This is "The Asia Trade." I'm Shery Ahn.
Top stories this hour: a rough open ahead for Asia after Wall Street falls to close out the month. Micron's upbeat forecast for the current quarter, fueled by the AI buildout, but warns profit margins will narrow.
And OpenAI accuses China's rival Moonshot of extracting data from its systems.
Take a look at the setup. As troubling as it is, retreating across Asia, it's going to be a challenging start as we get into the start of trading this Thursday session across this part of the world. The U.S. close did not help much at all.
The S&P 500 falling at the end of the worst month since June, fueled by slower-than-anticipated inflation data, with money markets recalibrating from the Fed rate hike in October — no less than a 40% chance.
PCE numbers, of course, rising by 0.2% in August. Consumer spending, on top of that, rising at the fastest pace in over a year. The economy clearly still resilient despite these inflation troubles.
A little bit of weakness as we head into the open, particularly when it comes to the tech-heavy Kospi. More moderated when it comes to Japan stocks. This is not helping the energy component of these worries.
Oil holding gains as we weigh that prospect of recovery around Middle East flows.
Brent crude up 2%. We are seeing flows from the Middle East close to pre-war levels, but supplies, of course, have not been consistent. The dollar index also seeing a little bit of a pullback. Mark Cranfield joins us for more on the markets. Take us through the takeaway from markets when it comes to the data we had out overnight.
The PCE data was reassuring in the sense that it was no worse than anybody expected. It does not give the Fed any urgency to get on with the interest rate hikes, and that's why traders are dialing back October, expecting a rate hike there.
A coin toss for that. December still looks like it. We had comments this morning with a couple of rate hikes on his pad. The balance of the Fed moving at a relatively constrained pace.
More significantly, they are interested in what Micron Technology did. The stock was volatile in after-hours trading but came back to the closing levels — slightly firmer in the trading. People seem to have decided the outlook for AI demand is more important than the fact that margins may narrow slightly. That should give a decent start to the tech-focused stocks we have in Japan, Korea and Taiwan.
A decent start today. It is the beginning of the final quarter of the year. Traditionally it is a good period for equities — fresh money to put to work. Probably a decent start in Asia, even with China and Hong Kong closed.
Do we continue to worry about the yield surge with oil not really coming down at this point?
Definitely. That will not go away, especially for the long end of the curve. Investors are skittish about what's happening with long-term Treasuries.
The 10 and 30-year auctions are coming up next week. The 30 will be a huge test in this environment. There's not much appetite for people to go into bonds even though yields are well above 5.5% in the 30-year. There's concern the factors moving it will not change in the near term.
Crude oil prices are higher. The U.S. fiscal situation is not improving. The Fed is raising interest rates but not fast enough to really slam down on inflation. They are attacking it at a gradual pace, and that is not good enough for the long end of the curve. There is concern international investors are not putting much money into the 30-year when there is an alternative.
Yields may be lower in Japan, but they are the highest in 30 years, and it is beginning to attract money back into Japan, particularly with the yen being stable. There are alternatives to Treasuries, and that is a major problem unless the U.S. jumps in and starts improving the fiscal situation. The long end will stay under pressure. The main concern here is how quickly yields move.
If we get a sudden move to 6%, that will be dampening across markets. If it is gradual, then equities can handle it.
What are we watching in terms of the FX trajectory? Dollar strength or recovery here to stay?
Not necessarily. You are beginning to see some other currencies attract decent flows. It's a mixed picture. You've got a currency like the yuan very strong, very clear backing from Chinese authorities. They want to keep the momentum to improve. They expect it to get even stronger as the year progresses.
The yen's beginning to turn. The positioning is much more neutral. It is no longer a guaranteed short bet. There was a time where people blindly shorted the yen against almost anything — that's not the case. It is turning against the euro, the Aussie, the Swiss franc and the Canadian dollar. All are very clear.
Even the U.S. dollar is beginning to see cracks. Very significant. It's a huge currency within the trading world. Only the euro is even more important. That's more neutral at the moment.
