Point 5 , the biggest move in three months, moving above 1300 an ounce, gold trading at the highest level since the u. S. Election. Showing iskorea is showshe crowd psychology as does the elliott wave. That it could move to 1339. 1340 could be that next level according to that chart good not only at the highest level in volatility, but fo spiking again. Up in the Asian Session, and this flight to quality being felt in the treasury market. Tradingeeing treasuries in the Asian Session and very near the low of the year, 2. 1 . Ant 2 really could be with grasp very, very soon. Not to mention Inflation Expectations are low, so will the fed delay rate hikes . That is another factor investors are looking at. Volatility in currency markets very high, shortterm volatility on the korean won spiking again, catching up to those levels we saw earlier in the month when we had President Trump talking about fire and fury against north korea, so currency moves key to watch. We are seeing upside for the dollar as well. Throughout the rest of this july, theough mid korean won has in fact underperformed its a developed heres. Peers. Take a look now at how markets are moving, and this has to do ,ith what north korea is doing firing that Ballistic Missile over japan. Pi the biggest loser, the biggest fall in about two weeks. We are seeing the south korean bond the biggest loser among currency markets in asia. The japanese yen as a safety haven. It does not matter how counterintuitive that is. That is the strongest level in three months against the dollar. You are seeing gold gained ground and a mixed picture for commodity markets, although given that harvey is affecting the u. S. , we are seeing crude rebound and extend gains. Yields in the sovereign debt market in asia losing ground as we see that flight to quality being played out in the asian market. It is devastating, Tropical Storm harvey, unleashing floods in houston. Lets get more on that with first word news. Tropical storm harvey has over texasw strength and neighboring states. The full extent of the damage want be known for weeks. The amount of rain measured in feet rather than inches. The texasppled energy home with a 10 of Refining Capacity shut down. Secretary of state tillerson is eliminating special envoy positions to meet President Trumps demand for deep budget cuts. He said many of the roles would these subsumed into other agencies. Positions under threat include envoys for Climate Change and the iran nuclear deal. Tillerson said his plan would advance americas interests. The chief brexit negotiator has accused the u. K. Of not being on britain tolled be more clear about its position. He spoke at the two sides opened a third round of talks in brussels. Mountingsed his frustration at the slow progress made so far with a key eu Leaders Summit just weeks away. China has created the biggest Power Company on earth, approving the merger of a coal assetsith a generator, worth more than 270 billion and seen as an attempt to slim down chinas bloated state owned sector. The company will be called National Energy investment corp. And its capacity could put it ahead. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. Thank you. Top story, north korea raising the stakes by firing a missile over japan. Show korea has promised a of force in response. The government followed the missile from its launch and was completely aware of its trajectory. The safety of our people was the main concern. This act causes a serious and profound threat to the security of the region and we have lodged severeaint in the most language and asked the United Nations to convene an emergency meeting of the Security Council to ask the International Community to put pressure on a rita ceases provocation. Political reverberations and people shaken up today. Our bloomberg asian editor is joining us now could what is the feeling in tokyo today . Interesting. To some degree, it is almost business as usual because clearly japan as with other countries in the region have gotten used to provocations of north korea. In terms of the japanese you mentioned how the Prime Minister has been on tv and has spoken a President Trump. We had the defense minister and foreign minister as well, so the government has been out trying to reassure people. In terms of japan in general, people are quite used to this , even though todays events are unprecedented. Had three short range missiles fired on saturday, im not surprised they about the latest developments, however, compared to previous launches, how did this latest missile fare. That is probably the key issue going forward. So far, we have heard from japans defense minister zhang this would appear to be an intermediate range missile, and he said that it was similar to one fired on may 14, but that one was fired at a higher trajectory. This one was fired at a regular trajectory. Looking in details, but that will be important in terms of building consensus politically going forward. Turns out to be an icbm, that would have serious implications, but that does not seem to be the case of this point. To for that. More analysis on the latest out of north korea. Next, what is prompting kim jongun to raise the provocation . We asked robert calley. Running for cover, the long and short of the safety trade. This is bloomberg. In north koreas minds, they are on the cusp of getting capabilities in the realm of great powers. For a leader to have this that isty is something the cap we have to manage. That is where coalition could arise. This is real. Stronger yen definitely hurts the Japanese Corporate profits and hinder the effort by the boj to raise