Isolation deepens. The white house says qatar should do more to tackle terror. Strengtheningmies , factory prices rising, so where is the inflation . Getting back to one of our top treasuries somehow chinese officials are getting back into the treasury market after the last couple of months. The previous eight months, they have reduced treasury holdings. Lets have a look at what is been going on since 2010, the buying program when it comes to the treasury market, and looking at this chart 9172. There we go. We have this move back up. Well, it has driven those yields further down when it comes to the u. S. Market, so sustaining the rally for the time being. Haidi thats right. Is that going to drive that you lower . We had that 10 year the lowest since just before the u. S. Elections last year, so we will talk about that a little bit more, a briefer spite when it comes to chinas buying interest. The other data point is this check of the australian economy, First Quarter gdp numbers at the bottom of this hour. Take a look at this chart, 6371, 26 years without a recession, and a lot of this and that white lined there is on the back of this commodities boom. Or so, weast year have come off that rally in iron ore prices, still in that bear market with prices continuing to slip. Also questions on sustainability of demand out of china and domestic consumption as well, 60 of economic growth, and that has been lagging on top of this redhot Property Market tapping households ability to spend and earned with wage growth at record lows as well. Away from thetes open in china and hong kong. Lets get over to sophie. A quiet start, but investors have a lot to contend with this thursday. Sophie defensive decisions being taken ahead of that trifecta on thursday, the ecb, james comeys hearing as well. , aticularly asian markets down day and currencies taking a hit. The yen and gold higher. Taking a look at what is moving asx 200 continuing to fall after tuesdays biggest drop in two months, shares and wellington following that First Quarter manufacturing viands saw a decline volumes saw a decline. The currency space, we have the korean won leading that drop, the offshore yuan giving into broad weakness. Bounce, black rock says it is serving as an acre for asian forex, instead as that source of disruption. ,oing back to the korean won ,hen it comes to the kospi falling for a second day, yet Foreign Investors continue to buy korean stocks for a third day, although the pace of inflows has slowed. On the track this terminal, where you can see the peaks and ebbs here. Checking in on the year to date areormance, foreign inflows 26 million. Year to date, 8 billion, just second behind taiwan at 8. 7 billion. Earlier we saw the taiex up by. 2 . Rishaad thank you. Rosalind has first word news headlines. Qatari stocks fell again as isolation takes hold. Been banned toe sail to and from qatar. Relies on imports for almost 40 through the land border with saudi arabia. President trump claiming credit for the saudi led isolationist campaign, calling it just punishment. He says it is prove his trip to the middle east is paying off. Washington is taking sides in a dispute between two key allies in the gulf. China has told the u. S. To mind its own business over the detention of labor activists who were investigating shoes made rand. He trump b the state department called for the release. China says no country has the right to interfere. California isf warning the u. S. Not to rest on its laurels amid rising competition in china. The democratic governor needs a 2. 5 train dollar economy, the worlds sixth largest just behind the u. K. Onehey are making a one to trump down, china up. Now they are saying china is on the move. The president say when china puts its mind to something, we persistent we get it done, so i thought those were the words of someone who is looking out over the whole world, and not looking inward. Global news 24 hours a day of powered by 2700 journalists and analysts in more than 120 countries. This is bloomberg. Rishaad as we were discussing, an unexpected did force pouring fuel on the u. S. Bond market fire, and we are talking china. Kathleen hays has more. We were just discussing the stability of the yuan, the strengthening does give impetus to buy treasuries again it would seem. Interesting process, this link between chinas holdings of u. S. Treasuries and managing the currency is once. Gain on full display here it goes wanting to buy some bonds back, and here is why. ,n that list of reasons why that yields on treasuries are attractive. They sovereign bonds, if want to put their money back into bonds, youre going to get the best yield in the u. S. Compared to other developed countries. Versus the up 2 6. 5 drop in 2016, so discussion as you look at this story that Bloomberg News broke after speaking to chinese officials, analysts and traders are saying this can promote confidence in chinas Exchange Rate system and the pbocs ability to manage it, promote a more globalized Exchange Rate market. 3032 two underscore the point of yields around the world. The yellow line is the yield on 10 year treasuries, just over 2. 1 , next in line the u. K. , bund further the german under 1 . The red line is japanese 10 year treasuries, giving you zero at this point. Understandably why the chinese would see u. S. Treasuries as attractive. By 28inese increased billion in march to 1. 1 trillion, the biggest increase since 2014. Haidi this remarkable treasury rally has confounded a lot of explanation, particularly with these record equity highs as well. How much of that has been china resuming its bond purchases . They have coincided, and maybe the change, the rethinking a month after the election, maybe donald trump camp reflate the u. S. Economy. North korea, the tensions there, the rush to safety, another thing that drove the u. S. Treasury rally, and softer u. S. Inflation and doubts about how be thisve the fed can year. Today, 10 year yield hitting its lowest level in six months, 9088, it shows what a lot of technical traders are looking at, gaps in the chart, so the question is does it break even lower than 2. 