# Samsung's Soaring Profit Fails to Impress, Yen Outlook

An episode of [Bloomberg Daybreak: Asia Edition](https://invisiblenetwork.ai/podcast/1663863437), 7 Jul 2026, 17 min.

Audio: https://podtrac.com/pts/redirect.mp3/traffic.omny.fm/d/clips/e73c998e-6e60-432f-8610-ae210140c5b1/58e85be7-dbb5-4043-afed-af80014dc0b3/2562934d-e756-45b4-acf3-b4800031f126/audio.mp3?utm_source=Podcast&in_playlist=27143354-63aa-4ac5-965d-af80014dc0d3

Business and finance news from the Asia-Pacific. Asian equities dropped as technology shares came under renewed selling pressure due to investors rotating into other corners of the market. Chip bellwether Samsung Electronics Co. fell after its results. Samsung Electronics Co.'s quarterly profit surged 19-fold, but failed to impress investors accustomed to eye-catching growth from the suppliers of chips to the global AI boom. We speak to Bloomberg MLIV Strategist Mark Cranfield. Plus - The yen should be as much as 20% stronger than it is — around 130 per dollar, a former top foreign exchange official in Japan said, pushing back against those speculating that the currency might continue its slide. Bloomberg TV host Shery Ahn spoke exclusively to Tatsuo Yamasaki, who served as vice finance minister for international affairs a little over a decade ago about his outlook on the Japanese currency. See omnystudio.com/listener for privacy information.

## Transcript

[0:02] Speaker 1: Bloomberg Audio Studios, Podcasts, Radio News.
[0:10] Speaker 2: Welcome to the Daybreak Asia podcast. I'm Derek Krisner this morning,
[0:14] Speaker 2: and Soul Samsung reported record preliminary operating income fifty eight
[0:19] Speaker 2: billion dollars. Now, that represents a nineteen fold increase tied
[0:23] Speaker 2: to the demand that we have been seeing for these
[0:26] Speaker 2: AI memory chips, which obviously are an integral part of
[0:30] Speaker 2: the data center story. For a closer look at today's
[0:33] Speaker 2: price action, I'm joined by Bloomberg strategist Mark Cranfield. Mark
[0:37] Speaker 2: joins from our studios in Singapore. So the semiconductor stocks
[0:42] Speaker 2: as a whole, and I'm saying that looking primarily at
[0:45] Speaker 2: the Philadelphia Semiconductor Index. They just wrapped up their best
[0:49] Speaker 2: quarter on record. Help me understand what we're seeing today.
[0:52] Speaker 2: We have these very strong results from Samsung, and yet
[0:56] Speaker 2: the stock is down more than five percent.
[1:00] Speaker 3: To please some investors. It probably tells you more about
[1:03] Speaker 3: positioning and also about the ADR which is coming up
[1:07] Speaker 3: for sk Heinich. So most likely it's a temporary kind
[1:11] Speaker 3: of reaction. We've seen this kind of thing also in
[1:13] Speaker 3: video as well. Sometimes in video has blowout numbers and
[1:16] Speaker 3: yet the stock goes down only to recover a couple
[1:19] Speaker 3: of days later. So in the case of Samsung, is
[1:23] Speaker 3: quite probable that traders are well positioned for Samsung over
[1:27] Speaker 3: the past few weeks. The numbers actually come out, it's
[1:29] Speaker 3: a kind of a buy the rumor sell the fact
[1:31] Speaker 3: quite response. Even though they're huge profits, it's not beating
[1:37] Speaker 3: the forecast by such a huge amount that people are
[1:40] Speaker 3: overwhelmed by it. There are also probably some people holding
[1:43] Speaker 3: back with money for this sk Heinix ADR that's a
[1:46] Speaker 3: huge draw on the market, which is going to be
[1:48] Speaker 3: priced over the next couple of days starts trading by
[1:51] Speaker 3: the end of the week. We expect that's going to
[1:53] Speaker 3: take quite a bit of money out of the market.
[1:54] Speaker 3: It also may be a signal that for the near
[1:57] Speaker 3: term valuations peak in the AI related themes, because if
[2:03] Speaker 3: sk Heinex is tapping the market at this stage, it
[2:06] Speaker 3: might be a signal that they don't see too many
[2:08] Speaker 3: more gains in the near term. So all of these
[2:10] Speaker 3: things are overhanging. It doesn't mean to say by any
[2:13] Speaker 3: means that the text story is finished for now. Of course,
[2:16] Speaker 3: we're going to get us earnings coming up pretty soon.
