haslinda, amin. getting job support from the pboc. more fed officials signal a delay to rate cuts. cleveland's loreta wants to see more data. we put the currency and inflation story together to go shopping. find out why japan tops the destination list for luxury bargain hunters. energy investments directive of income investments. we speak to the c.e.o. of one of the leading renewable energy companies in southeast asia. let's get you to markets asia. expanding gains at highs even though the u.s. closed in negative territory, the longest

losing streak this year. of course it is about the strong dollar which is taking a breather now. it is down 1/10 of 1%. recalibrating yet again fed rate expectations. getting a lift on the back of that weaker dollar. yen at the lowest level in more than 30 years. the chinese yuan, 724.24 is the level we're looking at now. paul, let's start with you. it is fx. it is about the strong dollar and we saw how the finance ministers in japan and south korea met with janet yellen. how significant was that

meeting? >> asia was meeting with the u.s. and expressing clearly the dissatisfaction with the current exchange rate and the pressure on their surgeon currencies. he said we have serious concerns. i want to emphasize the serious concerns. i think the takeaway they got is if the pressure continues to build, then there is a green light for them to intervene in the market. south korea and japan probably will have felt quite pleased with the outcome. what we're seeing in the market is a little bit of that pressure coming off. pressure is a little bit more cautious given that bank drop. allowing currencies to strengthen and dollar weaktons come through. that was an important meeting. it may be just a temporary respite. who knows how long it is going to last depending on whether the fed expectations get pushed

back. >> pierre, fed expectations. >> the outlook remains dependent upon inflation. we have had a decline of inflation at the end of last year. this first quarter of 2024, we have seen a resurgence of the inflation expectations. that has the markets quite worried for obvious reasons. in our view, this is a pause in the disinflationary trend. over the long-term, we still think inflation will gravitate very slowly back to the fed's 2% target. >> what'll price out rate cuts this year? we have gone from 7% to 2%. >> you're right. the movement has been dramatic. from november of last year until now, we have gone completely

full circle. higher inflation would essentially price out the remaining two rate cuts. maybe chairman powell hinting at rate hikes would boost the market to some extents. we're not there yet. the federal reserve has to be patient and keep interest rates at the current level for as long as they need to. >> your position, the yield is quite confident so what is the calculation at some point the fed is going to start cutting? >> it is a combination of those two factors from a evaluation perspective, 10-year yields at 4.6 are relatively attractive in our view, the ceiling in the last 25 years has been 5%. the risk-reward in our opinion is quite attractive. there is a soft landing, you can

see the yields gravitate downward. another benefit of fixed income is the diversification benefits are back with rates of 5.5%. if there is a hard landing, you can expect lower yields and that would be positive. if you take those outcomes, we see that in having long exposure in the fixed income markets. >> right now they are attractive, definitely. as you said, the markets are now pricing in one or two rate kus by the end of the year. -- cuts by the end of the year. monetary policy works. everyone has given up on the fact that it works. in our view it works with long variable lags. of course the u.s. economy has been more resilient, more

resilient than outside of the u.s. we do expect growth to revert back to trend. >> we talk about how trade is hedging themselves against risk. are we clear what that risk really is? is that inflation? slowing growth? what are you seeing? >> right now risk clearly is inflation. that has probably has the markets moving the most. that has been the most anticipated data point for sometime now by the markets and widely expected. we have had some false -- for example, c.p.i. in disconnect with p.c.e. sometimes it is a little bit hard to get a read. we have gone as i said, in different directions at different points in time. a resurge oarches inhalation like what we saw in 2021 and 2022 is the main risk for bond markets. there are other rescue, of

course. in our view, we are relatively constructive given where evaluations are today. your downside for bond markets is a lot less because yield is quite high. >> given what you're saying, it would make sense if you were overweight u.s. markets but is that right, are there other parts of the world where you find good, attractive opportunities now? >> yes, absolutely. that is one feature of the bond markets today. fixed income is attractive from a global perspective. you look at the u.k., europe, government bond yields, high quality corporate bonds. it is important to stay globally diversified as regions may be desynchronized. maybe with the ecb, the bank of england cutting before the

