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• 00:00It’s not a m in Hong Kong and Singapore, 10 a.m. in Tokyo. Markets in Greater China are shot, of course, but you are watching the China show and I’m not about rulers with David Ingles. Good morning. Let’s get to your top stories today. Japanese stocks are rallying for a second day following a tax cut and Chinese election, of course, as the next prime minister. Asian shares are also catching a bit of a tailwind is an understatement there coming out of that and the deal with open air. And on that front, we’re going to be hearing from executives of both companies with AMD taking a high stakes chance to challenge Nvidia’s lead in the AI computing industry. Also ahead, gold pushing closer to $4,000 an ounce. Here is the U.S. government shutdown and French. The French political crisis sparking fresh market uncertainty. And President Trump flags potential talks with Democrats on health care subsidies to resolve the shutdown impasse. Starting the show with some breaking news this morning. We’ve actually just had the Philippine CPI figures crossing the terminal here this morning. It’s come in softer than what the estimate was, the rising 1.7% on the year for September. The estimate had been for 1.9, but it is actually a hastening from the month prior because it was at 1.5% in that period as well. The Philippine peso. I mean, it’s not really changing too much so far. Yeah. We’ll have a closer look at the charts later on as it pertains to the past. And certainly as we were highlighting this week, inflation is actually a good it’s a blessing right now given the other more dominant negative issues hounding these markets. Speaking of, let’s just have a look at how we’re poised as we go into the thick of Tuesday’s session here. As we were pointing out, of course, a couple of markets are shut today. Mainland China, you don’t have Hong Kong. We also don’t have South Korea coming online today. All that being said, we are not short of market moving stories. We’ll get into the AMD story in a moment there in that massive move from overnight into where we are. And really, I think if you think about these two market themes, the story is more than offsetting the return of the dollar. Really, that’s down to what’s happening over in Europe. And we talked about the weakness that we’re seeing in the Japanese currency. Speaking of. Right, So Taiwan, flip the page, please, if we can, in the chip stocks have played there. And also worth mentioning that Hon. Hai is also of the individual play, but also reacting to the first time on that sales number coming out. So out of the gate, TSMC is up 2%. Hon Hai is up as well. Japanese players are also seeing some upside there. Over to Europe right now with a blowout in spread to the high is going back to the very start of 2025. Okay futures are online as we speak, still coming under pressure as with the euro. We’ll talk about these charts in a moment. Right. So we’re talking about the weekly top on the cloud as far as the Japanese yen is concerned. That’s trading at about one 5070 ish and change. That’s where effectively we should be looking at there. If you’re looking specifically at a point in time, it’s the high from August one on dollar yen. Right. Gold 4000 talked about that the gold play over in Australia silver and of course where you are as far as the oil market is concerned. So we’re close to 17 bucks away in the most active contract as far as the futures market is concerned. And again, a reminder, several markets are shut free to China and also South Korea, which would have been likely trading up. I will bet my unhealthy living on that given, of course, this air play and of course that air representation in that market. BELL Yeah, absolutely. I mean, there’s certainly going to be playing catch up when they come back online, but it is very much the story being dominated by tech this morning and for good reason. It’s it’s a huge, huge deal that’s been signed between Openai and AMD. So you just want to set the context of this. Openai is looking to deploy six gigawatts worth of AMD GPU units rather over multiple years. So six gigawatts, you sort of put that in the context of the recent deal you had between Openai and Nvidia. That was for ten gigawatts. So you actually, you know, just over half of that, but it is very significant in size and you saw that reflected in the share price of AMD as well. Yeah, 20 plus percent overnight. You know, this is all, these are all that use the plural version of that all coming at a time when there are questions around valuations here and you are getting a lot more on that as well that it begs the question now in terms of the size of data centers and who the winners are as well, is this a challenge to Hyperscalers? I think I think you can certainly interpret it in that way. I mean, so far, if you take a look at the infrastructure build out, it has been led by the Hyperscalers. So you’re talking names like Amazon, Microsoft, Google as well. But now it seems to be that open Air actually wants to become a hyperscale of themselves. That’s sort of what the shift seems to be, which is why you’re seeing it signing these deals with the likes of Nvidia AMD. So they sort of all said just trying to diversify where their bets are coming from. But I think it’s really interesting that you you mention the sort of valuations that we see in this space as well, because that is the big risk right now that it’s sort of just excess capacity, resource misallocation as well, that we actually haven’t really seen getting that for a while yet. But it is something that Sam Altman talked about overnight as well. Yeah, he did. You know, when it comes from someone of course within the industry itself, it certainly begs more attention to that and to the point you’re making, right. So what analysts are saying, Yes, yes, valuations are looking stretch, but they’re also at the same time raising their price target. So they themselves are also catching up at the short term rerating of this as well. In fact, let’s have a listen to all the commentary around the key stakeholders on this big story. Have a listen. Today, 4 million developers have built with openai. More than 800 people use chatbots every week and we process over 6 billion tokens per minute on the API. Thanks to all of you, A.I. has gone from something people build play with to something people build with every day. I have full confidence in, you know, open eyes. Greg. Sarah. I mean, this is a massive opportunity for us right now. Right here, it’s about who has the most compute and how fast can we get it online. And we’re committing to doing this together. We now have an ability for enterprises to build agents in a much more visual, much more intuitive way. You’ve heard us say 2025 has been the year of agents. We think that’s true. Codex has been a great example for us of that. Our coating agent now available through through an API. Also the lead time to make software is a lot shorter. It’s gotten a lot shorter. I think you saw today we demoed live demo at I think three or four different things that we’ve built in real time. We expect that to continue to be the trend. So I think it’s really great that Lisa Sue there from A & E also referenced the scale of the opportunity, because you think about A.I. data centers. I mean, right now today it’s around $250, $250 billion market, rather. But but by the end of the decade, I mean, everyone’s looking at to become a $1 trillion market instead. So we just heard from Bloomberg Intelligence earlier, for instance, talking about where does this leave AMD in this space? And so right now in the race, in the race between their share of the total center market and they’re in the low single digits right now, but actually, if they can totally fulfill these commitments to open air, they’re looking to take up to a 20% stake in in the market. So it becomes very significant for the company. Well, a bigger share in what is now increasingly looking like a bigger pie as well. So it’s not like they’re taking it from some of their peers on the street, just some of the analysts reactions on this overnight. So we talked about Jefferies and a price target now at 300 on AMD. Barclays is coming out as well with some commentary here. Proof the ecosystem is desperate for more compute. The very point that Bell just made just now we have a sharp upward move in. The stock is more than justified. So how do we wrap our heads around one story after the other and the fact that when you look at some of the technicals on this, I mean, is it even worth at this point in time worrying about technicals, given that, you know, this is this is not a short term story. This in fact, this might not even have to do with anything around short term cyclical in this economy. In other words, what I’m trying to say is, do we need to be worried about the Fed on the air? Or maybe not, because those are two separate things. The Fed is a short term conversation. The air, which seems to be driving the markets almost purely is a longer term consideration. And I think markets tend to confuse these two themes a lot more. But I mean, at some point we’ll need to see some rotation out right here. But this momentum is really, really strong. In fact, let’s get let’s get to take right now from Mark Cranford. Let’s bring him in. He’s been patiently waiting as we were just trying to set the scene for him right now. Mark, good morning. Thank you. Thank you for joining us. Just I mean, I look at a move of a let’s call it 25% on a stock that is so widely held already. Like and what else is there of, you know, beyond the hour is enough currently to drive this market even further. Yeah well what I was waiting the air bubble got even bigger and it’s just getting bigger and bigger by the minute. But nobody wants to. Nobody wants to cool the end of the bubble and the earnings season coming up in the US, which is just just started. But the big names haven’t put the numbers forward yet will be very significant in this because obviously in the end what investors want to see is that all this air promise actually translates into hard numbers in terms of profitability. Now, at the moment, the signs are pretty good. We’ve just had Hon Hai over the weekend, who’s a key supplier to India, produce very good numbers, much better than expected. So that sets up nicely the US earnings seasons because people will now be expecting that we’ll see something similar from these large American companies who are tied up with people in Asia as well. So it looks as though we’re going to get through this quarterly earnings season. Mostly it’s going to be a good season. It will keep the momentum going in US markets and