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Speaker 1: Bloomberg Audio Studios, podcasts, radio news.

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Speaker 2: Welcome to the Daybreak Asia podcast. I'm Dan Schwartzman. Doug

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Speaker 2: Krisner has a day off. Over the weekend, US and

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Speaker 2: Chinese officials said that they had agreed to a framework

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Speaker 2: of a deal on tariffs and other issues. The trade

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Speaker 2: negotiations happened in Malaysia, and this comes ahead of President

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Speaker 2: Trump's meeting with Chinese leader Shijimping later in the week.

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Speaker 2: Treasury Secretary Scott Besson was part of the US delegation

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Speaker 2: that went to Malaysia for those trade talks with China.

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Speaker 2: He says that Trump and she are expected to reach

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Speaker 2: a deal to verda NEU one US tariff on Chinese goods.

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Speaker 2: Here's Besson speaking on NBC's Meet the Press.

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Speaker 3: President Trump gave me a great deal of negotiating leverage

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Speaker 3: with the threat of the one hundred percent tariffs on

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Speaker 3: November first, and I believe we've reached a very substantial

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Speaker 3: framework that will avoid that and allow us to discuss

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Speaker 3: many other things with the Chinese.

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Speaker 2: That was Treasury Secretary Scott Besson speaking on NBC's Meet

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Speaker 2: the Press. Best went on to say that he expects

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Speaker 2: China to make quote substantial soybean purchases, as well as

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Speaker 2: offered deferral on sweeping rare earth controls. For more, we

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Speaker 2: heard from Bloomberg's China correspondent Min Minlow.

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Speaker 4: The two sides had two days of talks. The first

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Speaker 4: day was five and a half hours long, and it

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Speaker 4: does look like both sides are well. They seem pretty

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Speaker 4: satisfied with the outcome so far, at least from the

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Speaker 4: Chinese side. The Comments Ministry put out a statement saying

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Speaker 4: that the talks were candid in depth and constructive and

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Speaker 4: they had agreed on a range of issues, everything from

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Speaker 4: sentinel to export controls, to shipping levees to agricultural imports.

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Speaker 4: If you read between the line. Of course, that statement

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Speaker 4: was pretty vague so far as just putting out key

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Speaker 4: sort of themes there. But you read between a line,

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Speaker 4: any sort of progress on fentanyl, for example, could potentially

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Speaker 4: mean a reduction of removal of the twenty percent fentanyl

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Speaker 4: related terrors. Of course, those agricultural imports, and big win

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Speaker 4: for President Trump because it really targets his political base there,

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Speaker 4: and the US has said they are going to remove

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Speaker 4: the threat of those additional tariffs, whether or not the

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Speaker 4: existing tariff though will be brought down that is the

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Speaker 4: big question, if it stays at the current level or

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Speaker 4: the tariff twos being extended. China still has about forty

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Speaker 4: percent tariffs effective tariff level, which is about twenty five

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Speaker 4: percentage points higher than other countries, and it's still going

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Speaker 4: to be quite a disadvantage's position for Chinese exports. But

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Speaker 4: still all signs point to a thawing of relations between

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Speaker 4: the two sides, and it would at least buy a

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Speaker 4: little bit of a reprieve and remove all that uncertainty

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Speaker 4: when it comes to US China trade.

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Speaker 2: That was Bloomberg's China correspondent Min Min Loo. We go

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Speaker 2: to Japan next, where the Bank of Japan is widely

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Speaker 2: expected to stand pad at this week's policy meeting, but

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Speaker 2: chances of a near term rate hikeer rising given the

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Speaker 2: currency's weakness, which risks pushing up domestic inflation. Further from

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Speaker 2: where we hear from Taka QG Nomura Research Institute, executive

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Speaker 2: economists and former BOJ board member. He spoke to Bloomberg

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Speaker 2: scherry On in April, Hunk, the.

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Speaker 1: Bank of Japan this week not necessarily expected to move.

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Speaker 1: When are you expecting the first rate hike action coming

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Speaker 1: from the BOG and can they do it given this

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Speaker 1: new political environment.

