On a hostage situation in a sydney cafe entering its 10th hour. Is in sydney. What is the latest . Unfortunately, we havent had much of an update in the last couple of hours. It has been three hours since we saw two of those hostages escape , or at least were released. They looked terrified as they ran through the doors of the lindt cafe in sydney. About an hour before that, there had been three men that escaped. An update into get about 15 minutes from the New South Wales premier, and the Police Commissioner. Hopefully, we might get a little bit of an update. They certainly have been keeping everything under wraps. We heard from Deputy CommissionerCatherine Byrne saying that they are going to monitor social media feeds to get more of an indication as to what may have prompted these hostage situations. They have also indicated that the gunman is known to police. They wont be releasing the name for their purposes. Im sure that the area around the cafe is in lockdown. What about the rest of sydney . The rest of sydney is going about as usual. Certainly, that was the message that Prime Minister tony abbott and the premier said earlier today. There was quite a lot of lockdown in sydney earlier in the day. We had never had anything like this happen before. There were some mixed reports. The harbor bridge right behind my shoulder, and traffic has been flowing freely. Probably the only main change to the Public Transport Network system is the martins station which is underneath this cafe. That has been closed all day. Other than that, it seems as if commuters have been able to get home and get out of the city quite easily. There have been delays, but it is really just that pedestrian area. It spans about five blocks. Police have cordoned off probably about three of those blocks. That includes the Channel Seven thisrk which first saw unfold. Also, the reserve bank of australia which was under lockdown, and a few of the stores like tiffany and jimmy choo. Still under lockdown. A lot of people down there having a look. Bey certainly dont seem to worried about what is happening at the moment. It seems it is a bit more of a spectacle. Tensions have called somewhat. Thank you so much for the update. We will bring you any developments with this situation throughout the hour. We will bring you more context and more analysis of the situation. We will be doing that very shortly. In the meantime, let me take you happening, what else is on our radar, to corporate news. Bts negotiations to acquire one of britains Wireless Operations has gained momentum. O2 which is owned by telefonica is competing with rival mobile operator ee, which is owned by Deutsche Telekom and orange. Bt is looking to expand its operations into the bundling of mobile, broadband, and television. Sony pictures has requested that news outlets stop disclosing material from the computer hacks. 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Good morning to you. ,rom a london point of view good evening to you. What is the context of what is happening in sydney today . What was the buildup to this . Was there any warning . Can you put this in context . Waxed there was no warning. To speculate at this stage because there is no profile of the offender. As you expect, the police are very closed up on what is going on. There is potential to upset police operations. It has been very hard to ascertain the exact nature of the incident. From what i observed, i think it is certainly a lone wolf if you can call it that. But i also think, considering incident,on of the two months ago, we had another incident that was disrupted. Had b was to be ehead an innocent bystander. It wasnt significant at that another ow, with you can say at this stage, act of terrorism it is a very busy section of the city. Just near theated Channel Seven news studio, other government buildings. It is a very strategic place. This particular person would have been planning this potentially for some time. That the remaining hostages, and it is unclear how many are left, one new station was saying up to 15, and five were released recently. Lets hope the remaining hostages are safe. As time goes on, Police Negotiators are doing the best they can to get the others out. Australia of course sent fighter jets in iraq to fight the Islamic State. How vulnerable is this country . Look, im confident in our security, our intelligence agencies, our police agencies. Im very confident that they are capable and able to disrupt or prevent this type of incident, which leads us back to the scenario of the lone wolf. This person i dont want to speculate too much is unlikely to have come to Police Attention previously. Agenciese and security have done a lot of work in relation to community engagement, to bridge the gap between government and minority groups in australia. Part of that program is also to develop friendly relations so that they will report back to the police. Also, just bridging trust. The government has done all it can. In relation to legislation, some say it is going overboard in relation to legislation, in that it seems to be focusing on the Muslim Minority in australia. The government appears to be a little bit u. S. Centric. There is a few things the government has done that i dont want to say counterproductive but overall, there are arrangements which prevent this type of act. Clark, do you think this incident will change behavior . Do you think it will impact Public Perception of the way the government is conducting Foreign Policy . How will this impact the longerterm story . I dont think this incident will stop we dont know the demands yet of this particular offender. Police may know the demands at this stage but we dont know. I dont think it will change the governments