1 00:00:00,120 --> 00:00:07,040 Speaker 1: Bloomberg Audio Studios, podcasts, radio news. 2 00:00:09,840 --> 00:00:12,280 Speaker 2: This is the Blueberg Day ba Q podcast. Good morning, 3 00:00:12,280 --> 00:00:14,880 Speaker 2: It's Wednesday, the twenty third of July. I'm Caroline Hepka 4 00:00:14,960 --> 00:00:15,880 Speaker 2: in London. 5 00:00:15,760 --> 00:00:18,840 Speaker 3: And I'm Stephen Carolin Brussels. Coming up today, Reports say 6 00:00:18,920 --> 00:00:21,760 Speaker 3: Japan's prime minister will announce he's resigning as soon as 7 00:00:21,800 --> 00:00:25,080 Speaker 3: this month. After sealing a US trade deal setting tariffs 8 00:00:25,079 --> 00:00:26,520 Speaker 3: at fifteen percent. 9 00:00:26,760 --> 00:00:30,680 Speaker 2: The US Nuclear Safety Agency suffers a cyber security breach 10 00:00:30,720 --> 00:00:34,400 Speaker 2: as Microsoft points the finger at Chinese sponsored hackers. 11 00:00:34,720 --> 00:00:38,920 Speaker 3: Plus Europe warms to China's growing investments across the continent 12 00:00:39,320 --> 00:00:41,199 Speaker 3: and what Beijing may want in return. 13 00:00:41,520 --> 00:00:43,519 Speaker 4: Let's start with the roundup of our top stories. 14 00:00:43,720 --> 00:00:46,720 Speaker 3: Japanese media reporting that the Countries and Battles Prime Minister 15 00:00:46,840 --> 00:00:49,919 Speaker 3: Shigero Ishuba will announce he's stepping down as soon as 16 00:00:49,960 --> 00:00:53,840 Speaker 3: this month. The reporting comes after Issuba's ruling coalition suffered 17 00:00:53,840 --> 00:00:57,640 Speaker 3: a historic setback in Sunday's Upper House election, and comes 18 00:00:57,680 --> 00:01:00,560 Speaker 3: just hours after Japan secured a trade agreement with the 19 00:01:00,600 --> 00:01:04,039 Speaker 3: Trump administration. The Prime minister had sited the trade talks 20 00:01:04,080 --> 00:01:05,840 Speaker 3: as one of the reasons he needed to stay on 21 00:01:06,240 --> 00:01:08,760 Speaker 3: with the agreement with the US now seemingly clears the 22 00:01:08,800 --> 00:01:10,360 Speaker 3: way for him to leave office. 23 00:01:10,520 --> 00:01:14,039 Speaker 2: Reports of Isshaba's decision came as President Trump announced a 24 00:01:14,080 --> 00:01:17,360 Speaker 2: deal with Japan that sets tariffs on the country's imports 25 00:01:17,400 --> 00:01:21,560 Speaker 2: into the US at fifteen percent. The agreement spares the 26 00:01:21,680 --> 00:01:25,320 Speaker 2: key American ally from a threatened twenty five percent tariff 27 00:01:25,400 --> 00:01:28,880 Speaker 2: rate that was set to take effect next week. Crucially 28 00:01:28,880 --> 00:01:33,160 Speaker 2: for Japan, the fifteen percent rate covers car and car 29 00:01:33,240 --> 00:01:37,600 Speaker 2: parts exports to the US. Shares in Japanese carmakers jumped 30 00:01:37,640 --> 00:01:41,040 Speaker 2: on the news, with Toyota Motor Corporation up as much 31 00:01:41,040 --> 00:01:45,560 Speaker 2: as sixteen point three percent in trading now. In return, 32 00:01:45,760 --> 00:01:50,280 Speaker 2: Japan will accept cars and trucks built to American safety standards. 