With the Chinese and Japanese currencies beginning to turn, that tells you the currency world is shifting. It is no longer the case that the U.S. dollar is a clear case of going up — it's beginning to crack. The question is how far it will go down.
Take a look at the after-hours trading on Micron. We are not seeing a lot of boom, and the stock is under pressure at the moment. We have seen those big beats across the board in the results. The stock up more than 270% already this year — best-performing in the Philadelphia Semiconductor Index. For more, let's bring in analyst Jake Silverman. The profit guidance was up, fourth-quarter sales went up, profit estimates. Is this the sell-the-news situation we tend to see in these very high-stakes, high-expectations stocks?
I think it is tough to get investors excited about modest beats and raises. Typically, what investors have looked for in the past is for memory companies like Micron and peers to post fast, high-magnitude beats and raises as pricing continues to grow during up cycles and supply and demand continues to tighten.
I think what's going on now is these long-term agreements that are take-or-pay. I think it leaves less room for continued pricing growth. I also think it is much healthier for the industry — not only for Micron but for customers as well — because as you start to look at gross margins in the high 80s, mid-to-high 80s, it starts to become a situation where memory becomes a disproportionate level of the materials cost for not only AI servers, for smartphones, PCs, any electronic product. You name it.
The memory cycle sort of becoming less cyclical, I guess. In that regard, what are we seeing in terms of the results? Tell us about the durability of this AI memory demand at this point.
Continuing on the comment I made before, they have these long-term agreements now with 26 customers, up from 16 last quarter, that extend through 2030, 2031 in some cases. Auto customers are a three-year average, a smaller percentage of overall revenue. That gives Micron a lot of visibility in terms of the volume and level of revenue that they are likely to generate over the period of these contracts.
Basically what they have is these deposits are financial instruments, like deposits in some cases, that total up to $30 billion this past quarter. So investors are not really focused on the down cycle as much, but it potentially softens the blow if we start to see a decline in AI capex over the next several years.
It is hard to determine if it is cyclical anymore. I do think if you look at high-bandwidth memory, HBM, I don't think those products are necessarily what you would consider a standard commodity like DRAM. I don't know that we will see the same level of price declines or boom-and-bust type cycles we have seen with this type of product, but I think you will see potentially HBM margins change based on how standard DRAM pricing changes. Overall, the products are more important in nature to things like AI servers.
Our semiconductor analyst Jake Silverman joining us with the latest on Micron. We will have more reaction to the results later on "The Asia Trade."
Discussing the effect in chips and Asia. First, the $200 billion investment plans for U.S. energy projects in Korea. Details next. This is Bloomberg.
Take a look at how commodities are trading at the moment. We are seeing some early losses when it comes to WTI early in the Asian session, trading at around the $90 a barrel level. Even Brent came below $90 a barrel. We are seeing Saudi flows doing much of the work. The East-West pipeline running on half capacity, roughly.
The oil curbs really easing across the board. We see the supplies dwindle at very low levels. U.S. gasoline supplies hitting a 12-year low. When it comes to energy, President Trump now unveiling plans for South Korea to invest $200 billion in major U.S. energy projects, representing the first tranche of Seoul's $350 billion investment pledge made as part of last year's trade deal.
Today we are thrilled to announce one of the largest energy infrastructure investments in American history, thanks to the agreement secured with the Republic of Korea. They will invest up to $200 billion — the Korean government — to build a six-gigawatt power generation facility in Texas. About the biggest you will see. Eight new large-scale power plants, and at long last, the Alaska liquefied natural gas pipeline.
For more, our Bloomberg senior writer Derek Wallbank joins us. This is a very wide-ranging deal, including nuclear, LNG. What are your standout projects at this point?
You've got to read this in a couple of different ways. One is, it is a wide-ranging deal with a lot of different energy things in the mix. It is also the first tranche of what could be more. This is valued up to $200 billion. We are expecting up to $350 billion under the terms of the deal, according to the president. So, more to come on that.