global markets as our people can defer the risk that this bubble is certainly going to deflate and hurt equities across the board. The risks are getting. Obviously, the longer it goes on, the bigger the risk for the first quarter of 2026. And by then people are really starting to get a little bit nervous. But in the short term, as you say, even the Federal Reserve is being pushed to one side. At one point we were very desperate for interest rate cuts from the Federal Reserve to keep the momentum going even. That’s not such an issue now. It’s really now all about companies delivering, producing good numbers when they report in the next few weeks. And if you take all high as an example, things are looking pretty decent. People will be optimistic about it. Yeah, and actually we can just see on high they’re coming back online after that long weekend, but up 1.1% after we had those monthly sales figures capping off the last three months. But what do you make then of the move that we see in gold in particular? Because it’s obviously a haven play, it’s pushing ahead toward 4000. Does that tell you that there’s still some nervousness around the levels we’re seeing today? It does. Obviously, the geopolitical risks, the fact that the US shutdown could go on for far longer could be worth I think the longest one is about five weeks. People are suggesting it could be something similar to that. All of those factors B there isn’t a very strong currency all around. Gold always does well when people are disputing whether or not other currencies are really havens or not. The yen was beginning to look like a haven for a little while, of course, this week thanks to Takeuchi as completely upset the yen. French problems are undermining the euro. The US dollar was already starting to wane anyway and we’ve seen it in the reserve data. The US share is not as big as a sovereign wealth currency as it was before. It’s still the biggest, but not as much as it was. So all the major currencies for one extent or another are all seeing their value eroded to some degree. That’s all beneficial to gold and silver by implication as well. But just like the air bubble, there is certainly a risk that we’re seeing one in the precious metals now as well. And the chances are that they will come together about the same time we’re building up to some kind of a scenario like we saw in 2008 when everybody was concerned that everything was what they described as trading to one. Every the convexity of all these positions was so similar that when one breaks, they all break. So if we see a sudden reversal in tech stocks, that will probably lead to a reversal in gold and it will lead to reversal in other things as well. Anywhere we are positioning has built up very large, is all at risk. If one of them goes, they all go. All right, Mark, looks like I need to get on Elon Musk’s shuttle to to Mars in that scenario. Mark, just I mean, on the on the relative sort of comparison within the space, because you mentioned, of course, you know, gold seems to be standing out because of nothing else, seems to look good. We went into this week with at in my head the US shutdown down in a weak dollar and then Europe and Japan happened. Do we need to live with a stronger dollar? Slightly longer than expected, Mark? Yeah. Yeah. It probably goes a little bit further. I mean, thanks to the yen, especially the yen is obviously the key driver in this. You’ve got such a large currency. When dollar yen jumps 2% and more, obviously that has a cross-border impact for for the other markets as well. That’s helping support the US dollar at the margin. But unless the Federal Reserve suddenly turns very hawkish but probably not going to go very far, I mean, it can rise modestly, but we’re not going to see a huge rally in the American currency until we get some serious pushback from the central bank in the US saying that we’re not going to be lowering interest rates and nobody really expects. I think if there’s too much is built into the fact that lower interest rates, more cuts are coming, the Federal Reserve will deliver on that. So that will pull the dollar back every time it starts to go forward. And don’t forget the way things are going, the yen on a trade weighted basis, the Japanese yen is close to record lows. And the last time we saw that was in December 2024, and that’s when we saw severe verbal intervention soon followed by a Bank of Japan interest rate hike and everything turned around. We’re getting back into the territory where the Japanese authorities will be getting pretty uncomfortable about the yen, even though dollar yen hasn’t reached the one in 60 kind of area, It’s lost ground against so many currencies. Overall, the Japanese currency is very weak. Mark, thank you. Mark Cranfield in Singapore there for us out of M.I.T.. Coming up here on shows, traders are bracing for this 30 year bond auction. Speaking of Japan as the election there, of course. Scenario Takeuchi LDP leader continues to move these markets. Details later on in the show. And with politics moving markets from Tokyo to Paris, Brandywine Global joins us next to talk market strategy. And a reminder, of course, markets in Hong Kong, mainland China shop. You are still watching the China show so we’ll have plenty more ahead. This is Bloomberg. Welcome back. We’re mixed across the Treasury curve. You can see we’re slightly on the steeper side of things. Of course, there’s also a separate blowout conversation on bond spreads in Europe, the highest for the year. Also coming up on your screens, we’re trading right now to the downside here in the Asia Pacific. Joining us now is Traci Chen, portfolio manager at Brandywine Global, joining us out of Philly. Tracy, good morning from the Asia Pacific. Thank you for joining us. In this day of age of shutdowns and concerns over budget deficits. A global equity bull market which we can get to implications a bit later on. What are your biggest conviction costs right now within your strategies? I think we are still underway, the US dollar and also we still like Japanese yen and at the same time we still like EEM, especially Latin. And let’s talk about the direction of the Japanese yen then, because we have, of course, sitting it saying it sitting around that 150 mark. Do you see that being a sustained reaction in the currency? I think there is definitely some some more room to sell off. But at the same time, I think this might be an overreaction. So on the first day of the the victory of the election, I think the market overreact. I don’t think. I don’t think the new prime minister will actually deliver the expansionary fiscal policy or very accommodative monetary policy, as people expected, because she she actually softened her tone. And at the same time, if you look at the interest rate differential of the Japanese yen with the US dollar, I think the fair value should be around 142 or 143. So I think it’s probably a kind of market overreaction. Okay. So, Tracy, what does that mean then for this this trade that’s been very popular and profitable, which is shorting JGBs, particularly the long end this year? Do you think that that trade. Shorting the JGB space continues to make sense or would you take the other side of that trade? I think JGB is definitely the anchor of global global bond market, especially the developed countries bond market. I, I think if this new prime minister she she wants to do more fiscal easing and the inflation will continue to go higher. I think the long and potentially have more room to sell off. And at the same time, you see the curve steepening and the correlation among all developed bond markets are actually relatively high. So you see even the of the US bond market, you see bear steepening as well. So I think it might not be the right time to launch yet. There’s still more room for them to sell off on the steepening. And then to your point where I mean we’ve seen the 30 year bond yield, for instance, rising to a fresh record this morning. But what’s been interesting, at the same time, you’ve seen this sort of gyrations, particularly the longer end of the curve in Japan, actually treasuries. And expected volatility has been at its lowest level in around four years. That’s sort of being attributed to the government shutdown. But do you see that’s staying the course? And what’s your expectation of where trading activity goes from here for the US bond market? I think the we have seen the curve steepening actually have some kind of a reversal in late September and beginning of October until this victory of each. So that the curve steepening. Wait, wait, wait. We might start to see the curve steepening again. But at the same time, you see a lot of exciting development on that front. So the hope is for the development to boost the productivity. And if the productivity goes higher in the US, I think the inflationary pressure will be more, more mitigated and then the lower end should have some support. And at the same time, you still have Treasury Secretary Scott Bessant. He has a lot of tools to use to manage the yield curve, right? He can front load the T-bill insurance rather than issuing the long end. So there’s definitely some some some some flaw to the long end. And we still see there is some value in the lower end. But at the same time, it’s it’s the volatility is coming back because of this GDP development. Tracey, thanks very much. And please do stay with us because we still want to get your outlook on what’s happening in China’s debt space as well. So go back to Tracy Chen in just a few minutes. But for now, that’s Tracy Chen, portfolio manager at Brandywine Global, staying with us. We’ll have plenty more ahead. That is the market picture, very much an aid dominated story today because you had a huge deal being signed between Openai and AMD to supply GPUs. But people have plenty more ahead. This is Bloomberg. Some of the stories we’re following today. And President Trump says he would negotiate with Democrats over health care subsidies in a bid to resolve the US government shutdown the Senate has rejected for a fifth time a House passed stopgap bill to keep the government open through November 21st. Democrats say they won’t support the bill unless it addresses subsidies set to expire at the end of the year. After that vote, President Trump used the truce social polls to blame Democrats for the impasse, while indicating he’d be open to talks after the government reopens. We have a negotiation going on right now with the Democrats that could lead to very good things. And I’m talking about good things with regard to health care. The White House chief, David Sacks, says it’s essential for the US to dominate in AI. Defending the Trump administration’s