federal reserve will open up additional opportunities. in our flex income portfolios we have a global approach and we try really take advantage of wherever they may be. >> we talk about how credit markets are priced for perfection. what are the risks out there? how do you factor in geo-political risks in the middle east? >> yeah, so when we say that typically, we look at corporate bond spresd which are quite tight vs. history. your upside to some extent is capped and then if there is an exception, a bad risk aversion like we saw over the last few days, you can see the corporate bond spreads widen quite a bit. we think it is important to remain relatively defensive within credit given where we are in the monetary cycle. be patient in corporate bonds. wait for better entry-pounds in the future.

the geo-political risks are very difficult to price for aside from being very well diversified. they might crop up again and give investors a better opportunity in the future. >> how about the opportunities in this part over the world? >> in asia, we find investment grade corporate bonds that in our view remain attractive. those high u.s. dollar yield make it interesting carry play. as you point out, the u.s. dollar has been quite strong in recent weeks driven by the interest rate differential gap that is increasing. as we say in our view over the medium term u.s. economy growth is going to normalize and inflation is going to normalize. maybe that expensive evaluation of the u.s. dollar will come down to some extent and the u.s. dollar might appreciate in the medium term. there will be opportunities to

add to asian currency in our view. >> just to put you on the spot a bit. on a total return basis, i guess global bonds are down more than 3% this year. it is not working that well. equities up 4% in the first quarter. is it just a question of a waiting game? when does that diversification benefit, feel free to returns basically? >> you're right. this year, 2024, has been more difficult for bond markets. to some extent it is a reversal of the strong price gains that we saw at the end of 2023. in our view, we have a evaluation approach. as u.s. yields continue to rise and government bonds continue to rise, we will be quite tempted to gradually scale in to fixed income to increase our exposure. right now sentiment seems

bearish on bond markets but if you take a contrarian approach that is probably a good indicate indicator. >> are you assessing the challenges faced by several banks in asia in particular. we have seen how bank nearby was bank nearby wasforced to interv. >> they are federal reserve dependent and are waiting for neighbor u.s. central bank to make the first move. on the other hand, in many parts of as i quarter, we haven't seen the same demand side pressures as in markets and we would include japan there where the rate hikes have been limited. >> you talked about the opportunities out there in market.

what is the best conviction call out there? what would do best by the end of 2024 do you think? >> so within our global flexible strategies, we still think buying long dated government bond or corporate bonds is really the way to go. if you take a 12-month view, where will interest rates be in 12 months? of course we're very reactive and we'll adjust our position. in our view, the next move is probably lower and if yields do continue to increase, we will gradually increase our duration. >> and to go along with that theme a little bit more, what is your best bet for when the fed starts to cut rates? >> central banks all over the world have said they will be patient. they are in no rush to start cutting interest rates. they would rather cut rates too late rather than too soon. if you look at the federal

reserve, june is looking a little bit premature in my opinion. even july might be depending on the data might be a little too soon. i think we will have to wait until q 4-6r7b in the u.s. >> bloomberg's executive editor for asian markets. something to tell you about. we have the japanese bank governor meeting with jerome powell in washington, d.c. to discuss the current situation of the u.s., the chinese economy as well as far as monetary policy and financial stability again. the two, the governor of pboc and jerome powell meeting in washington, d.c. coming up, we'll get eric

francia's energy outlook. first, releasing the fourth quarter results. that is coming up next. keep it here with us. this is bloomberg. ♪ so, what are you thinking? i'm thinking... (speaking to self) about our honeymoon. what about africa? safari? hot air balloon ride? swim with elephants? wait, can we afford a safari? great question. like everything, it takes a little planning. or, put the money towards a down-payment... ...on a ranch ...in montana ...with horses let's take a look at those scenarios. j.p. morgan wealth management has advisors in chase branches and tools, like wealth plan to keep you on track.

