No substantive answers coming through at all. Harris unchanged. The dax has yet to get itself open. This machine is not helping me today. Waiting for richemont to open. Down 8 , nothing to laugh about there. They are not changing prices of their product. Cartier watches you think of those exclusive brand names in the richemont family and their sales are under pressure. Areva bank up 8 yesterday. I cant even talk for long enough to get those through. Lets move it along. Dollar down, yen strengthening. Bank of japan leaves quantitative easing at ¥80 trillion. Will they do more . That is a subject that you will focus on. We have the biggest weekly decline in yen and rise in dollar since february. Morgan stanley, they essentially say, theres the overall picture for the past five trading sessions. They maintain they say buy dollaryen, by dollar, selye in. The stocks around the 118. 70 level. I leave you with a last look at sterling. Back to some of those luxury stocks, we have an opening price in richemont. Here we go. There you go, magic. Down 3 on richemont. The read across is on to swatch. Maybe they will have to reconsider their pricing policy. Jonathan manus cranny, what market intuition. Thank you for joining us. The ftse 100 up by 0. 25 . The dax up by about 0. 1 . We will talk about that later in the show. I want to take things over to asia and turn our attention to japan. The boj keeping its ¥80 trillion Stimulus Program unchanged. Willie is in tokyo now for more. Great to have you on the show. By not altering policy today, weve got to talk about the state of the japanese economy. The boj seeming to be a little more optimistic. Is that misplaced . Certainly, japan fell into recession last year about april 2014. The tax increase was badly timed. Japan was badly shaking that off. The economy is stabilizing to some extent. The most recent numbers have gdp growth at about 4 , which is reasonably optimistic. When you look at the breakdown of the numbers, the gdp report is not as strong as people expected. The boj is taking a wait and see view of the economy. They have done a lot in the last few years. They are taking a deep breath to see how things work out. At the moment, they are looking at the economy and saying recession is over, we will see how things are in 36 months. Jonathan if i go back to 2013, when stimulus exploded, i thought by 2015, we were kind of near that 2 target. We are nowhere near it. If you could read the effort so far, what would you give them . Willie i would give the boj a b . I would give the japanese government may be a c. Inflation in japan is different than in other places. Deflation here is partly about week confidence in the economy. Things are too expensive in japan. Prices have to edge lower in china. Deflation is not only about the bank of japan. What we need is for the government to implement the Structural Reforms that Prime Minister abe has promised. He needs to make the economy more competitive. He needs to tweak taxes to increase startup activity. He needs to get companies to pass along the benefits of the week yen. We are waiting for the government to follow suit. One of the reasons why kuroda is not moving today is saying to the government, it is your move. It is time for you to do your part. We havent seen that thus far. Jonathan in the back half of this year, things could get interesting. You have a Federal Reserve bid. Youve also got a series of economists from surveys that is think the boj will move again. What does the fed hike mean for the bank of japan . Willie it complicates things for the bank of japan. As the fed posts liquidity, japan will have to make up the difference. Regardless of what the fed does the boj will be moving. The boj is the only game in town at this point. The government hasnt come forward with these Structural Reforms. In many way, the onus is on kuroda. When you look at the level of demand in the japanese economy things are not as healthy as you would expect. I think the boj has done a good job thus far. Theres only so much they can do. Because the government is not doing its part, i expect the boj to come up with qe3, qe4, in the next few months. Jonathan youve done so much work on the bank of japan. What is left for them to buy . The pension fund, the Big Government pension fund, has already had to get out of the way. What can they buy . Willie they can buy more assetbacked securities. They can buy more Mortgage Backed securities. Ive argued that they should consider giving money directly to japanese people in the form of data cards, if you will. The money they are pumping into the economy is sitting on bank Balance Sheets. No one is borrowing. No one is lending. The boj has to figure out a conduit to get money into the pockets of the japanese people. We havent seen that thus far. The boj has done so much. Why not go a little further . Jonathan willie pesek, great to have you on the show this morning. We are joined now by james bevan, chief investment officer. He oversees over 10 billion in assets. That sounded a lot like helicopter money. Do you think that is a solution . James we were talking about it 25 years ago. It is and it isnt. Japan faces enormous demographic headwinds. The shift in productivity of around 15 Percentage Points over the period that japans economy has been under the crash, is pretty well matched by the number of people who left the workforce. Im sure the bank of japan recognizes this challenge. Quantitative easing is now encouraging a heightened savings rate. People say, low Interest Rates you want to maintain the value of our assets. I would argue the bank of japan policies may now be counterproductive. Jonathan the problem rather than the solution . James you could argue