[2:19] Speaker 3: We may well get a reinforcement from the major names
[2:21] Speaker 3: in the United States that actually things are pretty good.
[2:23] Speaker 3: Demand is still very high, and give it a couple
[2:26] Speaker 3: of weeks and people would have forgotten about this. But
[2:28] Speaker 3: in the very near term there's a little bit of
[2:30] Speaker 3: an overhang in terms of some of these Korean names
[2:33] Speaker 3: have been bought up so far that they may be
[2:35] Speaker 3: a bit overheated in the neartum.
[2:37] Speaker 2: So I'm glad you've brought up ask Heinex. We have
[2:39] Speaker 2: this US listing, as you indicated, and which is really
[2:42] Speaker 2: going to represent a very powerful fundraising channel. And it
[2:46] Speaker 2: was only last week that sk Heinex and Samsung talked
[2:51] Speaker 2: about ramping up investment in South Korea. I guess it's
[2:54] Speaker 2: a government led initiative worth some eight hundred and eighty
[2:57] Speaker 2: billion dollars. Are there questions about over capacity?
[3:01] Speaker 3: Do you think, well, that's a global issue. It's not
[3:05] Speaker 3: just specific to career. I mean we've seen the ramp
[3:08] Speaker 3: up from these so called hyperscalas all around the world
[3:11] Speaker 3: and even Australia has benefited from a sudden builder in
[3:14] Speaker 3: data centers. So it's going all across the globe. And yes,
[3:18] Speaker 3: at some stage people are going to say there's too
[3:21] Speaker 3: much investment here in relation to the returns we can
[3:23] Speaker 3: expect that may not have reached the end points so far.
[3:28] Speaker 3: We may still be playing that out. It may still
[3:30] Speaker 3: be a year or so away before we reach about clearly,
[3:33] Speaker 3: it is something in the minds of investors at which
[3:36] Speaker 3: point is too much money being invested against the expectations
[3:40] Speaker 3: of the profitability on those things. As far as careers
[3:43] Speaker 3: concerned itself, they're still in the relatively early stages of
[3:47] Speaker 3: all that.
[3:47] Speaker 2: And I'm wondering if we look at the price action
[3:50] Speaker 2: in both Samsung and s k Heinix moving to the
[3:52] Speaker 2: downside today despite what we could say is very upbeat news,
[3:57] Speaker 2: that there is just a degree of leverage. So when
[4:00] Speaker 2: something begins to wobble a bit, that that trend can
[4:05] Speaker 2: get exacerbated by a certain degree of leverage that may
[4:09] Speaker 2: be being applied to being long let's say sk Heinex
[4:13] Speaker 2: or Samsung shares. Do you think that that could be
[4:16] Speaker 2: a factor in today's price action a bit?
[4:18] Speaker 3: Absolutely. People have been citing one particular ETF. There's a
[4:22] Speaker 3: leveraged ETF on Heinex itself, which trades in Hong Kong.
[4:26] Speaker 3: The amount of money involved in that has been so
[4:29] Speaker 3: huge that some people are suggesting that even on an
[4:32] Speaker 3: intra day basis, will drive the share price of sk Heinix,
[4:35] Speaker 3: which is really absurd that you can actually have an
[4:38] Speaker 3: ETF moving the market for such a huge company as Heinex,
[4:42] Speaker 3: which makes tremendous profits, has a massive turnover on a
[4:46] Speaker 3: day to day basis in a career in exchange, and
[4:48] Speaker 3: yet an ETF which is traded somewhere else in the world.
[4:52] Speaker 3: They need to adjust the pricing of that so frequently,
[4:56] Speaker 3: and the underlying shares need to be traded so actively
[4:59] Speaker 3: it can actually feed back into the mainstock itself. So
[5:01] Speaker 3: that's become a concern. And the Korean regulators have noted
[5:05] Speaker 3: that they may have been too quick to authorize these
[5:08] Speaker 3: leveraged ETFs, so they may well be a drawing back
[5:11] Speaker 3: of those privileges, and that might also be weighing on
[5:14] Speaker 3: sentiment as well, because a lot of retail investors have
[5:16] Speaker 3: been involved in these ETFs.