1 . We will have to wait and see there. One interesting point, if the chinese will buy treasuries, maybe it helps the fed, reducing the Balance Sheet and putting pressure, upward pressure on yields in the treasury market, so maybe they are doing the fed a bit of a favor here. Rishaad the r. B. I. Reserve bank in india were pretty hawkish, werent they . Given the recent data, well, a dovish tilt. Going to beis is more of a change than we atected, but lets look information undershooting the r. B. I. Indias target, and this is a big consideration in terms of going from hawkish to neutral and maybe even dovish, 5834 gives you the picture. The headline and core and india are falling. The vertical line showing you the 4 target. One of the lines is resting right there, the other inflation measure even lower, so this is the main thing people are looking at to say they have got to at least go to neutral when they communicate. Sharply. Has slowed it was 7 in the fourth quarter, down to 6 . That is an issue. Economists are looking for the r. B. I. To stay on hold, but Bloomberg Intelligence has a bold call. Its say the r. B. I. Will cut key rate when we get the decision hours from now. We know that the head of the r. B. I. Has been prone to surprise markets. That would be a very big surprise. Sticking intelligence to its guns, so we will see what happens. Thank you very much indeed. Right, still ahead, two can be better than one, how china and the United States cooperating in the tech space qamar interview with the founder of seasoft. Haidi haidi we examine the evolution Corporate Governance in japan. Is it happening fast enough . This is bloomberg. Haidi this is Bloomberg Markets asia. I am haidi lun in sydney. Rishaad i am Rishaad Salamat in hong kong. Japan is a hard place to win when it comes to doing business, but our next guest got panasonic to raise its offer and toshiba to return cash from its systems division. ,ets get more on the progress founder of Oasis Management. Great to see you. Tell us what is going on. Corporate governance is one of the things you are fond of trying to tackle in japan in particular. Tell us about what you are seeing and the mistakes being made and how they can be rectified. Takes arate governance long time to improve. Was a norm us excitement two years ago in the markets, then got disappointed. , the stock is up 250 as result. Rishaad he put it down to yourself . That is very modest. Company has done a fantastically great job. Cases, certain things take longer time, but it is getting short. , we engage them for the past year and panasonic decided to take the Company Private and raise the price 20 so far. We dont think that is enough and continue to press them. Rishaad what about toshiba . This is quite something, the state of this company at the moment. Sinsshiba has had numerous , but i long opportunity to fix themselves. Rishaad they are looking into the abyss more or less . Good news for tertiary is they have a great semiconductor and memory business that they will sell. If anything, japan has given them an norm us run way to fix it and they will make a sale. Rishaad what is left then of the company . Remain with a Nuclear Power business. I was joking with somebody they should be called toshiba elevator. We think they continue to sell some of the other residual businesses and take in westinghouse and they toshiba plant. It is the subsidiary that makes albany for power plants in japan. With the sale of the chip business come his it in the shareholders best interest for that to go to a domestic better . Bidder . It is absolutely in the best interest of minority shareholders. 190,000 employees, all the inreholders and toshiba, and toshibas case, it is in the best interest of japan itself. In terms of improve Corporate Governance, it is instructive nearly important for everybody, the government to the, and important reduction in the cost of capital across the board. Improvement in Corporate Governance would add a large uptick invite way she. Haidi you say it has been slow going, this reform, and that is not unsurprising given that decades of history, but in proof ands and Corporate Governance improvements and Corporate Governance is why so many houses have become constructive on japanese equities. In do you see your victories as a oneoff or a pattern that things are improving . It is a broader pattern. Have had two successes in the fast two months. The reason is there is a need and people are losing the safety net, so we will see the exposure of people to have a vote, so we have seen people voting in terms of the interests of the companies and no longer sotectionist of management, that exposes management to criticism and improving their own Corporate Governance. Haidi stay with us. We will talk more about activists and hedge funds and what they can do in this space. We have more with Oasis Management. This is bloomberg. Haidi some breaking lines, the for the sixth day 6. 