# APAC Stocks Rise as US Inflation, Tech Spur Gains

An episode of [Bloomberg Daybreak: Asia Edition](https://invisiblenetwork.ai/podcast/1663863437), 14 Aug 2026, 21 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/58e85be7-dbb5-4043-afed-af80014dc0b3/a3c94686-a66e-4d5b-934f-b4a60023aa44/audio.mp3?utm_source=Podcast&in_playlist=27143354-63aa-4ac5-965d-af80014dc0d3

Business and finance news from the Asia-Pacific. Asian stocks rose, adding to a fourth week of gains, as moderating US inflation reinforced bets that the Federal Reserve will refrain from raising interest rates next month. Technology stocks extended their rebound. In Asia, the yen remained within striking distance of 160 per dollar, even after Prime Minister Sanae Takaichi’s government was said to support an interest-rate increase. The Japanese currency was little changed Friday, near 159.43 per dollar. We get reaction from David Finnerty, Bloomberg News FX & Rates Strategist. Plus - even as Treasuries rallied Thursday, the US sold 30-year bonds at the highest yield in a quarter century, underscoring the premium investors are demanding to finance the nation’s deficits. Meantime, back-to-back benign inflation prints, following last week’s softer-than-expected jobs report and a pullback in oil prices, are easing pressure on the Fed to tighten policy at its meeting next month. For more on the broader market backdrop, we hear from Tim Waterer, Chief Market Analyst at KCM Trade Global. See omnystudio.com/listener for privacy information.

## Transcript

[0:00] Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.
[0:10] Speaker 2: Welcome to the Daybreak Asia Podcast. I'm Doug Krisner. The
[0:13] Speaker 2: government of Japanese Prime Minister son of Ataki Ichi appears
[0:17] Speaker 2: to be supportive of a near term rate hike from
[0:20] Speaker 2: the Bank of Japan. We are told the next move
[0:22] Speaker 2: is likely to be either in September or October. Now,
[0:27] Speaker 2: the Bank of Japan's fears over yen weakness driving up
[0:30] Speaker 2: prices further seems to be aligning with the government's desire
[0:34] Speaker 2: to strengthen the impact of the recent US Japan currency intervention. Earlier,
[0:39] Speaker 2: Bloomberg spoke with BlackRock's Rick Reader.
[0:42] Speaker 3: Is the Bank of Japan going to be hawkish to
[0:44] Speaker 3: support the currency? And heretofore they've been a bit deliberate
[0:48] Speaker 3: in terms of moving it. This moving in September to
[0:51] Speaker 3: sort of stabilize the currency is a big deal intervention.
[0:54] Speaker 3: In our watched intervention happen over time. You need to
[0:58] Speaker 3: really keep going with a lot of firepower. I would argue,
[1:01] Speaker 3: it's not another most durable way to get there.
[1:03] Speaker 4: That's Rick Reader.
[1:04] Speaker 2: He is Global Fixed Income CIO at Blackrock. For a
[1:08] Speaker 2: closer look at the end and the overall price action
[1:11] Speaker 2: in the foreign exchange. I'm joined by Bloomberg FX and
[1:14] Speaker 2: rate strategist David Finnerty. David joins from our studios in Singapore.
[1:19] Speaker 2: Thank you for being here. Give me your sense of
[1:21] Speaker 2: what we're seeing play out right now in terms of
[1:23] Speaker 2: the yen and whether it's really incumbented at this point
[1:27] Speaker 2: on the boj to move more aggressively otherwise we're going
[1:30] Speaker 2: to be stuck here at at around one fifty nine
[1:32] Speaker 2: fifty or one sixty against the greenback.
[1:35] Speaker 5: Yes, so you've heard the classic case of the intervention,
[1:38] Speaker 5: dolly in goes down and basically bounds quickly. I mean, honest,
[1:42] Speaker 5: it seems to be bound quicker and quicker every time
[1:43] Speaker 5: after the intervention I think now, So, so you're back
[1:46] Speaker 5: up to round one fifty nine fifty around that area.
