Monetary policy settings to more free trade. Shery pressure mounts on Narendra Modi as he struggles with his unpopular citizenship law. The bjp is headed for defeat. Lets get you to japan. We are getting the latest minutes from the bank of japans october meeting. Boj members saying it is appropriate to clarify the downward bias for rates. It overhauls their forward gardens and they are saying it is important to enhance cooperation with the japanese government. This was back in october before the 120 billion in fiscal measures announced by the japanese government this month, so lets get straight to the market action. We have the open in japan in south korea. And south korea. Open in japan and south korea. Sophie we have little in the way of fresh catalysts. We will be watching for reaction to news that boeing has requested to halt shipments. Sony interview after the company apologized to customers for not being able to keep up with demand. It looks like a muted session is underway. Changed after it closed after a record high. Checking in on the kospi this morning, we are seeing a marginal move as well. The asx 200 little changed after a threeday drop. Theching now to check in on yen, going nowhere so far this morning. Switching it out to check in on the yen if we could. This trading at 109. 38 morning. Little reaction to the boj minutes. Jgb. E keeping an eye on the head of a twoyear auction, the last of japans debt sales for 2019. The twoyear sale could have a up in twoyear yields. Ahead of a sale of u. S. Fiveyear notes, shery, Treasuries Holding Steady after drifting lower overnight. Jerry. Shery shery. Newy boeing has named a ceo after ousting Dennis Muilenburg. Struggling tois navigate the 737 max crisis. Stephen engle is watching this. 400,000 parts go into each 737 max, so how significant are the latest developments at boeing . Significant,s obviously. Under Dennis Muilenburg, boeing had been on a great run. This Company Becomes the biggest industrial giant in the United States, surpassing ge, under mullen berg. Its stock had tripled up until the beginning part of this year, when the problems the mechanical problems started to surface with the 737 max. The two crashes and more than 340 or the 346 associated aths associated with that. Dennis muilenburg, his philosophy, his mantra, was compete to win. He really drove a hard bargain with suppliers around the world. He put, according to a number of analysts, a laser focus on costs. It is being called a retirement but lets not mince words. He has premuch been ousted. The question now is did he put cash and cost savings at the expense of safety . That is the big question. David calhoun has the big task. He is a former ge veteran, the former ceo he is now the ceo and president taking over for mullen berg. Taking over in midjanuary. What is the first order of business . Stephen it is a long todo list. First of all, you have to look at getting those airplanes back in the sky. You can see the tales of the 737 on the tarmac, probably up at the everett facility. More than 400 737 maxes lighting up. They were producing 42 of these are month. They decided to suspend production because we do not have a timeframe for getting the max certified by regulators, but theres also other engineering issues. Theres been production problems. Theres been delays to the 777x new jetline. There has been an embarrassing mishap with the space capsule failing to rendezvous with the International Space station, but these are secondary to repairing the relations with the regulator, the faa, because we just got a statement in fact, just within hours of boeing saying that Dennis Muilenburg was going to step down. The faa put out a sharp rebuke of boeing and of the leadership newe, saying that the leadership must focus on being transparent in its relationship with the faa as safety regulators, and this has been one of the biggest criticisms of Dennis Muilenburg as well as the boeing leadership, and its relationship the last few years with the faa, that perhaps it had too much say, too much of a bully pulpit, if you will, in getting safety reviews through the regulator, and there is resentment built up at the faa. Its calhoun, is calhoun the right man to do that job . He is affable, wellconnected. One guest earlier said may be calhoun, 62 years old, nearing the retirement age, is not necessarily the person to lead longterm. David calhoun might be the right person. The trouble is, he is more of a shortterm solution. You know, his background, his skill set, general electric, hedge funds, private equity. It is really not the kind of longterm reemphasis engineering and reform that i think boeing really needs. I guess the answer to your last question is really getting those relationships back in order with the faa because if you dont have that relationship with the faa, you will knock at the 737 max up in the air again. Paul Stephen Engle and hong kong. Thank you so much for joining us. You can get more on the shakeup in todays addition of daybreak. Bloomberg subscribers go today be go dayb on their terminals and its also available on mobile in the bloomberg anywhere app. Lets check in on the first word news. Get over to Haslinda Amin. China will further lower the amount of many banks to put aside reserves to reduce borrowing costs for small firms. State media reports that pboc will cut the reserve ratio for rediscounting. Officialhas fired up efforts to ease a possible liquidity crunch caused by rising local government debt. Tesla jumped in the regular session on reports is secured almost 1. 5 billion in financing from china. Coming say the money is from local banks and a formal announcement may come this week. Tesla is preparing to sell its shanghai made model three. New car registrations in china climbed to a fivemonth high in november. 