Approach to China. Speaking to Bloomberg, Sachs stood by the decision to let NVIDIA and AMD sell less advanced A.I. chips to China. We cannot be pro-innovation. We’d be pro infrastructure and pro energy and we need to be pro exports so that the American technology stack dominates the world. All right. You should be looking ahead to the opening bell. But of course, mainland China remains shut. As with Hong Kong, South Korea is also shut today. So a lot of volumes off the table today. There is plenty more ahead here on show still. This is the China show. Good morning. Right. Welcome back. A reminder, the markets here in Hong Kong are shut. It’s the day after the mid-autumn. So our very best to you and your family and your friends. And while there is the holiday today, it does feel like we’re in the thick of summer. If you step outside, you don’t need to go to Burning Man. All you have to do is step outside. We have one version of that here in many parts of Southeast Asia. Speaking of burning and red hot, these equity markets continue to feel the fuel from this AIG frenzy that’s taking place on the index overnight, up over 2%. We talked about AMD story. It’s playing out as far as Taiwan, which is reopening. Of course, today, the Bond story, of course, as well. Two things is, one, the shutdown. You have Europe, It’s taking place. We’ll get to that in a moment. And of course, what’s taking place in mainland China, where once we reopen from this long holiday, we get into the thick of things where you have the activity numbers and eventually we’ll talk about the inflation prints coming through out of mainland China. On that note, let’s bring in let’s bring in Tracie Chen. She’s still with us, portfolio manager at Brandywine Global and joining us out of the United States. Tracie, thanks for sticking around. I want to ask you about what’s going on in this in this space. So effectively, the ten year yield, relatively speaking, has had a to you to your point, right, a big ish move, right. For 1.6, I think we’re not 1.9%. Is that is that inflation being future inflation being priced? Because so far the data doesn’t seem to be pointing to inflation coming through the system? Or is that simply money going into the plays in the equity space? Yes, I think there are several factors. There’s definitely a technical factor. The rotation of the rotation of the the money from the bond market to the equity market, that’s the number one. And number two is there is some exempt the removal of the exemption of the tax on the bond purchase. I think that’s another factor you see is on mutual fund, all banks are setting the CGT and certainly does that mean that we are we have seen the worst of deflation where the deflationary pressure, the worst of it is behind us. And at the same time we see the industrial profit actually jumped double digits in the month of August. So I think that’s a good sign that inflation profit correlates very closely with CPI. So I think for for the next month where we are hopeful to CPI improve a little bit. But CPI through the CPI do have some seasonal factors. So that’s hard to predict. But I think PBI should improve and you see the commodity boom, the metals and also the precious metals, they all rally hard. So I think PBI should improve going forward and probably will be the bottoming process of the deflationary pressure in China and the rerating of China’s equity market also tells you a lot, right? It’s not just the story, it’s the entire rerating of the the risk market in China. And you see it on the also also rallies, rallies nicely. And what I also want to highlight is the export growth in China is pretty healthy. Actually. The trade the trade surplus has exceeded 1.2 trillion. That’s a big number. That’s a great support for for IP outlook. And if China wants to achieve the self-sufficiency in the computer chips, I think China imported about 500 billion computer chips from the US. If they can achieve self-sufficiency, I think that’s that’s another boost to the US trade surplus going forward. Trace it again. Thank you. Thank you for that. Of all those factors that the does that that mean do you think we get to 2% on the ten year yield and how do I need to be thinking about I don’t want to call it intervention risk but the redemption, the resumption of bond buying in the CGP market, how are you looking at that specific that that issue specifically? Yeah, I think that’s highly likely. I don’t think anybody wants to see the ten year go above two. I think they have to ensure the funding costs to stay low. They have just too much. That’s right. Low government debt and also corporate debt. I don’t think they can afford for for the CW two to go too much higher from here. So I think they probably can resume bond purchase if if the yield go go too much higher from here. Tracy, what do you make about what’s happening in France right now? Of course, the resignation of the prime Minister, Lecornu. It was certainly shock many some are comparing this to a Liz Truss moment for France. Maybe we’re not quite at that point, but but certainly, when do you see this political crisis becoming an economic one for the country? So interesting that this time around we are seeing the peripheral countries doing well, whereas the core European countries are not doing that well. So it raised the question whether France is governable and this prime minister has a short tenure. Right. And I think the Cong is in a very difficult situation now. He can either appoint another prime minister and then just invoke the Article 49.3. And at the same time, he can he can call another snap election or he can just resign. But I think the political turmoil make the investor really nervous about this fiscal that the fiscal problem. Right. I don’t think they can reach agreement. Our fiscal budget for 2026 by the end of this year. So so I think the the bond curve probably continue to bear steepen. But at the same time, the reaction function of ECB like Christine Lagarde, I think she will keep a floor on on euro currency. And I think they can always buy more bond. So so I think the bond yield probably has a ceiling going forward. But but you do see the French spread to German bonds widened quite a lot. And German bond also sold off as well. It’s not just it’s not like safe haven anymore. And I heard your discussion about gold. I think gold serves as a true safe haven, that the common bond is less of a haven right now. Yes. You say three choices facing macro and none of them really look palatable to him probably right now. But that was Tracie Chen there. Thanks so much for joining us, portfolio manager at Brandywine Global. And let’s turn to another country, of course, that’s seen a lot of political moves recently. That’s Japan and and the new leader of the ruling party, Sanaa Takeuchi, announcing key cabinet posts as she seems to reassure markets and her party. Let’s get more from our eight East Asia government editor Jon Herskovitz. So, Jon, what have we learned so far from these appointments and what can be gleaned from them as well? Sure. What we’ve seen is appointments to the ruling LDP, and we’ve seen some really influential powerbrokers with a lot of experience move into top posts. This includes Taro Aso, a former prime minister who’s served in a number of posts taking over the vice leadership. We also see Suzuki moving into a top post, which really dictates that we’re going dictates the most Ministry of Finance influence in what’s going to be a part of her administration. And Kobayashi moving in as well, shows economic security. So these appointments show that Takeuchi is interested in trying to preserve party unity. And at the same time, she’s trying to reassure markets that there will be stability experienced in the leadership of the ruling party as she goes forward, tries to win the prime ministership race in the in the parliament and then forms a new government. And John, speaking of forming this new government, what challenges could she likely face as she tries to sort of embark on that endeavor? Usher. The key thing is getting the getting the LP, LDP back together. It’s in the minority position in the two houses of parliament. She’s going to need the help of of opposition groups to win the prime ministership, which she should get. But that also means making concessions which may not be palatable to people in her party. One of the things is some of the opposition parties have been looking at sales tax cuts by appointing these people into senior LDP positions. It kind of indicates that this is maybe off the table. Apart from the internal politics, there are huge international challenges that are going to face her right out of the gate. She has an Asian trip where she’ll meet world leaders. President Trump is coming to Japan. This will be one of the key tests for her. Just a few weeks into office, there’s a trade dispute going on with the US trying to get that trade deal enacted. And also there are concerns about security and where things are going to go with the relationship. Having Trump in your country with only about two weeks in government is going to be a huge challenge for her. And then there’s reassuring people in the region. John, thank you so much. John Herskovitz there in Tokyo for us. Almost. I want to preview that story, Trump and Takeuchi with well, the market implication is certainly a Nikkei that 50,000. Who would have thought. Right. This rotation probably might mean that there’s relative underperformance on the part of Japan relative to what we’re seeing elsewhere in the region could actually change as more global money comes back into this market. Let’s bring in Abhishek Bishnoi out of Singapore for us, our senior asia equities reporter. Abhishek, fantastic piece. Take a sort of thinking here. What does this mean for not just Japan but sort of other markets that have outperformed Japan? So, you know, Japan has been doing as good as well. It has been getting a lot of allocation. But what Takeuchi coming into equation has changed is the human backdrop, her pro, you know, stimulus stance and you know, comfort with the, you know lower amount of number of rate hikes essentially means that Japan can become a preferred peak in Asia and maybe even in developed markets to some extent, given the political instability that we are seeing in Europe at the moment. So in we are not saying that, you know, other Asian markets, especially something like Taiwan, Korea or China would stop sending money. It’s just that Japan would get more. Japan would get the biggest share of money that that is now going to get allocated. That’s the expectation from a lot of investors were, you know, very quickly pricing in that there would be a