[1:50] Speaker 5: The market at the moment is definitely a bit split
[1:53] Speaker 5: on where it goes from here. Obviously, Mark's very aware
[1:56] Speaker 5: of potential for the intervention if it went above one
[1:59] Speaker 5: sixt so're there's not much enthusiasm to sort of buy
[2:04] Speaker 5: at these levels. Having said that, there's people going why
[2:07] Speaker 5: would I sell at these levels? Either of the Really
[2:09] Speaker 5: the fundamental picture hasn't changed yes, the BOJ it looks
[2:12] Speaker 5: like maybe hiking in September or October. But the market's going.
[2:17] Speaker 5: But even before Bloomberg put up story yesterday, the market's
[2:19] Speaker 5: going when I sort of thinking that anyway, So the
[2:22] Speaker 5: market pricing changed a little bit, but the markets were
[2:25] Speaker 5: quite there was quite heavily factored into markets already. Hence
[2:27] Speaker 5: you didn't see a bit bit of a bump. So
[2:30] Speaker 5: the point being is even the BOJ hikes, I think,
[2:32] Speaker 5: let's say your hike now they hike another quarter, say
[2:34] Speaker 5: in January, whatever the market's going, I've already factored that in.
[2:37] Speaker 5: So for you the move, something else really has to happen.
[2:40] Speaker 5: So I think BOJ policy is a factor, but it's
[2:44] Speaker 5: not the only factor. And I think it comes more
[2:46] Speaker 5: back to the dollar side of the equation. I think
[2:49] Speaker 5: I think what's interesting is even last night you had
[2:52] Speaker 5: well this week you've had you know, lower than expected
[2:55] Speaker 5: straight CPI or tame CPI. PPI came alone and expected,
[2:59] Speaker 5: and yet and so the market diarback expectations for federal
[3:02] Speaker 5: reserve cuts. Still looking for basically hike this year, sorry hikes,
[3:07] Speaker 5: not cuts. Still looking for hike basically this year. But
[3:09] Speaker 5: it's not fully priced in now, and yet Dolly and
[3:12] Speaker 5: can't go anywhere. You know, it doesn't, then they're very
[3:15] Speaker 5: little sell off. So I think at the moment you
[3:16] Speaker 5: are in this lull period, we say where people going,
[3:21] Speaker 5: you know, do I want to buy it?
[3:22] Speaker 1: No?
[3:23] Speaker 5: Do I want to sell it? No? And therefore it's
[3:25] Speaker 5: not really going anywhere. It's really going to be data
[3:27] Speaker 5: driven I grind anywhere at best. But you'd have to
[3:31] Speaker 5: think at the moment, given that it can't, it's struggling
[3:35] Speaker 5: to go lower. Therefore you go, what doesn't it sort
[3:37] Speaker 5: of go down, will go up by default at some point,
[3:40] Speaker 5: So I'd say that risks are still skewed to the upside.
[3:43] Speaker 5: But again, I just because no one's jumping on this
[3:46] Speaker 5: bang wag, and I can't blame them to be fair.
[3:48] Speaker 5: Then I think at the moment it's you know, a
[3:49] Speaker 5: grind high at best.
[3:50] Speaker 2: What is your sense of the role that the US
[3:53] Speaker 2: is playing in this intervention? And I'm wondering whether or
[3:56] Speaker 2: not you can give any credence to this idea that
[3:59] Speaker 2: the bigger worry for the US Treasury is that Japan
[4:03] Speaker 2: would essentially sell US treasury as a way of raising
[4:07] Speaker 2: dollars to fund defense of the Japanese currency.
