Kuala lumpur trading getting underway and in singapore. We are heading up to the Lunar New Year holiday. And we have volatility and volumes are then. Let us see what we have at the moment regarding the session in this part of the world. Malaysiaore and joining the rise we are seeing in the region. We do have gold retreating for a fourth day. Moving further from the hundred level. Approaching as one high as we are seeing the yen stumble a bit. Aussie shares up 0. 6 with consumers stocks and banks. Metals are under pressure. Looking at the nikkei 225. Reversing thursday losses. See argy producer did contract cancellation for a power plant in australia. Declinectric on the after a earnings announced yesterday. Currenciesok at some. Bityen looking a little steadier. 60. After the cpi data. At 443 against the dollar. It has weekend about 5. 5 since Donald Trumps win. Suisse said recently that malaysia is one of the most vulnerable economies to a proposed border tax from the u. S. Along with vietnam, taiwan, and south korea given the american reliance on their goods. Of thell be a focus donald Trump Administration. Rishaad thank you. With thearting today latest developments surrounding President Trump. To foreign leaders figuring prominently on his agenda including theresa may and the mexican president. Building for the former and bridge burning for the latter. Let us start off with mexico. Mexico, we are clearly seeing further deterioration in bilateral ties. I want to point out that the u. S. And mexico are the Third Largest trading partners in the world. Around 500 billion. And so the latest development in noir tie is coming at surprise. In a twitter posting, not President Trump but this time Prime Minister the mexican president , said he would not go to the expected meeting next tuesday. He said he had informed the white house that he would not attend the meeting on tuesday. Interestingly, donald trump later claimed that it was mutually agreed on. Of mexico andnt myself have agreed to cancel our planned meeting scheduled for next week. Unless mexico is going to treat the United States fairly, with respect, such a meeting would be fruitless and i want to go a different route. Trump of that, president said he was working on a tax reform bill that would try to create revenue to make mexico pay for the southern border wall. Interestingly and raising eyebrows, the white house spokesperson, sean spicer weighed in and floated the idea of 20 export tax. He was on air force one when he said that. That, taxing the imports. Country policy might be too easily pay for the wall. That is raising eyebrows. It would not affect mexico are mexicans but it would affect u. S. Consumers and u. S. Companies ineffective paying for the border wall. Take a look at some of the top u. S. Imports from mexico. This is from the u. S. Trade representative office. In the auto industry. Electrical machinery and agriculture. Hat includes wine and beer including avocados. U. S. Consumers will not want to pay more for their guacamole. Interesting things there. It lit up twitter. A lot of people are very upset about this. Rishaad absolutely. Let us have a look at the other world later, Prime Minister theresa may. Wrapping up her address to the annual Congressional Republican retreat. What were the notable aspects of what she had to say . The big take away is alignment. She held out her hand to President Trump and said we are with you, we are conservative like you. Let us listen in. Destinys been americas to bear the leadership of the free world and to carry that heavy responsibility on its shoulders. United thinky, the of Great Britain and northern ireland, has been proud to share that burden and to walk alongside you at every stage. Was quite an allencompassing speech lasting about 25 minutes. Some of the notable phrases terror came up 10 times. She talked about isis and Islamic Radical terrorism. And russia and president reagan came up five times. On trade, she got a good round of applause when she talked about u. S. And u. K. And talking about an upcoming deal. Tomorrow, she will meet mr. Trump at the white house. Rishaad thank you for that. Let us get over to singapore and get the first word News Headlines. Border the board of toshiba will meet today and talk about turnaround options. The sale of the chip making business will be on the agenda. The anticipated writedown after the nuclear unit may also come up. The expected loss may be as much as 6 billion. Toshibas own estimate will be provided on february 19. Googles parent missed profit estimates in the Fourth Quarter after spending heavily on consumer hardware. Alphabet reported more than 3 billion in capital spending, up 46 from a year earlier. Some of that went to supporting the pixel smartphone that went on sale over the holiday season. Output that fell by more than 2 in extended trading. However, a different story at microsoft where profits beat estimates. The number were the numbers were boosted by people signing up for the Cloud Services. Shares gained about 1 . Following thetion surge in the past year. Chances are rising that bank of on. N governor will stay ab said he was doing ae terrific job. Said he was doing a terrific job. Enthusiasm, it has still to revive the economy. Global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. I am has Haslinda Amin and this is bloomberg. To japanst us get Consumer Prices dropping in december for a 10th straight month. The base declined. Supporting expectations that perhaps the return to inflation later this year. A weaker yen, a pickup in oil prices likely to drive up inflation. There are questions over slow wage growth and the lack of consumer spending. Is with us. Great to see you. What was your first reaction when you got these numbers . I think it is pretty much in line with expectations if not better than the consensus expected. Our own forecast was as you pointed out the rebound in oil prices combined with actually already seeing some evidence of material employment income growth. Overall monthly Wage Statistics are not growing fantastically but if you multiply that with the fact that japan is the only major developed economy where you are seeing participation and rates on the rise, we are seeing employee income go up by 3 . These things,n of wages and energy prices, we expect core inflation to reach 0. 