --> 00:13:13,160 Speaker 2: there still friction do you think on that issue? 249 00:13:14,440 --> 00:13:17,320 Speaker 10: Well, the White House pushed back against the notion that 250 00:13:17,360 --> 00:13:22,120 Speaker 10: Biden doesn't really like Britain. But what was fairly clear 251 00:13:22,320 --> 00:13:25,360 Speaker 10: from his visit is that when it comes to there's 252 00:13:25,360 --> 00:13:29,200 Speaker 10: a lot of warmth towards Ireland and much less warmth 253 00:13:29,720 --> 00:13:33,760 Speaker 10: towards the United Kingdom from the President. And that even 254 00:13:33,800 --> 00:13:38,400 Speaker 10: became clearer when he returned and he gave a briefing 255 00:13:38,600 --> 00:13:41,440 Speaker 10: and it sort of surfaced in the transcript. He'd said 256 00:13:41,480 --> 00:13:43,120 Speaker 10: he'd had to come over here to make sure the 257 00:13:43,160 --> 00:13:47,600 Speaker 10: Brits didn't screw around in Northern Ireland. So really, you know, 258 00:13:47,640 --> 00:13:49,560 Speaker 10: he likes to pick up his Irish heritage, and he 259 00:13:49,640 --> 00:13:52,959 Speaker 10: tried to flick a bit at his British heritage when 260 00:13:53,000 --> 00:13:55,120 Speaker 10: he was in Northern Ireland, and he had some English 261 00:13:55,160 --> 00:13:58,320 Speaker 10: heritage as well that he sort of emphasized, and that 262 00:13:58,360 --> 00:14:02,240 Speaker 10: was sort of a bone to the Brits who think 263 00:14:02,320 --> 00:14:06,920 Speaker 10: that maybe he doesn't quite like us very much. But yeah, 264 00:14:07,120 --> 00:14:08,640 Speaker 10: there seems to be a little bit of friction. 265 00:14:09,600 --> 00:14:13,760 Speaker 2: Okay, So that kind of point perhaps still of some contention. 266 00:14:14,559 --> 00:14:18,800 Speaker 2: How does the UK then respond to the Inflation Reduction Act? 267 00:14:18,840 --> 00:14:20,600 Speaker 2: Do you think that that is something that is going 268 00:14:20,640 --> 00:14:22,920 Speaker 2: to come up in these talks that are going to 269 00:14:22,920 --> 00:14:26,200 Speaker 2: be about kind of economics and about policy and about 270 00:14:27,040 --> 00:14:30,200 Speaker 2: you know, the relationship between the US and the UK. 271 00:14:30,360 --> 00:14:33,240 Speaker 2: The Inflation Reduction Act is simply huge in terms of 272 00:14:33,280 --> 00:14:37,320 Speaker 2: the subsidies that gives businesses to move, you know, towards 273 00:14:37,360 --> 00:14:41,280 Speaker 2: that energy and green transition. What do you think Sunac's 274 00:14:41,280 --> 00:14:42,480 Speaker 2: message is going to be on that? 275 00:14:44,040 --> 00:14:46,760 Speaker 10: Well, I'm sure so what wants to make sure that 276 00:14:46,800 --> 00:14:48,720 Speaker 10: I mean, as you said, it's a huge package, is 277 00:14:48,720 --> 00:14:52,440 Speaker 10: what three hundred and sixty nine billion dollars of subsidies 278 00:14:52,440 --> 00:14:55,200 Speaker 10: and tax breaks and just to sort of wind back. 279 00:14:55,240 --> 00:14:59,840 Speaker 10: The big concern amongst British companies is that it's just 280 00:15:00,080 --> 00:15:03,640 Speaker 10: it attracts investment to the United States that would otherwise 281 00:15:03,680 --> 00:15:07,360 Speaker 10: have gone to Britain. So you know there's been some 282 00:15:07,400 --> 00:15:10,960 Speaker 10: concern amongst ministers. When he was Business actually back in January, 283 00:15:11,080 --> 00:15:16,280 Speaker 10: Grant Shapps called it dangerous and Jeremy Hunt has said 284 00:15:16,280 --> 00:15:19,640 Speaker 10: that while he doesn't who's the chancellor obviously has said 285 00:15:19,640 --> 00:15:24,160 Speaker 10: that while he doesn't want to a subsidy race, he's 286 00:15:24,160 --> 00:15:26,160 Speaker 10: sort of hinted in recent weeks that the UK is 287 00:15:26,160 --> 00:15:29,920 Speaker 10: actually looking at some sort of subsidy response. I think 288 00:15:30,360 --> 00:15:33,280 Speaker 10: his exact words with subsidies have a role and that 289 00:15:33,320 --> 00:15:36,080 Speaker 10: Britain will make sure that we remain competitive. And he's 290 00:15:36,080 --> 00:15:39,280 Speaker 10: promised the UK response to both the US measures and 291 00:15:39,400 --> 00:15:42,240 Speaker 10: let's not forget that the EU launched a package of 292 00:15:42,280 --> 00:15:47,920 Speaker 10: messages sort of to counter the US effect. He's promised 293 00:15:48,840 --> 00:15:52,000 Speaker 10: a response by the full because obviously the danger is 294 00:15:52,040 --> 00:15:54,120 Speaker 10: that the UK ends up getting squeezed between these two 295 00:15:54,120 --> 00:15:56,680 Speaker 10: big powers and losing out on investment in both directions. 