[4:12] Speaker 5: I think, look, that's always been bantered around. Reality is
[4:16] Speaker 5: I think, you know, and the inn of lats around
[4:18] Speaker 5: holes quite a lot of treasury, so we have to
[4:20] Speaker 5: put that in mind. So giving useld some of them,
[4:22] Speaker 5: it could still be relatively a small dip in the pie,
[4:25] Speaker 5: given how the liquidity in the treasury market. And then
[4:28] Speaker 5: I think also Japan itself has be aware of it
[4:31] Speaker 5: has a very good relationship with the US. So you go,
[4:35] Speaker 5: you know, is that something you want to do? Obviously
[4:37] Speaker 5: not saying you won't do it or can't do it,
[4:39] Speaker 5: but I think at then day, is that really the
[4:41] Speaker 5: last measure? And historically they really haven't done it, so
[4:44] Speaker 5: why start it now? I think what's interesting is you've
[4:46] Speaker 5: had the US come in and support the coordinate intervention,
[4:50] Speaker 5: so you know that has happened a long long time,
[4:52] Speaker 5: and I think that's interesting. I do think the interesting
[4:54] Speaker 5: thing though we don't know, maybe only Scott's bestant knows this,
[4:58] Speaker 5: but was it like because Scott doesn't has said that
[5:00] Speaker 5: he'd like BEOJ to hike a bit faster historically, so
[5:04] Speaker 5: was it a question for me? Becomes it is okay,
[5:07] Speaker 5: what's like, we'll come and help you this time, but
[5:09] Speaker 5: you've got to hike quicker as more. As a result
[5:13] Speaker 5: of course, the catches even within an intervention, and even
[5:15] Speaker 5: now with boj seems to be hiking at a faster pace.
[5:19] Speaker 5: We save than once every six months, Dottie. And still
[5:22] Speaker 5: one fifty on fifty. So you know, at the end
[5:24] Speaker 5: of the day we can talk about leftar and center.
[5:26] Speaker 5: But the market has spoken, he goes, we're still one
[5:29] Speaker 5: fifty on fifty, So something different has to change for
[5:32] Speaker 5: that dynamic therefore to change.
[5:34] Speaker 2: What about the shape of the yield curve in Japan
[5:37] Speaker 2: right now? Do you expect that to change much going forward?
[5:40] Speaker 5: I think that there's certainly can be pressure on the
[5:42] Speaker 5: long term part of the your curve. Obviously we're to
[5:45] Speaker 5: see a bit more information on tackage spending plans, and
[5:50] Speaker 5: we know tack etanomics. We know that you know that
[5:54] Speaker 5: basically involves spending, and you know that's the case. She's
[5:57] Speaker 5: going to you'll pay for growth down the line, and
[5:59] Speaker 5: we'll see that the market's obviously more worried about Okay, well,
[6:02] Speaker 5: how much more spending is gonna is it gonna net
[6:05] Speaker 5: spending on in te because obviously, you know, very lowering
[6:08] Speaker 5: if they are the consumption tax and they go, okay,
[6:10] Speaker 5: it's less revenues, therefore you need the fund more. So
[6:14] Speaker 5: I think that the pressure remains on the long end
[6:18] Speaker 5: of the curve because of what the Prime minister is
[6:22] Speaker 5: looking to do. You know, I think as we move forward,
[6:25] Speaker 5: you know, these plans always evolve. You know, the budget
[6:28] Speaker 5: plans keep tweaking. There's always sort of a supplemental budget.
[6:32] Speaker 5: You know, if the expansory plans, if the funding plans build,
[6:36] Speaker 5: then I think it will just remain. But I think
[6:38] Speaker 5: from a long term perspective, you know, the pressure is
[6:41] Speaker 5: going to remain on the on the long end of
[6:43] Speaker 5: a curve, the short term end of the curve to
[6:45] Speaker 5: some degree. But again, the market's already priced in the hike,
[6:49] Speaker 5: so I don't see the boj going really really aggressive now.
[6:53] Speaker 5: You know, they may do once or said once in September, October,
[6:56] Speaker 5: months in January, but the market goes factor that in already.
[6:59] Speaker 2: So if there's a little more slope to the curve
[7:01] Speaker 2: in Japan, that's going to be a positive for Japanese financials,
[7:05] Speaker 2: for the banks as well, right, it.
[7:07] Speaker 5: Will be positive for them, and so you know, Nick
[7:10] Speaker 5: guys obviously, like most stock inticses has been forming well.
[7:14] Speaker 5: So say from a backstock perspective, they'll go. They'll certainly
[7:17] Speaker 5: quite quite happy to take that. But yeah, in terms
[7:20] Speaker 5: of overall in dollar yen, you know, I just think
[7:24] Speaker 5: at the end they unless yields shoot I which again
[7:28] Speaker 5: I don't think, you know, bankage vans always very wary
[7:30] Speaker 5: about whenever long term yeals go a bit unruly, should
[7:34] Speaker 5: we say, they try and rain those in a bit.