that they are seeing the same in germany with the ecb policies, people hiking their saving rates to preserve their savings. Therefore, what is the key . It seems to me that the key is the government is Encouraging Companies to do more. I can already identify several worldclass companies that are up for the challenge. The companies that have strong cash flow yields, that have an excellent position. I do think the bank of japan will remain on the jgb register. They will continue to hold japanese Government Bonds. They will hold them through to maturity. Jonathan they are already a huge buyer of japanese Government Bonds. They are the biggest buyer of e. T. S. In japan. If they want to move in october, what are they going to buy . James i dont think they are going to try to stimulate. I think they are trying to ensure that there is no collapse. Most investors recognize that there is no global value in the jgb market. That says, we have essentially no carry cost in terms of cash rate. We will hold these bonds on our Balance Sheet and take that against cost of cash, and we can afford to take the hit in a way that private investors cannot. Jonathan i read a great note about bubbles. One of the quotes was, bubbles are things you get fired for not buying. Is that the nikkei at the moment . You know that fundamentally things arent right but you know what the bank of japan is going to do, so you buy equities anyway . James in global terms, japan is one of the big beneficiaries of higher bond yields generally. Jonathan why is that . James if higher bond yields are a trade, if people are becoming more confident about Global Growth, japan has operational leverage. Japan has ample supply capacity but inadequate demand. Demand rises, japan will make money. I think, when i talk to people supporting japan, they believe we are going to see a pickup in Global Growth. That is not of you i share. Not a view i share. They have so much cash on their Balance Sheet. If only they could pay that out the return on equity would double. Jonathan i had a conversation about the stewardship code in japan the change in corporate culture. James i see no change. Absolutely not. Jonathan other people do. You start to see the buybacks coming through. People say things are changing. You dont share that . James i see a small number of companies that are used to operating into the international arena. I see Domestic Companies who still dont get it, who still have board structures that look like they were born in the 18th century. Jonathan back to what you said about the bond market. Reflation is good for japan. What does that mean for the japanese Government Bond market . James that is one of the reasons the bank of japan knows this risk. It is to manage the decline. I think this is all about managed movement. Jonathan lets just call it what it is. James exactly right. Jonathan james bevan. He is going to stay with us. As we head to the break, there is so much going on. Lets get a picture of the markets. Ftse 100 up i about 0. 3 . The cac 40 down by about 0. 1 . The dax, monday, tuesday, big move higher. Wednesday, a breather, thursday a breather. Looks like friday is a breather too. On the week, we are up 3. 5 , the most since january. The markets are busy for most of the week. Central banks look at this. 9 00 u. K. Time, mario draghi speaking in portugal. Governor of the bank of england, mark carney also speaking midday. 6 00 p. M. U. K. Time, janet yellen speaking in the u. S. Do not miss those. Bears, put your hands over your eyes. A lot of data coming out later as well. We will get a reading of german business confidence, then u. S. Inflation figures. If that is not enough, weve still got a show to bring to you. Coming up, and shoot jane crisis of confidence. Investors are giving the Deutsche Bank ceo one last chance to turn things around. Later, greek optimism drying up. Alexis tsipras, Angela Merkel, and hollande up past their bedtime. Then crude headed for its longest win streak ever. All of those stories and more coming up on this show. Jonathan good morning and welcome back. Im jonathan ferro. This is on the move on the move. Lets get you up to speed on where not to trade this friday morning. The ftse 100 pushing higher. The cac 40 pretty much unchanged. In frankfurt, the dax, quite a trip this week. The last couple of days have been dead flat. Dead flat again today, down by just a couple of points. The ftse mib in italy, unchanged. Have a look at the fx market. Eurosterling has been the big want to talk about. Four days of losses, coming back with a day of gains. Yesterday in the fx markets, all about pound power after those stunning u. K. Retail sales. In the, that he markets, wti pulling back by 0. 1 . Almost dead flat at 60 a barrel, but still heading for a record 10th straight week of gains. We will talk about the oil market in a little bit. For now, bloombergs top stories. Mario draghi and other policymakers are in portugal. Draghi said Economic Conditions have improved in europe, but growth is still too low. Draghi will give the keynote address today. Prime minister cameron says he wants to start talks on European Union reform in riga. Cameron says there will be ups and downs in the negotiations. It is in britains interest. It is also an opportunity to start discussions about the reform of the European Union. There will be ups and downs. You will hear one day, this is possible the next a, Something Else is impossible. One thing will be constant and that is my determination to deliver reform of the European Union. So they get a proper choice in that referendum that we will hold. Jonathan richemont reported an unexpected decline in april sales. Shares are down more than 3 . It has been a big week for the Banking Sector. Six of the worlds biggest banks agreed to pay 5. 