lot more fiscal stimulus will come and there would be delay in rate hikes and that would be and again, would weaken. And, you know, Japanese stocks would prosper. Now, this is coming in the backdrop of Japan stocks being relatively cheap than many of other developed markets like us, especially Japan’s air story is yet to be discovered as nicely as we have seen in China, we have seen in the US. So these things, coupled with this new backdrop, means that Japanese stocks can become sort of a core bad bet for, you know, someone who was looking to allocate to North Asia as a bloc. Yes. Abhishek, is this is this fast money or short term investors that are going to be moving in? Or are we talking about long term institutional investors? Because you talk about that Acima And certainly it’s a it’s a lot more pronounced in markets like Taiwan or South Korea, for instance. Well, it is fast money. It is the start of the cycle, the start of the street. It has to be fast money. I would not call it dumb money. It may be smart money, but for the long term structural money to come in and they’d like to see how it sort of navigates the political landscape, how, you know, she is able to, you know, walk around the parliament and get these bold stimulus measures approved. How much of that comes into being? So, as you know, people see more of that long term structural money would get a lot more comfortable in that. But, you know, Japan already is doing a lot. You know, it is possibly the best bet on in terms of structural corporate reforms and dark ages. Possible way, not possible prime ministership is actually going to burnish that case, the bull case for Japanese assets. So, you know, Japan has sort of attracted about $18 billion in terms of money coming in from foreign investors to add to its cash equities. And, you know, Korea and Taiwan have all also received a lot of money. But Japan is a far bigger market. So as a percentage of that market cap still, you know, very small amount. And from what we are getting, the assessment is that as long term money becomes a lot more comfortable with the story, this news story, and we can see, you know, possibly multiples of this number that we are talking about in terms of year to date inflows. Yeah. And we’re seeing the Nikkei into a fourth day of gains. That’s Bloomberg’s Abhishek Bishnoi there in Singapore will have plenty more ahead. This is Bloomberg. Well, the open air sea of bread like that says the company is incredibly constrained in its compute power, and deals like the one with AMD will help build out more capacity. He also told us about the importance of investing ahead to keep pace with demand. We are tremendously compute constrained. It feels like we’re in this kind of recurring theme of being compute constrained. And I think the reason for that is the answer to the question you ask, which is demand, right? We see there are multiples of demand that are latent and untapped from what we we have today. And even today, obviously, by any standard, demand in revenue growth has been torrid in its in its pace. And so really we have to invest ahead of that. And I think that’s going to be the rate limiter for us to be able to go capture demand, whether it’s consumer or enterprise. And for us to be able to build new models, parallels more experiences, more product experiences, and then enable users specifically to be able to use those products more actively in their daily life at work and at home. So, you know, even things like Sora, the app we just launched, we wish we could invite more people onto it now, but we just need more compute. So the AMD deal, we’re excited about being, you know, directionally a way for us to do that. I’ve got to ask about the report that open, closed, secondary or the ability for employees to sell shares at a $500 billion valuation. I already asked you this question, but what is the metric? We’re supposed to judge your success by the $500 billion valuation, the 6 billion tokens per minute to you, Brad, what is it? For me, it’s it’s actually kind of a metric that we we talked about is is tokens. It’s you mentioned 6 billion tokens per minute on our API. That is the purest for me. The kind of essence of, of utility is that consumption metric. And, and so we’ve actively tracked that metric to see how people’s consumption of AI is growing over time. And you see this happen in amazing ways. So things like Codex, for example, we’ve seen grow ten X since August purely on consumption of tokens around coding, and you start to see that same pattern emerge across multiple lanes of use and across multiple areas of work. And that’s the metric I look at because that number is going up. It means people are using us for more things and that’s the ultimate goal. Right. That was at Ludlow there, of course, with the open air school, which, of course, all that useful overnight is leading to what you’re seeing on your screens right now and really on almost on a daily basis. Our folks here in the NEWSROOM and our analysts are having to deal with the implications of all the news. Let’s come through. In fact, what for all for for a look at what all of this means for the region, let’s bring in our Bloomberg intelligence senior analyst must I to get in Tokyo for us, who again, almost on a daily basis has to look at the news flow and has to figure out what this means. Masahiro can I put that question to you? This deal between open air and AMD, what does this mean for the broader air development conversation? Yes. So we think that, you know, we can at least say that the demand is quite strong. And even after seeing several years of the I know, demand the boom and volume for the air, and we now expect that maybe that deal could generate additional 100 billion US start dollars revenue for the AIG business and the companies maybe trying to achieve around maybe 7 billion U.S. dollars in revenue from the AIG people this year based on the consensus. And the number is still quite small, but maybe next year that number could go up and the consensus of some maybe around 10 billion USD for the AIG B and probably on the consensus basis, probably over the next four or five years, 70 billion USD was the previous maybe consensus for the AIG view. But now the company expects additional 100 billion US start off could be possible. So maybe we think that AIG demand should continue to be quite strong and we think that there should be many things to do in terms of the development and that we are still working on the many, you know, mind you had to walk. So we think that still we should see that quite strong demand going forward. What does this mean for for the overall tech sector? Because we’ve been talking about how how much the pie as a whole is expanding here for the server market, maybe $1 trillion by the end of the decade. What does it mean for other chips, for equipment in turn? Yes. And when it comes to a calculation, we need, of course, the GPU and the major buy in video or AMD, but we also need a high bandwidth memory, which is a high performance DRAM. And when it comes to AMD’s GPU, there may be more chance for Samsung Electronics to supply the HBM chips. And when it comes to any media so far, it’s how you saw maybe Micron. They were are the major supplier for that most advanced GPU. But when it comes to the mini Samsung may have more chance so in the sense that we could see the bit in a healthier competition among the suppliers for the HBM as well as GPU. So I think that that this kind of a healthy competition should be quite good for the when we think about our industry development. So in the case probably going forward the chipmaking equipment makers will work on quite there are several companies including Samsung is gaining ground with a micro of course in addition to TSMC. Yeah. What about what about this the situation in Japan because it is talking with Abhishek Bishnoi there from the equities team saying that the AI story has been a little bit underappreciated so far in in Tokyo on the Tokyo market. Do you see that shifting at all at Japan’s more of the equipment, as you said, the materials play the any names that stand out? Of course, we have a quite many equipment companies and the largest market share is now owned by ASML or sometimes Applied Materials. But we have a Tokyo electron. Or maybe we think about the test outside. The advantage test could be the major suppliers and screen holdings we have has a large, large market share for that and a cleaner equipment. And when it comes to the, you know, our photo mask equipment, you know, our laser tape could be the supplier. And when you come to the materials we have, you know, Ibid. or some other suppliers. So in the case, we think that going forward, some companies could also benefit from this you know kind of the market expansion of. I yeah. And indeed I’m just looking at the biggest movers in Asia today and Adventists and Tokyo Electron are some of the standouts but that was at Bloomberg Intelligence senior analyst Masahiro Wakasa in Tokyo. And if you’re a subscriber and if you want to rewatch that interview, you can buy our interactive TV function, TV gold. You can also become part of the conversation by sending us instant messages. So do check it out at TV. Go. We’ll have plenty more ahead. This is Bloomberg. Right. Welcome back to a look at gold, which continues to hit record after record on a daily basis. Goldman Sachs out with a new forecast December next year, 4900, which effectively is 28% give or take from the current level. An early on track, by the way, for the best year since 1979. Smashing Pumpkins, by the way, are in town. Welcome back to the China show. Look, this is not the beauty shop we take. Usually at the top of the ten hour. Today, you see the beautiful Sydney Harbour. Oh, that is right. Yes, Yes. I’m sorry to the point you’re making, we’re not used to seeing. We’re not used to seeing especially this angle too. Yeah, that is a shame. I haven’t seen that angle before. But the point is, is that we’re we’re, we’re seeing that, of course, because there’s a lot of markets that are shut today. Greater China, so’s the mainland, plus Hong Kong, Korea as well for the holidays. But what is trading in the session today? You can see a very clear theme here because Australia is sort of standing out to the downside. But you’ve got the Nikkei and Taiwan also heading higher. Taiwan really leading the charge. So this is really the tech story, Dave. It really is. And I think that’s really showed up in, you know, when you look at factor investing and shout out of course are markets producer Anthony Stevens for just giving us a heads up as far as this is concerned. Right. So here’s the here’s the plug that’s coming up on your