[7:36] Speaker 5: So that's the last thing they want as well. So
[7:39] Speaker 5: I think, you know, stepman of the YLK cleve or
[7:41] Speaker 5: movement of the elk Cub's fine, but it will be in
[7:43] Speaker 5: an orderly fashion, should we say, or I would expect
[7:47] Speaker 5: it to be. So.
[7:48] Speaker 2: You mentioned the price reports in the US this week
[7:50] Speaker 2: we had both CPI PPI. The numbers came in on
[7:53] Speaker 2: the cool side, and if you look at them together,
[7:57] Speaker 2: I think the July price reports have essentially lowered the
[8:02] Speaker 2: implied probability of a FED rate hike in September. I
[8:05] Speaker 2: think we're below around forty percent put September aside for
[8:09] Speaker 2: the moment, are you still expecting the FED to move?
[8:12] Speaker 2: Maybe twenty five basis points worth of tightening between now
[8:16] Speaker 2: and the end of the year.
[8:17] Speaker 5: For me, I'm be honest, it's more of a coin
[8:19] Speaker 5: to its the market's basically priced it in at the moment,
[8:23] Speaker 5: it's a bit more of a coin toss. I mean again,
[8:26] Speaker 5: there's a big variable of how long is it are
[8:28] Speaker 5: more go on, how high does oil go, how long
[8:33] Speaker 5: is it stay elevated, and even then how much does it
[8:35] Speaker 5: feed through. It's fed through less into inflation data than
[8:38] Speaker 5: the market is expected. Does that continue or do we
[8:40] Speaker 5: actually start seeing the bump. So there is a lot
[8:43] Speaker 5: of variables out there. I think the Fed's very split.
[8:47] Speaker 5: I think we can safely say that there's sending some
[8:49] Speaker 5: hawks for some people wait for more data. You start
[8:52] Speaker 5: and see a little cracks in the labour side, nothing major,
[8:57] Speaker 5: but I think they're cound be wary of that. So
[9:00] Speaker 5: I think if let's say data kept coming in as is,
[9:04] Speaker 5: I don't think they'll hid. But then I think, obviously
[9:07] Speaker 5: the catch is that we know there's these inflation pressures
[9:10] Speaker 5: about So for me, I think it's more of a
[9:12] Speaker 5: coin to us at the moment. You know, and obviously,
[9:15] Speaker 5: like everyone will, data dependent, but at the moment you
[9:18] Speaker 5: go with data has come in on the south side,
[9:21] Speaker 5: so you know, you go, the market's going, but it
[9:24] Speaker 5: will change. But so far, you go, but it hasn't.
[9:26] Speaker 5: We got pretty much strong economy, inflation not too bad,
[9:31] Speaker 5: higher than you'd want. But I think it really we
[9:33] Speaker 5: need to uptick or stay elevated for longer. Certainly it's
[9:36] Speaker 5: not upticking, then I think the probabilities rise. But again,
[9:40] Speaker 5: let's see what this month's in September stata comes in out.
[9:43] Speaker 2: I think that's a good point because the real question
[9:47] Speaker 2: I think for the market as wether or not this
[9:48] Speaker 2: cooling is temporary. We had the head of the Cleveland Fed,
[9:52] Speaker 2: Beth Hammock, saying on Thursday in the US, maybe the
[9:55] Speaker 2: recent signs of a slow down in inflation will continue,
[9:58] Speaker 2: but it's none of the less. She reiterated a call
[10:01] Speaker 2: to raise rates now. So she seems to be of
[10:04] Speaker 2: the opinion that you really got to nip this in
[10:07] Speaker 2: the bud immediately rather than wait for that cooler data
[10:11] Speaker 2: to continue to trickle in. And I'm wondering what she
[10:14] Speaker 2: is looking at right now to justify an immediate move
[10:18] Speaker 2: to raise rates.