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Speaker 5: I think I expect that the VOJ will move at

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Speaker 5: the December meeting instead of the meeting this week. But

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Speaker 5: maybe condition is mister taka we changed his mind in

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Speaker 5: preventing the BOJ from increasing industrate.

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Speaker 1: It's really interesting because we talk about the independence of

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Speaker 1: central banks, but at the same time, it's not like

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Speaker 1: that BOG can actually just completely ignore the political environment.

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Speaker 1: But at the same time, we do have households really

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Speaker 1: really from higher costs really nationwide. How much of an

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Speaker 1: issue is this.

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Speaker 6: Yeah, it's a very serious problem.

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Speaker 5: UH if that the mister miss Takaichi tried to block

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Speaker 5: that the red track of Japan, that could uh UH

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Speaker 5: alls that the weakness of yang uh which is pushing

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Speaker 5: up that the prices and undermine that the consumption of household.

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Speaker 5: But on the other hand, mister Tai argued that the

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Speaker 5: UH had UH maybe supporting that the household which is

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Speaker 5: suffering from that the price increase, could be a fast

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Speaker 5: proude of them possis I think that two arguments seems

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Speaker 5: to be inconsistent. So I think that the people may

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Speaker 5: start to criticize if that the action on the b

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Speaker 5: o j we cause it to big a yen, that

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Speaker 5: kind of increash of a public opinion could gradually uh

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Speaker 5: or steady and steadily changed. That the mister is Hocky

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Speaker 5: stands on the uh stands on the the boj and

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Speaker 5: she eventually she have to change weakened his uh, weaken

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Speaker 5: her uh uh persist uh stance opposing to opposing to

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Speaker 5: the direct heck of Bango jabam by the end of.

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Speaker 6: This year.

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Speaker 7: Taka in her speech in Parliament, I think the idea

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Speaker 7: of addressing the cost of living issues would appeal to

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Speaker 7: the public. At the same time, though, is she in

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Speaker 7: a way constraint with how expansionary her policies can actually be,

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Speaker 7: given how this might impact the market. How does the

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Speaker 7: conversation then shift to beyond what she might do, what

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Speaker 7: she should be doing.

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Speaker 5: Yeah, I think that in the short term she's rightly

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Speaker 5: to implement a persis. One is that the reduction of

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Speaker 5: taxon gas ring and another one is a substive for

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Speaker 5: that the electricity and the gas are to reduce their places.

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Speaker 5: So I think that she's likely to implemented this policy

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Speaker 5: is uh.

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Speaker 6: Next next month. But in the long time.

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Speaker 5: I think that she made planning to introduce some reduction

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Speaker 5: of income tax and UH, so I think that that's

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Speaker 5: such a compulsive could be expandory. So you know that

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Speaker 5: the UH missed Takai raised two composes as a pillars.

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Speaker 5: One is that the expandardy fiscal posy and then oother

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Speaker 5: one is continuing that is amount of policy.

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Speaker 6: I think that.

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Speaker 5: The UH this UH these poses are continuation that fast

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Speaker 5: and the second all of abeno mix.

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Speaker 6: However, I think that UH she's very extreme possy.

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Speaker 5: We're not likely to implement it because that the Japan

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Speaker 5: Innovation Party UH UH Question partner of the l D

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Speaker 5: b UH describe that the expansions of fiscal policy and

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Speaker 5: it's a respect that the healthy UH fiscal conditions and

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Speaker 5: also that the UH the party UH I tend to

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Speaker 5: respect that the independence of Japan. So a resort that

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Speaker 5: I think she have to accept that the opinion of UH,

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Speaker 5: the Japan UH Innovation Parties and the change Weakened his

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Speaker 5: are very extreme composis so anyway otherwise that the if

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Speaker 5: that the UH Japan UH Innovation Parties, I will leave

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Speaker 5: that the H question government. It's possible that the l

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Speaker 5: d B will lose the majority in Parliament and the

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Speaker 5: and the roots that the government. So I think that

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Speaker 5: the maybe Innovation Parties UH has a very influential to

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Speaker 5: that the composer of Miss Takaichi eventually hi.