296 00:15:58,440 --> 00:16:04,320 Speaker 2: Yeah, on the foreign policy points, then Ukraine, Russia, China, 297 00:16:04,400 --> 00:16:07,520 Speaker 2: and the UK has been close to the US in 298 00:16:08,160 --> 00:16:11,360 Speaker 2: the support for Ukraine in terms of, you know, giving 299 00:16:11,440 --> 00:16:16,040 Speaker 2: weapons to Vladimir Zelenski. How do you think that the 300 00:16:16,120 --> 00:16:19,600 Speaker 2: discussions will be handled in terms of moving forwards when 301 00:16:19,600 --> 00:16:22,320 Speaker 2: it comes to the war in Europe? But also the 302 00:16:22,440 --> 00:16:26,880 Speaker 2: US is rhetoric increasingly tough rhetoric and actions against China. 303 00:16:28,720 --> 00:16:32,400 Speaker 10: Well. On Ukraine, I mean, it's almost arguable that the 304 00:16:32,520 --> 00:16:34,520 Speaker 10: UK has been ahead of the US and we were 305 00:16:34,520 --> 00:16:38,200 Speaker 10: the first country to provide main battle tanks to Ukraine, 306 00:16:38,840 --> 00:16:41,360 Speaker 10: and I think when now the country that's provided the 307 00:16:41,400 --> 00:16:43,360 Speaker 10: longest range missiles. 308 00:16:44,280 --> 00:16:45,400 Speaker 5: To the US. 309 00:16:45,520 --> 00:16:48,040 Speaker 10: But I think largely the two countries are in lockstep 310 00:16:48,080 --> 00:16:52,720 Speaker 10: on that, and certainly Biden's been very supportive of Ukraine 311 00:16:53,400 --> 00:16:56,720 Speaker 10: in a way that perhaps this publican predecessor might not 312 00:16:56,840 --> 00:17:01,160 Speaker 10: have been. And on China again, I think I think 313 00:17:01,440 --> 00:17:03,800 Speaker 10: there's a sort of similarity in the language. Both both 314 00:17:03,840 --> 00:17:08,800 Speaker 10: countries are wary that China is a very important economic 315 00:17:08,840 --> 00:17:12,360 Speaker 10: character and that they need to maintain an economic relationship 316 00:17:12,400 --> 00:17:17,040 Speaker 10: with China, but they're also wary of China's growing sort 317 00:17:17,040 --> 00:17:23,040 Speaker 10: of nationalism and the danger it poses in the Indo Pacific, 318 00:17:23,680 --> 00:17:27,119 Speaker 10: and perhaps the visit that Sunak made to the US 319 00:17:27,880 --> 00:17:32,800 Speaker 10: earlier this year to San Diego, where the US, the 320 00:17:32,920 --> 00:17:37,040 Speaker 10: UK and Australia sort of fleshed out the details behind 321 00:17:37,080 --> 00:17:40,040 Speaker 10: their orchest packs. That's that's an indication of how seriously 322 00:17:40,080 --> 00:17:43,000 Speaker 10: they hit the China threat. It's sort of a big, 323 00:17:43,520 --> 00:17:46,000 Speaker 10: multi billion dollar plan for a new feat feet of 324 00:17:46,200 --> 00:17:50,719 Speaker 10: nuclear powered submarines to patrol that that region. 325 00:17:51,720 --> 00:17:54,600 Speaker 2: Yeah, absolutely, and the White House has pointed to this 326 00:17:55,040 --> 00:17:58,080 Speaker 2: as an area for discussion, you know, reviewing a range 327 00:17:58,080 --> 00:18:00,520 Speaker 2: of global issues, is how they put it. 328 00:18:01,520 --> 00:18:02,600 Speaker 9: I wonder whether. 329 00:18:02,359 --> 00:18:07,000 Speaker 2: There are areas for photo ops but also slip ups. 330 00:18:07,119 --> 00:18:11,320 Speaker 2: That's always something that we are kind of keenly aware of. 331 00:18:11,400 --> 00:18:13,840 Speaker 2: I mean, it is a big, big moment, isn't it. 332 00:18:13,920 --> 00:18:16,720 Speaker 2: He's gonna arrive on the seventh of June, then he'll 333 00:18:16,760 --> 00:18:18,520 Speaker 2: be in the White House the following day, and then 334 00:18:18,520 --> 00:18:20,840 Speaker 2: he's meant to also be meeting congressional leaders. 335 00:18:21,000 --> 00:18:23,280 Speaker 9: You're going to be on the plane with him. 336 00:18:23,400 --> 00:18:25,000 Speaker 2: Do you think there'll be a chance to ask him 337 00:18:25,040 --> 00:18:29,000 Speaker 2: some questions, to pose some questions to Rishie Sunak. Are 338 00:18:29,040 --> 00:18:33,240 Speaker 2: there any kind of he's under pressure politically at home? Surely, 339 00:18:33,280 --> 00:18:35,560 Speaker 2: isn't he on quite a number of fronts? 