[10:19] Speaker 5: Well, she could go, look, inflation is still too high. Yeah,
[10:24] Speaker 5: I mean, I mean you can thissually just go as
[10:25] Speaker 5: simple as that. You go, look, how how long can
[10:28] Speaker 5: we keep let inflation be a by target? And Kevin
[10:30] Speaker 5: Walsh has repeated that himself in his press conferences, and
[10:33] Speaker 5: of course we still quite don't know where he standing
[10:35] Speaker 5: in this matter of you know, hike or no hike,
[10:38] Speaker 5: but certainly the reality is that it's just gone to
[10:41] Speaker 5: it's still elevated, it's be elevated for a long long time,
[10:44] Speaker 5: and we have oil elevated and up ticking. Now we've
[10:48] Speaker 5: all moved still closed. Then you go, look, the pressure
[10:51] Speaker 5: is sort of just building. So again it's one of
[10:53] Speaker 5: those things where you know, hindsight's a beautiful thing, but
[10:56] Speaker 5: that's not what the FED or markus have. They only
[10:58] Speaker 5: have all we have to look forward, and we use
[11:00] Speaker 5: the data that we have to look forward and try
[11:03] Speaker 5: and estimate what we think the data will be. And
[11:06] Speaker 5: obviously that's half time long if we're honest. But at
[11:09] Speaker 5: the moment, you know, she could simply she has grounds
[11:11] Speaker 5: to say, look, inflation has been too high for too
[11:14] Speaker 5: long and enough's enough. And I think that alone is
[11:17] Speaker 5: fair to say, yeah, okay, that's good grounds, I like.
[11:21] Speaker 2: All right, we'll leave it there. David, It's always a pleasure.
[11:23] Speaker 2: Thank you so very much for making time for us.
[11:25] Speaker 2: Bloomberg strategist David Finnerdy joining from Singapore. Coming up, we'll
[11:29] Speaker 2: hear from Tim Waterer, chief market analyst at KCM Trade.
[11:34] Speaker 2: That's ahead on the Daybreak Asia podcast. Welcome back to
[11:43] Speaker 2: the Daybreak Asia Podcast time Doug Krisner. In the US session,
[11:47] Speaker 2: the auction of thirty year US treasury sold at the
[11:50] Speaker 2: highest interest rate in a quarter of a century. This
[11:53] Speaker 2: twenty five billion dollars sale was awarded at a rate
[11:57] Speaker 2: of five point two one six percent. Now that reflects
[12:00] Speaker 2: the markets need to be compensated for financing the nation's
[12:03] Speaker 2: growing deficit. Just yesterday, the government recorded the fourth largest
[12:08] Speaker 2: monthly deficit in the history of the US. That's where
[12:11] Speaker 2: we start our conversation with Tim water Tim is the
[12:15] Speaker 2: chief market analyst at KCM Trade. He spoke with Bloomberg
[12:19] Speaker 2: TV host Heidi Strald Watson Sherry on let's start off.
[12:22] Speaker 1: With what's going on with treasuries at the moment. How
[12:24] Speaker 1: much more pressure are we going to see, particularly when
[12:26] Speaker 1: it comes to the long end.
[12:28] Speaker 6: Good to be with you hardy, and I think he
[12:29] Speaker 6: really mentioned it there, is that the market's really demanding
[12:32] Speaker 6: an increased premium to absorb that government dead at the moment.
[12:35] Speaker 6: So I think what's interesting to note is that the
[12:38] Speaker 6: ten year yields pretty much where it was a week ago,
[12:40] Speaker 6: and in that time we've had soft CPI, soft PPI
[12:44] Speaker 6: and a dismal jobs report, So the fields aren't reacting
[12:48] Speaker 6: to that economic picture at the moment. So I think
[12:50] Speaker 6: what's that telling us is that maybe the bond market
[12:53] Speaker 6: a little bit more worried about the US economy longer
[12:55] Speaker 6: term than what the Fed is perhaps.
[12:57] Speaker 1: In the shorter term, though there's obviously but this week's
[13:00] Speaker 1: data gives a little bit more credibility to the doves
[13:03] Speaker 1: that want to be patient. But not out of the
[13:05] Speaker 1: woods yet for September, I would have thought.
