Have a look at my bloomberg chart to illustrate how it comes together longerterm. Now that we have seen the data comes through, given the fact they had the hike in south korea yesterday, something to keep in mind. Real rates have diverged between japan and south korea. The boj is not doing anything and inflation is picking up slowly. When it comes to south korea, we are getting a lot in terms of inflation. You would expect to put some pressure on dollar one moving forward, g btv 5102. When it comes to the markets, it has been a topsyturvy session. In mood music has changed several times. Lets get it over to sophie to get a sense of what is happening. They are grappling with disappointment over the tax vote. But not too shabby Economic Data from across the region. We have seen the kospi gain of 0. 2 . Japanese futures looking fairly flat. There could be indication japanese stocks could rise in the afternoon session. The yen is trading flat at 112. 55. Filling up the board to show you what is going on with those markets. Shenzhen and chinese exchanges gaining ground. China under pressure, as energy and materials stocks drag. Maybe investors shaking off their jitters. May be indicating liquidity with apple could refuel the bull charge for the hang seng. As you can see on the breakdown of imf for hang seng, these stocks are on the decline, primarily because of tencent. Discretionary shares leading up to percent. The hang seng rebalancing takes effect at the end of market closed today. Changed to 11 from 10. 7 . Week, lost over 5 this extending losses. Its worst week in almost two years. David waiting for these index funds to track the index. Another thing, casino stocks are on the way up. Can you tell us why . Sophie we have the stock rerating, Galaxy Entertainment upgraded to buy. Macau gettingwynn a win on both brokers. To gaming revenue for november, that is expected to moderate. It is still on course for the 16th Straight Year on year gain. People are still looking to roll the dice. David sophie, thank you for your markets update. The other thing i was talking about, data from japan and korea. Here is paul allen with your first word news. Contrasting messages from korea and japan did a. Seoul showing inflation slowing unexpectedly to a one year low. Growth came in ahead of forecasts. Japan saw inflation accelerating slightly, 0. 1 in october. Bojsmains far from the 2 target. Household spending was unchanged. The white house and state department denying speculation President Trump is preparing to dump secretary of state rex tillerson. Say theration officials subject has been under discussions in silly september, with relations breaking down since midyear. The official line is that than the rumors are not true and the two men continue to work together. Wild ridechs say the enjoyed by bitcoin this year means it is too soon for a strategy. Lloyd blankfein said there crypto currency does not seem stable or have longterm value. 15 , drop, and rallied again. Blankfein says he feels no urgency to develop a plan. Something that moves up and down 20 in a day does not feel like a currency or a store. If it works out in gets more established and trades like a store value and does not move up and down 20 and there is liquidity in it, we will get to it. Bitcoin is not the only stock on a high. These four lesserknown companies have jumped more than 1000 in 2016. The market value of a japanese steakhouse pepper food has risen this year. Heg makes graphite electrodes to turn scrap into steel. Indiabulls invest in trading. And China Investment works with an auto company. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am paul allen. This is bloomberg. Shortsellers are now worst bonde see the row in china in several years. Theral have pointed out decline across bonds. To 2. 7 billion of notes issued this year. We are joined by our guest in beijing. What thisderstand latest chapter is right now. Seems to be another byproduct of the Deleveraging Campaign that has been going on whole ofhina, for the 2017, picking up at the end of the year. The bond market has been under pressure all year. Banks seem to be capitalizing on that. We have seen a real uptick in bond borrowing in china. Aroundt record levels, the equivalent of 270 billion worth. Banks are shorting the bond market. They are doing this by borrowing government bonds, and then selling them into the stock market. Which events at which adds into the downward pressure in the market. Once it gets to a suitably low level, they are buying it back. And they are benefiting from that trade. Another example of how banks are looking at this deleveraging situation and making money. David that is what Market Participants do. They take the reality end ride with it. It is exacerbating moves in the bond market. What are the people what with the people tell you . Emma we have seen really extreme moves. Particularly since the communist Party Congress came to an end midoctober. Things seem to have been let loose in chinese markets. They seemed to get more serious about this Deleveraging Campaign. Initiatives coming out, the crackdown on microlenders, for example. This definitely caused jitters in the bond market. This shortselling phenomenon on top of that has exacerbated those moves. 