393 a year earlier. Have been sentenced to death in saudi arabia for the murder of journalist Jamal Khashoggi istanbul last year. The killing was not premeditated and the court ruled it did not have enough evidence to incriminate senior officials crown Prince Mohammed bin salman. He repeatedly denied sanctioning the killings. Indian Prime MinisterNarendra Modi looks set for an election defeat. To containles nationwide anger at his religionbased citizenship law. Least 24has seen at people killed. They are wrestling with an economy growing at its lowest pace and unemployment at its highest in decades. Global news, 24 hours a day, on air and on quicktake by bloomberg, powered by more than 2700 journalists and analysts in more than 120 countries. I am Haslinda Amin. This is bloomberg. Thank you. We will have plenty more, coming up on daybreak asia, including a Market Outlook for 2020. This is bloomberg. Shery this is daybreak asia. I am shery ahn in new york. Paul i am paul allen in sydney. Stockmarkets have had a spectacular run this year. Equity investors have an economic resurgence in 2020 may want to be cautious. Valuations in several markets are getting stretched. Pete mcguire joins us now in sydney. Peter, an incredible runup in 2019. Surely, this cannot continue. Is been outstanding. When you look at the performance, no one would have guessed you would have 1. 5 to 2. 5 per month gained. Put on 48 . The ball outocked of the park. Paul you were explaining before i joined you that it doesnt really square away with what Interest Rates are doing. Peter you are living on a Deserted Island and say what did the market do . What will Interest Rates be . Seven . Aussie is up 24 . Should be 8 or 9 so it is not a true indication. Monetary easing all over the world, and this is probably the fuel to get those markets to where they are and what is ahead of us, the next decade, will be outstanding. Shery we are seeing the 10 year breakevens around the highest level since july. Are we going to see some inflation scares next year and notential potentially have n affect on how the central bank look to the economy . Uper inflation has to tick eventually paid when you look at the crude market, 63. That has been the headline we saw a decade and a half ago. The next though decade, you will see inflation up higher. Seen wage growth. You have not seen strong underpins as far as those key imports to really get inflation up and running so its going to be a fascinating amount of months ahead. Elections, brexit, and so on. Shery talking about the election, we have priced in most of that phase one trade deal optimism in the markets with record highs in the u. S. Aerybody will want to take jab at china. They arethe risks going into next year . There going into next year . Peter it has been scrapped together. The Chinese Market up seven or 8 for the year. No doubt of rumblings internally. We all understand what their plans are and what impact it will have to the domestic economy, but still, you have got to say that they are doing reasonably good numbers. I think theres going to be a little bit of uncertainty over the next year. What are the next steps as far as these trade wars . And what does chinas rebuttal do . Be ancertainty is going to bit of nervousness. I think the fundamentals are there. Everyone wants a deal and everybody wants to grow their economies. Paul what our expectations for some other trade deals . I am thinking the u. S. And u. K. Peter the u. S. Is going to play hard on euro if they play hard on brexit and i think that will be this trade off so i am not sure how that plays in the First Quarter of next year but i feel as the mr. Trump has really got as eyes on that auto sector far as europe, and there is no doubt that the euro zone is not doing as well as what we anticipated if you put your mind back a couple of years. Germany and so on. It has got to be a hard slog for those guys and over the next two to three years have really got to start hitting some good numbers to get those growths moving forward. Paul in terms of other risks, nobody talks about the deficit much these days. It is 1 trillion. When does it become a political or economic problem . Peter political, another year away. The mantra at the moment as President Trump has only got one agenda and that is to try and get back in power and he has his eyes focused on that one. They are kicking the can down the road. Very, very strong employment growth. I feel as though there is enough momentum to take the gaze away from that. You have a surging u. S. Stock market. The dow up 27. S p up 33 for the year. The headline numbers, they are on board, but overall the economy is doing very well. Paul your earlier point, you were talking about some of the runup in equity markets. The role that Central Banks have had to play. Uncomfortable, doesnt the experience of the past few years tell us, dont worry, the fed will be back to save the day . Peter absolutely. Nothing is changing. That is under normal. When i first heard that terminator or nine years ago, it was like what does that actually mean . Are in unheralded times. What is the storyline . No momentum at the moment is all about trying to get growth. You have strong demographics, surging, you know, new age economies. They are really changing the landscape. That will be the fascination moving forward over the next decade or two decades. From 7. 