340 00:18:36,720 --> 00:18:38,399 Speaker 10: Yeah, I mean certainly. I mean what we don't know 341 00:18:38,440 --> 00:18:39,800 Speaker 10: is if there's going to be a press converty yet. 342 00:18:39,800 --> 00:18:42,320 Speaker 10: But on the plane the Prime Minister will normally come 343 00:18:42,320 --> 00:18:45,840 Speaker 10: back and speaking what's called a huddle. I think the 344 00:18:45,880 --> 00:18:51,400 Speaker 10: photos and our legendary, so you know, each reporter will 345 00:18:51,400 --> 00:18:55,200 Speaker 10: get probably one question to the Prime Minister and then 346 00:18:56,680 --> 00:18:58,400 Speaker 10: you know we'll ask him about a range of issues 347 00:18:58,440 --> 00:19:00,199 Speaker 10: and it won't just be about the US visit. So 348 00:19:00,640 --> 00:19:02,719 Speaker 10: I guess there's the chance that he says something on 349 00:19:02,760 --> 00:19:07,320 Speaker 10: the plane referring to its domestic issues that you know 350 00:19:07,400 --> 00:19:11,480 Speaker 10: that are that are preoccupying the British media at the moment. 351 00:19:12,560 --> 00:19:15,520 Speaker 10: In terms of in terms of potential for embarrassment, I mean, 352 00:19:15,720 --> 00:19:21,880 Speaker 10: Richie sec is a pretty assured operator. It's it would 353 00:19:21,880 --> 00:19:25,960 Speaker 10: be unusual for him to misspeak. But you know, on 354 00:19:26,160 --> 00:19:28,600 Speaker 10: on on any international trip, there's the potential for something. 355 00:19:28,400 --> 00:19:31,960 Speaker 2: To get wrong, yeah, or something to peque our interests. 356 00:19:32,000 --> 00:19:34,480 Speaker 2: I know you'll be there with your question for the PM. 357 00:19:35,000 --> 00:19:37,679 Speaker 2: Uh and Alex thank you so much for being with us. 358 00:19:37,720 --> 00:19:41,400 Speaker 2: Bloomberg's UK Government editor Alex Morales, of course, who will 359 00:19:41,400 --> 00:19:44,600 Speaker 2: be in Washington, DC and following the movements of the 360 00:19:44,640 --> 00:19:48,200 Speaker 2: British Prime Minister Richie Sunac on his visit at State Side. 361 00:19:48,200 --> 00:19:50,199 Speaker 2: I'm Caroline Hepgar here in London. You can catch us 362 00:19:50,200 --> 00:19:52,560 Speaker 2: every weekday morning here for Bloomberg Daybreak you're at beginning 363 00:19:52,560 --> 00:19:53,600 Speaker 2: at six am in London. 364 00:19:53,760 --> 00:19:55,120 Speaker 9: That's one am on Wall Street. 365 00:19:55,240 --> 00:19:58,359 Speaker 1: Tom beg you, Caroline. That was Bloomberg Daybreak Europe Post 366 00:19:58,600 --> 00:20:01,840 Speaker 1: Caroline Hepgar and coming up on Bloomberg day Break weekend, 367 00:20:02,240 --> 00:20:06,120 Speaker 1: we talk about Japan's economic recovery and preview this week's 368 00:20:06,520 --> 00:20:10,919 Speaker 1: GDP report. I'm Tom Busby and this is Bloomberg. 369 00:20:10,720 --> 00:20:24,880 Speaker 11: Broadcasting live from the Bloomberg it a active Brokers studio 370 00:20:25,000 --> 00:20:28,200 Speaker 11: in New York. Bloomberg elemon three oh to Washington, d C, 371 00:20:28,320 --> 00:20:31,720 Speaker 11: Bloomberg ninety nine one to Boston, Bloomberg one oh six 372 00:20:31,840 --> 00:20:35,119 Speaker 11: one to San Francisco, Bloomberg nine sixteen to the country, 373 00:20:35,200 --> 00:20:39,080 Speaker 11: Sirius XM channel one to nineteen to London DAB Digital 374 00:20:39,200 --> 00:20:42,119 Speaker 11: Radio and around the globe the Bloomberg Business app in 375 00:20:42,200 --> 00:20:46,320 Speaker 11: Bloomberg Radio dot Com. This is Bloomberg Daybreak weekend. 376 00:20:52,480 --> 00:20:54,600 Speaker 1: I'm Tom Busby in New York with your global look 377 00:20:54,600 --> 00:20:57,560 Speaker 1: ahead at the top stories for investors in the coming week. 378 00:20:57,840 --> 00:21:00,320 Speaker 1: And this week we get some important economic data coming 379 00:21:00,359 --> 00:21:04,080 Speaker 1: out of Japan, including the latest GDP report. For more, 380 00:21:04,160 --> 00:21:06,359 Speaker 1: let's go to Hong Kong and Bloomberg day Break Asia 381 00:21:06,400 --> 00:21:07,760 Speaker 1: host Brian Curtis. 