[5:18] Speaker 2: So if we can agree that we have seen tremendous
[5:20] Speaker 2: demand for these memory chips, and we know that for
[5:24] Speaker 2: the companies that purchase these chips and put them in
[5:27] Speaker 2: turn into their products, they want to preserve their margins
[5:31] Speaker 2: and so they may be in a situation where they
[5:34] Speaker 2: have no other alternative but to raise cost. Do we
[5:37] Speaker 2: need to explore maybe an aspect of the inflationary story
[5:41] Speaker 2: vis a v semiconductors. I know we've focused a lot
[5:45] Speaker 2: recently on what we've been seeing in the energy complex,
[5:48] Speaker 2: but it seems like the chips have become a source
[5:50] Speaker 2: of inflation.
[5:52] Speaker 3: Yeah. Indeed, Bloomberg Economics just had a very large piece
[5:56] Speaker 3: just yesterday saying that they see that the base of
[6:00] Speaker 3: global interest rates has risen, partly because of the AIS
[6:03] Speaker 3: story and the demand for chips, and also because of
[6:06] Speaker 3: the inflationary impacts of the Iran War and even still
[6:09] Speaker 3: going back to the Russia invasion of Ukraine. So these
[6:14] Speaker 3: things have been building up over a number of years,
[6:17] Speaker 3: and what it's meant is that when interest rates dip,
[6:20] Speaker 3: they can't go back to that kind of zero bound
[6:22] Speaker 3: unless there's a real crisis that we saw like the
[6:24] Speaker 3: global financial crisis. But assuming that economies continue to grow
[6:29] Speaker 3: all the time, the base of inflation is rising and
[6:32] Speaker 3: that's going to keep interest rates globally relatively high. And
[6:36] Speaker 3: a big part of that is the spending on data
[6:38] Speaker 3: centers and the expectations going forward, and as you say,
[6:42] Speaker 3: increasing pricing on chips, which the demand is almost insatiable,
[6:46] Speaker 3: so end buyers seemingly have to pay whatever they have
[6:49] Speaker 3: to pay.
[6:50] Speaker 2: So if we look at global bond markets, then we're
[6:53] Speaker 2: not likely to see much lower yields for a while. Now.
[6:56] Speaker 2: I would imagine if the Fed, let's say, is going
[6:59] Speaker 2: to remain on holden, maybe even before the end of
[7:02] Speaker 2: the year, increase the FED funds raised by twenty five
[7:04] Speaker 2: basis points, it looks like these yields that we're seeing
[7:07] Speaker 2: today across the US Treasury curve probably will continue to
[7:11] Speaker 2: fluctuate around this very narrow range, wouldn't you say?
[7:15] Speaker 3: Yeah? Indeed, certainly, if you think of the short term
[7:18] Speaker 3: yields in particular, it is very very difficult under current
[7:22] Speaker 3: circumstances for the Fed to even consider lowering short term
[7:26] Speaker 3: interest rates, whether they hike rates in the near term
[7:31] Speaker 3: or further down the road, certainly that the push factor
[7:34] Speaker 3: is for them to put at some stage raise the
[7:36] Speaker 3: interest rates. So clearly investors are looking at this and saying, well,
[7:39] Speaker 3: there's almost no downside to short term interest rates in
[7:43] Speaker 3: the United States.
[7:43] Speaker 1: It's just a.
[7:44] Speaker 3: Question of how far are they going to arise. How
[7:47] Speaker 3: steep is the yield curve going to get over the
[7:49] Speaker 3: next six months to one year.
[7:50] Speaker 2: Where does that leave the Bank of Japan and the
[7:52] Speaker 2: Bank of Korea.
[7:54] Speaker 3: In a very tight spot, because, certainly in Japan's case,
[7:58] Speaker 3: they've made it fairly clear that they see the neutral
[8:00] Speaker 3: rate at two percent, but they're going to take their
[8:02] Speaker 3: time to get Their short term rates are only one
[8:04] Speaker 3: percent now, and at the speed they're going they won't
[8:08] Speaker 3: meet two percent short term rates probably until twenty twenty
[8:11] Speaker 3: eight somewhere like that career is in a similar situation
[8:15] Speaker 3: they meet this month. They may well increase interest rates,
[8:18] Speaker 3: but by a very small margin, and their absolute level
[8:20] Speaker 3: of rates is only just above two percent, so again
[8:23] Speaker 3: it's not close to the inflationary levels, and they're going
[8:25] Speaker 3: to be behind the curve for a long time. Both
[8:27] Speaker 3: countries are allowing the currency to take the strain here.