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>> we're keeping an eye on asian chip makers as we count down to tmc's earnings today. china sales likely to be heard. tsmc up 1%. smic up almost 2%. tsmc's capital spending plans will be a key focus. that is after asml posted orders short of expectations. chip makers laid off buying

equipment in the fourth quarter. rob, do those afml results give us any insight or indication what we can expect if tsmc today? >> very good question. asml has an enormous order book that stretches out multiyears. so the surprise we saw last night is that the ortds just --d were lower than expected. i don't think it has a real bearing on tsmc's quarter that will be reported later today or for rest of the year. however there is a question mark as to the sustainability and the outlook of the demand environment post this year. that is something to file away and bear in mind as the year progresses. haslinda: rob, i'm looking at the estimates for tsmc. net income estimate 214 taiwan

dollars. can they beat expectations? >> yeah. as yourself and your viewers know, we know what the q1 revenue number was. it was slightly ahead of the guidance. we also had the earthquake. that seems fairly negligencable on the company. a.i. is well known. with their revenue beats or coming slightly ahead of the mid range, the market is expecting a decent set of numbers but back to what you said a moment ago, there are potential question marks on the long-term horizon given asm larched the weakness we're seeing from apple. they account for roughly 20% to 25% of tsmc's revenue.

nvidia will remain in the driver seat. there are question marks on the medium term horizon with apple and also the asml side. haslinda: given this question mark you're talking about, how does q2 and the rest of the year look like? if you were to look into the crystal ball, what would you see? >> i guess that is what i'm paid to do. so i think, again, the market, looking bawrsd, it is unlikely we get any major surprises out of q2. drivenly nvidia and a.i. let's take a quick step back. roughly 14% of tsmc's revenues come from the auto sector from e.v.'s and mainstream automotives. we are seeing weakness from that site. particularly china e.v.'s. that is a question mark.

we are seeing incremental weakness. that is an additional question mark. a.i. remains robust. we all know that story. there are potential signs of incremental weakness coming through. given the backdrop of weakness we're seeing in markets, this company has to deliver earnings outlooks above market expectations to potentially drive the stock higher from here. i think that is a pretty rational view from where we stand. haslinda: we have a bloomberg scoop that micron is about to get $600 million in grants. it sounds like empty competition to me. >> it is a great scoop that the news colleagues have got. micro around in intel are two of the few remaining semiconductor

companies that not only design their chip in the u.s. but also fabricate them dough de-- domestically. will it change the competitive dynamics at all? it should help boler micron's position and outlook. it is a notoriously volatile market and micron's near term outlook is determined by the supply of the market rather than a u.s. grant. haslinda: 6 billion ain't too happen isy. plenty more ahead. keep it here with us. this is bloomberg.

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haslinda: welcome back. here are some of the top stories out of china we're following. president biden has called combine xenophobic during an election campaign stop in pennsylvania. relation between two nations have stabilized of late but tensions are growing in manufacturing. >> they have a population that is a lot more people in retirement than working. they are not bringing -- they are xenophobic. nobody else coming in. they have a real problem. haslinda: china's commerce industry has blasted a biden plan for its maritime chip building sector. they announced an investigation

after a petition from five major groups. the review frames normal trade investments as harmful to the u.s. and is driven by domestic politics. the chinese yuan, data from swift shows a portion of yuan transactions rose to 7.4% in march, the highest since a new baseline was created in july and meanwhile the euro share continued to decline dipping below 22% last month. the yuan has been the world's fourth most transacted currency since november. here's a look at mobile health network solutions. a singaporean telehealth startup. more than 350% rally. the company's market capitalization has ballooned to $650 million despite reporting a loss in its most recent fiscal year. take a look at that.

a massive 350% upside. we're keeping an eye on aussie miners. bhp production rising 3% in the first three months. this is the world's biggest miner. shrugging off heavy rainfall along with dwindling deand in china. the group up more than 2%. up next, renewable energy. keep it

haslinda: shanghai, shanghai. welcome back. china markets heading to lunch. reviegz losses up 6/10 of 1%.