perception or their Foreign Policy. I dont think that will be the case. In fact, it will make them more determined to continue on with military operations. But we do need to assess the domestic situation and those relationships i was talking about between police and security agencies and the community. We still need to do a lot there. There is still a great divide. Racistave a fairly population. We are doing a lot to try and deal with that, but obviously there are groups here that feel marginalized. Groups like the Islamic State are tapping into those marginalized, and in many cases, vulnerable individuals. Thank you so much for your time, clark jones. Lets move on and turn to japan. Prime minister shinzo abe has been reelected in a sweeping victory. Bloomberg News Reporter james major joined us now from tokyo. Story in terms of the japan, how much will it actually change in reality . Shinzo abe didnt look particularly evil eight when he announced victory particularly elayted when he announced victory. This is policy and will carry on in the way he has announced. Thats right. For a lot of the economic what we aresically looking at is the same policy as before the election, just three weeks delayed by the campaign. We are now looking at the supplementary budget the government was talking about. 25 billion of extra spending to help japan out of the recession. It looks like that is going to happen on boxing day for christmas. Is now looking like it is going to be announced sometime in the middle of january. Things like security policy, energy policy, things like the growth strategy, the only change in those policies is going to be that they are three weeks later than they may have been if there had been no election. Little or no change to how japan is being governed. James, in terms of what the government was trying to achieve , is this now are really strong mandate . Mr. Abe said that he wanted to go to the people to put to them the question of whether japan should raise the sales tax again. The first increase in april this year push the economy into recession. He decided that he was going to push it back. He said he wanted to go to the people and have them vote on this. That is one of the reasons for the election. Another reason is to say he wanted to get an increased , butte for his policies also to convince the opposition within his own party that the policies he was putting forth were actually the right way for japan to be going. He did get a renewed mandate on those things in the sense that they have one more seat than they had at the last election. Time, half the populace in japan, half the electorate in japan, didnt bother to come out and vote. Froms a renewed mandate maybe half the people who are eligible to vote. Doesnt look like particularly a strong mandate for doing something more radical. James, is it possible the real surprise of this election becomes moreabe hawkish on the policy front . I read some statements over like and you felt like you were getting hints of that. He is pretty hawkish on the Foreign Policy. He came into power saying what he wanted to do was revise the constitution. Has territory disputes with china and korea, also with russia. He has been quite strong on the dispute with china and less so on the one with korea. I dont think it is going to be a surprise if he continues with that policy. Have been slight increases in Japanese Military spending. I dont think there is going to be a massive change in any of the policies. He may take this election as a mandate to go out and push further the policies he has already bought out on defense spending. I dont think there is going to be a big change in the actual composition of those policies. He may just push harder than the has in the last few years. James, thank you for your time. Coming up, bloomberg exclusive with mikhail khodorkovsky. We speak about why he things it will take a black swan event to unseat president putin. And a reminder, you can follow both of us on twitter. We are back in just a couple of minutes. It is 22 minutes past the hour. You are watching the pulse. We are live on bloomberg tv. A quick check on the price of oil. The two main contracts and what is happening here, both up. Nymex is up by 1. 4 . Brent is up by over 2 this morning. 60opec monitors went below earlier on, which is fairly significant. Let me take you to what is happening in sydney now. We have been monitoring events very closely. We have a News Conference taking place as we speak. Lets listen in to what is being said. Ultimately, we are doing all we can in these difficult circumstances and we will get through it. The commissioner will make a few comments. Thank you, premier. Good evening, ladies and gentlemen. , our only goal tonight and for as long as this takes, is to get those people that are currently caught in that building out of there safely. That remains our number one priority. Nothing will change. Imre any questions sure there are many questions you have for us and im not in a position to give you that information. Not be going into the tactics are the strategies we are employing. Suffice to say we have large numbers of police. They are in contact and we are working to resolve this as quickly as we can. I too want to thank the community, particularly those in the city today, you acted in a way that made our job a lot easier than it could have been. There is much work to be done and much more for us to do over the coming hours. Again, for those that have loved ones that may be caught up in this, for those that may be in that particular building, rest assured, we are doing all we can to set you free. We will be looking after your safety as our number one priority. Im happy to go to questions. [indiscernible] im