I think the showpiece here was intended to be Alaska LNG. It's an interesting thing to showcase right now, because even though you have a certain amount of lead time to get these things done, one of the things that is very quickly coming on the president's calendar is the November midterm elections. And Alaska is a state Donald Trump won three times, but where there is a critical Senate race we are paying a lot of attention to that could determine control of the Senate between incumbent Dan Sullivan, who Trump praised repeatedly at this event, and former Democratic Representative Mary Peltola, who leads him in a lot of polls.
You are looking at an investment here, but keep in mind we are talking about an election that is about to be decided on economic matters. Some of these projects are going to some of these states that are heavily contested in the midterm elections coming up in November.
And how much does this commitment also connect to what is happening broadly in the U.S.? Not just the economic side and the midterms, but also the enormous AI buildout, the infrastructure and energy needed for these projects?
There's a clear connection between those things, right? If you're sort of looking at the U.S. and AI, there's been a question about regulation, but there's also been a big question about infrastructure behind it. And indeed, the infrastructure has maybe been one of the parts that's been more politically sensitive, as we have seen pushback throughout a lot of states and localities to the data center buildouts, including some places where they have been full-on stopped and halted, literally legislatively or regulatorily.
Getting the power to make sure that all this works is going to be a critical thing, and anything that pushes forward on that goes hand-in-hand with President Trump's goals, which is the U.S. continue on an accelerationist path towards AI. He's been clear here he does not want to slow down on the regulation side or the infrastructure side, so all of this is going together.
As well as, candidly, the White House has been talking up this all-of-the-above energy mix that they want to do. And there is no secret right now that the cost to fill up your truck or your car or tractor or whatever is a lot higher than it was before the U.S. began the war with Iran.
So the cost of energy, full stop, if I put energy all together in one basket, is one of the key issues that we are seeing in the U.S. in terms of affordability. Politically, it is an issue. If you are the president right now, this is something that ticks a lot of your boxes in an area he can draw a contrast with Democrats, who have historically not been as friendly to some energy projects. Although I would note that Peltola, the Democratic candidate in Alaska, has been supportive of a lot of this as well.
Our Bloomberg senior writer Derek Wallbank there. South Korea's investment pledge puts Alaska and LNG back in focus.
Friday, we speak with Yukio Kani. The Japanese power giant is one of the world's largest gas buyers and has signed a deal for a million tons of Alaskan LNG a year. We will ask what that means for the project's path forward.
Let's take a look at the top-level headlines this hour. Authorities in Saudi Arabia are questioning a commercial pilot that reportedly stabbed his colleague. Passengers and crew stormed the cockpit of the flight that was on its way to Tel Aviv after a plunge of more than 14,000 feet in less than 30 seconds. They were able to subdue the attacker, with another pilot who was on board as a passenger able to land the Boeing 737 in Saudi Arabia.
I salute these heroes who showed exceptional resourcefulness and courage. They saved many lives and prevented a major disaster.
President Trump says the former Fed chairman Jerome Powell should resign from the central bank's board of governors over the mismanaged renovation of its headquarters. A report from the Fed's internal watchdog said mishaps caused the project to balloon to $2.4 billion but found no evidence of criminal wrongdoing.
It's horrible what they've done. He's incompetent, and the man that is incompetent should not be sitting on the Federal Reserve Board. I'm sure Todd and everybody will be looking, because the report was a pretty bad report. The report said they did a bad job — they did not know what they were doing.
More ahead here on "The Asia Trade." This is Bloomberg.
OpenAI accuses Moonshot of being responsible for a wide-scale effort to extract data from its GPT systems that could be used to reproduce the reasoning and capabilities of the company's most advanced models. Let's bring in our China correspondent Minmin Low, joining us in Hong Kong. What are these accusations?
OpenAI released a long post saying that they have found as many as 16,000 attempts in late July through 4,000 accounts or users by individuals that could be tied to Moonshot AI, attempting to uncover the way that OpenAI's models are reasoning through problems.
What OpenAI has done in a bid to fight this is they had already partially hidden the reasoning of its models, where it offers answers instead of explanations to user queries. But Moonshot was able to get around this by copying those encrypted reasonings and asking a model in a different conversation to transcribe them.