most clients avoiding china despite cheap valuations. china up about o of% from a low we saw in january. gains too for china and shanghai shenzhen. china heading to lunch. we have japan coming back from allergy. let's check in on how japan and the rest of asia is faring. >> we're looking at some calm returning to japanese markets today. after multiple days of losses no thanks to that higher for longer fed narrative. today we see the nikkei,

topix.asml flashing a warning sn about demand. let's take a look at what we're seeing among currencies. obviously given how this fed narrative is playing out, that is going to be a bit of a headache for asia central banks. we are getting a sense that the calm in the stock market might be short-lived. we have seen the again aback a-. we got a joint statement from the u.s. the pboc coming in with some jawboning but philippines something we're focusing on.

we heard from the deputy governor of the philippine central banks saying that inflation the second quarter is likely to remain elevated before easing and separately the governor of the bsp said any easing is likely to come pushback into next year. haslinda: that's right. not great for asian currencies. very closely watched level of 57 per dollar. expectations that the fed will delay interest rate cuts. let's find out. our next guest runs a corporation. eric franceier.

>> we're pretty much diversified. we have businesses in vietnam and australia. indonesia and the u.s. the diversification helps us manage the volatility including currency volatility. as you know, as a defactor export business that strengthens the value of our international business as we repatriate back to the philippines. we're a growth company and we typically reinvest at this point any cash flows into expansion and growth. overall, obviously with significant exposure in the australian dollar, u.s. dollar, it is good hedge. haslinda: is there concern about debt that you may have? >> not necessarily. because our policy, our company policy is to match the currency

of the revenues with the debt. so we have a perfect match through a natural matching or hedging. so we do have exposure in terms of currency mismatch. haslinda: we know when it comes to renewable capacity, you have a big ambition getting to 20 gig watts. where are you with that and what is the plan to ramp it up? >> we're around 5 gig watts. gigawatts. we're closer to 6 gigawatts. we actually essentially achieved that two years ahead of schedule. there is good momentum obviously with the uncertainty an volatility around the world. we need to calibrate the growth. doesn't mean that we will

necessarily slow down, but it is more of a calibrated approach. for example, with rising interest rates, you just need to plan ahead that as in when the rates taper, that's when you step on the gas pedal again. that is the theme, some of our shovel-ready projects, if you will. we just need to exercise a little bit of patience anywhere. overall we are ahead of plan. we have the luxury of being more patient in terms of hitting the green go ahead button. haslinda: how about projects like to floating solo project. how is that coming along and contributing to your overall targets? >> it is a huge one. we have 800 he can't he can'tors hectors on the lake.we are in tg

for the permits. getting the permits. it is going to take time but we will certainly get there. in the meantime, we're full speed ahead with expansions in some of our onshore wind projects and ground mounted solar. so in fact we are operating -- today we have over 500 megawatts of solar planned in the philippines that was recently operational providing, you know, a lot of needed -- much needed power to the grid, especially during the summer because that is peak production of solar. it helps a lot in a very tight situation. we need to roll out much more. haslinda: you talk about expansion within the philippines. how about expand expanding the footprint around the region? >> australia is our largest market outside of the

philippines. there is a lot of activity there. we recently signed on the 200 megawatt battery storage. forging ahead with energy -- you need to balance renewables with a lot of storage. vietnam, we're doing across border as well. we're involved in a large -- the first and the largest wind project from laos exporting to vietnam. we're doing some expansion in india as well which is a very large market. obviously philippines remainingst our core that accounts for 40% at least of our business and there is a dire need for expansion in the philippines. we're pretty much focused on accelerating scale. haslinda: can you put -- to your expansion plans? >> we're at 5 gig watts.