8 billion in fines related to a currency rigging probe. They all pleaded guilty to felony charges. Swiss bank ubs avoided felony charges but will pay 203 million over libor charges and an additional 342 million to the fed. Elsewhere in the Banking SectorDeutsche Bank had this big agm and they had a lot of shareholder pressure on the coceos. Hosni goes had this report. Hans the leaders pledged to stay in close contact. They had that twohour meeting in riga. It broke up without real tangible signs of progress. Greek officials are talking about being very close to a deal. We have heard from mr. Dombrowski, talking about more progress needs to be made. In some ways, there are opportunities for the sides to come back together. Everyone still is in riga. There is a meeting scheduled between mr. Tsipras and mr. Juncker. The pressure is very real. No one really disputes the deadline. In early june greece will not be able to pay if they dont get a new infusion of cash. Back to you. Jonathan hans nichols from frankfurt. James bevan still with us. The Banking Sector, where on earth do you want to start . I guess we can start with Deutsche Bank. The agm yesterday, hearing from representatives. The complaints sounded a lot like complaints about any bank in europe. Why is Deutsche Bank different . James longterm shareholders feel immensely irritated that deutsche, that was the lion back in the 1980s and early 1990s said, we are going to because she is and they didnt grow. As a result, santander became worth more than the entire german Banking Sector put together. Deutsche said, they have taken too much risk. Deutsche of course became unstuck in the Global Financial crisis. People are saying, we didnt get much of the upside. When is it all happening . It is very clear that the banks, as one of the mechanisms, are being blamed for what is going on. German people are very nervous of Economic Conditions. Jonathan it is not clear to me what investors would like Deutsche Bank to look like. What does Deutsche Bank need to look like for james bevan to say, there is some room for this . James it needs to be ruthlessly efficient. If you say, who are the winners of banking, i would day in tesla, Credit Agricole in europe , they have national strength, they have Retail Business to die for those are the ones to look for. If one were thinking about the investment Banking Sector, i would say this is an easy home run for Goldman Sachs. They have invested aggressively and they are a miles ahead of the competition. They are much more risk, is in. If you were to say to me, what is the problem with goldman, it was the staff got the lions share of the benefits. Jonathan theres a couple people still screaming at the tv saying, seven . Why sabado . James low valuation. I think one of the challenges we face as an investing community is, we spent a lot of time trying to judge a company by the progress of its share price. They are doing all the right things. Jonathan talking about doing all the right things, weve had guilty pleas, some sizable fines. The bank stocks didnt really care this week. I guess a lot of that was priced in. Do you think it was much of a punishment . James absolutely not. Lets be clear, weve had a series of fines. Barclays put aside 3. 2 billion. In a sense, they got off lightly. I think many people with whom i speak are furious that individuals are not being held accountable for the banking debacle for their part of the Global Financial crisis, for the absolute loss of money for the loss of thousands of jobs and all the associated bad news. Jonathan why hasnt that happened . James it is a really interesting challenge. Governments spend time waiting fingers at the regulator. The regulator says, we are doing our best. The people are irritated. Lloyds is a bank in the u. K. Which has been much under caution. Weve had statements about it being overly dependent on the public purse. This is a company that i think will be paying a dividend based on todays share price. To me, people want longterm income. Jonathan you have been bullish lloyds for a while. I want to talk about one of the underlying stories. You and i had some back and forth about this. It was the benefit of the ppi scandal. With the currency rigging scandal, the libor scandal, where was the social benefit . James there are two separate issues here. Theres the issue of banks being fined where the money goes into the exchequer. The ppi was about compensating people who suffered losses. We have not yet seen a large chunk of the loss recognition. Take the Interest Rate swap sales. The banks themselves determine what the compensation should be. There is no a movement saying we want to have this independently assessed. I wouldnt be surprised if the number goes up as more conversation comes through. On the fx scandal, we have the fines. When you have the department of justice and the state saying there were actual losses, people are going to be saying, we would like some money back. This is an opportunity to crowbar some money out of the banks again. Jonathan james bevan smells a little trouble coming up. Thank you very much for joining us this morning. Coming up, greek Prime MinisterAlexis Tsipras keeps Angela Merkel and Francois Hollande up late. Talks go nowhere. The clock is ticking on greece. Optimism dries up. We will discuss. Quick check in on the markets, the ftse 100 pushing higher. The biggest mover is vodafone. Negotiations are still ongoing. Progress has not been as fast as it should be. [indiscernible] we are in the second half of may. Negotiations are still ongoing. It is time to step up the is negotiations and ensure successful completion of the b