[13:07] Speaker 6: Not out of the woods. A lot can happen between
[13:09] Speaker 6: now and then. Certainly with the oil prices, they're the
[13:11] Speaker 6: rogue element for central banks at the moment, so that's
[13:13] Speaker 6: a difficult one to predict, but certainly inflation figures heading
[13:16] Speaker 6: in the right way. A bit of a less less
[13:18] Speaker 6: for a headache now in terms of the jobs market,
[13:20] Speaker 6: for the Fed now that there are more cracks appearing,
[13:22] Speaker 6: So if there are some doves on the FED board
[13:26] Speaker 6: maybe looking for rate cuts, that could get a few
[13:29] Speaker 6: more dissenting votes on that side of the ledger may
[13:31] Speaker 6: become September.
[13:33] Speaker 1: In the meantime, broader equity markets, the AI exuberance continues
[13:37] Speaker 1: to build. Obviously there's a bit more volatility be introduced,
[13:40] Speaker 1: but I Erry mentioned volatility has frollen well down even
[13:43] Speaker 1: when it comes to the Korean market.
[13:45] Speaker 4: That's right, of course.
[13:46] Speaker 6: July we had a number of episodes where you know,
[13:49] Speaker 6: AI was shunned. But then I think what happens is
[13:51] Speaker 6: once the dust settles, once I try to start searching
[13:54] Speaker 6: for yield again, they tend to gravitate back towards that
[13:57] Speaker 6: AI and tech picture, and I think that's what we're
[13:59] Speaker 6: seeing at the moment. I think that the US earning
[14:01] Speaker 6: season that went some way to dispelling some of the
[14:04] Speaker 6: fears that we're building up about valuations and the sustainability
[14:08] Speaker 6: of operating margins. They're still lingering to some degree, but
[14:11] Speaker 6: like I said, it has been less and somewhat because
[14:13] Speaker 6: of some of the bumper results we've seen from the
[14:16] Speaker 6: likes of Microsoft and Amazon and the likes, so I
[14:19] Speaker 6: trade looking a bit better now than it was, but
[14:21] Speaker 6: still some lingering fears about sustainably lity moving forward.
[14:24] Speaker 1: Well, the question is always going to be return on investment, right,
[14:27] Speaker 1: Are we getting a better answer out of China on that?
[14:30] Speaker 1: And then China ai names given the spend.
[14:33] Speaker 6: Well, that's the big deal at the moment, isn't it
[14:35] Speaker 6: sort of how China will compare to the US counterparts
[14:37] Speaker 6: and that efficiency standpoint. I think the US earning season,
[14:41] Speaker 6: I think that gave us a better idea of what
[14:42] Speaker 6: the sweet spot is for CAPEX so in terms of,
[14:45] Speaker 6: you know, CAPEX to revenue ratio, I think what we're
[14:48] Speaker 6: learning is at the cloud companies, they're sort of the
[14:50] Speaker 6: gold stand for CAPEX efficiency Microsoft and Amazon for example,
[14:54] Speaker 6: So difficult to put a number on that ratio thirty
[14:57] Speaker 6: five thirty percent. Perhaps side of that, when there's a
[15:01] Speaker 6: bit more of a cloud over sort of punt intended
[15:03] Speaker 6: about sort of what the window will be to get
[15:05] Speaker 6: a return on that investment. I think that's when the
[15:08] Speaker 6: market gets the anxiety levels up a notch and isn't
[15:11] Speaker 6: willing to have the same patience that they have for
[15:13] Speaker 6: the likes of Microsoft and Amazon.
[15:14] Speaker 1: As it also when it comes to picks and shovels
[15:17] Speaker 1: and across the supply chain, has it given you a
[15:18] Speaker 1: better idea of where perhaps valuation entry points should be.
[15:22] Speaker 6: Yes, I mean I think that on that front, I'm
[15:24] Speaker 6: still quite bullish on the chip manufacturers themselves. I think
[15:27] Speaker 6: the supply demand dynamics are still in their favor. I
[15:30] Speaker 6: think when you have full order books moving forward, then
[15:34] Speaker 6: you know that the risk to your revenue is not
[15:36] Speaker 6: on the order book side, it's on the factory through put.