7 on the Positive Side by the end of 2017. Rishaad tell me a little bit about the earnings story out there at the moment. We do have some momentum. Wageoint is you talk about growth inflation, it should be stronger than this. This is the argument many economists are putting forward. Least for the quoted sector, we are looking at profit revision momentum basically having bottomed out late last in tandem was exactly with the stock markets rally. We are forecasting going into fiscal 2017 profits to reach doubledigit growth rate of about 12. 5 . Assuming not that much yen appreciation from current levels. We are assuming 115 yen against the dollar. Just a simple fact that topline growth is going to rebound this year compared to fiscal 16. That should be enough to allow companies to pass through higher some such as wages and see better Margin Expansion and profit improvement. That is the highest growth we are expecting globally. Rishaad it is pretty good. This number, the inflation number and what is going on with corporate japan . What is him does japan the bank of japan look at this rism does what ip the bank of japan look at this through . They set an ambitious inflation target. The commitment has been not to change the status quo or the current quantitative easing framework until core inflation exceeds the 2 level. Given that most forecasters assume that is not going to happen immediately although as i said earlier inflation momentum should be improving later this year, it is likely to result in the reality that the bank of japan is unlikely in our view to dramatically change the current framework. Rishaad do stay with us. We have a lot more to talk about, not least the Earnings Statement and looking at banks there in japan as well. More from kathy in a moment. You are with Bloomberg Markets asia. Banks Third Quarter earnings. Up since Donald Trumps election. Nowcis chan is with me looking at this surge. They have to deliver here. Investors may focus on any size of stabilization in income. The weaker yen may boost the conversion of overseas revenue. The securities income will be helped i the stock market. They may form new plans of expansion in the country. Rishaad we have noticed bond yields going up globally ever since the trump election. Is that a strategy . May capitalizes on this news. Banks may expand or increase their holdings. After a sixmonth trade reduction previously. They may purchase more u. S. Treasuries because of the spike. Thank you very much. Francis chan there. Kathy, thank you for sticking around with us. What is your view of where the banks go next because they have gone a long way . Yes, absolutely. But like he said, the entire Global FinancialServices Industry and stock market have significantly rerated in terms of their valuations since november. You have to keep it in perspective. Keep in mind that it was not that long ago, not even half a year ago when japanese negative bank shares were trading at the same valuations as italian banks. Now, everyone has their views on capital quality but it was our view that it was unjustified. A huge move in Japanese Bank back tois a rerating more normal levels of valuation. The challenge of course is will the deliver, are expectations rising about their improved profitability, improved going toket gains etc. Be seen through the bottom line. It is challenging for the megabanks given that their average loan duration is less than five years so we will see in the near term any significant improvement in their net interest margins. If you go back to my earlier comments about the prospect that domestic inflation might the picking up, that we think overseas economic act vividly in general will make them more robust, that is a favorable and construct the macro environment for these japanese megabanks to perform. We also like the Japanese Insurance Companies as well. They may give more direct play on the prospect of yields. They have to deliver. You say they have been rerated. They have to deliver today when they come out with numbers. To justify the valuations and the rerating. Sure but if you compare japanese megabanks to banks in the u. S. And in europe, i still think they are not trading above or at premium levels by any means. There has been an adjustment in the Japanese Banking sector to more normal levels of valuation but that is not above book level which is the case for many banks around the world. I dont out in terms of fundamentals in japan for the Banking Sector will still take time. To rise higher. But if you are looking for a way to express a more positive view , it isstic reflation hard to find a more interesting part of the market than japanese financials. Is this rally sustainable . I want you to crystal ball a bit. There is a great deal of uncertainty around the world, particularly on a lot of investors focused on the potential trade policies that may be coming out of the new government in the u. S. But at the end of the day, our story is pretty simple. We are expecting earnings to grow. Without that much further yen depreciation from current levels. The market is trading