screens. That’s the function you run. And effectively what you get on the terminal is you look at the big winners from overnight or in this case over the past week, it’s really momentum. Excuse me. That’s it in many ways. Excuse me. Dominated market returns. Right. So within momentum, that’s mostly tech. And you do get some constituents there. As far as biotech, Pop Mart, for example, is doing very well as far as momentum goes. And you have some of these names also, obviously in growth because they all tend to be large in market cap size. So these are effectively some of the the traits that have done very well. I actually need some water, but yes, thank you so much. Okay. As we get that water, speaking of liquidity, let’s please have a look at momentum, specifically behind the Philly Semiconductor index, which, of course, the big story overnight was that 20 plus percent move in AMD 190 points to the upside on a SOX index, which effectively now puts this massive run from Liberation Day on a 14 week RSI basis down effectively at the highest levels on record. If you look back over the last it’s called 15 years or so, this sort of new paradigm, the in as far as the air and semiconductor space is concerned. Now valuations, I mean when you hear we’re reaching fairly lofty and extreme levels on, on PE itself, you compare that historically. But of course back then there was no rerating as far as the longer term runway was concerned. But on a number itself, right, we’re approaching 30 times and forward p e, which effectively puts us very near. In fact, we’re closer to three standard deviations than we are to to on forward. P Now, has that been a concern? It has been a concern. Has that stopped the rally? No, is the question short term? BELL Yeah, that’s right. I mean, are we in sort of a bubble right now? Is is one of the key questions. But certainly overnight you saw that rally extending and the latest thing to to inject optimism in it into it is is AMD inking this major deal with open AC. You’re looking at deploying six gigawatts of air chips over multiple years. We had an interview actually with the AMD CEO, Lisa Su. She spoke to us about this, saying how it’s mutually beneficial. There is that big question from the open air side as well, how they’re planning to finance these major investments they’re making into chips from the likes of AMD, but also NVIDIA. But the OPENAI president, Greg Brockman, was also in this interview speaking to us about the partnership and how as well the company plans to fund their massive projects. Take a listen. You can really see that we’re very much in the we just want compute as much compute as possible. We think this is important for the economy. We think this is important for the nation. We think this is important for humanity. And so really, we’re working with everyone in this whole industry in order to get as much compute power online as quickly as we can. Lisa, I’m sorry, specifics. Where is this datacenter going to be? Is it one single site? Is this Oracle that will partner with you on this? Well, actually, what this really is, is an announcement of what you know, AMD and they are going to do together. You know, Openai has a lot of partners in terms of, you know, where they deploy. I imagine a lot of it will be in cloud service providers. It’s really up to, you know, open I and Greg and Sam in the team. But the way to think about it is for this, you know, amount of compute, it’s going to have to be in a lot of different places. So it’s a massive a multiple locations, multiple locations, I would imagine, you know, multiple providers to really get this online as fast as possible. Greg, there is a lot of focus on where open AI is going to get the money from to fund all of this. Sam Altman’s big picture commitment is well documented, right? And the numbers in his mind are in the trillions. But have you specifically thought about debt financing for this relationship with AMD? Have you thought about doing a specific equity raise? You are very committed across multiple projects. Yeah. Look, the way that I the way that I would look at this is that air revenue is growing faster than I think almost any product in history and. That ultimately, at the end of the day, the reason this compute power is so important and so worthwhile for everyone to build is because the revenue ultimately will be there. Now, as a company that is trying to move as fast as we can and we look at everything, we look at equity debt, we look at trying to find creative ways of financing all of this. That’s been actually a huge focus of us for the past couple of years, is thinking about how can we possibly build the amount of compute that is required in order to really transform this whole economy into an AI powered economy. And so I think you’ll see lots of creative ideas. But fundamentally, I think at the end of the day, it is because we believe. Sorry to jump in and interrupt. And Carrie, just forgive me on this one. The condition of AMD issuing the stock to open AI requires you to spend money basically because you have to deliver that gigawatt of capacity first. Lisa, I have to ask you if you have assurances that open air is good for it. Well, let me be clear. I mean, this deal is a win for AMD. It’s a win for Open and it’s a win for our shareholders. And that’s kind of the way we put this together. I have full confidence in, you know, open eyes. Greg, Sarah, I mean, this is a massive opportunity for us right now right here. It’s about who has the most compute and how fast can we get it online. And we’re committing to doing this together. That was the AMD’s SEO Lisa Su the opening by President Greg Brockman, of course, with their colleague Ed Ludlow on a massive, massive move up overnight. Carl brought us with a senior market analyst capital Lacob. Kyle. Good morning and thanks for your thanks for joining us. Good morning from Hong Kong. I realize, of course, you’re in all eyes right now. I mean, talk to us. I mean, every time every time the chart seems to suggest we’re likely going to see a pullback in U.S. equities, it just goes the opposite way. How do I need to be looking at this rally right now? Do I lean into momentum even further? Well, I mean, taking your point earlier about sort of the momentum factor at the moment, you know, almost everything is pretty much momentum play right now. And it’s so sentiment driven. I obviously don’t have to sort of give you the numbers here about, you know, how expensive stocks are at the moment, especially when you look at sort of things in a forward price to earnings basis. But the way that I’ve been explaining it to clients is that, you know, there’s lots of questions coming my way about is this a bubble or is a crash coming around the corner? There’s always obviously those fears. It’s almost a kind of universal question in the markets at any time. But, you know, fundamentally, yes, we’re incredibly frothy. There’s a lot of big assumptions being baked into the market now that is kind of supporting valuations at these levels. But even still, you know, this is a momentum driven market. And what I would describe as a by the break market, which is to say that like last night when we see the market pushing to new highs, you say that is a bullish signal flow is going into stocks. You know, the pie in the sky or blue sky ambitions when it comes to I’m like a pretty much, you know, being priced in and it’s a cliche thrown around sort of frequently that we’re priced to perfection. So like we have been for the last few months, where a market that is very prone to shocks right now because of where valuations are, but nevertheless, momentum is very strong. And, you know, you can go broke obviously very quickly trying to to short, you know, short, short the rally here. So that means earnings is going to be really pivotal and a pivotal test for the market. What happens if we don’t see any ROI on all of this spending on AI? Is the market still going to be patient or can we expect a pullback? Well, I think there’s sort of two things kind of embedded in that question there, which is, you know, the short, short term earnings picture. And that really comes down to the question of monetization by the big HYPERSCALERS and whether they can continue to outperform in terms of earnings growth. And, you know, the way that I kind of when I say it is like a pole vaulter, you know, exceeding record highs, record highs with with every jump and impossible bar being set for the jump a bit, constantly being exceeded. For example, last quarter’s earnings growth from accident companies was almost 30%, exceeding a bar of about 50% going into that earnings period, which, you know, is quite extraordinary. If these companies don’t make those earnings expectations going forward, there is going to be that potential correction and will have to be to reflect a wake of earnings outlook. The bigger question, though, is what you just touched on is the kind of broader return on investment, on artificial intelligence as a technology and whether what we’re seeing right now is a lot of capital being allocated into something that is going to create excess capacity and effectively a lot of misallocated resources if that happens to occur. And that’s because effectively artificial intelligence proves to be a hype, then that’s catastrophic for the market. However, that’s a bigger, bigger story, a bigger picture story, and one that we’re probably not going to confront, you know, this earnings season, for example, yet. Kyle, I’m not sure if you follow athletics. You mentioned the pole pole vault event, Mondo Duplantis, of course, the world record holder almost does it incrementally, almost point one at a time. Sort of. The reason I bring that him pushing the boundaries ever so slightly even further is do you think when I look at markets right now and people talk about don’t look at the short term and I look at the longer term, look at the runway, how useful is it to use these current market metrics of P 30 times earnings? Do these matter right now as an indicator of expensive valuations? Well, expensive stocks are not. Well, it is that age old question of whether this time is different and maybe it is different this time. And I think fundamentally, if you do think that artificial intelligence is going to be world changing, what you’re actually, I believe saying is that effectively these labs will get to a point that they displace human labor to the to the point that productivity absolutely booms. Profits are almost unlimited. And as a result, you know, these kind of multiples no longer sort of reflect the same world that we used to live in. And when they were once, you know, obviously a valuable tool to sort of assess, you