If it sounds similar, it is because we have heard similar accusations from other companies, right? Anthropic recently accused Moonshot AI of passing those answers off as their own. This just adds to the pile of accusations we have heard from Silicon Valley companies against their Chinese counterpart.
Moonshot AI has not provided any comments in response to the accusation. The Chinese government rejected the accusations, saying they will take countermeasures if the U.S. were to impose penalties. And that is the crux of the matter here. If the U.S. does impose penalties on the Chinese AI models, that could greatly impact the ability of the models to scale globally and encourage model adoption overseas.
This is certainly something we will continue to watch, especially in regard to how it influences U.S.-China relations.
We are also watching for the latest developments when it comes to DeepSeek. Publicly, the software is created with Huawei to program AI chips. Is this a threat to Nvidia?
In some ways, yes. But also no, because Nvidia's ecosystem is already not being used much in China because of the export bans. This is a call for AI companies to work on import substitution.
So DeepSeek, in collaboration with Huawei, has come up with their own AI software toolkit that could rival — or at least provide an alternative to — Nvidia's CUDA ecosystem, seen as the global industry benchmark right now. That is a software system that can allow users to program AI chips, and DeepSeek tells us that its programming language is straightforward and simpler, that will give developers more access and more efficiency.
This is some of the latest elements we are seeing in the Chinese AI ecosystem.
Bloomberg's China correspondent Minmin Low there.
And Hong Kong developer New World says that it has the financial support of the Cheng family, even after massive write-downs on the Hong Kong Airport complex led to a $3.6 billion loss for the fiscal year. The pledge of support confirms investor expectations the family behind New World would back the firm.
Paramount-Skydance says the former Motel chief will become co-CEO after he completes his acquisition of Warner Bros. Now saying they expect a merger to close on October 6 after approval by a California federal judge. A source also says Paramount sold $30 billion of U.S. dollar investment-grade bonds, securing the biggest piece of its financing for the buyout. This is Bloomberg.
They focus very much on Micron as we digest those results. After-hours trading pretty volatile because it was first pressured by the fact that investors were watching the narrowing of margins in their results, but we are still talking about beats across the board. Fourth-quarter sales guidance was up, and revenue guidance about 8% above consensus or so.
Still, this stock has rallied so much — more than 270% year-to-date, the best performer in the Philadelphia Semiconductor Index, which will really move its peers here across Asia, right? Watch out for Samsung, SK Hynix, the memory cycle ongoing right now. But a lot of concern also on the fact that Wall Street fell overnight. S&P 500, worst month since June, so the market breadth is very much narrowing.
We could get uplift in terms of how Asian investors interpret the news flow out of Micron, looking potentially past profit warnings and looking to focus on that upbeat forecast that has been fueled by the ongoing AI frenzy. So that is how we see Asian traders preferring to read the scenario. We could see a good start to the fourth quarter, certainly better than the month we had before.
At the same time, a lot of the same themes that plagued investor sentiment in the previous month are still ongoing. We are still seeing the concern over the ongoing war in the Middle East. New York crude down by about 0.4%. There is evidence to suggest that the restoration of flows is starting to normalize, but the consistency and reliability of that is certainly one to watch out for as well.
Also watching the pressure on yields as we have this back-and-forth in terms of Fed expectations. We had a pretty big reaction in response to the PCE numbers, the spending numbers in particular. S&P futures at the moment, though, 0.3% higher.
Let's get more in terms of Fed and inflation expectations. As you point out, there was a reaction, a bit of a reversal. We have seen some of these investment houses change their outlook. If you look at the data overnight, does it meaningfully shift expectations for you from the Fed?
I don't think it necessarily changes too much in our view. We are still watching data, still seeing how the Fed is going to react. We still have time for the meeting and more data prints to come up, including payrolls on Friday.
One thing about the PCE report: there were some methodology changes, which did bring down some of the strength that would have been in PCE. So one of these things that brings down the core PCE would be the change to portfolio management fees. That is a measure that is excluded from the market-based measure, something the Fed has been talking about and looking at very frequently.
That came in at a very strong 0.29, compared to the weaker core PCE print. Obviously, we are looking at that, and that keeps us thinking that October is still in the game.
