Welcome to first up. We get straight to breaking news from south korea where the current account surplus widened to 10. 1 billion in march, after it recorded a surplus of 7. 51 billion, better than expected. We will check in on how korean markets reacted. To newasiapacific, zealand, that market is open and falling 1 5 of 1 . 69 u. S. Cents is the level for the u. S. Dollar. Rba decision tomorrow. Counting down to the opens in australia, japan and korea. Sydney pointing to a lower open. 76 u. S. Cents. Lets get over to japan. Checking futures trading in chicago. A big drop for futures and indicating a lower open at the start of the session. This, after it took a market holiday on friday. This is really the first chance for equity markets to react to that boj surprise decision to keep things as is. Japan yen 106. 65. Continuing to strengthen there. Lots of closed markets to tell you about today to mark labor day. China, hong kong, taiwan, singapore, thailand, malaysia and sri lanka and vietnam. Our top story this morning, here in asia, chinas factories are exhibiting more encouraging signs of stability, and that implies further stimulus may not be needed for the time being. We have got Stephen Engle looking at the latest pmi numbers. It looks like things have stabilized. We have gone beyond the lunar holidays. Now we are into april data, so there is stabilization. Some of that targeted easing working into the system. At least to your point that perhaps as economist are increasingly thinking not predicting another pboc rate cut until later on down the road because this has been the recovery based on increased lending and construction. In particular, and housing. Instead of focusing on deleveraging in the economy. Really pushing this kind of stood minister get the economy going on and is working. Look at the manufacturing pmi at 50. 1. Angie this is 3. 5 years worth of weakness. Stephen there was seven months below 50 for the manufacturing. This is the official pmi. The more private surveys tend to be bearish. In march,big pop up not big still barely above 50 but much better than the the fourth had in quarter and the First Quarter. April showing continued signs of stability. Angie as for stimulus, if not now, when . The consensus is for perhaps the pboc to revisit another rate cut if needed. They are in a watch and wait period. Not till the Fourth Quarter. The benchmark oneyear lending record low. 35, a but most economists expect if things do start turning down into the Fourth Quarter, could be cut down to 4. 1 . Right now what we are seeing is strength domestically. Some index of new orders in the pmi stood at 51. Export orders and imports showing the external picture still weak. So, employment showing factories are cutting workers. So, there are some clouds on the horizon. Angie thanks. Checking other headlines right now. The casinos are showing increased signs of stability. Its operators shipped their focus to attracting more casual gamblers. We are expecting a dip of 13 . Gaming revenue dropped only 9 to 2. 2 billion. As casino operators have been encouraged to diversify. Halliburton and baker hughes is said to be prepared to call off their 28 billion merger with reports that an announcement could come today. The deal has met stiff antitrust resistance from regulators in the u. S. And europe. Deadline at the end of april was set. If terminated, how halliburton would have to pay 3. 5 billion in fees. Oil producers are considered a deal to freeze output but mark mobius says there iso need. Some analysts are warning oil mady tumble to 30. But mobius is betting prices will rise. I do not think you need a freeze. You must remember that the demand for Oil Continues to rise. It is not going down. Globally in the u. S. And globally has gone down precipitously. The supply has got to diminish despite what is happened in the middle east and the demand will continue to rise year, and the2 a commendation of this means we will see a higher price going forward. Angie you can watch more of that on our new show Bloomberg Markets middle east. Has kicked off earnings that australian banks reporting slighter weaker than expected firsthalf result. Paul allen right from sydney right now. Run us through the numbers. What do they tell us . Paul first off, earnings were actually up 3 , but it was not what the market was expecting. Billion was delivered and the average estimate was for 4 billion. It was dragged odown by the institutional arm. Four major exposures according to westpac worth 252 million weighing on this result. The ceo says this is not a sign of malaise. He calls it a few pockets of stress. Hes positive for the australian economy. A couple of other drag factor spirit all the major banks in australia have been capital raising. One capital ratio up to 10. 5 . Net interest martyr weaker than expected, down to 2. 14 . Interim dividends from westpac, that did come in as expected as 94 cents on the dollar. It is a big week with anz and National AustraliaBank Reporting earnings this week. Angie paul allen live in sydney. You can get more on all the days top stories at our digital destination Bloomberg Business bringing together the best of bloomberg news. This week, Bloomberg Television and new regional content. Also on bloomberg. Com, it is crunch time for medical turned out for malcolm turnbull. But indian Bond Investors turned bullish as the rbi governor shows them the money. That is bloomberg. Com asia. Check it out. The japanese government says it is ready to act if the yens rally continues. It is now trading in the 106 territory and the opposition says abenomics is failing. Where does japan stand now . Its finance minister again saying that one side speculated movement in the dollaryen rate is extremely concerning, a warning that he will be watching currency movements very closely. That he will take action as they may be necessary. Timehis is not the first that japan, japanese policymakers have