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Speaker 7: I wonder also when it comes to BOJ policy making,

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Speaker 7: do you see some cognizance about the pressure that the

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Speaker 7: US might be a resulting because not so long ago

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Speaker 7: we did hear from the US Treasury Secretary implying that

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Speaker 7: the BOJ is behind the curve. Is that something that

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Speaker 7: will be figuring into their calculus, especially this week when

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Speaker 7: the US and Japanese leaders are meeting.

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Speaker 5: I think that the maybe a currency market week ayen

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Speaker 5: and Bog's man post could be an issue over that

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Speaker 5: meeting with the Miss taka and mister Trump tomorrow. And

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Speaker 5: it's possible that the mister Trump argued that the currency

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Speaker 5: of the value of the end is too weak and

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Speaker 5: bog is read hike could correct that the excess weakness

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Speaker 5: of the yen. So if that the mister Trump we

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Speaker 5: raise these issues explicity, I think it's called at the

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Speaker 5: sharp yen appreciation and maybe increased that the expectation for

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Speaker 5: red hike by Bangwa Japang anyway, it's very likely that

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Speaker 5: the BOG will keep that. The multiplessun changed anyway this week. However,

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Speaker 5: I think that that's kind of uh said comment of

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Speaker 5: that mister Trump could be a kind of that the

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Speaker 5: aid for the b o J to increase that the

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Speaker 5: interest rate. And I think that that's called that the

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Speaker 5: correction of the week. Ye and I think it's a

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Speaker 5: bit to that the stronger yen.

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Speaker 2: That's Takahi q Ge Numeer of Research Institute, executive economists

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Speaker 2: and former BOJ board members speaking of Bloomberg, Sherry On

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Speaker 2: and April Hank on the Asia trade. Coming up next,

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Speaker 2: we'll hear from South Korean President Lee J. Young about

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Speaker 2: the the progress on trade talks between his country and

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Speaker 2: the US here on the Bloomberg Daybreak Asia podcast. Welcome

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Speaker 2: back to the Daybreak Asia podcast. I'm Dan Schwartzman. Doug

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Speaker 2: Krisner has the day off. South Korean President Lee JM

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Speaker 2: Young says soul and Washington remains stuck on quote all

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Speaker 2: the major details of a three hundred and fifty billion

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Speaker 2: dollar investment pledge. His comments come days before an expected

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Speaker 2: meeting with President Trump on the sidelines of the APEX Summit,

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Speaker 2: Lee sat down with Bloomberg's Sherryon about the latest trade

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Speaker 2: negotiations between his country and the US. Both of them

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Speaker 2: spoke through a.

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Speaker 8: Translator, Hajmiga Nepsal, and the negotiations between Korea and the

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Speaker 8: United States are proceeding in two areas of security and

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Speaker 8: economics simultaneously.

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Speaker 9: Negotiations in the field of security issues are going very well,

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Speaker 9: but negotiations in the area of economics, especially trade, have

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Speaker 9: reached a preliminary agreement and when the process of hashing

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Speaker 9: out the details. The discussion is ongoing and there are

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Speaker 9: some differences of opinion, but the delay does not necessarily

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Speaker 9: mean that this is a failure. We already have a

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Speaker 9: comprehensive agreement and we're currently working on the details, so

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Speaker 9: I would appreciate your patients.

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Speaker 1: When it comes to Japan's deal, there have been some

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Speaker 1: divergent interpretations itself because we are trying to make it

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Speaker 1: more specific than Japan's and if that's the case, could

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Speaker 1: that become more burdensome for Korea later on?

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Speaker 8: I'm mingled in.

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Speaker 9: Korea is not Japan. I do not fully know what

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Speaker 9: deal the US and Japan have struck, but From our

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Speaker 9: point of view, we have our own circumstances and we

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Speaker 9: will reach a rational result that suits us. Of course,

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Speaker 9: the example of Japan or Europe could be a base

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Speaker 9: that we can refer to, but in the end, we

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Speaker 9: must find a way which takes into account Korea's circumstances

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Speaker 9: that is acceptable to Korea and also helps the United

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Speaker 9: States in its manufacturing renaissance. As we search for a

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Speaker 9: mutually benefitial path, there will be differences as well as

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Speaker 9: alignment of opinions.