[8:30] Speaker 3: Both have got relatively weak currencies and they seem fairly
[8:33] Speaker 3: comfortable with that setup. So as long as US yields
[8:36] Speaker 3: stay higher, the Korea on one and the Japanese end
[8:39] Speaker 3: will be relatively weak, and that the strain will be
[8:42] Speaker 3: taken out that way. But on the flip side, it's
[8:45] Speaker 3: probably quite good for their economies and their exporters.
[8:48] Speaker 2: In terms of market action that we were seeing today.
[8:50] Speaker 2: I mentioned the fact that the cospey was down about
[8:54] Speaker 2: four percent at last glance. Would you think that it's
[8:58] Speaker 2: going to be a safe bet that we're going to
[8:59] Speaker 2: see a lot more of the same type of volatility
[9:02] Speaker 2: for a while longer until these markets begin to settle down.
[9:06] Speaker 3: Well, we're starting the earning season in the US pretty soon.
[9:09] Speaker 3: That will be followed by more earnings comeing out of Asia.
[9:12] Speaker 3: So investors will need reassurance that these amazing projections are
[9:17] Speaker 3: actually fulfillable, that companies really can make. If companies can
[9:21] Speaker 3: produce the numbers that's expected and with positive outlooks as well,
[9:25] Speaker 3: it won't be too long before people put that in
[9:28] Speaker 3: the past. But yes, in the short term, there's a
[9:30] Speaker 3: lot of uncertainty. People will be nervous because markets are
[9:33] Speaker 3: priced in a lot of good news. If you look
[9:36] Speaker 3: at I mean COSTP index rising at over one hundred
[9:38] Speaker 3: percent in the past year, that kind of number you
[9:41] Speaker 3: need to justify. There needs to be earnings that come
[9:44] Speaker 3: in line to say, yes, we really can fulfill these
[9:47] Speaker 3: kind of crazy expectations. That needs to happen in the
[9:51] Speaker 3: next couple of months. If it doesn't, we'll have to
[9:53] Speaker 3: get used to very big swings on a day to
[9:55] Speaker 3: day basis.
[9:57] Speaker 2: Mark, and thank you so much. It's always a pleasure, Bloomberg.
[10:00] Speaker 2: Just Mark Cranfield joining from Singapore here on the Daybreak
[10:03] Speaker 2: Asia podcast. Welcome back to the Daybreak Asia Podcast. I'm
[10:13] Speaker 2: Doug Krisner. We go to Japan next to where the
[10:16] Speaker 2: yen continues to trade near a forty year low against
[10:20] Speaker 2: the greenback. Even so, former Japanese Vice Finance Minister Tatsuo
[10:24] Speaker 2: Yamasaki says the yen should be as much as twenty
[10:27] Speaker 2: percent stronger. Yamasaki spoke exclusively to Bloomberg TV host Sherry
[10:32] Speaker 2: On and Cherry began the conversation by asking him about
[10:36] Speaker 2: a possible floor for the Japanese currency.
[10:39] Speaker 4: I don't know, but I think the kento yen extended it.
[10:44] Speaker 4: He is a substantially on about you, and I think
[10:48] Speaker 4: the debution it's reflecting the economic condaments. I think Mozang Hayazang.
[10:59] Speaker 4: Maybe it wasn't ten passed into attorney.
[11:01] Speaker 1: Wow, why don't investors and traders feel that way that
[11:05] Speaker 1: the yen is undervalued? Is this all about speculative possessioning.
[11:09] Speaker 1: Why are we continuing to see this pressure?
[11:13] Speaker 4: Yeah, I think that primary driver is speculative for it
[11:18] Speaker 4: and such speculators until recently argue that starting crude oil
[11:25] Speaker 4: future price is a man fact that to yen. But
[11:29] Speaker 4: now it's holding down right, So that's now they are
[11:33] Speaker 4: seeking Who has another three reasons? So first is interstrator
[11:40] Speaker 4: gap between the United States and Japan is widen in
[11:43] Speaker 4: our gain. And the second tracharity as a mestallation is
[11:49] Speaker 4: probably opposing the father polititate hikes. And the thirdlation is
[11:59] Speaker 4: now fifteen towards more expansion in physical policy.
[12:05] Speaker 1: Are those statements true? I mean, it's what the markets believe,
[12:10] Speaker 1: actually something that's happening on the ground.