I still think that regardless, the Fed has shifted towards hiking. So if it is October or December, it seems like they have another hike in them in 2026. But as of now, I don't think you can discount October entirely, which is why markets are still pricing in about 50% odds of an October hike at this point.
We are coming off a month where we see various yields hitting multi-decade highs. Does that theme continue? And I guess, at what point do you see the opportunity now for Treasuries given where yields are sitting?
They certainly look attractive. The question is when. The question is: does it keep moving higher? At what point do investors come in and think this level is attractive enough to take the risk?
I think investors fear at this point maybe we go up to 5.5%. The question is: when does it stop? One of the uncertainties that remains is the pricing of oil. That's driven a lot by the war in Iran, and it is uncertain if that will remain elevated, how that will impact rates, which have been correlated by moves in oil.
We expect a weaker payroll print on Friday, so that could provide investors some stability in terms of 10-year rates settling somewhere around the 5.25% mark, and that could be enough for investors to find this a good starting place to go long.
Overheating when it comes to markets is one thing, particularly equities fairly sanguine when it comes to Treasury yields. But there are underlying concerns about the U.S. economy, or does the stability of the data fend off some of the broader structural concerns for you?
Right now, a lot of the move today that you saw was driven by higher growth expectations. Nominal GDP higher. I think that a lot of those are contributing to higher yields, but the longer the yields remain high, it will also weigh on interest expenses. That is becoming more and more of a large portion of our budget.
If we remain at these high levels, we will be having to issue more debt to support paying off our older debt. So I think that will start becoming more of a concern if we keep having yields remain high for the remainder. But I think that right now, that's not really the focus. It seems to be more on Fed expectations, and growth expectations are driving higher yields, and fiscal concerns will probably take a backseat until we need to address them.
What is the path forward when it comes to the U.S. dollar? That dollar-debasement trade seems to have faded, and I wonder if that will be something that returns.
I think something that's interesting in the recent moves we have seen is the dollar has still remained very correlated in terms of moves with big day-to-day data such as CPI. We are seeing yields sell off dramatically, and the dollar has not really followed that.
The driver of long-end rates seems to be different than what we see in the dollar, which seems to be driven by what we normally see, which is U.S. data, Fed expectations. Whereas the long-end rates have gone off on their own and are driven by different factors such as supply, fiscal competition in terms of corporate debt. There's a lot of factors driving rates right now, whereas the dollar seems to be more of a clean trade in terms of U.S. data.
Obviously, there is geopolitical risk at play, but as we get closer to post-midterms, do you think there is some volatility that we are not appreciating?
I think that midterms do matter going forward, but I don't think it will change too much in terms of Fed trajectory and rates in the near term. If we look historically going into elections, it does not really change Fed decisions statistically and significantly compared with non-election years. I don't think it will really change Fed policy and Fed expectations going into elections.
That has been the largest driver of rates at this point. 10-year rates, for example, since March have been almost 70% driven by Fed expectations. For that reason, we do not think impending elections will be too large of an impact as of now. Obviously, that can change as time goes on, but as of now, we do not expect that to be the largest driver as we focus more on what the Fed is going to do and oil prices and other factors that are more important right now for rates markets.
Great to have you with us. Later on, we will be hearing from the Minneapolis Fed president. Neel Kashkari will talk about the outlook for inflation, rates and U.S. growth as policymakers weigh lingering price pressures on these ongoing geopolitical risks. More ahead. This is Bloomberg.
Google has unveiled its latest flagship AI model, but insiders have told Bloomberg that some employees are questioning its performance on real-world coding tasks. AI and venture capital editor Samantha Oldman joins us now. Is this why we are seeing a limited rollout so far? What has been the response?
The response has been a little mixed. Maybe a matter of an hour or even before that, before Google announced the launch of Argon, my colleagues had published a report basically illuminating how inside Google there had been some skepticism about how well this model actually performs.
And I think the questions the company has been grappling with internally reflect an even bigger one, which is: how prepared is Google to compete with other AI makers like OpenAI or Anthropic? Google employees told Julia Devi that they were skeptical about the model because they said it can struggle at certain tasks, particularly when it comes to coding, which is a very important task for AI models.