7858 ontronger,ednesday, the previous day strengthening for a sixday in a row. Lets pick up on our discussion with seth fisher, the founder and cio of Oasis Management company. We have been focusing on japanese Corporate Governance and reforms. Activists funds come what more of april can they play in pushing this forward . Activist funds can spend their time Holding Peoples feet to the fire. Inre are in almost tools japan in particular, proxies, voting, holding other people to vote, and fiduciary responsibility of directors, which directors have not been held accountable in the past. We have been Holding People accountable with success, so i think other activists players can use the same playbook and hold people to account. Been, people have suggesting better Corporate Governance come up but in our case, we have taken people to court, in the court system is extraordinarily effective for shareholders, so youve used the tools available. Haidi how does Legal Recourse work when you have to rely on it . When you go into these companies wanting to shake things up, what is the reception you get from japanese management . The best management, we get a warm hello. We have, what are your suggestions and a serious engagement of our suggestions and a dialogue and debate about the value of those suggestions, and we are perfectly happy to remain quietly interested. The scepter known come on going to talk about a company doing all the right things. I am going tooon, talk about a company doing all the right things. The best company say these are great ideas, lets talk about them implement some of them and add value to everybody. The thing is, you are also invested in hong kong. What about activist shareholders in this territory here . What concerns do you have . Look, governance is extraordinarily important. Some recent victories for shareholders when they have had votes, a gas Company Recently where you had a robust shareholder battle, and shareholders won and put the best management in place. Corporate governance has a long way to go here. The small and Medium Companies they have families at the heart of them. The viewers question has come through saying are you prepared to take on these families who effectively run the companies for the families benefit . The answer is yes. Seehe families dont thinking about all investors come up at families increasingly have an understanding that the old hong kong is out and now you have to think about Corporate Governance for all shareholders. Technology, 8 up, a good example. Yes, there was a short report two weeks ago. They went through a very robust process, in the market seems to give that process credit and the stock is up a result. Rishaad it had been absolutely panned before. Any idea of what territory . Today im going to talk about japan. Rishaad thank you very much indeed. Seth fisher from Oasis Management. We did have some sluggish growth or gdp readings. Of theabout the reality ulster strain a calm and break down the latest data out in a few minutes from now. This is bloomberg. Rishaad that his statue square in the heart of hong kong. 9 29 here at the moment. Count you down to the start of this trading wednesday. I am Rishaad Salamat coming to you from bloombergs asia headquarters. Haidi that is say much clear day you guys have than we have in sydney. Behind me, it is cats and dogs as we await the release of this gdp number. Read comes on the back of a slew of soft indicators, retail sales, consumption, which is 57 net exportand some numbers as a component of gdp looking soft as well. Hot Property Markets like here in sydney, wage growth, softening inflation, things are dicey when it comes to this 26 year stretch of a recessionfree australia. Rishaad indeed. Haidi we are getting these numbers out. Rishaad carry on. Haidi we do have these numbers out. Bang in line with expectations,. 3 for the First Quarter as expected. That gives us an annualized figure of 1. 7 him and we are seeing the Australian Dollar climbing off the back of that good news. It could have been far worse. A number of economists revising downwards those payment showed a big drag on gdp , declines in net exports. National australian bank, Capital Economics were all forecasting a contraction comes so. 3 is a look pretty good. Haidi there were quite a few he said hels, but still expects even if this quarter is soft, ongoing were not be bad. Why he isess that is sitting in the governors chair. He did reaffirm his expectations that growth will improve. It is good news for the country as a whole, 26 years without a recession remains intact for at least one more quarter. It looks like that record is safer 2017. Rishaad thank you a lot for that. Strained gdpat are figure, spot on estimates, looking ahead to the british election, ecb, and next weeks fed meeting. Sophie lets focus on the reaction to the aussie data. The sun is coming out for the aussie dollar. You can see that spike following that gdp update. Just to recap, the estimate was 4. 3 quarter on quarter rise, in line with that forecast. On its standing pat policy rate, slugging off the slowing growth in the australian economy. In the equity markets, the asx 200 down. 1 , falling for a second straight day. Taking a look at the open in shanghai, a marginal drop their, but shen shen little changed. We do have a rise of. 2 on the hang seng. Ke shareve china van suspend and. Suspended. We also have the fix for the yuan coming in stronger at 6. 7 858. Saying that is key to the ongoing rally given its recent stability. At aacake a look technologies, up 8 . Short sellerthe that spark its tumble says it plans to address the points raised on tuesday. That same day we had another short seller, anonymous analytics, issuing a rare buy , and theation for aac stock could rally 36 from its last official close. We have muddy waters on the radar looking to update us on his latest target at 2 p. M. Hong kong time today. Right. the Political Drama in brazil, lets get to first word news. Rosalind the brazilian president faces a new threat has a top Court Debates whether he and his former running mate took it legal financing. He could lose his mandate if the verdict goes against him. He has been under rising pressure since corruption allegations emerged. Lloyd blankfein is echoing calls from jamie dimon and calling for the u. S. To spend more on infrastructure. He tweeted come always impressed by the condition of the airport, roads, cell phone service, etc. The u. S. Needs to keep up. Tim cook