its inflation, so the impact through yen is real. Some consumer is concerned, but i dont think it plays into consumer confidence. North korea is wired in a way people dont understand. Pain thatbsorb our economies cant imagine. It is hard for them to deal with growth and prosperity, but they can handle sanctions and isolation, so what i am anticipating is that even if china implements these sanctions, north korea will keep their missile and Nuclear Programs going full speed ahead. About that Economic Impact and reverberations when it comes to north korea, firing that missile over japan. For more on that strategy, robert kelly helps us to get in the minds of north korea. Give us a sense of why they are doing this. Launch over japan was the signal that north korea japan,etaliate against as well as the South Koreans and americans. It has been well known a long time that north korea could do a great deal of damage to south korea, and this is north koreas way of saying we can also hit japan. Way for the north to toeaten the japanese convince the South Koreans and american not to attack north korea over the nuclear program. We thought potentially there could be close to doors discussions between the u. S. And north korea going on. Happened, is this that an indication there is nothing behind the scenes going on at the moment . It is possible, but i dont think so. It was close, you would not know about it. I think it is likely, but i korea access an integrated actor. Missile launches is the way various release compete against each other. There is no breakthrough that anyone can see, so threatening japan along the way is in the context of the current exercises at the time when people are worried about america striking north korea. I dont see any reason why these two things cant be happening at the same time. We often talk about Nuclear Programs as threats, but they also act as great deterrence. In a way, north korea is basically saying if you attack us, we will go full throttle. When it comes to conventional weapons, south korea is a chess piece easily taken by north korea, but what i dont understand is why retaliate with japan . Is this trying to draw in the u. S. To come in closer to take it out . I think to spread the damage around. The more north korea looks like damage, lashot of out and hit all kinds of people who have nothing to do with the conflict, the more dangerous and risky it becomes to strike north korea. Its primary way of preventing that strike is to damage the reason locally. Also, a missile threat to japan and a Nuclear Missile threat for the continental United States, north koreas best option to change, that is what is at stake, showing you can do that to the japanese. I keep hearing that the u. S. Wants to ring north korea to the negotiating table. Talks inthe sixparty beijing. Back then, the thought was we will only give you highlevel talks with washington if you come forward and engage with us. Changed . Dynamic is the u. S. More willing to talk to pyongyang than it was 10 years ago . I think that willingness is the same. The big issue is there is a strong belief in the u. S. Government that the North Koreans are not that serious about it. I think the collapse of the deal in 2012 sent a real signal to the americans, the North Koreans started backtracking within a month, and that convinced the Obama Administration to walk away. That is what the donald trump people are saying to. To be some kind of concession by the North Koreans, otherwise we are stuck in a stalemate. You have to understand the ultimate in game for korea. Realwe understood the endgame, reunification, movement of forces out of south korea . It is simply the survival of north korea. I am skeptical that north korea could reunify the pencil on its own terms. I think it would be a huge leap to try to absorb south korea, so if north korea just wants to , then it Needs Nuclear Weapons to do that. It would be great to have reunification, but i dont think that is realistic. It is more just hanging on and the Nuclear Weapons are a great shield. What is next from the International Community and the United States . The International Community, more u. N. Sanctions. China has not done enough to pressure the North Koreans, and that is what we are hoping for, but that track is more or less exhausted. We should continue to try, but we will not strike north korea. Locally, the issue in the future is missile defense. Missilelipping in a missile arms race. South korea begins to deploy more missile detection technology, and north korea builds missiles, so an arms race. There is the potential a miscalculation could backfire. Andk you for joining us giving us your thoughts on the latest north Korean Missile launches. Coming up, details on how chinese Property Group evergrand e managed a 250 jump in firsthalf profit. This is bloomberg. Evergrande rising strongly on the back of the 250 jump in firsthalf profit. Rising property sales help revenue doubled. Real estate editor is here with the story. Lets talk about this company. Was targeted by shortsellers earlier this year, so what is the story . Is among the most high flying of chinese developers, and that is saying something in a sector that has been on a roll. A point at which shortsellers came in and started taking bearish positions on the stock, but it has been a bad debt with shares up almost 400 this year. The shortsellers have really been in a bad position. They had a legy to stand on at the time. There was criticism of a huge debt pile. 70 down. How significant is this effort to bring its debt down . Traditionally been chinas most indebted developer. So a