Google, for its part, disagreed and pointed out how Argon performed well on the benchmarks the industry uses to test models. They said it even did better than certain models at certain tasks.
You talked about the competition right now, fears among AI models. How does Google and Argon fit into all of this?
Google kind of needs this model to do well. It's true Google is a well-established tech giant, but it has been dealing with challenges, and you might even say upheaval, when it comes to its AI efforts. It is in some ways aspiring to keep up with new giants. The company had several star AI researchers leave this summer. I think they also scrapped plans to release an earlier version of Gemini called Gemini 3.5 Pro.
So in some ways, it struggles to keep up, and this is happening as concerns mount about the safety risks AI could pose. You have Google sending leaders to Washington to meet with President Trump to discuss how to safely develop this technology. There's a lot of challenges on multiple fronts.
Right now, Argon's launch is pretty limited.
They said that they are rolling it out with the U.S. government and trusted cyber defenders through its Fairwind program. Going forward, as the launch rolls out to more users more broadly, the question is how it actually performs in the real world when being used by customers. The real test will be: is this product embraced and used?
CoreWeave says its products remain largely sold out, underscoring the intense demand for AI infrastructure. The CEO told us more about the company's data center buildout amid mounting pushback against new developments in some parts of the U.S.
We brought on 500 MW worth of active power into our infrastructure. Part of that comes from our approach to how we go about building data centers. You work with communities to make sure their voices are heard. It also is recognition that not every community will have a data center, and that we don't have to force the issue.
Fundamentally, moratoriums do not alter the demand for compute. They simply move where the compute will be built. We are not trying to force this on anybody. We are trying to work with communities where we build our infrastructure, and we think we do a good job, and we get a lot of credit from the communities for the work we do there.
In your risk factors in your regulatory filings, you talk about the fact that to meet that demand, you might have to talk about different solutions. I sat down with some of the industry players.
We monitor the full spectrum of accelerators that are available that can drive artificial intelligence companies. Our job is to deliver the best solution in the world on the best technology in the world on the best software in the world. Right now, we do not have enough infrastructure to meet the needs of our clients. We are overwhelmed. We are largely sold out.
Over time, for several years, it is really a function of being the best at the job that we do, which is deliver the best solution in market, which is the Nvidia solution from the accelerated perspective, to our clients. We do a great job of it. We have 5,000 people at the conference. The conference is sold out. It is people that want to get on our cloud and build with us on our infrastructure, which is grounded in the Nvidia GPU accelerator.
We will keep an eye on chip stocks when markets open in Korea and Japan shortly, as investors get that reaction to Micron's forecast of another strong quarter as AI demand continues to surge. The memory chip maker expecting an even stronger 2027, although it did warn that profit margins will narrow slightly in the current quarter.
Inflation data was benign. We spoke about Micron, already pretty strong, but that bullishness being constrained by high yields. Anthony Stephens joins us now. In a lot of ways, it was a forgettable month, but we started a new month. What do you make of the listlessness in the after-hours performance of Micron, and how that plays through to somewhere like Korea?
It is interesting how Micron has not done much in the aftermarket despite a fabulous quarter. The read-through to tech should be simple, but you are seeing mixed messaging from the Korean premarket session.
One of the reasons is this notion of a profit bubble in the semiconductor space. So, how durable are these fantastic earnings going to be looking forward? Some of that is addressed in the margin progression Micron is seeing. Also, if there is a profit bubble, it further sharpens the focus on shareholder return in Korea. Recently, there has been a reward around that front. The upside case in Korea is getting a lot less optimistic, even though the spot price on the Kospi has recovered. So that is an interesting divergence.
One of the reasons is a lagging shareholder return program compared to the profitability that these companies enjoy. So that dynamic is spilling through from Micron. If we have a profit bubble in the semiconductor space, it becomes even more important that cash is returned to shareholders or there is more shareholder return initiative. So let's watch that space. We see hedge funds complaining on that front and saying the Korean discount may be warranted.