33 00:01:50,480 --> 00:01:52,720 Speaker 2: Here is President Trump discussing the deal. 34 00:01:53,280 --> 00:01:55,400 Speaker 5: We worked on it long and hard, and it's a 35 00:01:55,440 --> 00:01:57,800 Speaker 5: great deal for everybody. I always say it has to 36 00:01:57,800 --> 00:02:00,680 Speaker 5: be great for everybody. It's a great deal, A lot 37 00:02:00,720 --> 00:02:02,520 Speaker 5: different from the deals in the pest. 38 00:02:02,600 --> 00:02:03,360 Speaker 4: I can tell you that. 39 00:02:03,920 --> 00:02:06,960 Speaker 2: A centerpiece of the packed outlined by Trump is a 40 00:02:07,000 --> 00:02:09,799 Speaker 2: five hundred and fifty billion dollar fund backed by the 41 00:02:09,919 --> 00:02:13,440 Speaker 2: Japanese to make investments in America, with details still to 42 00:02:13,480 --> 00:02:16,320 Speaker 2: be hammered out. Japan has also agreed to buy one 43 00:02:16,440 --> 00:02:21,720 Speaker 2: hundred Boeing aircraft, boost rice purchases and increased defense spending 44 00:02:22,040 --> 00:02:26,480 Speaker 2: with US firms. President Trump meanwhile pledged to guarantee Japan 45 00:02:26,560 --> 00:02:31,120 Speaker 2: the lowest global rate on forthcoming sect all tariffs, expected 46 00:02:31,160 --> 00:02:34,280 Speaker 2: to include semiconductors and pharmaceuticals. 47 00:02:35,440 --> 00:02:38,560 Speaker 3: The US Japan deal will add pressure on the European 48 00:02:38,680 --> 00:02:40,919 Speaker 3: Union to secure an agreement with the White House, as 49 00:02:40,919 --> 00:02:44,360 Speaker 3: the block's top leaders also seek to deepen ties with Japan. 50 00:02:44,800 --> 00:02:48,800 Speaker 3: European Commissioned President Ursula vander Lyne and European Council President 51 00:02:48,800 --> 00:02:51,840 Speaker 3: Antonio Costa were expected to meet Prime Minister Ishiba in 52 00:02:51,880 --> 00:02:54,520 Speaker 3: the coming hours, but even if the meeting goes ahead, 53 00:02:54,560 --> 00:02:57,960 Speaker 3: it takes on a new tone. European officials described Japan 54 00:02:58,000 --> 00:03:01,600 Speaker 3: as its closest strategic trading partner in the Indo Pacific region. 55 00:03:01,880 --> 00:03:04,640 Speaker 3: The leader has planned to sign agreements on defense, industry 56 00:03:04,680 --> 00:03:08,600 Speaker 3: cooperation and economic security, with officials saying they will also 57 00:03:08,720 --> 00:03:12,320 Speaker 3: compare notes on their trade negotiations with the Trump administration. 58 00:03:13,880 --> 00:03:17,520 Speaker 2: Now, the Italian bank UniCredit has reported second quarter net 59 00:03:17,520 --> 00:03:21,440 Speaker 2: profits that beat estimates. Net to profits are coming in 60 00:03:21,680 --> 00:03:26,240 Speaker 2: at almost three point five billion euros. UniCredit is kicking 61 00:03:26,280 --> 00:03:30,040 Speaker 2: off the earning season four Italian banks, also announcing revenue 62 00:03:30,040 --> 00:03:33,240 Speaker 2: of six point one to three billion euros, just slightly 63 00:03:33,240 --> 00:03:36,880 Speaker 2: below the estimated six point one seven billion. The focus 64 00:03:37,000 --> 00:03:40,200 Speaker 2: overrule for the company remains on chief executive officer Andrea 65 00:03:40,320 --> 00:03:44,840 Speaker 2: Orchell's M and A ambitions, which have seen setbacks. Unicredits 66 00:03:44,880 --> 00:03:47,880 Speaker 2: board decided to withdraw an offer for Banker BPM on 67 00:03:47,960 --> 00:03:53,040 Speaker 2: Tuesday because it effectively couldn't secure government authorization. According to 68 00:03:53,080 --> 00:03:56,480 Speaker 2: a statement and a separate approach by UniCredit for Germany's 69 00:03:56,480 --> 00:03:59,600 Speaker 2: comments bank is stalled amid opposition from Berlin. 70 00:04:00,240 --> 00:04:03,760 Speaker 3: Europe's most valuable company, SAP, has reported quarterly sales that 71 00:04:03,800 --> 00:04:07,400 Speaker 3: fell just short of estimates. The firm, which sells software 72 00:04:07,440 --> 00:04:10,920 Speaker 3: to manage business operations, said cloud and software revenue rose 73 00:04:10,960 --> 00:04:14,200 Speaker 3: by eleven percent to just shy of eight billion euros. 