warned about positively acting against these currency movements. But it is worth mentioning that it is the first time they are saying this when the japanese yen is at such levels. It hasnt been at this level in more than a year. It is at an 18 month high after refrain from further monetary easing, going against market expectations. Now we are seeing the japanese currency gaining strength. In the past year, it has gained 10 against the dollar. Also, we are seeing a dollar weakness is also adding to the yens gains, because with the fed just frustrating dollar bulls by reiterating it is in no rush to increase interest rates, angie we have that weak gdp, too. Sheri now we see the pressure on the japanese yen to blimb to climb against the dollar. The gap in real yields. The effect is narrowing. We are seeing more support for the japanese yen. Consumer price pressures in t he u. S. Building. This is making things more difficult for japanese policymakers. Now were hearing if Central Banks do not act and sit on the sidelines, Credit Suisse expects the yen to climb to 90 dollar. Japanese markets were closed on friday for the holiday but they are coming back on line in an hour. Angie doing some quick calculations ,5 drop at the start of the session. Look, policymakers under fire, increasingly at home and abroad. The number of critics are growing. Sheri those commetns com comments come just as the u. S. Has released its watchlist. They have put japan among other country in their Currency Exchange rate practices watch list. To past is among china, germany, south korea and hey juan. And taiwan. Currencysays there practices need monitoring because they could provide an unfair traded manage over the u. S. So, or according to the nikkei report, this treasury report doesnt in any way constrain japan from acting, but the report does note that in japan, all policy leverage available, including fiscal policy and abenomics has come under fire. We are hearing japans Opposition Leader saying that abeomics has failed because relies on monetary and fiscal policy instead of structural reforms. There needs to be more action on ow, boostingr private investment and raising productivity. The problem is that abe hasnt done that. Angie we need abenomics, not kuroda nomics. New data suggest that china grew last month. Chief economist coming up next on first up. In whole . In hong kong. China says it sees signs of improvement in its relations with japan. Beijing commented after met the visiting foreign minister. They share trade relations worth more than 340 billion but ties have been strained by territorial disputes and japans decision to beef up its military. Is expected to be expelled from Parliament Today for leaving the country and not paying his debts. 1. 3said to owe more than billion. He is living in the u k and has offered various funds to prove he will pay up. Delhi has asked britain to send them back to india. Japan has to abandon a satellite that was designed to study black holes. Launched ins february. Contract was lost in margin scientists think Flawed Software costed to spin out of control, breaking off its two solar arrays. It was a joint effort between the Japanese Aerospace agency as nasa. 2400 journalists and 150 bureaus around the world. This is bloomberg news. Ck look now at the key events coming up in asia this week. Hsbc releases firstquarter earnings on tuesday. Stuart gulliver has been cutting jobs and shedding unprofitable businesses. 8sbc posted a loss of 85 million doing a fall due to a fall in income. On tuesday, the International Monetary fund releases its latest report on Economic Outlook for asia. It is expected to address the china slowdown. We will hear from the asia pacific head once the findings are made public. Alibaba reports fourthquarter results on friday with sales expected to jump 33 . Revenue growth expected from rising china retail and increased monetization as mobile shopping and advertising. Party also sees Rare Congress in north korea. The first meeting of the Workers Party since 1980, and the first under the leadership of kim jongun. They expect to see kim shuffle his inner circle and consolidate his grip on power. He may also order a nuclear test around the event. Joining us now to discuss the tree drivers is the the key drivers is the anz economist. Lets get straight to chinese numbers paid you have p you have pmi expanded. Is it enough to be a trend . Is it sustainable . It probably is enough to be a trend in the sense that we have other data that was told us the last few months china has picked up a lo t. The steel pmi data, sector is doing particularly well. There is some concerns about what that is going to do to the Spare Capacity which is apparently being close but maybe not permanently. The shortterm indicators im trying to continue to look relatively good. Angie can pboc hold off, then . They certainly can. They have started to restrict liquidity a little bit in the money market. And i think that is and appropriate an response. It is difficult to see them providing any easing steps while we are seeing these macro events going on in the form of continued strong money growth, a good rebound in the sectors which have been weak. While, at the same time, we have started to see a drift higher in terms of default and stresses in the Corporate Bond market. I think that combination keeps them very much sidelined. Angie the thing is, we have got that rising yield on on short debt. That is a concern, no doubt. Ook, it is a concern but i think we agree that credit risk in china has been miss trust historically turned we are going to see corrective developments. And that is what we are seeing. Also the fact, it is occurring with a pretty modest but a bit of a selloff in the Government Bond market is good news, because at least that repricing is occurring when the economic environment is a little better rather than when the environment is deteriorating as well. Angie it is a