know, the fair value of something. The big issue is whether we do start to see that evidence in the data and evidence in the real economy where A.I. is truly displacing human labor and is leading to this kind of productivity boom. This comes at outside of my kind of circle of competence by by some way. But at this point in time, most of these elements aren’t delivering, you know, kind of novel thought. Some of them are, some of them are. The pipe works, obviously delivering kind of novel thought that could genuinely displace human labor. But at the moment it really is kind of a very good guessing machine and a very powerful search engine, which, you know, if nothing else can provide at least a very easy way to consume things, make life a little bit easier, but may not be world changing. So it really does depend on whether basically the hype is met. If we do see it materialise, if it doesn’t, then, you know, this time isn’t different and things have to correct to reflect maybe harsh realities. Yeah, I guess so. You’ve still got that race toward AGI or artificial general intelligence where maybe you’d have better capabilities than the human mind. But but leaving that to the side for now, what about the market moves that we’re seeing around gold in particular? We just had Goldman Sachs, for instance, raising their December 2026 forecast to 40 $900 an ounce. How long do you see that playing out and what’s it expressing as well to you? For me, it’s expressing basically the expectation that governments around the world are going to run economies incredibly hard into next year. And one of the reasons that I think the Japanese situation was very illustrative that governments want to do this is, you know, one, there’s kind of a mandate now from the public to effectively ensure full employment at all times and much higher economic welfare than, say, we saw in the 20 tens in that kind of what you could call that kind of secular stagnation period. But the other part of it, and this is crucial too, and is tied into the II trade is the strategic competition that is emerging, that is forcing governments to try and reassure a lot of industry, ensure a level of of independence and a protection of national interests, both again, from economic purposes, but also military and strategic and competition purposes. And this is a kind of very precarious dynamic because it means there’s a lot of public money, a lot of deficit spending that’s going to be pumped into economies in the United States, as we seen in Japan, maybe to an extent as well, depending on how things evolve in Europe over the next few months in Europe. So, you know, the German sort of raid leveraging, public leveraging as the example, their goal is effectively suggesting that nominal growth is going to be extraordinarily strong going forward and that investors wary of the value of government debt, allocating more to gold as a safe haven or at least as a store of value. So that’s the dynamic we’re seeing. And again, until we sort of see that kind of breakdown, this sort of new era of economic statecraft, where governments are focused on reshoring, manufacturing and defending their strategic interests, I think gold in the long run just continues to rise. Kyle, thank you so much for all of that Kyle relative there senior market analyst at capital dot com. I mean just the two market themes of the day dominated that were for good reason. Goldman. Also, I just have lines coming in. Let me just reorganize my screens here so I can get to both for you guys. Let me start things off with a line coming through. This concerns Taiwan and the president here. Yep. Effectively saying that he hopes for a continued Trump support to deter China. And of course, separately and I believe this might be also part of the lines coming through is that Taiwan supports TSMC to invest in the US, Japan and also Germany. I want to extrapolate beyond that. That’s the headline we’re seeing so far. Separately, we’re also hearing from China’s Ministry of Foreign Affairs that China’s Premier Li Chung will be visiting North Korea. And I believe we also have some dates now being attached to that. Let me just look at my limited number of screens and I think the dates there are October. Bear with me. I think it’s October 11 or 13. I’ll correct myself anyway. Okay. Let me just make sure of that before I get to that a bit later. Okay. Let’s tell you what else is coming up here, Bill. Yeah, we’re going to be actually looking at Japan’s growing investments in defense. Darden says that the public becomes increasingly worried about potential regional threats. Plus, we’ll take a look at the mass of disinformation or misinformation being generated around Japan’s incoming leader, Takeuchi. We’ll have plenty more ahead. This is Bloomberg. Welcome back. Almost right on cue, with the yen topping 150, we’re getting some commentary coming through here out of Mr. Kato, talking about how it obviously is key for effects to move, stably reflecting fundamentals, also other key things that are closely watching for any excessive moves in the markets. Are those initial signs of verbal intervention. That’s a question mark, of course, now. I think the charts coming up on your screens very shortly and this is we’re going to give a shout out to Michael Wilson, of course, out of our efforts team for effectively helping us understand what are the levels to watch as we’ve broken above 150. And I think one specific level and I’m going to bring Michael in in a moment here to talk us through this August one high of just above 150, which if we close above that, might confirm this bullish uptrend we’re seeing. We’re right in the middle of that as far as this pair is concerned. Michael Wilson joins us right now, our great supporter out of Sydney. Michael. Yeah, so that’s the that’s the headline for you. Help us understand and make sense of all these lines on the chart beside me here. Okay. Well, yeah, so it’s proceeding nicely up inside that channel and that’s all very good. But you know, if you look at that, that’s actually a weekly and chart and it’s a for the eyes of a itchy moku cloud. So if you look at along the top of that cloud, the lead line, they had some a lot of previous calendar highs around that one 5092 151 2025 level. And I think that that’s probably the true level. There was a lot of talk going into this, you know, Monday morning, people were obviously scrambling and looking for a level to fight it, you know, with the Fed coming up and everything like that. So they wanted to fight the move. But, you know, some of got in and got out, you know, because the move kept going, I think again fell 2% yesterday. So as we approached that level, but it was genuine stalling, we saw Honda come out and they took a huge advisor and say that, you know, getting above 150 wasn’t desirable. And I can say that with a bit of hindsight. Cato’s just come out and said, you know, a little bit of jawboning as well. So, you know, it’s obviously going to be a bit of a problem and it’s going to suit that narrative. Well, I do think there might be genuine resistance around that 151 level, and that’s illustrated in that in that chart line there. So while we are up in, we are proceeding up in that’s up that channel, that bullish channel. I do think that we’re going to do some hard lifting to close above that one 5130 area. And if we if we fail to if it’s rejected, that’s interesting in and of itself because we’re heading into obviously by end of the month. But there’s also an APEC summit. So we’ve got a couple of macro drivers there. If billion was say around that 151 level, you know, Ministry of Finance would be under the pump to probably push out a little bit lower because it would be a very awkward conversation on the sidelines of that APEC summit between the US and Japan. As to the yen weakness, how it’s reacted maybe on a bit of a liquidity squeeze and that’s that’s fine, but it’s actually held to level. So that will become problematic closer to the end of the month As to the, you know, the Bank of Japan. So I think that, you know, the market is obviously looking for a reason to jump back in in by the end. But I think they’re not going to have much opportunity for a, you know, any sort of true hawkish commentary out of the central bank. So, Michael, okay, we’ve had the H.M. crude cloud. We can also move to a stochastic slow chart as well and take a look at what’s happening in the Kiwi dollar right now. So what can you tell us? Well, Kiwi is actually just, you know, staged its own mini recovery before I BNZ tomorrow and it’s doing doing rather well but look all bets are off come now this time tomorrow because you know there’s talk, you know every bit of data that’s come out of late, you know it’s either 25 or 50, you know is it a dovish 25 basis point cut, which will probably still cause a bit of a mini squad to the top of that channel where it would only ever get resold anyway. You know, the narrative from the strategists and the all the economists is that they should probably go 50 rather than just to try and turn to turn the ship around a little bit. There was a bit in about opinion survey out today which was soft and if they trying to actually fire up the economy, you know, get some green shoots going, well, they’re probably going have to go 50 earlier and frontload that stimulus. Otherwise it’s going to be like death by a thousand cuts. And technically speaking, if we close below that 5754 low a couple of weeks ago, that’s very, very signal. That’s quite a quite a gap. So we could see you’re probably a 56 handle easily next week if they don’t even if I if I were to go 25 and without sound reasoning why I can’t. See how they can come up with three things that would, you know, make you seem bullish on the Kiwi at the moment. But if I, if I were to you’d probably only you just get a in the Mac would resell it because you know the market sometimes is inclined to reward a proactive central bank you know and if they see 50 up front Kiwi might go down first but then you might see a bit of short covering. It’ll consolidate but if they if they see that there’s no real determinant to stimulate the economy, they’ll just keep piling on those shorts and that 5750 will be on the radar for a while. So even though it is a a bullish channel, it’s it’s vulnerable at best. Michael, really great to have you insights this morning. That was ethics and rights reporter Michael Wilson there in Sydney. And remember, of course, terminal subscribers can interact with the charts we show using GTV. Go browse recent charts featured on Bloomberg TV to catch up on key analysis and save those charts of future reference will have plenty more ahead. This is Bloomberg. Just