382 00:21:08,000 --> 00:21:10,000 Speaker 3: Tom, we look at some of the cross currents in 383 00:21:10,040 --> 00:21:12,880 Speaker 3: the Japanese economy as we look forward to the next 384 00:21:12,880 --> 00:21:16,359 Speaker 3: reading on GDP. Good time to talk about the Japanese 385 00:21:16,440 --> 00:21:21,399 Speaker 3: economy now. Japan's businesses increased spending for the fourth straight quarter. 386 00:21:21,800 --> 00:21:25,560 Speaker 3: That was a sign of the country's recovery from the pandemic. However, 387 00:21:25,960 --> 00:21:29,919 Speaker 3: a surprise drop in industrial production does suggest a week's 388 00:21:29,920 --> 00:21:33,000 Speaker 3: start to the second quarter, and it raises the risk 389 00:21:33,119 --> 00:21:35,199 Speaker 3: that the bounce in GDP that we saw in the 390 00:21:35,240 --> 00:21:38,800 Speaker 3: first quarter could lose some vigor in the second quarter. 391 00:21:39,080 --> 00:21:43,320 Speaker 3: Paul Jackson, Bloomberg's Japan, Korea Economy and Government editor for Asia, 392 00:21:43,720 --> 00:21:45,240 Speaker 3: joins us So. 393 00:21:45,280 --> 00:21:45,560 Speaker 9: Paul. 394 00:21:45,880 --> 00:21:48,639 Speaker 3: We note that the capex number was pretty strong, up 395 00:21:48,680 --> 00:21:53,480 Speaker 3: eleven percent year on year, but the factory output number disappointing. 396 00:21:53,640 --> 00:21:56,280 Speaker 3: What are we expecting for this next reading on GDP 397 00:21:56,400 --> 00:21:57,120 Speaker 3: in the coming week. 398 00:21:57,280 --> 00:22:02,000 Speaker 12: First of all, we've the reading all first quarter GDP 399 00:22:03,040 --> 00:22:06,359 Speaker 12: should still be a positive. I think we should see 400 00:22:06,400 --> 00:22:11,760 Speaker 12: signs that there is this moderate recovery coming through, helped 401 00:22:11,880 --> 00:22:15,920 Speaker 12: and driven by this influx of foreign tourists coming in 402 00:22:16,320 --> 00:22:22,120 Speaker 12: and continued consumer spending, lifting of more pandemic measures. And 403 00:22:22,280 --> 00:22:27,600 Speaker 12: this capex figure shows that companies are still optimistic and 404 00:22:27,680 --> 00:22:31,240 Speaker 12: buoyant that the recovery will continue for now. And of 405 00:22:31,320 --> 00:22:35,320 Speaker 12: course they need to invest in more equipment because they've 406 00:22:35,359 --> 00:22:39,000 Speaker 12: got this labor shortage within the country and now with 407 00:22:39,080 --> 00:22:41,800 Speaker 12: all these people you know, flooding back to visit Japan, 408 00:22:42,440 --> 00:22:45,720 Speaker 12: especially in the service sector, they need to ramp up 409 00:22:45,760 --> 00:22:50,560 Speaker 12: investment so that they can deal with more people. So 410 00:22:50,760 --> 00:22:53,960 Speaker 12: I think that when we get the revised GDP figures 411 00:22:54,000 --> 00:22:59,040 Speaker 12: through next week, they should still be positive and appointing 412 00:22:59,080 --> 00:23:02,520 Speaker 12: to the moderate recovery. Now where we go from here, 413 00:23:03,160 --> 00:23:06,600 Speaker 12: As you've noticed those production figures for the start of 414 00:23:06,640 --> 00:23:10,639 Speaker 12: the second quarter were disappointing. We do have some dark 415 00:23:10,680 --> 00:23:14,400 Speaker 12: clouds on the horizon. And another thing to look at 416 00:23:14,600 --> 00:23:19,000 Speaker 12: is those poor figures that came out of China yesterday 417 00:23:19,400 --> 00:23:23,080 Speaker 12: showing that the recovery there isn't panning out in the 418 00:23:23,119 --> 00:23:26,840 Speaker 12: way people had hoped. So there are dark clouds, but 419 00:23:26,920 --> 00:23:30,560 Speaker 12: it's still a pretty good environment for Prime Minister Forumyo 420 00:23:30,640 --> 00:23:34,240 Speaker 12: Kishida to even consider an early election. 421 00:23:34,480 --> 00:23:36,880 Speaker 3: Yeah, I was curious about to what degree Japan could 422 00:23:36,920 --> 00:23:39,880 Speaker 3: be benefiting from some of the weakness that we've seen 423 00:23:39,960 --> 00:23:43,000 Speaker 3: in China. I mean, on the one hand, obviously a 424 00:23:43,040 --> 00:23:47,080 Speaker 3: week China is not good for Japanese exports to the country. However, 425 00:23:47,200 --> 00:23:50,879 Speaker 3: in terms of attracting investment and travelers, and you already 426 00:23:50,920 --> 00:23:55,159 Speaker 3: mentioned that inbound tourism is doing pretty well. In a sense, 427 00:23:55,400 --> 00:24:00,640 Speaker 3: is Japan benefiting from some of China's troubles, I think. 