[12:12] Speaker 4: In your opinion, I think that all of these three
[12:15] Speaker 4: sceniarii or abuse are mistaken because as far as UH
[12:22] Speaker 4: interest differentials, yes, bog it's the next two move, it's
[12:27] Speaker 4: definitely ready to hike, maybe followed by a several late
[12:32] Speaker 4: to hikes. While if well be next two move, it's
[12:36] Speaker 4: still uncertain creasy is ready to hike or lad to cut.
[12:41] Speaker 4: Even if it is late to hike. I think it
[12:44] Speaker 4: is very likely just one time event.
[12:48] Speaker 1: Despite fundamentals, markets and really market moves are about psychology, right,
[12:53] Speaker 1: So if we continue to have this belief in the
[12:56] Speaker 1: markets at the end will continue to weaken from here
[13:00] Speaker 1: does any sort of effects intervention by Japanese authorities help?
[13:03] Speaker 4: So what it actually was an intervention exactor to make
[13:09] Speaker 4: the market or conveny so that the current to direction
[13:13] Speaker 4: is wrong. Current to direction is for deviating from the
[13:19] Speaker 4: economic fundamentals.
[13:20] Speaker 1: And it's not about a level. Because last time we
[13:22] Speaker 1: had more than seventy billion dollars or so used by
[13:25] Speaker 1: Japanese authorities, we didn't see the Japanese y and break
[13:29] Speaker 1: one fifty five. That was a very difficult line in
[13:32] Speaker 1: the sand. It seems where we wouldn't strengthen further. So
[13:35] Speaker 1: how much is it about the pace of the movement
[13:37] Speaker 1: of the Japanese yen, not necessarily about a threshold.
[13:41] Speaker 4: That is a very difficult question. But the company to
[13:44] Speaker 4: the prettyvious intependi like in the Yabu twenty twenty four
[13:50] Speaker 4: things that japan us in the gap has sutitude now
[13:57] Speaker 4: but to still yen continue to weaken. So the intervention
[14:02] Speaker 4: was very effective, but now people are not yet convenienced
[14:05] Speaker 4: that economic fundamentals is different from the current levels.
[14:11] Speaker 2: So that's why to make people who believe.
[14:14] Speaker 4: With that economic fundamentals or tacit administlation the policy even
[14:18] Speaker 4: more how it's called the uh proving the so long
[14:26] Speaker 4: I am.
[14:27] Speaker 1: Will Japan need the help again from the United States
[14:30] Speaker 1: in the form of FED rate checks? And would that help?
[14:35] Speaker 3: I think that.
[14:37] Speaker 1: Never be?
[14:38] Speaker 4: Who have the US authorities so well understood and so
[14:43] Speaker 4: well accept to Japanese current intervention activities, so they are
[14:50] Speaker 4: always ready to support us. But of course it is
[14:56] Speaker 4: a different from if they make the intervention by their
[14:59] Speaker 4: own account because what them to make the intervention means
[15:04] Speaker 4: they devalue their own currencies. It is they have been
[15:08] Speaker 4: criticized to as a counter live China. So it's very difficult.
[15:12] Speaker 1: But even if there were to support Japan for how long,
[15:15] Speaker 1: especially since Japanese authorities also potentially need to sell more
[15:19] Speaker 1: treasuries right, which would actually push up US fields which
[15:23] Speaker 1: the US probably doesn't want to see.
[15:26] Speaker 4: But do you know that the current or revel the
[15:28] Speaker 4: Japanese fording this up sees was a one point three data,
[15:32] Speaker 4: which is two hundred exactly is not enough. So also
[15:37] Speaker 4: impactings ustorially bond the market. Japanese authors can make the
[15:46] Speaker 4: intervention that.
[15:47] Speaker 2: Was Tattoo Yamasaki, former Japanese Vice Finance Minister, speaking exclusively
[15:52] Speaker 2: to Bloomberg TV host Sherry On bringing you their conversation
[15:56] Speaker 2: here on the day Breakasion podcast. Thanks for listening to
[16:01] Speaker 2: today's episode of the Bloomberg Daybreak Asia Edition podcast. Each weekday,
[16:06] Speaker 2: we look at the story shaping markets, finance, and geopolitics
[16:10] Speaker 2: in the Asia Pacific. You can find us on Apple, Spotify,
[16:13] Speaker 2: the Bloomberg Podcast YouTube channel, or anywhere else you listen.
[16:17] Speaker 2: Join us again tomorrow for insight on the market moves
[16:20] Speaker 2: from Hong Kong to Singapore and Australia. I'm Doug Prisoner
[16:25] Speaker 2: and this is Bloomberg

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