74 00:04:14,640 --> 00:04:18,040 Speaker 3: SAP also warns of the weakening dollar poses currency pressures 75 00:04:18,080 --> 00:04:20,479 Speaker 3: for the firm, which generates more than thirty percent of 76 00:04:20,520 --> 00:04:21,799 Speaker 3: its sales in the US. 77 00:04:22,480 --> 00:04:27,040 Speaker 2: The US agency responsible for producing and dismantling nuclear weapons 78 00:04:27,080 --> 00:04:31,279 Speaker 2: has been breached by a hack of Microsoft's share Point system. 79 00:04:31,560 --> 00:04:36,320 Speaker 2: Bloomberg understands that no sensitive information from the National Nuclear 80 00:04:36,360 --> 00:04:41,280 Speaker 2: Security Administration is believed to have been compromised, but Aur Newburger, 81 00:04:41,480 --> 00:04:47,159 Speaker 2: former US Deputy National Security Advisor, says the attack is significant. 82 00:04:47,320 --> 00:04:51,159 Speaker 6: Because shrpoint is so widely used. We can expect likely 83 00:04:51,200 --> 00:04:54,080 Speaker 6: a fair number of victims and the vulnerability is a 84 00:04:54,120 --> 00:04:58,600 Speaker 6: major one. So attackers cannot only steal data, they're stealing keys. 85 00:04:59,000 --> 00:05:01,400 Speaker 6: And when they steal key, think about physical keys in 86 00:05:01,440 --> 00:05:04,320 Speaker 6: our own homes. That means they can get back in 87 00:05:04,760 --> 00:05:07,560 Speaker 6: unless keys are changed, and they can maintain access. 88 00:05:08,040 --> 00:05:12,239 Speaker 2: Anne Neuberger, former US Deputy National Security Advisor, speaking there, 89 00:05:12,720 --> 00:05:15,359 Speaker 2: hackers were able to breach the agency as part of 90 00:05:15,400 --> 00:05:19,440 Speaker 2: a twenty twenty attack on a widely used software program 91 00:05:19,880 --> 00:05:25,000 Speaker 2: from Solar Wins that Microsoft blames on Chinese state sponsored attackers. 92 00:05:25,560 --> 00:05:29,800 Speaker 2: A department spokesperson at the National Nuclear Security Administration said 93 00:05:29,880 --> 00:05:34,719 Speaker 2: then that malware had been isolated to business networks only. 94 00:05:35,640 --> 00:05:38,760 Speaker 2: In a statement recently, the Chinese Embassy in Washington that 95 00:05:38,839 --> 00:05:41,839 Speaker 2: said that China firmly opposes all forms of cyber attacks 96 00:05:41,839 --> 00:05:42,720 Speaker 2: and cybercrime. 97 00:05:43,200 --> 00:05:45,840 Speaker 3: In sports news, England's Lionesses through to the final of 98 00:05:45,880 --> 00:05:49,920 Speaker 3: the Women's Football European Championship after defeating Italy an extra time. 99 00:05:50,320 --> 00:05:54,880 Speaker 3: Managestin Aviigman says she's experiencing a range of emotions following 100 00:05:54,920 --> 00:05:56,640 Speaker 3: the dramatic two to one victory. 101 00:05:56,960 --> 00:06:01,000 Speaker 1: I'm feeling relieved, something happy. It feels a bit surreal 102 00:06:01,880 --> 00:06:05,680 Speaker 1: making a final again, but we're here and we're going 103 00:06:05,800 --> 00:06:09,080 Speaker 1: to the final, so we need to recover a bit. 104 00:06:10,279 --> 00:06:14,120 Speaker 3: England's threenawigmand speaking there, the defending champions forced extra time 105 00:06:14,120 --> 00:06:17,320 Speaker 3: with the ninety sixth minute equalizer from nineteen year old 106 00:06:17,560 --> 00:06:20,880 Speaker 3: Michelle Agamang, before Chloe Kelly struck in the one hundred 107 00:06:20,920 --> 00:06:24,600 Speaker 3: and nineteenth minute from a rebound after seeing her penalty saved. 108 00:06:24,640 --> 00:06:27,760 Speaker 3: The team will play Spain or Germany in the final 109 00:06:27,839 --> 00:06:28,560 Speaker 3: on Sunday. 