haslinda: in terms of investment money funding that you're putting there. >> over the balance of the decade we're going to look at 15,000 megawatts. it will require about $15 billion of capital of which 40% will come from the philippines. we'll be looking to invest around $6 billion of capital in the next six years or so or roughly about $1 billion of capex in the philippines. haslinda: will this help you become the largest platform? >> that is the ambition. that is the aspiration. we have a lot of momentum and getting strong support from our partners, from the banks, from the international institutions. i think there is a lot of momentum for doing this renewables push. haslinda: we though you are doing some drilling. you're leading in consortium in the south china sea.

somehow that coming along? >> we're not doing any drilling there. haslinda: not? >> we're not involved there. we have a unit that has an oil and gas service contract. we're not putting any capital behind the drilling but we're act i everly looking for the right sponsor. the philippines needs much an -- indigenous resource as it ca. there are other contracts that are promising. our subsidiary has one of them. unfortunately because we're renewables focused not going to be risking that by ourselves. haslinda: energy a big snu the philippines. where are we with how the philippines is gearing towards

its renewable transition? >> they have set the right goals and policies in place with 35% renewable by 2030. we're currently at 22% and expanding to 50% by 2024. it is a large goal. by our estimation we would need to deploy, construct new capacity of around 18 gigawatts of renewables capacity between nowp and 2030 and well over 50 gigawatts to 2040. and address the growing demands over the philippines which is still growing about 5% per anum. one of the key con traints is the transmission line. we are working with the grid operator and the policy makers

to make sure this infrastructure is built. on our case, we have actually invested quite a bit of transmission connection infrastructure to enable large scale solar plants that can later on be incorporated with battery storage to make them more reliable and decrease our need for fossil fuel plans which by the way, back to the theme of foreign exchange, fossil fuel plants, for coal, half of the cost of little bit linked to fuel which is volatile in terms of commodity price and foreign exchange and gas is 70% to 80% of the elect price of gas is linked again to gas prices so to be able to accelerate the scale of renewables and battery storage, that will help us not only hedge in terms of energy security and less reliance on imports but also fix the price

because once you lock in -- it is mostly capex. there is no marginal costs. it is a good balance. hopefully the department of energy will create the policies to really push renewables and shortage in the philippines. one of the measures or mechanisms that we are piloting with the support of monetary authority of singapore, the initiative, is this notion of transition credits which is a form of carbon credits, high integrity carbon credits which entail the closure of coal plants and the replacement with clean energy. it will help with the retirement of the coal plant that we have

influence on. 246 megawatts to bring up the retirement from 2040 to 2030. the responsible thing to do given the tightness in this the market is to replace that with clean reliable and affordable energy. our clean energy solution will entail not only building the ample amount of solar and wind farm. batteries storage as it stands today for that use case is not economical. haslinda: great insights. thank you for joining us. eric francia. still to come, how dollar strength and lingering inflation are turning japan into a paradise for luxury shoppers. details next. keep it here with us. this is bloomberg. ♪

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haslinda: all right.welcome bac. let's do a check on the markets. we're seeing gains in asia. unlike how the u.s. closed yesterday. you have india currently in positive territory in the first minute of trade. up 3/10 of 1%. we're keeping an eye on infosys. mixed picture there. let's get to the fed. fed chair jerome powell's caution on rate cuts this week amid persistent inflation. the situation has changed from when we kicked off the year. >> i was discussing it with you in december when jerome powell

sounded very dovish and expectations were high that we were going to have several interest rate cuts this year. how the situation has changed, been pushed back not just from jerome powell but other fed speakers as well. there has been a reversal in so many things yet the stock market continues to do well. in term of the currency specifically, there is a meeting going on this week in washington. you can hear the concerns from asian finance ministers, very worried about what the strong dollar is doing to their currencies. they don't really want to raise interest rates to protect their currencies. they were hope that the united states would help them out by weakening their interest rate signal. that is not happening. janet yellen today has come out with the japanese and south koreans that she has sympathy