5 your mind go billion dollars to 9 billion in 20 odd years. Those consumers will drive total growth across the whole planet. Paul one of the things that has been missing for a very long time now is inflation. A number of guests we had our inflation risks to which my reaction was always, really . Isnt japan if occasion japanification more of a problem . In 1989. ,000 points india japan had not a bad year when you think about those numbers. From a lownumbers base. I think there is still that momentum. They have an aging economy. Very different from china and india. Maybe their time on that top horizon is starting to move down the curve a little bit. Paul inflation is mia. Where is it . We have not seen it since the 1980s in a serious way. Peter it might just be bubbling along. Japan has other issues to attend to before we get to inflation in japan. Paul peter mcguire, thank you so much for joining us. Still to come, pushing production. Sony working around the clock to meet demand but even a 24 hour operation has not been enough. We will get the details, next. This is bloomberg. Shery take a look at nikkei futures at the moment unchanged. We are seeing the Energy Sector leading the gains on the market. We continue to see financials and communication stocks weighing on the index. This of course as we see the japanese yen trading within a very tight range ahead of the Christmas Holiday week. Stockkeep an eye on one moving in japan. Sony working around the clock to manufacture its in demand image sensors. But even 24 hour operation has not been enough. For the second straight year, the Japanese Company will struggle to keep up with demand in the holiday season. Our Technology Reporter joins us now. How does this demand for these sony image sensors square with the doom and gloom we are seeing in the mobile phone market . Know, it is pretty much there is no phone that does not have a camera that faces inwards as well as afterwards but it continues to rise. And to highend mid to highend models will have a camera on the back. Some manufacturers like huawei and samsung are pushing even into more lenses, more cameras. Everyone wants their pictures to look at on the internet. On the instagraming facebook. Lenses,ant telephoto pictures that are good in the light. That comes down to the sensors that make that possible, which is why sony can continue to grow when the market swings. It helps that they control more than 50 of that market. Shery what are they doing to meet demand . Peter they are working around the clock to running their factories. They have been investing heavily in expanding capacity. They have doubled spending this year to 2. 8 billion. The problem with these kind of investments is they take a while to take effect. The machines that are going online today, they were ordered a year ago. Our decisions the company has to make long before. It is really hard to read demand a year ahead. And depreciation affects your balance sheet. They built a new factory that will go online and 2021. But the head of the Semiconductor Business says even that might not be enough. He thinks the supply might be fairly tight through 2021. Paul highend cameras and more cameras, are they enough to convince people to buy new sounds . Samsung and huawei are betting that they are. For the longest time, screens were the main differentiator. We moved down to oled screens and they are potentially inflexible. Apart highend models from mid end. You have seeing the proliferation of 3d sensors. It has the interfacing facial recognition camera. It is the weaker version of it. Sony is developing time of light sensor that will allow for much higher resolution and much of Depth Sensing and facing inwards, this could allow you to redo gestures and potentially even understand facial expressions that would allow you to map the world around you and that is helpful for augmented reality games. It is a bit of a chicken and egg scenario. There are rumors that apple might introduce a depth sensor in which case a lot of ios developers will have a lot of motivations to come up with interesting things and many people are betting this will convince users to buy a new phone. Seen investors bottoming out. We continue to see these numbers, especially koreas exporting members. Semiconductors in double digits. Where can we see this industry finally bottoming out . Pavel it depends on who you ask. If you are asking the manufacturers of equipment, they have said the bottom is hit. , somet the share prices of them are more than double this year. They are getting the orders for chips that are yet being made. The bottom might be some time off. Paul the bloomberg Technology Reporter. Thank you for joining us. Lets get a check of the latest business flash headlines. Forit suisse blamed its coo a second spying scandal at the bank. Again, painting his peer as a rogue operative. He has been blamed for the first incident and was allowed to resign in october. He has been declared as having been fired and stand to lose 4 million of stock as a result. Shery bmw is under scrutiny from the fcc over its sales reporting practices just months after the regulator fined yet chrysler for similar issues. Contactedit has been and will cooperate with the investigation. Paid 40sler million. The fcc said it was fraudulent. Paul chinese video sharing app tictoc is said to be considering building a global hq outside china as part of a plan to distance itself from antibeijing criticism. Sources say singapore is under consideration along with london and dublin with no u. S. City on the shortlist. Tictoc does not have a headquarters although its most Senior Executive is not shanghai. Its main office is in los angeles. Still to come, mission to mend ties. We will look at what is on the agenda when the leaders of japan and south korea meets in a few hours. Stay with us. This is bloomberg. Bloomberg. Shery this is daybreak asia. I am Haslinda Amin with the first word headlines. Boeing ousted Dennis Muilenburg after the tumultuous year that has seen two fatal air crashes. He leaves after being publicly rebuked by the aviation regulator for his handling of the 737 max crisis that boeing criticized for pushing too strongly to be allowed back into service. Thousands rallied in hong kong monday evening. By aseized money raised crowdfunding platform to support the antigovernment protest movement. Police arrested for people of Money Laundering and froze almost 9 million of assets for the Spark Alliance group on thursday its bark alliance condemned the Pol