some lines crossing the terminal here. Hearing from the incoming Japanese leader, Sunny Takeuchi, this morning, talking about the plans to work with Trump Xi saying that they want to have a free, open Indo-Pacific region. It does seem like maybe the Trump administration is looking at making a stop in Tokyo later in the month. This would be, of course, really an important and very early test for Takeuchi as well about how she plans to manage that relationship with Washington moving forward. But that’s what we’re hearing so far. Yeah, because so far the focus has really been on the domestic agenda, the economy, what it means for fiscal spending. This might give us an initial clue as it pertains to the foreign policy stance there. Lots more on Japan coming through in the next next segment here. Before we get to that, just very briefly, we were talking about gold a lot in the last hour or so. So Goldman’s upped its target to 4900. Standard Chartered, by the way, is coming up in the next hour of Bloomberg Television. Suki Kimberly talking as to, of course, their new take on gold. As you can see, gold, this gold and crypto play specifically are also doing very, very well today as we inch ever closer to that 4000 level. I don’t think I mentioned a 4900 target now. Goldman Sachs, sorry about that, but specifics. More on that in a moment, which, of course, is deep dive into Japan. It’s 11:29 a.m. in Tokyo this morning. Japanese markets are just about to go into their lunch break, but not before. We have been getting really a flurry of of updates because there’s been a presser going on at the LDP HQ and we’re getting some lines crossing, including from Takeuchi, who is he’s talking about plans to work with Trump. She wants a free, open Indo-Pacific region. Also hearing from Chinook Suzuki as well, who could be taking a really key post in the new administration as well. But but he’s saying that the trust between the LDP, Komeito is is is firm. They’ve had an ongoing or an existing coalition with that political party as well. So that’s what he’s saying about that. He’s also talking about essentially you need to have investment in Japan. You can’t achieve growth without that. But still, at the same time, you do need to value fiscal discipline and that can’t be ignored as well. No, no, don’t throw it out the window. So I think those are two very important points because they’re coming at a time when I guess to some extent markets are questioning to what extent we can sort of stretch those concepts both on is it going to be with the Camacho Party, number one? And number two is is it going to be a lot more juice in this economy as far as fiscal push is concerned? And just on the sort of surface value of those two statements doesn’t seem to be something that we should be too liberal with. That’s well, just to borrow a pun there. Go ahead. Go ahead, Bill. I just need to make a correction there so that we said that LDP pressure is ongoing at the LDP HQ. I mentioned that Takeuchi line about plans to to work with Trump to have an open Indo-Pacific region that actually was Truman, an ex post or a post on the social media platform X, but she’s essentially saying very pleased to receive such a worm. Warm words, rather, of congratulations from Donald Trump, and she’s hoping to work toward him as well, or within rather, on their alliance and make it even stronger and more prosperous. So that’s in response to to an earlier post on ex from from President Trump then. Yeah and that’s ahead of course the like the trip coming up of course. Yeah that’s right and possibly looking to make a stop President Trump in Tokyo later this month. But let’s get more on on what we’re hearing so far from about Takeuchi XI coming in, possibly going to be the first female leader in Japan years ahead of the US as well. But let’s bring in our opinion columnist really who thinks Japan’s incoming leader is generating buzz and misinformation in equal measure. So so Guero, it was a really great piece from you just sort of laying out some of the key areas we’re hearing around gender equality, fiscal discipline or a stance on on on on fiscal spending. What is standing out to you so far about that buzz, but also that misinformation? Well, certainly, you know, there’s a lot of buzz in the markets. I think a lot of people found themselves a little bit mis positioned, a little bit too confident that Koizumi was going to win the election. So now you’re seeing a real sort of like, you know, backlash to that in the markets. I kind of feel a little bit of the you know, the Abenomics 2.0 froth is a little bit too much. You know, Takeuchi is going to have a far more constrained position than than Shinzo Abe had when he came in as leader. He had a huge majority and a huge mandate to get things done. TAIPEI He has a much weaker position in the party. She has a much weaker position in Parliament and she’s going to have to do a lot of very practical things before she has any big free spending plans that she’s able to to get through Parliament. So I would I would dial back the hype on that front just just a little bit before anyone gets too excited that we’re going back to the to the, you know, Abe era fun times in terms of the, you know, the misinformation. I do think a lot of people have been a little bit sort of like wrong footed about, you know, what they knew about each or how much they knew about her. There’s a lot of stuff going around that cancer has, you know, a very radical, you know, ultra conservative figure. I think that also goes a little bit too far. And I think people should pay a little bit more attention to what she says and the policies that she’s outlining. We’re going to get a clearer idea of that, I think, in the coming weeks, presuming she gets confirmed as prime minister next week. So pay more attention to that, I think, than than anything you might see online. Well, that then begs the the opposite question here, Carol. Does what’s the likelihood of nothing changing? I mean, nothing. There’s not a big chance of nothing changing, shall we say. Obviously, TVG comes from a very different side of the LDP to Ishiba, who is very much on the the left wing of the LDP. Takeuchi Certainly is, you know, a very conservative choice. They have very different views on many kinds of things, including spending. However, you know, the first thing Takeuchi is going to have to do is going to have to be very practical policy. She has to rebuild support for the LDP within the country. Voters are really annoyed. They’re upset with the LDP. They’re upset with inflation. The first thing she’s going to have to do before we get to any, you know, big spending, before we get to any, you know, change in foreign policy, she’s going to have to figure out a way to get voters on board. That means putting cash in their wallets. I think that’s going to consume at least the first couple of months of her term as she tries to compile an extra budget in order to, you know, do something, do anything in order to alleviate voters concerns about inflation. Greg, one final question for you. Foreign policy, what can we extrapolate? What’s not what’s not noisier? What’s what’s real? In terms of foreign policy, you can very much expect, I would say, a continuation of Abe’s thoughts on, you know, a strong Japan that sits, you know, side by side as a more equal partner with the US and one that, you know, is a strong presence with the US in Japan. She will very much try to, I think, emulate the relationship that Abe had with Donald Trump and maybe try to exploit the fact that they both were close to Abe. I of course, the big risk is that China and South Korea relations, you know, with both of those countries improved a lot under first I think the Kishida and then Ishiba. They are already looking at her very skeptically and it depends what kind of position she takes. Does she, for example, visit Yasukuni Shrine? That could be a big potential flashpoint in the months ahead. Having said that, she has moderated her stance this time. When she ran for election last year, she very outright said that she would continue to visit Yasukuni Shrine as prime minister. She has essentially dodged that question every time she’s been ousted this time around. So she’s clearly being a little bit more pragmatic this time around that has gotten her into, you know, top job in the LDP. And I think we can assume that, you know, surrounding her. She also has you know, she has a she has a lot of debts to pay, shall we say. She has debts to pay to the likes of of Taro Aso, who helped elevate her into this position. And we can expect or at least I expect that she will be in the short term, she will be trying to be more pragmatic and try to avoid any potential flashpoints from which there’s very little for for her to gain in the near term. Caro, thank you so much. Gerhard Reedy there in Tokyo for us. Bloomberg Opinion columnists on everything, including into foreign policy and what it really means for what is largely still perceived as a pacifist. Japan, We’re looking at defense related stocks because that sector has been very much in focus image. This pick up in spending changing in mindsets. Certainly with tensions with mainland China. You have North Korea of Russia. Let’s bring in our politics and security reporter Alister Gale for more on this. And Alastair, I mean the the title of the headline is Pacifist Japan is boosting its spending on defence startups. And what has changed in a country that’s traditionally been fairly risk averse when it comes to that spectrum of corporate Japan? That’s right. I mean, a lot is changing right now, as you say. You know, there are threats from around the region that Japan worries about China, North Korea and even Russia to Japan’s north. I mean, really over the last five years, you’ve seen a sort of shift in thinking about what Japan should do to deal with that. Obviously, in the background, as well as Russia’s invasion of Ukraine, which made people worry about a larger power, trying to take over a smaller power. And could that manifest itself in Asia as well, perhaps over Taiwan. So Japan has sort of come around to the idea that you’ve just got to boost defence spending and you’ve got to boost the defence sector, which historically has been quite small in Japan. You only have a handful of large companies which provide equipment to the Japanese military, the self-defense forces, as it’s known, and it’s been relatively small compared to other major countries, even compared to South Korea next door. So what the government is trying to do is encourage the the growth of that sector are one part of that puzzle is bringing in smaller businesses, startups who have innovative ideas about defence