428 00:24:00,480 --> 00:24:03,119 Speaker 12: On the whole, if you look at it, net, I 429 00:24:03,160 --> 00:24:08,280 Speaker 12: think it is a minus because, like most of the world, 430 00:24:08,320 --> 00:24:13,360 Speaker 12: were very dependent on China as a market and as 431 00:24:13,400 --> 00:24:19,040 Speaker 12: a producer in terms of the inbound actually the biggest 432 00:24:19,040 --> 00:24:24,919 Speaker 12: spenders in Japan are from China. So some economists are saying, hey, look, 433 00:24:25,320 --> 00:24:28,800 Speaker 12: you know the moment, we've got a great boost to 434 00:24:28,880 --> 00:24:33,160 Speaker 12: Japan's economy from the inbound spending, and we still don't 435 00:24:33,160 --> 00:24:38,040 Speaker 12: have the Chinese tourists coming back yet. They will eventually 436 00:24:38,280 --> 00:24:41,280 Speaker 12: start coming, and that will be another driver for Japan. 437 00:24:41,400 --> 00:24:45,440 Speaker 12: So in that sense, some of the positives from China's 438 00:24:45,440 --> 00:24:48,000 Speaker 12: situation have yet to feed in. 439 00:24:48,880 --> 00:24:51,440 Speaker 3: So China's a big challenge, and you mentioned that there 440 00:24:51,480 --> 00:24:53,399 Speaker 3: are plenty of challenges. What else. 441 00:24:53,760 --> 00:24:59,160 Speaker 12: Inflation is by international standards not that high, just above 442 00:24:59,200 --> 00:25:04,639 Speaker 12: three percent in Japan, but that's kind of historically high 443 00:25:04,680 --> 00:25:09,399 Speaker 12: for Japan, the post abode of deflation and falling prices, 444 00:25:10,160 --> 00:25:14,879 Speaker 12: so you know, at some point economists are expecting the 445 00:25:15,240 --> 00:25:19,960 Speaker 12: kind of post pandemic spending splurge. To then segue into 446 00:25:20,280 --> 00:25:23,400 Speaker 12: wait a minute, you know, real wages are falling, prices 447 00:25:23,400 --> 00:25:26,960 Speaker 12: are going up, We've actually got less spending power, and 448 00:25:27,000 --> 00:25:32,000 Speaker 12: that you know, spending, consumer spending in real terms might 449 00:25:32,080 --> 00:25:35,840 Speaker 12: start to fall and then weigh on the economy. That's 450 00:25:35,880 --> 00:25:40,320 Speaker 12: obviously a concern for both the Prime Minister and for 451 00:25:40,720 --> 00:25:44,400 Speaker 12: the Bank of Japan. Bank of Japan has been trying 452 00:25:44,560 --> 00:25:49,639 Speaker 12: to generate stable inflation for more than a decade. You 453 00:25:49,680 --> 00:25:53,760 Speaker 12: would think they've achieved the mission over three percent, right, 454 00:25:53,840 --> 00:25:57,840 Speaker 12: because their targets two percent, But they're still sticking to 455 00:25:57,920 --> 00:26:01,000 Speaker 12: this view that what we've got here is a cost 456 00:26:01,160 --> 00:26:06,399 Speaker 12: push kind of transitory inflation phenomenon. The rest of the 457 00:26:06,440 --> 00:26:11,600 Speaker 12: world thinks otherwise. But in Japan, they're looking for more 458 00:26:11,760 --> 00:26:16,200 Speaker 12: sign of stronger wage growth that could support some kind 459 00:26:16,240 --> 00:26:20,280 Speaker 12: of demand driven inflation over a longer period of time, 460 00:26:20,480 --> 00:26:25,240 Speaker 12: and that has been the long term goal of Japanese policymakers. 461 00:26:25,720 --> 00:26:27,760 Speaker 3: And the week end is a double edged sword. It's 462 00:26:27,800 --> 00:26:30,360 Speaker 3: good for Japanese businesses and I'm sure they are quite 463 00:26:30,359 --> 00:26:34,600 Speaker 3: comfortable with the yen at one thirty nine. However, it 464 00:26:34,640 --> 00:26:38,800 Speaker 3: does make imports and prices for the average Japanese consumer 465 00:26:39,720 --> 00:26:42,360 Speaker 3: very difficult. How does that weigh up when you talk 466 00:26:42,400 --> 00:26:43,080 Speaker 3: to people. 467 00:26:42,800 --> 00:26:45,600 Speaker 12: In Japan, Well, I think if you go back to 468 00:26:45,840 --> 00:26:49,000 Speaker 12: last year when we had the very quick slide in 469 00:26:49,080 --> 00:26:51,560 Speaker 12: the end down to as tho as one five to 470 00:26:51,560 --> 00:26:55,119 Speaker 12: two against the dollar, I think there was kind of 471 00:26:55,200 --> 00:26:59,440 Speaker 12: sense of panic, and combined with the sudden surge in 472 00:27:00,359 --> 00:27:04,200 Speaker 12: prices and import prices, there was a lot of concern. 