110 00:06:29,440 --> 00:06:32,800 Speaker 2: So those are our top stories for you this morning. Well, 111 00:06:32,839 --> 00:06:35,200 Speaker 2: you know, the football was exciting, but the markets factly 112 00:06:35,200 --> 00:06:39,360 Speaker 2: are also exciting today, Stephen, because of this a trade 113 00:06:39,400 --> 00:06:41,640 Speaker 2: deal between the US and Japan. So at the moment, 114 00:06:41,640 --> 00:06:45,000 Speaker 2: we're seeing the MSCI Asia Pacific Index broadly up by 115 00:06:45,040 --> 00:06:47,680 Speaker 2: one point eight percent, the nick A two two five 116 00:06:47,839 --> 00:06:51,080 Speaker 2: surging three point five percent, and you've also got Toyota 117 00:06:51,120 --> 00:06:54,960 Speaker 2: Motor Corporation. It's not the only one, but it's certainly 118 00:06:55,200 --> 00:06:58,080 Speaker 2: seeing a huge jump currently up fourteen point seven percent 119 00:06:58,160 --> 00:07:01,280 Speaker 2: right now. Stop futures for you are also surging one 120 00:07:01,279 --> 00:07:02,560 Speaker 2: point two percent higher. 121 00:07:02,880 --> 00:07:03,640 Speaker 4: A word in there. 122 00:07:03,640 --> 00:07:05,400 Speaker 2: For the bond markets, there were up a couple of 123 00:07:05,400 --> 00:07:07,600 Speaker 2: basis points on the ten year US treasure yield at 124 00:07:07,640 --> 00:07:10,440 Speaker 2: four thirty six. The Japanese yen is slightly we could 125 00:07:10,440 --> 00:07:13,240 Speaker 2: against the dollar down two tenths of one percent, and 126 00:07:13,280 --> 00:07:15,239 Speaker 2: then of course we're in the midst of earning season, 127 00:07:15,240 --> 00:07:17,720 Speaker 2: so we've still got Tesla and Alphabet to report. 128 00:07:17,880 --> 00:07:18,600 Speaker 4: On Wednesday. 129 00:07:18,640 --> 00:07:22,600 Speaker 2: The mag seven companies overall expected to post a combined 130 00:07:22,920 --> 00:07:25,400 Speaker 2: fourteen percent rise in second quarter profits. 131 00:07:25,680 --> 00:07:27,880 Speaker 3: Yeah, indeed, and on that story from Uniu Credit as well, 132 00:07:27,920 --> 00:07:31,520 Speaker 3: improving their outlook for fullier profit and shareholder distributions of 133 00:07:31,600 --> 00:07:34,480 Speaker 3: fullier profit expectations now lifted to around ten and a 134 00:07:34,520 --> 00:07:38,800 Speaker 3: half billion euros, the distribution to shareholders planning to get 135 00:07:38,840 --> 00:07:41,000 Speaker 3: to nine and a half billion euros this year as well. 136 00:07:41,000 --> 00:07:43,600 Speaker 3: The net income figure for the second quarter at three 137 00:07:43,640 --> 00:07:47,239 Speaker 3: point three billion euros, which was an increase as well. 138 00:07:48,120 --> 00:07:49,920 Speaker 3: In a moment, we'll bring you more on the US 139 00:07:50,000 --> 00:07:52,360 Speaker 3: Japan trade deal and look at how Chinese companies are 140 00:07:52,360 --> 00:07:53,960 Speaker 3: shifting their investment strategies. 141 00:07:54,000 --> 00:07:54,640 Speaker 4: In Europe. 142 00:07:54,680 --> 00:07:57,440 Speaker 3: But another story that we've been reading this morning, if 143 00:07:57,440 --> 00:07:59,960 Speaker 3: you hadn't perhaps realized it is twenty to twenty fo 144 00:08:00,240 --> 00:08:03,120 Speaker 3: but we are talking about meme stocks all over again. 