[15:40] Speaker 6: So I think while that's looking healthy, I think at
[15:41] Speaker 6: least through the end of twenty seven, I think they're
[15:44] Speaker 6: still looking in fairly good stead at the moment, and
[15:46] Speaker 6: pullbacks are probably buying opportunities longer term. Yes, there are
[15:50] Speaker 6: questions about say Chinese competitors moving forward increasing supply and
[15:55] Speaker 6: demand and supply matching more down the track, but markets
[15:59] Speaker 6: are forward looking. But we know what Cain said about
[16:01] Speaker 6: the longer term. So I think in the here and now,
[16:03] Speaker 6: I think through twenty twenty seven, I think the chip
[16:05] Speaker 6: names are still looking pretty good.
[16:06] Speaker 1: Do you worry about the froth, you know, I guess
[16:09] Speaker 1: it's a bit more of an existential question, but when
[16:11] Speaker 1: you start having these circular funding scenarios, circular financing scenario
[16:16] Speaker 1: is do you start to question whether things are getting
[16:18] Speaker 1: a little bit concerning.
[16:20] Speaker 6: Yeah, there is a bit of a concern on that front.
[16:22] Speaker 6: I mean I think that the Nvidia one, I mean,
[16:24] Speaker 6: they're certainly pulled in a number of big names on
[16:26] Speaker 6: wall streets, so I think they're certainly selling the proposition well.
[16:29] Speaker 4: So I think that come the.
[16:30] Speaker 6: Market nerves a little bit once again when you're getting
[16:32] Speaker 6: these names outside of the tech space itself, and that
[16:35] Speaker 6: on the banker side of things, if they're putting their
[16:36] Speaker 6: funds into it, I think that's a bit of a
[16:38] Speaker 6: vote of confidence sentence. But look, let's see what happens
[16:41] Speaker 6: when we have say IPOs moving forward and whether those
[16:44] Speaker 6: valuations I'm sure they're probably eyewatering, but whether they're still
[16:48] Speaker 6: capturing the tension of the market, say.
[16:50] Speaker 4: As SpaceX did in this year.
[16:52] Speaker 6: So let's see how that plays out, whether that appetite
[16:54] Speaker 6: for AI, particularly on the IPO front, where that gets
[16:57] Speaker 6: sustained moving forward.
[16:58] Speaker 1: Yeah, what are you finding compelling outside of the AI story?
[17:02] Speaker 6: Still bullish on gold structurally, so you mentioned that it
[17:05] Speaker 6: has had certainly a better start of things to August
[17:09] Speaker 6: compared to July. I think the intervention to boost the
[17:12] Speaker 6: end gold was an indirect beneficiary of that because it
[17:15] Speaker 6: dragged the US dollar lower. So I think that to
[17:16] Speaker 6: move gold above its trading range it had been occupying
[17:19] Speaker 6: between about thirty nine to fifty to forty two hundred,
[17:22] Speaker 6: sort of break outside of that range. And I think that,
[17:24] Speaker 6: combined with ongoing appetite from central banks to create some
[17:29] Speaker 6: separation away from the dollar, that should underpin gold moving forwards.
[17:32] Speaker 1: So that's the expectation is see more purchases from China.
[17:34] Speaker 6: For example, China, Russia, Turkey as well for example. So
[17:38] Speaker 6: I think that should provide a base of support for
[17:41] Speaker 6: gold headwinds forward At the moment are still those elevated
[17:44] Speaker 6: oil prices and a dollar which is hanging just under
[17:47] Speaker 6: one hundred dollar mark in terms of the dollar index.
[17:49] Speaker 6: So I think if we did get some reprieve on
[17:52] Speaker 6: the oil and a dollar front, that could open the
[17:54] Speaker 6: avenue high for gold above forty five.
[17:56] Speaker 4: Hundred five thousand. Could be a bit of a stretch
[17:58] Speaker 4: this year, but perhaps in Q one two twenty seven.
[18:02] Speaker 1: Reprieve in so far as it came from the joint
[18:04] Speaker 1: intervention that's probably going to continue to fade.
[18:07] Speaker 4: That's right, an artificial impact on the market.