4 , theyields around highest levels for benchmark yields since 2014. The outlook is that this will continue. There are not any real barriers as of yet. As we know, the chinese authorities are very quick to quash speculations in the stock and currency markets. There is little sign of that in the bond market. David thank you so much, m obrien. Emma will come on the program to talk about his plans for japan, a massive casino complex in the land of the rising sun, which he says might be bigger than the one in macau. This is bloomberg. David welcome back. Resorts unveiled a plan for new casino. This massive integrated resort would be more massive than the one in manila and macau. He joins us live out of tokyo. Lawrence, welcome to the program, good to see you again. Switching on their tvs and seeing you in japan, i am guessing you are not there to visit disneyland. Tell us what brings you into town. Lawrence it is great to be on the program. To be honest, i have been to Tokyo Disneyland with my daughter many times. Probably more than the hong kong disneyland. I have a genuine love for japan. I have been coming here for 35 years, since i was five years old. It has always been such a cool experience, the unique country with rich heritage. If we were lucky enough to build an integrated resort here, that would really be a dream come true. We set up our offices in japan in both tokyo and osaka. We have a full team working here. I come here often to work with part of continue to be hopefully the opening up of the integrated resort process. David a few more things have to be worked out. Among those, things like bidding out licenses for location. Have you and the big players been part of that conversation with japanese legislatures legislators . Has there been any clue what they are looking to open up just yet . This initiative has been 10 years plus in the making for us. We have had a lot of dialogue with both the National Government level and the old local levels. There is still a long road ahead. But we are very respectful to their process. And we are patiently continuing. There are things that need to be resolved beforehand. Ir first law passed was the promotional, the second, the implementation law, has yet to be debated and passed. A lot of the bidding processes will be crystallized at that stage. We anticipate the earliest for these, it will be the most Competitive Bidding process in history. The earliest would be may be end of next year or middle of next year. David why is that . A lot of people got very excited on the prospect, the idea of japan with casinos, everyone was encouraged by that news. Why do think that is . What is different from japan versus your other businesses in macau and manila . Lawrence japan as a country, if you look at the population base, most importantly for us, it is such an amazing country. It is so unique. Current visitation from foreign visitors is around 22 million. In comparison, if you look at a small place like macau with 30 million people, and the city state like singapore with over 60 million, the potential for visitation growth into japan is a norm us is enormous. Japan is one of the most sophisticated countries. And hence, those attracted to japan will be more affluent and really our type of customers. Melco focuses on luxury customers. I think that is the right type of customers to attract into a country like japan. David i am sure you have done a little bit of the mouth. Can you give us a ballpark figure roughly what it would cost to realize that japan dream, and whether it will be an issue raising that kind of money . , we are only melco interested, our interest lies in the biggest cities. That is where the International Airports and best infrastructure is. You also have the population base to back it up. I think a resort in japan will easily be the most expensive integrated resort ever built. Macau,ly our resorts in the ones we have built, cost around 4 billion to 5 billion. I think one in japan could be closer to 10 billion. Between the equity market and the debt market, all the Global Players like us would not have a problem in terms of writing the equity check. David generally speaking, can any big player globally afford not to be in japan . That is i do not think it is a luxury afforded to everyone. Ultimately, it will be the japanese government and local prefecture government that decides. What we are hearing at a first stage, only two or three licenses will be given. There will be companies that will be unlucky and unfortunate. David if you have the choice, would you proceed alone . Are you looking to partner with anyone, and if you are, and you give us a sense of the types of groups you would be speaking with . Lawrence that is also the beauty of melco. We have boys been a Company Built on collaboration. Been aave always a Company Built on collaboration. Every jurisdiction we have gone partnershad a local who have helped us and guided us and steered us along. We are very openminded. World, we would have as much equity in a project as possible. We recognize we want our local partners to have skin in the game. It is of National Importance for the local, large corporations and small, medium corporations, to have some kind of stake. We are very openminded to it. Out of all the governments we have ever worked with, the common denominator willow is be the bestre the most corporate citizens to work with those governments. Just to pivot to macau, the last 12 months has seen a decent recovery in the industry. At the moment, growing by 25 . What to you is a Sustainable Growth rate . Point, i am sure current capacity becomes an issue. We were extremely pleased. Macau went through two very tough years. That was driven by chinese policies that affected the Consumer Sector across the entire globe. But in the last 15 months we have had consecutive growth. Your today, we are around 19 . Comp base was the lower. Next year we will have much higher comps, given the growth issue. I still think given chinese gdp is growing at 6. 