145 00:08:03,360 --> 00:08:06,360 Speaker 3: They're meanier than ever, it seems. I don't know, if 146 00:08:06,360 --> 00:08:07,720 Speaker 3: you want to go back to the days of Game 147 00:08:07,760 --> 00:08:11,040 Speaker 3: Stop and bed Bath and beyond. This time around, it's 148 00:08:11,080 --> 00:08:14,720 Speaker 3: the department store Coals and the property website open Door 149 00:08:14,800 --> 00:08:18,160 Speaker 3: that have caught the internet's imagination. So quite similar to 150 00:08:18,200 --> 00:08:21,400 Speaker 3: in twenty twenty one, we're seeing traders piling into heavily 151 00:08:21,440 --> 00:08:25,400 Speaker 3: shorted companies in a bit to strike quick riches. Some 152 00:08:25,520 --> 00:08:28,680 Speaker 3: similarities to twenty twenty one stock markets at all time highs. 153 00:08:28,680 --> 00:08:32,080 Speaker 3: Bitcoins doubled in less than a year. But Steve Stasnik 154 00:08:32,080 --> 00:08:35,440 Speaker 3: for Interactive Traders is charmingly called this a flight to crap. 155 00:08:36,679 --> 00:08:38,720 Speaker 4: I love that that is wild. 156 00:08:38,760 --> 00:08:41,320 Speaker 2: Look, I mean, you know, not to do down the 157 00:08:41,360 --> 00:08:43,480 Speaker 2: retail investor, I mean, why not, you know, if you've 158 00:08:43,480 --> 00:08:46,520 Speaker 2: got might invest in you, you know you want to 159 00:08:46,559 --> 00:08:49,560 Speaker 2: try to make a profit, of course, But yes, I 160 00:08:49,600 --> 00:08:52,160 Speaker 2: think it is also kind of a difficult moment, whether 161 00:08:52,400 --> 00:08:55,280 Speaker 2: you know, when people pile into these yeah, to these stocks, 162 00:08:55,280 --> 00:08:57,160 Speaker 2: it's yeah, and I don't want to go back to 163 00:08:57,160 --> 00:08:58,720 Speaker 2: twenty twenty one though. No. 164 00:08:58,880 --> 00:09:01,520 Speaker 3: Indeed, perhaps not the moment we'll remember from twenty to 165 00:09:01,520 --> 00:09:04,360 Speaker 3: twenty one down the line. Let's bring you more details 166 00:09:04,400 --> 00:09:06,640 Speaker 3: though on that top story this morning in the trade 167 00:09:06,640 --> 00:09:09,760 Speaker 3: agreementstry in the US and Japan lowering tariffs and exchange 168 00:09:09,760 --> 00:09:12,160 Speaker 3: for commitments to purchase more American goods and set up 169 00:09:12,200 --> 00:09:15,040 Speaker 3: that fund to invest five hundred and fifty billion dollars 170 00:09:15,360 --> 00:09:18,040 Speaker 3: in the US and Japanese media are also reporting the 171 00:09:18,080 --> 00:09:22,400 Speaker 3: Prime Minister Shigeroshiba will now resign from his post. Winburgs 172 00:09:22,440 --> 00:09:25,120 Speaker 3: John Harskovetz joins US from Tokyo for more, John, great 173 00:09:25,160 --> 00:09:27,440 Speaker 3: to talk to you. Let's start with the trade deal. Then, 174 00:09:27,760 --> 00:09:29,439 Speaker 3: what are the key headlines from it? 175 00:09:30,400 --> 00:09:32,440 Speaker 5: Im sure? The main thing is the reduction of the 176 00:09:32,480 --> 00:09:37,000 Speaker 5: tariffs trumpet twenty five percent that's been knocked down to 177 00:09:37,040 --> 00:09:41,800 Speaker 5: fifteen percent, and this also applies to automobiles and automobiles 178 00:09:41,800 --> 00:09:44,559 Speaker 5: in all the parts are the bulk of Japanese exports 179 00:09:44,600 --> 00:09:48,280 Speaker 5: to the US. This is the biggest sector effected, and 180 00:09:48,559 --> 00:09:50,600 Speaker 5: this is the one that's going to see the rate 181 00:09:50,679 --> 00:09:54,080 Speaker 5: drop by ten percentage points of fifteen percent. As you 182 00:09:54,160 --> 00:09:57,360 Speaker 5: mentioned previously. Auto shares like Toyota have jumped on the news. 183 00:09:57,360 --> 00:10:01,080 Speaker 5: There's finally some sort of certainty what's going on. And 184 00:10:01,440 --> 00:10:03,960 Speaker 5: the one thing that Japan offered in return