at 15 times earnings. Therefore, we think the market overall still looks attractive. Quickly, talking about donald trump. There is an argument that japan needs to do a trade deal pretty quickly as tpp has gone by the wayside. It is a tricky situation. But japan has already been in dialogue with the broader regional asian Free Trade Agreement negotiations that do include china. It has also been in dialogue with the eu. Whether japan strikes a Bilateral Agreement with the u. S. , that is very much up in the air. It is keen to continue to forge free trade relationships with partners around the world going forward. Rishaad kathy, thank you so much for joining us from goldman sachs. Big day of earnings. Next results coming from technology. Microsoft and out of that. Microsoft and alphabet. More on that in a moment. Rishaad let us have a look at googles parent. Out for that. Reporting earnings. A bit of a disappointment. Fourthquarter adjusted profit missed on heavy spending on infrastructure for the growing internet business. Take a look at after hours. It was down from 3. 5 . Likely translating into friday trading. 46 tal expenditure, yearoveryear growth in spending. It wants to be part of the cloud. Microsoft, a different story after hours. They were up after hours. Beating the street. Show theirups investments are paying off. Cloud revenue almost doubled. Up from 47 . As analyst said that as long the cloud is growing, people are happy and that is why shares were up. It could also translate into a pop on friday. Rishaad a quick word on ford. The future looks bright. They did not they do not take a firstquarter loss. Adjusted numbers were in line. They took a 200 million writeoff related to the factory. The ceo is optimistic that the new president will ease up on the new tax revamp and reducing regulations on emissions. We shall see. Talking about the earning season there. Microsoft beating and alphabet, not so much. Toshiba turnaround plans. A Board Meeting taking place. Looking to sell off part of its chip business. Trading day is getting underway here in hong kong. First word headlines. Japans Consumer Prices fell in december for a 10th straight month although the pace of decline eased. Cpi was down 0. 2 from a year earlier. A weaker again and a pickup in oil prices is likely to drive up inflation this year. Questions it remain. Trump administration has floated eight we percent hike on imports from mexico to pay for a wall on the southern u. S. Border. The plan was revealed hours after the mexican president canceled at the meeting at the white house. Sean spicer told reporters that such an effort would easily pay for the wall of the wall although he did not explain how it might affect u. S. Consumers and businesses. A wave of Senior State Department officials as the Trump Administration exerts its control. Say President Trump is keen to shakeup the state department bureaucracy and make a break with what he sees as decades of failed foreign policy. Portugals foreign minister finance minister has told bloomberg that his countrys debt is declining and funding is under control. The european stability mechanism chief saying markets are nervous. While borrowing costs are a concern, he expects of volatility to fall away. We have a cash offer that is why that is large enough. We are in a comfortable position. The challenges are there but we are preparing ourselves for that. Haslinda global news 24 hours a day powered by our 2600 journalists and analysts in more than 120 countries. This is bloomberg. Looking at market action. Of volatility and sharp moves volatility and sharp moves. A Lunar New Year. And the prospect of it. Haveong with that we Earnings Seasons that may sway the way equities move. Japanese shares approaching a oneyear high. Adding one third of 1 . Aussie stocks maintaining the momentum. In singapore, are rise of 0. 2 . Highlighting cap capital core. Wereompanys earnings dented. It is the Worlds Biggest Oil overuilder and it has cut 10,000 jobs in 2016 and despite rising oil prices, the company is saying it is no solace for the company. The hang seng is snapping a fourday event. Property stocks are leading the drop. Property prices are falling. Let us take a closer look at casino stocks out of macau listed in hong kong and head of the Lunar New Year holiday. It is usually peak season there. Booking trends of for the weekend may surpass the october golden week holiday. When macau wynn macau extending rises. Sands china is extending its losses. Rishaad thank you. Let us get to jack ma and financials. Continuing its shopping spree as it expands internationally. Money gram. Aunt is getting ant is getting bigger. Quickly. Panded quite it has a bevy of different Financial Services in china and they are asked handing overseas because of threats from others like tencent. They want to expand overseas and they have made a number of different purchases including in india and thailand. A biometricught Security Company that scans the retina of your eye, an american company. Acquisition on the march. Money gram. Buying it for 80 million. 13. 25 a share. Dallasbased. Wednesdaysover close. Surged by as much as 11 getting back up to the premium that they paid. Closing at 12. 92. The stock has doubled since late october. A be some people knew this was in the works. Did i just say that . Remain eastt will in dallas and it will keep the name money gram. An ipo in hong kong later this year. Given the track record of Chinese Companies taking over u. S. Once, it will face close scrutiny by the regulators. There is a committee that reviews of foreign purchasers in the foreign purchases in the u. S. This could receive extra scrutiny because of the Trump Administration and b