5 annually, macau will always grow faster than that. I think a growth rate of somewhere in the high Single Digits or low double digits, it will be easily achievable next year. David very quickly, what is your internal target for putting all your properties together in macau for next year . We dont ever give projections. But i think we are looking at, our benchmark has always been, we want to grow faster than the market. We feel we have Premium Properties we are proud of. Moreact we have won michelin awards than anyone in the market, our properties are built for the longterm. Our benchmark even though we do not have new projects coming onene other than morpheus, of the most iconic buildings in asia, we feel we will grow faster than the overall market. David lawrence, thank you for coming on the program. Lawrence ho, chairman and ceo of melco. If you are a bloomberg subscriber, you can catch all the interviews in you may have missed on tv. Join the conversation, send us instant messages. We have some more guests to get engaged ifions and, you have anything to ask him on the latest gdp read. Check it out. This is bloomberg. David lets get a check of your latest business flash headlines. Nippon paint up. This comes after talks. Their rival was unwilling to match their perceived value and take on the debt needed to what have been a 10 billion transaction. s data shareholder, berkshire hathaway. Staying with potential transactions, broadcom delaying its merger with qualcomm until next year. They do not anticipate raising the money until march. They do plan to nominate a director next week. Meanwhile, qualcomm is facing opposition to its 47 billion bid. They plan to press qualcomm to sweeten its offer. Bhp said to have scrapped its ore. T phase on mining iron shut down when the mine collapsed. Another option to divert waste into the nearby valleys. Toshiba up 1 in the morning session. Among reports a settlement with Western Digital over the sale of its flash sales unit. What do we know . What we are hearing now is that toshiba and Western Digital, its memory chip partner that had been suing the companies to stop the sale of the chip business, are close to an agreement. Toshibans essentially, thatmoving a headache originally threatened to derail the deal entirely because Western Digital claimed it had potentially the first right to buy the unit. Now that that is going away, toshiba will be about to complete the agreement with bain capital, which has agreed to buy time for ausiness in deadline in march, when it has to raise enough money to raise its Balance Sheet and remain listed on the tokyo stock exchange. A lot of moving parts. But basically, the deal is good news for toshiba and shares are up. David we will see what happeneds what happens am a developing story. This is bloomberg. David hello, and welcome back. You are watching Bloomberg Markets asia. Last 30 minutes of trade here, we are back from a lunch break in tokyo. Before we get to those details, lets take a step back. We are still down on the day. [no audio] we get of course these periods of downside in the market. The bottom panel is what we are watching. At the moment, we are still above 50. 40 isrt of drop below perhaps when you start worrying a little bit further. That means it has been an astounding year for equity markets. Lets get it over to sophie with a check of what is happening. Seeing quite a few shifting of gears. We are seeing pressure for chinese and hong kong stocks. The nikkei 225 gaining ground, up 0. 2 . The dollar yen trading fairly flat. I want to pull up the board to show you. This is lower for a second day. Low for a second day this year. Gmm, weather hang seng is being weighed by tencent, it has gains in gambling shares. The 781g shares above handle. The onemonth high rate has added five bits, back above the 1 level. The offshorehlight and onshore rates under pressure. 1 infutures losing over shanghai. Thank you for that update. When get you more updates, it comes to tax reform or the tax bill in the u. S. In the united states. Paul allen has more. The u. S. Senate has a suspended votes on the republican tax bill until 11 00 a. M. Friday come oh washington time. They rejected the trigger proposal designed to win support. At least three gop holdouts have tied their votes, which would have raised taxes automatically if promised revenues were not met. Senator mccain indicated his report. He scuttled the Obamacare Repeal earlier this year. The rebuke comes as washingtons washington seeks beijings help. However, the treasury says it is concerned that recent economic liberalization has slowed or even reversed. They are putting too many of their marbles in the owned enterprises, in the party structure. We know that what they are doing is not really working for u. S. Workers. That is the impetus for the change. Efforts to compromise on the irish border are under threat by the party that supports theresa mays government. The democratic unionist of them is opposed to compromise with dublin and said it will abandon may, as necessary. A Spokesman Says the u. K. Has not produced enough progress on the border issue. The e. U. Set a monday deadline to may to deliver. Japan set a formal date for when the emperor will step down. In june, a onetime law to allow the 83yearold to relinquish. The first emperor in 200 years to do so. The crown prince will succeed his father as emperor. Global news 24 hours a day, powered by more than 2700 journalists and analysts in more than 120 countries. I am paul allen, this is bloomberg. Up where paulck was talking about, the u. S. Senate has suspended this bill on the republican tax bill until 11 00 a. M. Washington time. Were joined by Jodi Schneider with the latest and where we go from here, how are publican leaders are trying to get over the finish line, and what is left to get over and what obstacles are remaining. Clearly they are delaying it because they are worried about having enough votes. They can only risk two republican votes. What happened at the end of the day in the u. S. After a pretty good day where they thought they were headed for this, they had john mccain on board, they got a ruling from part of the Parliamentary Office that says one of the ways they would try , three members concerned about the effect on the deficit, they could not do it that way. They basically allow there to be tax increases that they do not did not meet revenue targets. Now they have to try to find another way to get these three people on board, and it will be hard. There is not a lot of room to maneuver. There is a moderate they have been concerned about all along. This is now, how do you construct this and make changes at the last minute that are going to allow you to get enough republican votes . David how