[18:10] Speaker 6: But I think what it has done is brought some
[18:12] Speaker 6: time for market dynamics to move in favor of the
[18:16] Speaker 6: end and by extension, in favor of gold as well,
[18:19] Speaker 6: if we did see a pullback in US yields and
[18:22] Speaker 6: the dollar. So in terms of you know, what could
[18:24] Speaker 6: those favorable dynamics be. It's been mentioned about a possible
[18:28] Speaker 6: Bank of Japan hike next month. If that was combined
[18:32] Speaker 6: with a US hold for example, that could shrink that
[18:35] Speaker 6: JGB to treasury yield differential and maybe give the end
[18:40] Speaker 6: a bit of breathing room, and by extension, help gold
[18:43] Speaker 6: against the dollar as well.
[18:44] Speaker 4: So let's see how that plays out.
[18:45] Speaker 1: I mean, it's interesting that even the government, the Prime
[18:47] Speaker 1: Minister is now supportive of a hike from the BOJ. Right,
[18:52] Speaker 1: do you think the window has closed for kind of
[18:54] Speaker 1: decisive and impactful action here.
[18:57] Speaker 6: I think I think it'd be more of a measured action.
[18:59] Speaker 6: I think there's certainly priming in the market for you know,
[19:02] Speaker 6: I would say an increasing in rates to support the year.
[19:05] Speaker 6: I mean, on the inflation front in Japan, it's not
[19:07] Speaker 6: out of control at the moment. Projections are that it
[19:09] Speaker 6: will move higher in the second half of this year,
[19:12] Speaker 6: but I think they've got a bit of room to
[19:14] Speaker 6: play there in terms of the inflation side of things.
[19:16] Speaker 6: But I think if the banks Japan does hight rates,
[19:18] Speaker 6: I think it will pretty much just to support the
[19:21] Speaker 6: end At this point in time. We've heard from Scott Bessent,
[19:23] Speaker 6: I think further the US intervention, I think that could
[19:25] Speaker 6: certainly happen. I believe him when he said whatever it takes,
[19:28] Speaker 6: echoing Maria Draguis. So I think the US doesn't want
[19:30] Speaker 6: to see Japan dumping those treasuries that they hold in
[19:34] Speaker 6: great numbers and put higher pressure on the US yields
[19:37] Speaker 6: at the moment. So I think certainly mutual interest from
[19:40] Speaker 6: Japan and the US to keep US yields under control
[19:43] Speaker 6: and get the end on more even footing. So are
[19:46] Speaker 6: the loads in for the end for the year. Quite possibly, certainly,
[19:49] Speaker 6: not a certainty, but I think we could see it
[19:51] Speaker 6: maybe operating and sort that one fifty three to one
[19:53] Speaker 6: sixty range for the rest of the year. Approach is
[19:55] Speaker 6: above that, that's when we'll get those murmurs of further intervention.
[19:58] Speaker 6: Let's see if the that FEMA facility comes into play
[20:02] Speaker 6: against to facilitate US or Japan not dumping those.
[20:06] Speaker 4: Treasuries, which is really the fear of US officials at
[20:09] Speaker 4: the moment.
[20:10] Speaker 2: That's Tim Waterer. He is the chief market analyst at
[20:13] Speaker 2: KCM Trade, speaking with Bloomberg TV host Heidi Stroud, Watts
[20:17] Speaker 2: and Sherry On bringing you their conversation here on the
[20:20] Speaker 2: Daybreak Asia Podcast. Thanks for listening to today's episode of
[20:25] Speaker 2: the Bloomberg Daybreak Asia Edition podcast. Each weekday, we look
[20:29] Speaker 2: at the story shaping markets, finance, and geopolitics in the
[20:33] Speaker 2: Asia Pacific. You can find us on Apple, Spotify, the
[20:36] Speaker 2: Bloomberg Podcast YouTube channel, or anywhere else you listen. Join
[20:40] Speaker 2: us again tomorrow for insight on the market moves from
[20:43] Speaker 2: Hong Kong to Singapore and Australia. I'm Doug Risner and
[20:48] Speaker 2: this is Bloomberg

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