is like 185 00:10:04,679 --> 00:10:08,520 Speaker 5: dropping some of these non tariff barriers, like accepting US 186 00:10:08,559 --> 00:10:13,200 Speaker 5: safety standards. But the thing is, for the Japanese auto market, 187 00:10:13,280 --> 00:10:16,160 Speaker 5: even with these changes, you're probably not going to see 188 00:10:16,160 --> 00:10:19,760 Speaker 5: a lot of US cars here. About forty percent of 189 00:10:19,760 --> 00:10:23,040 Speaker 5: the Japanese auto market is this type of this car 190 00:10:23,080 --> 00:10:27,520 Speaker 5: called a K car for light small engine displacement, small 191 00:10:27,559 --> 00:10:30,600 Speaker 5: in size and weight, and the US automakers don't make 192 00:10:30,679 --> 00:10:35,319 Speaker 5: anything for this market. Also, Japanese cars are on the 193 00:10:35,440 --> 00:10:39,319 Speaker 5: right side of the road. Japanese cars drive on the 194 00:10:39,360 --> 00:10:42,760 Speaker 5: other side, as US cars steering wheels on the other side, 195 00:10:43,000 --> 00:10:47,120 Speaker 5: So the US cars probably aren't going to be making 196 00:10:47,200 --> 00:10:51,160 Speaker 5: much of an inroad here. And other things in the 197 00:10:51,200 --> 00:10:54,080 Speaker 5: deal are this five hundred and fifty five five hundred 198 00:10:54,080 --> 00:10:57,600 Speaker 5: and fifty billion dollar fund, which Trump says will be 199 00:10:57,679 --> 00:11:00,480 Speaker 5: similar to a sovereign investment fund. I think we still 200 00:11:00,520 --> 00:11:02,040 Speaker 5: have to wait for the details to find out what 201 00:11:02,160 --> 00:11:06,440 Speaker 5: this is. It It may it may be difficult to 202 00:11:06,440 --> 00:11:10,600 Speaker 5: see Japan actually giving this amount of money when it's 203 00:11:10,640 --> 00:11:15,840 Speaker 5: already one of the largest foreign direct investment countries in 204 00:11:15,920 --> 00:11:18,040 Speaker 5: the US. So it's just it's a lot of money 205 00:11:18,080 --> 00:11:19,959 Speaker 5: on top of what's already gone on. We have the 206 00:11:20,000 --> 00:11:23,920 Speaker 5: blowing aircraft, about one hundred more agricultural goods, increase in 207 00:11:23,960 --> 00:11:28,360 Speaker 5: defense spending, and there's also an LNG product project in 208 00:11:28,400 --> 00:11:31,520 Speaker 5: Alaska that the US have been pitching for years, bringing 209 00:11:31,679 --> 00:11:35,880 Speaker 5: LNG from the state to Asia to places like Japan. 210 00:11:36,400 --> 00:11:40,520 Speaker 5: Whether this will actually happen is another matter. Trump has 211 00:11:40,520 --> 00:11:43,880 Speaker 5: been pitching this for a while. Actually getting this and 212 00:11:43,920 --> 00:11:47,560 Speaker 5: getting the purchases getting in Dasias is something that is 213 00:11:47,920 --> 00:11:49,680 Speaker 5: a bit in doubt at this moment. 214 00:11:50,920 --> 00:11:54,440 Speaker 2: Okay, interesting, So the main issue on the car manufacturers. Yes, 215 00:11:54,520 --> 00:11:58,000 Speaker 2: Honda Motor Corporations share price up by twelve percent and 216 00:11:58,120 --> 00:12:02,520 Speaker 2: Nissan Motors up ten percent at the peak. The kind 217 00:12:02,559 --> 00:12:05,360 Speaker 2: of immediate reaction then to this deal. But look, there 218 00:12:05,240 --> 00:12:09,520 Speaker 2: also reports in Japanese media that the Prime minister is 219 00:12:09,600 --> 00:12:12,400 Speaker 2: now planning to resign. So what more can you tell 220 00:12:12,440 --> 00:12:13,520 Speaker 2: us on that front? 