473 00:27:04,640 --> 00:27:09,359 Speaker 12: And obviously for those you know, globally orientated companies or 474 00:27:09,400 --> 00:27:13,359 Speaker 12: the exporters, this is great. This is a kind of 475 00:27:13,480 --> 00:27:18,800 Speaker 12: instant profit margin boost if the currency is week so 476 00:27:19,000 --> 00:27:22,800 Speaker 12: at the moment where the currency is, those global companies 477 00:27:22,800 --> 00:27:26,679 Speaker 12: and outward facing companies are in a good position. The 478 00:27:26,800 --> 00:27:31,800 Speaker 12: domestic companies especially those that import materials and produce for 479 00:27:31,880 --> 00:27:36,160 Speaker 12: a domestic market. It's more of a squeeze for them. 480 00:27:36,359 --> 00:27:40,080 Speaker 12: But hey, look at the stock market. We are at 481 00:27:40,119 --> 00:27:45,359 Speaker 12: the highs highest level since since nineteen ninety, and that 482 00:27:45,520 --> 00:27:50,800 Speaker 12: suggests that company profits are benefiting. 483 00:27:51,080 --> 00:27:55,439 Speaker 3: I'm curious about the third arrow of abinomics reform, and 484 00:27:55,520 --> 00:27:59,119 Speaker 3: I want to know, you know, across the economy, women 485 00:27:59,119 --> 00:28:02,280 Speaker 3: in more powerful positions and playing a bigger role in 486 00:28:02,320 --> 00:28:05,440 Speaker 3: the economy, and so many of the aspects of reform, 487 00:28:06,440 --> 00:28:09,000 Speaker 3: corporate reform, how much progress has been made. 488 00:28:09,119 --> 00:28:09,359 Speaker 5: Well. 489 00:28:09,440 --> 00:28:12,880 Speaker 12: I think this is kind of one of the unfin 490 00:28:13,800 --> 00:28:20,200 Speaker 12: unfinished targets of abinomics. The growth program that was launched 491 00:28:20,200 --> 00:28:28,359 Speaker 12: in twenty thirteen, so a decade ago. We had flexible 492 00:28:28,760 --> 00:28:36,639 Speaker 12: fiscal spending, aggressive monetary policy. All helped to give a 493 00:28:36,680 --> 00:28:41,320 Speaker 12: new burst of life into Japan's economy some time. But 494 00:28:41,440 --> 00:28:45,959 Speaker 12: this third arrow in the quiver of that growth strategy 495 00:28:46,720 --> 00:28:50,000 Speaker 12: didn't really get a great deal of traction. We have 496 00:28:50,160 --> 00:28:55,080 Speaker 12: seen some reforms on corporate governance, We have seen some 497 00:28:55,800 --> 00:29:00,600 Speaker 12: progress there. The thing is is obviously Sins. The former 498 00:29:00,600 --> 00:29:05,200 Speaker 12: Prime minister who stepped down and was then assassinated, is 499 00:29:05,240 --> 00:29:09,120 Speaker 12: no longer in power, and his faction has less sway 500 00:29:09,360 --> 00:29:12,880 Speaker 12: over what might be the primeister might be doing. Under 501 00:29:12,960 --> 00:29:17,800 Speaker 12: from Kishida, he's been emphasizing the idea of new capitalism. 502 00:29:18,200 --> 00:29:21,200 Speaker 12: It's kind of like a new deal for how we 503 00:29:21,280 --> 00:29:26,000 Speaker 12: run things and what is acceptable for companies. One of 504 00:29:26,000 --> 00:29:29,680 Speaker 12: the key things he's been focusing on is the idea 505 00:29:29,720 --> 00:29:32,400 Speaker 12: that needs to be kind of rethink of the distribution 506 00:29:33,080 --> 00:29:37,000 Speaker 12: of income. Maybe shareholders should get a little bit less 507 00:29:37,520 --> 00:29:42,640 Speaker 12: focus after under Abbe premise to Abbe getting a lot 508 00:29:42,640 --> 00:29:46,280 Speaker 12: of attention. Maybe your average worker should get a bit 509 00:29:46,320 --> 00:29:49,840 Speaker 12: more in their pay packet. That's the kind of message 510 00:29:50,440 --> 00:29:54,320 Speaker 12: that would feeding well to an electorate that is struggling 511 00:29:54,440 --> 00:29:55,960 Speaker 12: with inflation at the moment. 512 00:29:56,080 --> 00:29:58,880 Speaker 3: Paul, thank you very much for joining us. Paul Jackson, 513 00:29:58,880 --> 00:30:04,120 Speaker 3: Bloomberg Japan Economy and Government Editor for Asia. I'm Brian Curtis, 514 00:30:04,200 --> 00:30:06,760 Speaker 3: along with Doug Krisner. You can catch us every weekday 515 00:30:06,800 --> 00:30:10,280 Speaker 3: here for Bloomberg Daybreak Asia, beginning at six am in 516 00:30:10,320 --> 00:30:13,320 Speaker 3: Hong Kong and six pm on Wall Street. 