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Speaker 1: Top in finding common ground. Could the signs of the

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Speaker 1: US Investment Fund become smaller.

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Speaker 9: Panshi, the method of investment, the amount of investment, the timeline,

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Speaker 9: and how we will share the losses and divide the dividends.

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Speaker 9: All of these remain sticking points. The US will, of

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Speaker 9: course try to maximize its interests, but it must not

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Speaker 9: be to the extent that causes catastrophic consequences for South Korea.

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Speaker 9: The United States is the leading country in the world

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Speaker 9: when it comes to democracy and rationality. South Korea is

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Speaker 9: an ally and friend of the United States. So we

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Speaker 9: believe that we will be able to reach a rational

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Speaker 9: result that is acceptable to all sides, and this is

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Speaker 9: what has to be done.

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Speaker 1: Even investing in the US seems somewhat unstable, as we

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Speaker 1: saw with the imigation rate in Georgia. We understand Koreans

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Speaker 1: can now work at US factories with B one and

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Speaker 1: STA visas, but when can we expect a more fundamental solution.

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Speaker 8: Kita Munden and.

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Speaker 9: I believe we can find a realistic solution to the

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Speaker 9: visa issue in the not too distant future. In fact,

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Speaker 9: the visa issue is less a problem for Korea than

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Speaker 9: it is for the United States. Korean firms are taking

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Speaker 9: risks by investing in the United States. As a result,

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Speaker 9: they create jobs and help the manufacturing renaissance. Providing an

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Speaker 9: environment for Korean firms to quickly build their factories will

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Speaker 9: be in the interest of the United States. If there

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Speaker 9: are restrictions on Korean workers who build factories and train employees,

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Speaker 9: this will stall the construction of factories. Thus it's in

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Speaker 9: the interest of the United States to quickly resolve these

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Speaker 9: issues ivone.

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Speaker 1: A highlight of the APEX summit is the upcoming meeting

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Speaker 1: between Presidents Trump and Chi Jin Pin. How important is

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Speaker 1: this dialogue for sound Korea.

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Speaker 8: Hang Wogun Chin Kongu manitus.

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Speaker 9: W When it comes to the supply chain, the world

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Speaker 9: is divided into two blocks facing off each other, one

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Speaker 9: led by the United States and one by China. Korea

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Speaker 9: is situated both geographically and economically between these two. We

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Speaker 9: are situated in between two grinding stones. It's a situation

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Speaker 9: akin to having both arms pulled by China and the

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Speaker 9: United States. This is both a challenge and an opportunity.

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Speaker 9: We cherish our baseline policy emphasizing the Korea US alliance

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Speaker 9: and Korea US Japan trilateral cooperation. At the same time,

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Speaker 9: we do not seek to sever tize or pursue excessive

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Speaker 9: confrontration with China or socialist nations. Korea will continue to

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Speaker 9: cherish and emphasize its alliance with the United States and

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Speaker 9: at the same time manages relationship with China.

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Speaker 1: Can Emi to Hanaoshan Already Hangosan's US subsidiaries are caught

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Speaker 1: in the middle.

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Speaker 6: Though.

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Speaker 1: Are you concerned the other Korean companies might become targets too?

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Speaker 1: And do you feel this is somewhat an unfair situation?

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Speaker 8: Hung game Bible into Tavisa.

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Speaker 9: It is from Korea's point of view, it's very regretful

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Speaker 9: and hard to understand that Korean subsidiaries in US having

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Speaker 9: sanctioned by China because we were cooperating with the United States.

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Speaker 9: It's highly likely that this is China's way of applying pressure,

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Speaker 9: signaling that such incidents could continue to occur in the future.