technology. You know, think areas like drones. I that kind of, you know, new cutting edge technology often that’s brought in to the defence sector by these kind of smaller, creative, more kind of scrappy businesses. And that is also a cultural change for Japan. It doesn’t have a large entrepreneurial sector that is changing, but it’s coming from a small base. So what’s happening here now is the government is trying to sort of promote the growth of those companies, is offering finance for them. It’s saying, you know, we want to incorporate you into our defence sector. You are important to us. And we’re also seeing younger Japanese who are more worried about the regional security picture, wanting to contribute to that and breaking through what’s really been a historical taboo about being in the defence business here. So a lot is changing. It’s starting from a small scale, but we’re starting to see entrepreneurs and people who want to contribute to defending Japan from what they see as the rising threats coming up with new ideas. And that will over time perhaps lead to a more robust, more kind of filled out Japanese defence sector. Yeah. I feel like you’ve sort of really gone through, I guess, what what the contribution can be in the sense that that start ups can be a little bit more agile and they can contribute that innovation maybe you don’t get from the industry behemoths, but, But what are the challenges then to the success of startups in the in the country as well, given this has been sort of an underinvested area? Well, one of the challenges is money, Of course, you know, attracting capital into start ups is is a challenge here in Japan. It is the VC sector is growing, but there is some reluctance to invest in the defense business. So Japanese companies, you know, have a problem. These startups have access to capital. The government is trying to contribute to that by doing being really a matchmaker for these companies to find investors. The more, you know, more Japanese companies are going to sort of global events to try and raise their profile, to try and attract investors. So money is a big part of this. Obviously, a lot of this technology is very cutting edge. It may not work. You may be looking at something that you spend a lot of time and effort into, but essentially, you know, comes to nothing. So there’s the risk side of things which, you know, Japan doesn’t have, you know, that kind of culture. Of course, there’s been a big risk takers in Japanese business in the past. Think of like companies like Sony and Toyota. But in recent years, the kind of entrepreneurial spirit has perhaps been less in the forefront. So it’s trying to sort of move back into that kind of more risk risk risk, own type approach to doing business. But of course, that, you know, the upshot of that may be that you may end up with nothing. So there’s various factors that are challenges for the business of defense here. What about the challenge of also your export markets? There are a range of restrictions in place, including on exports of of lethal military equipment, for example. How do they overcome that? And I guess for certain types of technologies, you’ve mentioned drones, for instance, there’s always surveillance or reconnaissance. But what does that mean then? But I guess there they grow these startups. That’s right. I mean, there are still restrictions on exports, as you mentioned. Japan has gradually kind of loosened those restrictions. In 2014, there was still a complete ban on defense exports. That’s been lifted, but there’s still a general ban on anything which is considered to be lethal weapon. So I think things like missiles, even suicide drones. So those kind of things, you know, it’s hard to get markets overseas for those because you still have to deal with the fact that those restrictions exist. The government is trying to find ways around that. We had a big deal recently here for Japan to sell warships to Australia. So it’s making exceptions. It’s trying to find ways to work around those restrictions. And I think, you know, it’s interesting now with Takeuchi coming in as the head of the LDP, she’s very forward leaning on having a robust defense sector. We may see more momentum in rolling back those restrictions, particularly if we see some kind of change in the government with perhaps more hawkish elements who have sort of more sway in the government. See that really now is the time for those restrictions to be lifted in total. But the challenges still remain. So it’s a kind of case by case process. Businesses here talk about lots of paperwork that they have to do to get our exports approved. But we are seeing some changes and it’s becoming easier. Yeah, And on that point, I mean, we just heard from Takeuchi in the last few minutes and in an ex post saying she’s committed to a free and open Indo-Pacific. But sometimes, of course, building up your weapons capabilities is a key aspect of deterrence as well. But that was Bloomberg’s Alastair Gilbert in Tokyo for us. And just ahead. Sovereign wealth funds and global money managers are jumping into LG Electronics, India IPO. We’ll have details of the anchor investors coming up. This is Bloomberg. Welcome back. Just looking ahead, of course, the to cash market open in India. A big day there and it’s shaping up to be a big year for ECM. Futures are pointing to the upsides. The IPO market we alluded to that just now. Of course, the proceeds this month are expected to cross a record $5 billion. He had the sovereign wealth funds, plural, of Abu Dhabi. You have Norway, Singapore have all become anchor investors. And of course, the big name we’re talking about today, which is the Indian unit of LG Electronics, will start trading and take will start taking orders from public investors later today. That’s the operative word it expects to list on the 14th of October. Yes, you said I mean, it’s it’s set to be a record month for Indian IPO. So you’re looking at proceeds maybe crossing $5 billion in October alone. But let’s get more that Asia equities reporter Ashutosh Joshi now joining us. So, Ashutosh, why are we seeing this frenzy right now with this huge amount of capital being raised essentially? Hi, thanks for having me on the show. India is set for a year of record, probably a crossing last year, 21 billion funds raised to IPO is what’s driving demand for new listings in India is funds coming from mostly institutional investors. There is demand for new listings, which are seeing a strong participation from domestic as well as foreign investors. What’s driving the demand from domestic investors is money coming where mutual funds and retail investors participate. Big companies have been able to raise funds to valuations, perhaps a much higher than some of the biggest markets in India. That that allows investors such as private equity fund to exit their investments through a listing of companies. This is helping India’s IPO market remain robust and has helped. India became one of the busiest places again this year in terms of capital raising. And I mean, certainly it helps that you have such a big listing coming. It helps that the market is not doing too badly. In terms of the brands behind this, though, do they help Tata? LG, for example. Tata, LG. Both are big brands and as expected, anchor portions and good IP operations were subscribed by global names. LG Anchor investors included some of world’s biggest sovereign funds. Tata We also saw strong participation from domestic mutual funds and insurer Life Insurance Corp of India, as well as funds managed by Goldman Sachs and Fidelity also participated. And anchor participation indicates that these IPOs are fit for a strong demand. We already saw almost 40% of Tata Capital IPO sold on the first day itself. So investors are hopeful of both IPO raising more than 1 billion each. We will see strong demand. When you’ve got so much IPO activity, though, what happens to to to market liquidity? Has there been any sort of impact on that? Yes, a secondary market in India is undergoing a sort of led patch of lean performance. India’s benchmark Nifty index has trailed its Asian peers by its biggest margin in more than almost 30 years. This comes on the back of a strong performance of some of the peers like China and Korea. However, despite this, Indian equities are on course for their 10th straight year of positive returns. That is a feat not achieved by many of emerging markets ever. However, there is a case for some sort of impact on secondary market performance because a lot of liquidity is absorbed for the new IPO of all new listings coming. Hence, for the rest of the year we may see some weakness in the secondary market. Right on. That’s a fairly positive tone. It’s that banter, of course, as there’s Joshi there in Mumbai for US and Asia Equities report. A big one of course, coming through in the next week or so. Mark your calendars now. October 14. Right. Coming up here on Bloomberg Television, in fact, just on this very topic, this booming IPO pipeline in India, the Bombay Stock Exchange CEO joins in exclusively, of course, an insight. Plus, we’ll get his outlook on the derivatives and options markets there as well. Right. Welcome back. Today to Japan is not a strong Taiwan. The reopening today is that it’s playing a bit of catch up. Of course, the air and ship play there. Oh, it’s going the opposite way. We are, of course, on the lunch break over in Japan. We’re watching it very closely as we move into the trading session there on Tuesday. The blowout in yields, the weakness we’re seeing in the currency. But and really, we were supposed to be talking about a weaker dollar this week on the back of the shutdown. But Japan and then Europe have been so hands were trading at about these levels. Gold seems to be a story that keeps giving here. Well, there’s sort of three stories really for gold to track today. Firstly, you’ve seen the PBOC extending its gold buying spree for 11 straight months. That’s one of the reasons we’ve been seeing so much momentum behind gold prices. Then you’ve got as well the story that Goldman Sachs has upgraded their their price target year end for 2026, but to 40 $900 an ounce. And then lastly, we had an interview with Ken Griffin from Citadel as well. Yeah, and that’s one of the top stories as well on the Bloomberg terminal today. Yeah, He’s saying that essentially investors are starting to view gold as a safer asset than the dollar and that it’s a development that’s really concerning, probably concerning to a lot of people out there. All right. We will see you all tomorrow. That’s it from us here on the China show. Have a good to stay ahead.

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