little counterintuitive. If things are Getting Better and economy for china, why would you morereprice debt at a Much Negative perspective . Look, i think it is all about the cost of credit and the availability of credit. If the economy is Getting Better, it is very easy Monetary Policy starts over the last 1218 months, we will start to tighten up. We have seen some hints out of the pboc. I think that is what markets are responding to. Angie ok, we have got a strata, rba decision coming out tomorrow in australia. What is your expectation . Richard i do not think the rba will move tomorrow. The last inflation number was very low. All of a sudden it catapults australia into the realm of other countries which are facing uncomfortably weak inflation. I think the reality is, you need to make a case that monetary easing is going to help return inflation to the target. I dont know of any good argument for that at that point. Activity side of the economy is doing extremely well and the labor market looks ok, i off ande bank will hold try and look through a little bit of this low inflation data. Angie 1. 5 year on year. 50 year low. It was a surprise. It is not necessarily the 1. 5 , which matches global levels. It was the negative it was so off. Richard yeah. So, its hard, i mean, given the degree of the surprise, you look at the detail of the numbers and actually downside surprises across a range of sectors left domestic inflation, then forecasters thought less imported inflation given the aussie had been depreciating for most of the past couple years. Less imported inflation sent forecasted thought that forecasters out. Relatively weak wage growth, range ofps across a countries. As i say, the reality for Monetary Policy is you must have an expectation of a result. You look at the bank of japan, a number of years into an experiment of easy Monetary Policy, no apparent sustained inflation dividend from that. Either you have an uncomfortable discussion with the market why you explain why you are not easing. Or you ease a a few times and then have the discussion. Prices are around 10 or 15 higher. Angie good talking to you. Anz acting chief economist live from sydney. Coming up next, not all doom and gloom. Singapores Prime Minister says company should take a longterm view on the slowdown coming up next. Welcome back. You are watching first up. It muste has been told urgently transform its economy to ensure jobs and continued growth. The Prime Minister says globalization and technology is forcing the country to review how its business is done. Life right now to singapore to haslinda amin. How is singapore responding to these tangent these challenges . About reachw, it is raining upgrading the skills of its workers. As you know, disruption is now a buzz word. We are seeing the likes of uber, airbnb, all about the. They disrupt the economy. It is no longer business as usual. Technology allows us to do things differently. There is a need to reinvent certain industries. Here is what the Prime Minister had to say. The only way to do that is to transform the economy, create new opportunities and opportunities not just erarn a pay, but to upgrade ourselves so that we can do more challenging jobs. And that means restructuring our industries, that means we shaping our jobs. Reshaping our jobs. Has the urgency is real. Singapore grew 2. 1 last year, the slowest pace since the financial crisis in 2009. After that, add to that, an aging population, tell you labor market and global competition and a slowing china angie where are the opportunities in singapore and where the growth sectors . Has you have to look at the technology space. Facebook,of apple, google. They are expanding in a big way. Their operations are growing, they are hiring more coders. So, singapore will have to respond by transforming its industries and create new jobs. Now, it has to do it fast as well. Jobs have always been at the heart of singapores transformation. It set up a committee on the future economy but some economists say its now much harder to retool the economy. It is no longer about picking winner sectors to prop up growth. They are a lot more constrained, unable to tap talent as freely as before. So, it is just a tougher environment now. Angie the cold reality of it all. Challenges ahead. Thank you for that. Trading gets underway in tokyo again today after the long weekend. But if youre long japanese equities, you might want to look like. You are watching first up. Angie it is 8 30 in tokyo. We are awaiting the start of the open in japan. It is expected to be quite a fall, 30 minutes away from the opening of trading there as well as south korea and australia. Stories, china officially saying its factory gauge, seeing signs that economy is stabilizing. Forout this morning at 50. 1 april, just under the average forecast by economists we surveyed. And conditions are improving. Extension adds to strength of stimulus to avoid housing prices or flooding sectors with cheap credit. Shows the yen rally shows one of six near an 18 month high against the dollar. The currency surged after bank of reeve the bank of japan refrain from stimulus last me. The government will take action if necessary. Not off to ankers great start. Rise in cash profit in the first half, trailing estimates. Also growth and mortgage loans, bad debt almost double on the year. But it is up the about the Australian Government economy. In by over 2400 journalists 150 news bureaus around the world, this is bloomberg news. Lets check in on markets in the asiapacific, to new zealand we go. The kiwi dollar is looking like this, . 69, seeing losses of 1 counting down to the open of new zealand, south korea, australia as well. Futures are better than expected. Almost expanding pmi, first check in months from china, biggest trading partner for australia. That is going to help lift that a bit for the aussie dollar, but still seeing futures in sydney pointing to a lower start a