them. she is giving them the green light. if you want to support your currencies, we're not going to stop you. haslinda: that is why the markets are looking intervention for the yen. strong dollar also changing world of shopping. for savvy shoppers with a nose for luxury bargain, japan is proving hard to beat. let's bring in lisa in tokyo. and ada in hong kong. we're seeing all kinds of deals in japan. the japanese have been gaff taking it, descending on japan to get those bar gaps. -- bargains.you have to wonder t will last. >> i was there and it was full of tourists from the u.s. and across europe and asia hoping to get their hands on luxury goods. they discovered that basically with the yen being so low and the ability to shop duty-free

without tax, the ability to get savings on hermes scar t'wolves chanel bags. it is a very good sentiment now. they are holding strong currency. haslinda: in terms of lvmh alone, i think it saw japan sales rise 30% when other parts of asia saw a decline in sales. we're also seeing big demand for discount stores minting billionaires in asia. talk to us about it and will this trend last? >> absolutely. so when you look at lvmh and the luxury shopping, it is mostly for international travelers. for the japanese people themselves when they are in the country with the high inflation that they are experiencing, it is quite tough on their wallet. so what we're seeing is some japanese retailers refraining

from upping the selling prices just because they are scared to scare people away from the shops. with the inflation, people need to be mindful of where they are spending. are they spending on consumer staples where they need to feed their families and also keep a family rung or will they have sufficient extra cash to spend on luxury? with this discount, it is probably going to stay longer because are looking for more value from money. >> i have a question about the yen. obviously the weakness of the yen has attracted a lot of people as you say. do you get any sense of which point maybe they would not want to come to japan? let's say went down 130. would that make japan too expensive for foreigners?

>> to be honest, i feel even at 130 it would still be quite attractive. you're thinking about where it was before covid where dollar yen was at 110. getting almost a 40% discount compared to when the yen was much stronger. even at 130, i think the demand to come to japan would still be quite strong. haslinda: we're seeing a lot of competition from chinese platforms,e-commerce platforms. how is that playing out? >> i think that is always a tricky one to navigate. with thee-commerce platform we are seeing a proliferation of cheaper goods for the people in the country. and in japan, say, for example, with the constrain in spending powers given the persistent inflation, we think people would

increasingly utilize various platforms and various channels to get cheaper goods. haslinda: so mark, in the end, where do you think asian currencies will be headed by year end if there is no rate cut? >> the way in which the central bankers and finance ministers are stepping up their intervention is suggesting they are losing patience and they are getting close to drawing a line in this the sand. the way that janet yellen spe are not going to stand in their way. if the fed doesn't change interest rates, somehow the asian countries are going to take it into their own hands. we may see a few asian countries at the same time buying their currencieses. they will be quite e febtsive. we're probably reaching a pointed where they can't stand it much more. they are going to take it into their own hands. once they stabilize the

currencies, you'll probably start to see some improvements. you would expect asian currencies will end stronger than they are now. haslinda: lisa, you get the final question. i'm looking to go to japan of course. when it comes to lux brands, they tend to equalize the prices. are they likely to do that? >> like you said, these big luxury brands are quite savvy. they want to equalize prices globally. however what you're seeing with the yen is that it is fluctuating. it keeps getting weaker. the volatility. there is a lot of volatility. you have a very savvy shopper, you're here in japan holding stronger currency, you able to score very good deals. one product that we looked at was a watch. usually retails for $65 noon the u.s. in japan you can get it for around $5,000 here. giving savings more than $1,000

here. it is quite a good deal in japan. haslinda: given how the dollar has been resilient, i will be on the next flight to tokyo. thank you so much for playing with us today. plenty more ahead. keep it here with us. this is bloomberg. ♪

haslinda: a picture paints a thousand words. asia not tracking the u.s. gains as speak. dare we say it, calm returning. traders recal braight again fed rate cut expectations. strength reflecting the possibility of that intervention particularly where we are in term turnovers yuan up almost 1% vs. the u.s. that is it. this is bloomberg. ♪ b eight months pregnant.. that's a different story. i couldn't slow down. we were starting a business from the ground up. people were showing up left and right. and so did our business needs. the chase ink card made it easy. when you go for something big like this, your kids see that. and they believe they can do the same. earn unlimited 1.5% cash back on every purchase

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