221 00:12:14,480 --> 00:12:17,400 Speaker 5: Sure way it looks now what we've seen in Japanese media, 222 00:12:17,480 --> 00:12:21,720 Speaker 5: people close to the ruling Liberal Democratic Party are saying 223 00:12:21,760 --> 00:12:24,720 Speaker 5: that Prime Minisy issue, but is looking to resign in August. 224 00:12:24,760 --> 00:12:28,320 Speaker 5: This will set up a leadership struggle for the party 225 00:12:28,360 --> 00:12:31,959 Speaker 5: that's ruled for most of Japan's post war history. But 226 00:12:32,040 --> 00:12:36,240 Speaker 5: the interesting thing is that the LDP, the ruling LDP party, 227 00:12:36,640 --> 00:12:40,480 Speaker 5: doesn't have an outright majority in either house of parliament. 228 00:12:40,920 --> 00:12:43,560 Speaker 5: So even if they pick a leader, there's probably going 229 00:12:43,600 --> 00:12:46,160 Speaker 5: to be some deal making with some of the smaller 230 00:12:46,240 --> 00:12:49,400 Speaker 5: parties to get that leader to stay on as the 231 00:12:49,440 --> 00:12:54,880 Speaker 5: prime minister. So it's interesting to see Isshuba was suffered 232 00:12:55,080 --> 00:12:57,280 Speaker 5: the defeat in the upper house election this month. He 233 00:12:57,360 --> 00:13:01,760 Speaker 5: suffered a previous defeat in a lower warehouse selection. He's 234 00:13:01,760 --> 00:13:04,600 Speaker 5: been on the job for about nine ten months. His 235 00:13:04,760 --> 00:13:10,120 Speaker 5: popularity is below, his approval readings below twenty percent. That's 236 00:13:10,160 --> 00:13:13,080 Speaker 5: considered when you get below twenty percent is consider a 237 00:13:13,200 --> 00:13:19,600 Speaker 5: danger zone in Japan. And two election losses, low popularity 238 00:13:19,720 --> 00:13:23,040 Speaker 5: and a lot of people angry about inflation. It's just 239 00:13:23,600 --> 00:13:26,400 Speaker 5: it's been he just doesn't have a way to stay 240 00:13:26,440 --> 00:13:27,280 Speaker 5: on in the job. 241 00:13:28,480 --> 00:13:30,760 Speaker 3: Okay, John, thanks very much for being with us. John 242 00:13:30,760 --> 00:13:33,800 Speaker 3: Houskwetz and what in Tokyo there with more on these 243 00:13:33,800 --> 00:13:35,120 Speaker 3: stories out of Japan this morning. 244 00:13:36,080 --> 00:13:40,000 Speaker 2: Well, meanwhile, European Union leaders are traveling to Beijing tomorrow 245 00:13:40,040 --> 00:13:42,720 Speaker 2: for a high level summit. It could signal a turning 246 00:13:42,760 --> 00:13:46,080 Speaker 2: point in a sometimes strange relationship at a time when 247 00:13:46,120 --> 00:13:50,120 Speaker 2: both parties are facing Donald Trump's trade tariffs. Chinese companies, too, 248 00:13:50,200 --> 00:13:52,840 Speaker 2: have been shifting their investment strategies in Europe, with a 249 00:13:52,880 --> 00:13:56,360 Speaker 2: move to higher value industries and building their own factories 250 00:13:56,400 --> 00:13:59,680 Speaker 2: with the help of state subsidies. Bluebag's Libby Cherry has 251 00:13:59,720 --> 00:14:02,080 Speaker 2: been about this in today's Big Take stories. 252 00:14:02,080 --> 00:14:04,520 Speaker 4: She joins us now from Frankfurt for more. 253 00:14:04,840 --> 00:14:10,040 Speaker 2: Good Morning, Libby, How have Chinese attitudes to European investments shifted? 