high leverage, high debt strategy for evergrande is significant in its evolution as a more stable company. In mind that a lot of expansion has been fueled by its debt. They have been very active with acquisitions, acquiring land bank, said that has put them in a strong position. Want toe hearing they build theme parks in china. Home sales in china have an at the slowest pace in two years, so what is the broader outlook . Chinese regulators and leaders seem determined to and thatny disruption, will be pronounced ahead of the Party Congress meetings later this year. With developers such as evergrande and its rivals who have been very active in consolidating and acquiring weaker rivals and assets from weaker rivals, it puts them in a strong position to be able to weather any downturn or slow down in the property market. It is not just evergrande it is happening across china specifically. Thank you for joining us. Lets get a quick check of the best headlines. Companyof li kashing 1. 2 billion tax bill. Hutchinson Telecommunications International says it continues to dispute the validity of the tax charges. Analysts see it as a test case that could influence future Foreign Investment in india. Restructuring proposals for four lotte units. It will end merger plans to convert to a holding company. S achieve the necessary quorum to approve the proposals. Qatar Sovereign Rating has littlet saying it sees progress. The Worlds Largest exporter of liquefied natural gas was put on watch in june after countries cut diplomatic and transport ties. Fitch says International Mediation efforts of not shown significant progress. Lets check in on trading across the region. Arrows as we can see it, except the shanghai composite, but red arrows for north, asx 200 down 1 as three of fires that missile across japans bow. We are seeing the risk off sentiment spread across the region. You can also see the Hang Seng Indexes now in the red, down. 5 . That after reaching the highest level since 2015. We saw five consecutive sessions of gains for the index, but the regional benchmark is down about. 4 . Butt of downside pressure, the shanghai composite seems to be fluctuating between gains and losses. Safe havens such as gold gaining ground. Now 1316 an ounce. It is the yen as well. Japanese shares are tumbling in the morning session. It is about to reopen for the afternoon in tokyo. The worst monthly performance in more than a year. The latest on japan, next. This is bloomberg. It is 11 29 a. M. In singapore. These are the latest first word news headlines. The japanese Prime Minister says he and President Trump have agreed to increase pressure on north korea after its latest missile launch. The two leaders spoke after a missile flew over japan and landed in the acidic. Said it was an unprecedented, grave, and serious threat, and called on china and russia to play a role. The south korean president has ordered a show of response, telling the military to conduct bombing drills. Pacific rimom 11 countries are meeting in sydney to revise the tpp. The talks are aimed to reach an overall agreement to be signed in november. President trump pulled the u. S. Out of the pack soon after taking office, saying his favors first policy oneonone deals rather than multinational agreement such as tpp. President trump preparing for one of his most important sales pitches, getting voters fired up about rewriting the tax code. However, there is precious little to sell at the moment. Basic questions about changes and tax brackets and levels have yet to be addressed. Steven mnuchin predicted the bill would be passed by august. To he wont commit completing it by the end of this year. Global news 24 hours a day powered by more than 2700 journalists and analysts in more than 120 countries. This is bloomberg. A check on the markets, risk off this session. Set for then stocks first monthly drop in 2017, and korean asset during the brunt of todays selloff. The kospi set to lose over 1 this as the won drops by the most in two weeks. Korean bonds are on the back foot. The yenr winners are and gold, although gold is starting to pick up more favor versus the yen when it comes to the safe haven play. It has been a day of swings for the yuan, but the onshore and offshore rate trading at highs not seen since june 2016. Commodity markets unfazed, copper rallying along with other base metals. We do have Oil Rebounding while gasoline futures are pricing for a sixth day. The shanghai composite is slightly higher, treading water at december 2015 highs. Leadingroducers material stocks higher. One minor is set to report results today. Stocks moving on the hshare index after a slew of results. Almost 4 higher, the most since february, since an upgrade after the jump in net income. Sincelling the most january. It expects profit to drop. On the hind saying hang seng, the tech rally selling as tencent is living. It is off saving offsetting the rise and casino stocks. Today, aac is tumbling as much as 5 of the biggest drop in a month. Senge hind saying hang looking to snap a five day advance. Overall a risk obsession in asia. A macro day. S on the micro story is north korea firing that missile over japan. Saying to china and russia to step in, urging the United Nations to hold an emergency meeting. Pressure those saying that sanctions this just crossing the bloomberg terminal, russia saying sanctions are no longer useful against north korea. The Russian Deputy foreign minister on sanctions here. His sanctions are no longer useful, is a military incursion or action the next step . That is fodder to absorb. We dont want to get there. We dont want to Start