not certainly in a position to talk for the tactics or what we are doing. Certainly, when the time is right, we can talk about that. [indiscernible] again, what is happening thingsthose premises are that will need to be resolved amongst our negotiators. We have the best negotiators in the world on the job right now. At this stage, rather than secondguess or give them anything that might cause some grief for those people caught in there, we are not in a position to talk further about that. [indiscernible] one haserstand that no been injured and if that is true, we are grateful. [indiscernible] certainly, they will be working with us to assist in making sure we get a peaceful outcome. The one thing that i can say is, bypeople are being contacted hostages, particularly the media, we ask that you put those people and ask them to ensure that the men inside speaks to police. They are the people that can resolve this, that can help them. Certainly, they are available and will be looking to talk to them, and have certainly got control of that particular building right now. [indiscernible] we wont go into the details about who is in there, how many. We are not in a position to do that at the moment. [indiscernible] [indiscernible] at this stage we are putting that picture together. At this stage, in terms of numbers, we are not at liberty to go into that information. [indiscernible] again, they are out of the building. At this stage, rather than talk about how that happened, we are just pleased to see them out. [indiscernible] look, again, at this stage, there are many out there that would be surmising there would be many out there that are guessing. We are not in the business of speculating. We are in the business of investigating. We will get to the bottom of it. Sureis stage, all i can do you is, we are doing all we can and we will do even more to guarantee the safe release of these people. [indiscernible] it is too hard to say, lucy. We are certainly looking to increase those numbers in the coming days. We are hopeful that we get an outcome. That is what we are all praying for. Having said that, we will put as many police as we need to in this operation. It is that important to us. [indiscernible] i understand one hostage did go to a hospital for a preexisting condition and was treated for that. There was nothing that came from this event that caused that person to go to the hospital. [indiscernible] a again, we wont be in position to go into that. Id like to give you as much as i can but right now that is as much as i can. First and foremost, we are going to make sure we do nothing that could jeopardize those that are still in the building. [indiscernible] theres no place on earth that doesnt have access to social media. We know that. Our plans are built around that. [indiscernible] again, the means by which we are communicating is something we would rather keep close to our chest. At this stage, suffice to say we have got contact. [indiscernible] understandable, because when there is not a lot of information, people dont know what is going on. Want toaid that, i praise sydneysiders for what theyve done. Clearly, in behaving that way, it has made our job a lot easier. I can only ask that that would continue. Theres no reason for people to be around that area. Again, if we can get that level of support tomorrow, we will be in a good place when it comes to managing crowds. You seen the opera house and other buildings . Stageare only at this dealing with one location. We are not concerned about any other. [indiscernible] we needed to be sure that those locations were safe. We were acting on advice. If people see something, we want you to tell us. We want you to ring the National Security hotline. Ring and triple zero. Of dont hesitate. Thats what its there for. We have had a lot of support from the public and we would encourage that to continue. If if you see something, say something. To talk aboutng numbers and were not going to talk about those that might be inside that stronghold. At this stage, we know its at least one. Looking at some of the posts what would be your message to other people . Somethingl attacks or that should not happen. Settle to let everyone down. We want people to remain calm. There are large numbers of police the will be involved in ensuring that we have a level of safety and confidence that people can go about their in any part ofly New South Wales at this time. Those police will be out there. You have seen them a in operation appleby. There was Community Confidence that the police were there to serve. That will continue. [inaudible] we are working towards ensuring that everyone is kept safe. That will continue. Ok . The most significant aspect of that which affects sydney. That press conference is coming from sydney. That is the Police Commissioner. Really speculating about anything and giving very little information. He was very careful. Thats just given the facts are clear at this stage, but not going further that are in he said they are working on it. They have demands, but he did not say what they were. Your listing to that News Conference. What you make of it . I think the police have really decided to take that stance for a couple of hours that they are trying to keep the operation under wraps. The Deputy Police commissioner said about an hour before the press conference that it doesnt help anyone if they start speculating on the operatives of what police are doing and how they are trying to deal with the gunman inside the cafe. You have to respect the fact that the police are trying to give as much as they can to the media with that giving away their game. They want to keep their negotiations very much close to the chest at this stage. Premierting to