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Speaker 9: Despite this, we will continue to pursue basic stance which

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Speaker 9: emphasizes the United States while working to maintain good relations

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Speaker 9: with China. In any case, we will not directly face

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Speaker 9: off against China. On the outside, it might seem that

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Speaker 9: the United States is very confrontational against China, but at

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Speaker 9: the same time they continue to ceaselessly communicate and cooperate

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Speaker 9: in areas where possible.

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Speaker 1: The Bank of Korea has left interest rates unchanged again.

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Speaker 1: If there are no more rate cuts, will the government

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Speaker 1: need another extra bus.

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Speaker 9: Regarding the economic situation in Korea, the interest rate is

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Speaker 9: not the issue. Rather, it's more a matter of fiscal

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Speaker 9: policy and economic policy. From these three, I believe a

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Speaker 9: stable economic policy is most important. Next would be the

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Speaker 9: fiscal policy that supports economic policy. If we were to

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Speaker 9: lower interest rates, this could stimulate real estate prices, which

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Speaker 9: is already an issue for US. The BOK made the

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Speaker 9: right decision by keeping rates unchanged instead of cutting them

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Speaker 9: in order to revive Career's economy and ensure sustainable growth.

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Speaker 9: The fyscal policy of the past may not be sufficient,

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Speaker 9: but it's not lacking either. With additional measures such as

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Speaker 9: expansion and productive financing in areas like high tech development,

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Speaker 9: which we're focusing on, we'll be able to build a

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Speaker 9: foundation for economic revival and sustainable Growthjmen.

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Speaker 1: Surprising is that people invested heavily in real estate. And

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Speaker 1: even my parents always told me to buy a house

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Speaker 1: forced but now there's saying I should buy stocks. How

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Speaker 1: do you view this new trend of growing assets?

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Speaker 8: Okay, I'm mingle with.

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Speaker 9: The truth is the Republic of Career is sitting on

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Speaker 9: a very dangerous potential crisis, a ticking bomb that is

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Speaker 9: excessive real estate investment.

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Speaker 2: Just look at Japan.

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Speaker 9: It's real estate bubble burst more than thirty years ago,

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Speaker 9: and a country is still dealing with the economic pain today. Unfortunately,

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Speaker 9: Career is heading down a similar path. Our property prices

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Speaker 9: are among the highest in the world. If this trend continues,

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Speaker 9: the bubble will inevitably burst. When this happens, it won't

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Speaker 9: just be an economic crisis. Will face a severe crisis,

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Speaker 9: not only economically, but across all sectors. We must prevent

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Speaker 9: that from happening. That means creating channels for capital to

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Speaker 9: flow into more productive sectors of the economy. That's why

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Speaker 9: I've been working hard to remove unnecessary regulations and irrational

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Speaker 9: barriers in our capital markets. We're beginning to see the results.

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Speaker 9: Funds are gradually shifting from real estate into financial and

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Speaker 9: capital markets, and public trust in those markets has prove significantly.

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Speaker 9: You can see the results reflected in the new record

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Speaker 9: highs of the cost P index levels we've never seen before.

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Speaker 9: We need to stay on this course. If we continue

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Speaker 9: implementing national policies that curb speculative real estate investments and

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Speaker 9: direct capital towards productive areas, we can sustain this positive momentum.

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Speaker 9: That's the only way to normalize korem eclony back to

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Speaker 9: a healthy, sustainable path of growth. We cannot give up

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Speaker 9: in this path.

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Speaker 2: That was South Korean President Lee Jane Young speaking of Bloomberg.

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Speaker 2: Sherry On, Thanks for listening to today's episode of the

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Speaker 2: Bloomberg Daybreak Asia Edition podcast.

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Speaker 4: Each weekday, we look at the story shaping markets, finance,

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Speaker 4: and geopolitics in the Asia Pacific.

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Speaker 5: You can find us on Apple, Spotify, the Bloomberg Podcast

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Speaker 5: YouTube channel, or anywhere else you listen.

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Speaker 4: Join us again tomorrow for insight on the market moves

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Speaker 4: from Hong Kong to Singapore and Australia.

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Speaker 6: I'm Doug Prisoner and this is Bloomberg