254 00:14:11,040 --> 00:14:14,120 Speaker 7: I think what is really important when we're talking about 255 00:14:14,640 --> 00:14:19,360 Speaker 7: the kind of shift in strategy that we've seen from 256 00:14:19,480 --> 00:14:22,400 Speaker 7: Chinese companies when it comes to their investments in Europe 257 00:14:22,720 --> 00:14:24,480 Speaker 7: is to put it in the kind of broader arc 258 00:14:24,560 --> 00:14:28,240 Speaker 7: of where we've seen European investments. So I would say 259 00:14:28,240 --> 00:14:30,480 Speaker 7: the peak of that investment, and we're looking at a 260 00:14:30,520 --> 00:14:34,160 Speaker 7: report pit together by Radium Group and Merricks was in 261 00:14:34,200 --> 00:14:37,920 Speaker 7: twenty sixteen, which was really we saw a lot of 262 00:14:38,000 --> 00:14:41,400 Speaker 7: Chinese companies looking to buy I don't know, stakes and 263 00:14:41,480 --> 00:14:47,000 Speaker 7: football clubs, a lot of trophy assets, and since then, 264 00:14:47,280 --> 00:14:51,920 Speaker 7: obviously the climate has slightly shifted, and you know, we've 265 00:14:51,960 --> 00:14:55,920 Speaker 7: seen kind of seven years of decline up until twenty 266 00:14:56,000 --> 00:14:59,280 Speaker 7: twenty four, where we've seen a bit of a rebound. 267 00:15:00,080 --> 00:15:02,040 Speaker 7: It does seem when we sort of speak to people 268 00:15:02,080 --> 00:15:05,680 Speaker 7: anecdotally that Chinese companies are looking to do a bit 269 00:15:05,720 --> 00:15:08,400 Speaker 7: more investment in Europe. But obviously this comes in a 270 00:15:08,440 --> 00:15:11,600 Speaker 7: context where investment has really really come down. I mean, 271 00:15:11,640 --> 00:15:13,800 Speaker 7: the levels in twenty twenty four are about a fifth 272 00:15:13,800 --> 00:15:18,720 Speaker 7: of where they were at the peak in twenty sixteen. 273 00:15:19,520 --> 00:15:21,400 Speaker 3: One of the main reasons for it then leby. 274 00:15:22,400 --> 00:15:24,880 Speaker 7: So a lot of this comes down to the politics. 275 00:15:26,000 --> 00:15:30,240 Speaker 7: So obviously on the Chinese side, what's happened is you've 276 00:15:30,280 --> 00:15:33,720 Speaker 7: seen a lot of from the government looking to trying 277 00:15:33,760 --> 00:15:36,080 Speaker 7: to shift Chinese investments to more of these sort of 278 00:15:36,400 --> 00:15:39,720 Speaker 7: so called strategic investments, so that might be for example, 279 00:15:39,720 --> 00:15:43,240 Speaker 7: in battery technology rather than the sort of trophy assets 280 00:15:43,280 --> 00:15:47,640 Speaker 7: I was talking about before. And on the European side, 281 00:15:47,680 --> 00:15:51,120 Speaker 7: sort of in response to that shift to more strategic investments, 282 00:15:52,320 --> 00:15:55,200 Speaker 7: you've seen a lot more tightening of screening and that 283 00:15:55,360 --> 00:16:00,000 Speaker 7: stopped some Chinese acquisitions from occurring. However, it isn't whole 284 00:16:00,280 --> 00:16:02,960 Speaker 7: political So if we look at the industries where Chinese 285 00:16:03,000 --> 00:16:07,720 Speaker 7: companies have traditionally invested, so for example, in automotive machinery, 286 00:16:08,040 --> 00:16:10,480 Speaker 7: we've seen a lot of macroeconomic pressure that. 287 00:16:11,240 --> 00:16:13,960 Speaker 3: This is Bloomberg Daybreak Europe, your morning brief on the 288 00:16:14,040 --> 00:16:17,080 Speaker 3: stories making news from London to Wall Street and beyond. 289 00:16:17,360 --> 00:16:21,359 Speaker 2: Look for us on your podcast feed every morning on Apple, Spotify, 290 00:16:21,440 --> 00:16:23,320 Speaker 2: and anywhere else you get your podcasts. 291 00:16:23,440 --> 00:16:26,480 Speaker 3: You can also listen live each morning on London Dab Radio, 292 00:16:26,480 --> 00:16:29,200 Speaker 3: the Bloomberg Business app, and Bloomberg dot Com. 293 00:16:29,240 --> 00:16:32,000 Speaker 2: Our flagship New York station is also available on your 294 00:16:32,040 --> 00:16:36,760 Speaker 2: Amazon Alexa devices. 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