517 00:30:13,360 --> 00:30:16,320 Speaker 1: Tom, thank you, Brian, and coming up here on Bloomberg 518 00:30:16,400 --> 00:30:20,120 Speaker 1: day Break weekend. More Republicans are challenging former President Trump's 519 00:30:20,320 --> 00:30:24,520 Speaker 1: re election dreams. I'm Tom Busby And this is Bloomberg. 520 00:30:35,080 --> 00:30:37,600 Speaker 1: This is Bloomberg day Break weekend, our global look ahead 521 00:30:37,600 --> 00:30:40,000 Speaker 1: at the top stories for investors in the coming week. 522 00:30:40,360 --> 00:30:43,840 Speaker 1: I'm Tom Busby in New York. Some big announcements expected 523 00:30:43,880 --> 00:30:46,720 Speaker 1: this week in the Republican race to be the party's 524 00:30:46,760 --> 00:30:50,120 Speaker 1: nominee in twenty twenty four. And for more, let's head 525 00:30:50,120 --> 00:30:52,600 Speaker 1: to our Bloomberg ninety nine to one newsroom in Washington 526 00:30:52,760 --> 00:30:55,960 Speaker 1: and Bloomberg Sound On co host Kaylee Lines. 527 00:30:56,200 --> 00:30:58,920 Speaker 4: Yeah, Tom, the Republican primary field is about to get 528 00:30:58,960 --> 00:31:02,280 Speaker 4: even bigger week. At least two more candidates are set 529 00:31:02,320 --> 00:31:04,680 Speaker 4: to formally throw their hats in the ring for the 530 00:31:04,680 --> 00:31:08,040 Speaker 4: twenty twenty four GOP nomination. The first we'll come on Tuesday, 531 00:31:08,120 --> 00:31:10,360 Speaker 4: when former New Jersey Governor Chris Christy is set to 532 00:31:10,360 --> 00:31:12,800 Speaker 4: announce at a town hall in New Hampshire. And then 533 00:31:13,000 --> 00:31:15,920 Speaker 4: just one day after, on Wednesday, the announcement will come 534 00:31:15,920 --> 00:31:18,719 Speaker 4: from former Vice President Mike Pence, who will do it 535 00:31:18,760 --> 00:31:21,400 Speaker 4: from Iowa. Joining me now to look ahead to both 536 00:31:21,400 --> 00:31:24,080 Speaker 4: of these events is Gregory Cordy, who covers US politics 537 00:31:24,120 --> 00:31:26,840 Speaker 4: for US here at Bloomberg. So, Gregory, if we could 538 00:31:26,880 --> 00:31:29,880 Speaker 4: just start with Chris Christy, because he goes first. He's 539 00:31:29,920 --> 00:31:33,560 Speaker 4: tried this before in twenty sixteen, and that was unsuccessful, 540 00:31:33,600 --> 00:31:35,800 Speaker 4: as we know, why does he think he could beat 541 00:31:35,840 --> 00:31:37,200 Speaker 4: Trump this time around? 542 00:31:37,440 --> 00:31:41,080 Speaker 7: Yeah, Chris Christy is the first of Donald Trump's twenty 543 00:31:41,240 --> 00:31:44,800 Speaker 7: sixteen rivals to re enter the fray, and he kind 544 00:31:44,800 --> 00:31:48,240 Speaker 7: of harkens back to a Republican party that's pre Trump, 545 00:31:49,000 --> 00:31:53,560 Speaker 7: a little bit more establishment. But as you point out, 546 00:31:53,600 --> 00:31:56,680 Speaker 7: the party has changed quite a bit. It's become Trump's 547 00:31:56,920 --> 00:31:59,920 Speaker 7: Republican Party. And so that's going to be the challenge 548 00:31:59,880 --> 00:32:04,240 Speaker 7: for Chris Christy to appeal to those voters as someone 549 00:32:04,280 --> 00:32:08,720 Speaker 7: who is anti Trump. He would be quick to point 550 00:32:08,760 --> 00:32:11,600 Speaker 7: out that he's not never Trump. He was on board 551 00:32:11,640 --> 00:32:13,360 Speaker 7: with Trump in twenty sixteen. He dropped out of the 552 00:32:13,400 --> 00:32:17,600 Speaker 7: race after New Hampshire endorsed Trump. Was chairman of Trump's 553 00:32:17,840 --> 00:32:23,120 Speaker 7: Transition Committee, helped Trump with debates, chaired his Opioid Commission, 554 00:32:23,240 --> 00:32:25,840 Speaker 7: and was pretty much on board through almost all of 555 00:32:25,840 --> 00:32:29,600 Speaker 7: the Trump administration until after Trump refused to concede. So 556 00:32:29,800 --> 00:32:32,800 Speaker 7: Chris Christie's theory of the case is that he's the 557 00:32:32,840 --> 00:32:36,680 Speaker 7: one guy who can debate Trump. He prepared Trump for 558 00:32:36,760 --> 00:32:40,440 Speaker 7: debates against Hillary Clinton and Joe Biden, he's debated Trump 559 00:32:40,480 --> 00:32:43,120 Speaker 7: in the twenty sixteen debates. He knows Trump as a 560 00:32:43,160 --> 00:32:45,840 Speaker 7: debater better than anybody else who will get on that 561 00:32:45,960 --> 00:32:49,800 Speaker 7: stage when the Republicans have their first debate in August 562 00:32:49,840 --> 00:32:53,040 Speaker 7: and Milwaukee, and so he's counting on being able to 563 00:32:53,080 --> 00:32:56,600 Speaker 7: deliver some kind of knockout punch, he says. The other 564 00:32:57,640 --> 00:33:00,680 Speaker 7: opponents in the race, the other challengers to Trump, have 565 00:33:00,880 --> 00:33:03,520 Speaker 7: been sort of a little bit too delicate in how 566 00:33:03,560 --> 00:33:07,160 Speaker 7: they deal with Trump. He he says, he can engage 567 00:33:07,200 --> 00:33:09,640 Speaker 7: Trump head on and maybe knock him off his perch. 568 00:33:09,720 --> 00:33:12,000 Speaker 7: But yeah, it's gonna be a big challenge because the 569 00:33:12,120 --> 00:33:15,440 Speaker 7: lead that Trump has right now is just so far 570 00:33:15,520 --> 00:33:18,080 Speaker 7: ahead of all the competition. It's going to take some 571 00:33:18,160 --> 00:33:19,720 Speaker 7: doing to get Trump down off that perch. 572 00:33:20,080 --> 00:33:22,280 Speaker 4: Well, and of course, another person who is going to 573 00:33:22,560 --> 00:33:24,680 Speaker 4: run against Trump is a man who served him as 574 00:33:24,760 --> 00:33:28,200 Speaker 4: Vice president, Mike Pence. Does that just make him a 575 00:33:28,320 --> 00:33:30,840 Speaker 4: villain to Trump's base that he has such a tight 576 00:33:30,880 --> 00:33:31,240 Speaker 4: hold on. 577 00:33:31,360 --> 00:33:34,840 Speaker 7: Still, Yeah, that's the problem that a lot of Republicans 578 00:33:34,840 --> 00:33:40,600 Speaker 7: have is how to go after Trump without alienating Trump's base, 579 00:33:40,800 --> 00:33:44,400 Speaker 7: And Mike Pence has a particular problem with that since 580 00:33:44,920 --> 00:33:48,680 Speaker 7: to the more extreme members of the Trump base. The 581 00:33:48,760 --> 00:33:52,000 Speaker 7: people who marched on the Capitol on January sixth, they 582 00:33:52,040 --> 00:33:57,600 Speaker 7: were chanting, hang Mike Pence, and former President Trump has 583 00:33:57,640 --> 00:34:01,320 Speaker 7: done very little to disabuse people of the notion that 584 00:34:01,360 --> 00:34:06,080 Speaker 7: Mike Pence is a traitor to their cause. So that's 585 00:34:06,080 --> 00:34:08,600 Speaker 7: a challenge that I think Mike Pen's acknowlogist that he's 586 00:34:08,640 --> 00:34:12,520 Speaker 7: going to have to appeal to that part of the 587 00:34:12,560 --> 00:34:16,120 Speaker 7: Republican Party on these constitutional principles. He was bound by 588 00:34:16,120 --> 00:34:18,759 Speaker 7: the Constitution to do what he did in helping to 589 00:34:18,800 --> 00:34:25,839 Speaker 7: certify Joe Biden's win in the electoral College. But yeah, 590 00:34:25,920 --> 00:34:30,600 Speaker 7: that's the challenge that not just Pence and Christy, but 591 00:34:30,960 --> 00:34:34,480 Speaker 7: every Republican has, is how to deal with that Trump problem. 592 00:34:34,560 --> 00:34:36,759 Speaker 4: It's going to be a long primary season, and I 593 00:34:36,840 --> 00:34:38,719 Speaker 4: trust you'll have it covered for us. Thank you so 594 00:34:38,800 --> 00:34:41,200 Speaker 4: much to Gregory Cordy, who covers US politics for us 595 00:34:41,200 --> 00:34:43,920 Speaker 4: here at Bloomberg and Tom I'll send it back to you. 596 00:34:44,200 --> 00:34:44,520 Speaker 5: Thank you. 597 00:34:44,600 --> 00:34:47,840 Speaker 1: Kaylee. That was Bloomberg Sound On co host Kaylee Lines 598 00:34:47,920 --> 00:34:51,200 Speaker 1: reporting from our Bloomberg ninety nine one newsroom in Washington, 599 00:34:51,520 --> 00:34:54,560 Speaker 1: and you can hear sound on weekdays one to three 600 00:34:54,600 --> 00:34:57,680 Speaker 1: pm on Bloomberg Radio and that does it for this 601 00:34:57,840 --> 00:35:00,600 Speaker 1: edition of Bloomberg day Break Weekend. Join us again Monday 602 00:35:00,600 --> 00:35:02,800 Speaker 1: morning at five am Wall Street Time for the latest 603 00:35:02,800 --> 00:35:05,680 Speaker 1: on markets overseas and the news you need to start 604 00:35:05,719 --> 00:35:09,120 Speaker 1: your day. I'm Tom Buzzby. Stay with us. Top stories 605 00:35:09,120 --> 00:35:12,640 Speaker 1: and global business headlines are coming up right now.