Japan has been playing catch-up to Taiwan and Korea. What do we see there?
That has been an interesting combination of tech and financials. Japanese financials like the unicorn story in the inflation recovery. There was quite a strong outperformance by Japan yesterday versus the rest of the region. Early leads are for more of the same. It will be interesting to see if SoftBank recovers given these Micron earnings.
The rest of Japan is really starting to look up. There's about a 30% gap between Korea and Japan, and it looks like the macro favors a closing of that gap. We continue to see hedge funds file into Japan, and the net income is more positive in terms of chasing upside in Japan than it is in Korea for the moment.
Staying with Japan, we are getting the latest business sentiment survey for the third quarter. For large manufacturers, coming in at 24 and improving from the previous 22 level. A little bit below economist expectations, but remember already in the second quarter we had seen the highest number for large manufacturers since 2018, perhaps not surprising given the weakness of the Japanese yen holding at that 157 level against the greenback, helping some of these manufacturers.
The large non-manufacturer index coming in at 35, decelerating a bit, still in positive territory, slightly below expectations. Capex estimates softening a little as well, coming in at 11.3%. But suffice it to say that despite the fact that we have ongoing wars, the Middle East crisis affecting oil prices, we continue to see strong numbers out of the business community here in Japan.
It has avoided severe supply chain disruptions so far, despite the concerns that I mentioned around the Middle East. We are also seeing the summary of opinions from the Bank of Japan from their September policy meeting. One member announcing that they need to watch the impact on currencies on the price trend. We will continue to watch the BOJ trajectory. This is Bloomberg.
This is how we are setting up for market opens across Japan, South Korea and Australia. Large manufacturers coming in at 24, improving from the previous quarter, at a time when we are also following the latest summary of opinions from the BOJ meeting, saying that the price trend is expected to hit 2% soon. One member says it is desirable to bring up the rate early toward the goal.
We are also watching live footage of the flag-raising ceremony in Hong Kong being led by Chief Executive John Lee. We will have more at the top of the hour. The market opens in Sydney, Seoul and Tokyo are next. This is Bloomberg.
This is "The Asia Trade." We are counting down to Asia's major market opens.
You are watching live pictures from Hong Kong as it observes National Day, marking the 77th anniversary of the founding of the People's Republic of China. The chief executive as well as senior government officials are attending a ceremony. We will see other festivities just outside that convention and exhibition center. There will be performances as well as children's choir performances, as well as that National Day reception in the convention center later. Shery:
This comes at a meaningful time for China as they just released their biggest push since September 2024. The Chinese stock markets, tech, Chinese stocks being pressured recently. Take a look at how we are opening in the markets as we see a bit of upside for the Nikkei, and this, of course, after coming off the back of Micron results in the U.S. That was a little tricky because we saw some downside and then some upside. Beats across the board, but at the same time perhaps narrowing margins giving a little bit of anxiety to investors. We have a lot to contend with, including the fact that we got the survey from the BoJ. Business sentiment still resilient in Japan. We're talking about large manufacturers. Already in the second quarter there was the highest level since 2018.
The large manufacturers index improving at the moment, perhaps not surprising given the Japanese yen weakening a little bit right now, 157 against the U.S. dollar. This coming after we got the BoJ summary of opinions from their July meeting. Financial conditions remain accommodative, so we saw a little bit of downside on the Japanese yen. Keep an eye on JGBs because we have a two-year auction as well. We had a pretty solid auction showing that investors might be attracted to those yields. Look at how South Korea is opening.
We have seen a bit of downside pressure for South Korea. If you can change the board, you can see what is happening, and you can see foreign selling has continued to affect this market, and the Kospi is losing 0.7%. But it's really about the semiconductor space, that trade, and we are getting more information on where South Korea stands with export numbers breaking right now, rising for the month of September, 83.5% year on year. Those numbers are huge, right? James, surpassing expectations at this point. Imports also rising 26% year on year. You can see right now for today, a little bit of downside on the semiconductor side of things. We are also digesting Korea's $200 billion commitment to U.S. energy projects. So plenty to move markets today. Haidi:
