Japan's Takaichi Formally Elected PM, Stocks Get Tech Boost

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Welcome to the Daybreak Asia podcast. I'm Derek Krisner. We begin today in Japan, where sana A Takaichi was reappointed as Prime Minister following her electoral win in the recent snap election. This will allow Takeiichi to focus on passing the annual budget and implementing a trade deal with President Trump. Here is Bloomberg's Brian Fowler.

So we heard from her last night and we'll get her big policy speech tomorrow in which she'll lay out a lot of what her agenda is going to be. We expect her to talk about this idea of cutting the sales tax on food purchases for two years. She's already said that she wants to put that on a priority list. But she'll also talk about the deal that's been done. I think that gives her a lot of

So I think she'll.

Tout that and give us some, you know, some more information about that.

That is Bloomberg's Brian Fowler. The Japanese company Kieran is perhaps best known for its beer, and these days the company is being confronted with a long term decline in alcohol consumption worldwide. Health concerns are just one factor. Many liquor companies are being forced to diversify, and Kieran is no exception. It's making a full scale push into health sciences to help drive growth. And that's where we begin our conversation with Toro Yoshi Mura, senior executive officer at Kieran.

So tell us a little bit about how significant your division is the rest of the kidding group.

Okay, thank you. Kirian has the long expan.

It from it's a founding to be a brewing business in nineteenth century and then into the food domain and then we enter to the pharmaceutical sector back in nineteen eighties. And uh, health science business is kind of another pillar which bridges between food and the medicine and which we are confident to nurture. You know, the global is solving the people's health problem like immunity, anti aging and gut

Is.

So this seems like a very natural progression for Kating at this point. You also purchase Fango brand in China. Where are the bright spots around the world, because even the Chinese market is such a tricky one, isn't it?

Yeah, it is uh.

You know, the China involves a lot of you know, the uncertainties like regularly and microeconomic and also a geoparticle

So you're planning to expand in China. What about the United States? Because you now have this US Japan trade deal, the mood seems very favorable. Is that one market that you could target?

Well, actually, our primary target right now is Asia Pacific. Uh, you know, because we're going to be at one of the largest and the most stressed health sales companies in Asia Pacific.

So probably the first off.

Our priority will be on the southeast is and the China. However, uh, you know, because of the scale of the awareness market. Uh, the US is really also very important for US and uh uh you know, but the unit US has you know, kind of higher barrier entry and uh here has competition there, so we really need to establish our serves as kind of a credity credit the based position in the US. Uh, probably with a science at its core.

How else you expecting to perhaps establish that as you perhaps look to the US as a key market. Torosian, Oh, the US market are you looking at in terms of a science based approach when you look at the US as a place of opportunity? What some of the other metrics and A just might be as you explore the US?

I see, thank you.

And you know, as I mentioned, you know, creditive based approach means that we leverage our expertise in UH, uh R and D based on the fermentation about technology, and I strongly believe that we can leverage our approprietary ingredients. Killing has been developing something like we call the ELC plasma plasma lactic acid bacterium and also a citical in UH is A and LC plasma is actually UH the the ingredients up which activates called the PDC the command

Space you mentioned earlier. Also geopolitical tensions really not helping.

When it comes to China.

Are you seeing any change in the business because of the US, because of the Japan China attentions?

Well, you know for both black Moss uh and fun course, it's too important uh you know uh uh to nurture.

Or expand our business in China.

So uh you know, uh, and the people places their value in the science and the product product quality, product quality, so that's where we can you know, leverage our expertise us hearing and where do you produce?

I'm sorry, because the end is also very vulnerable, right, So do you have manufacturing facilities in China or here in Japanelly?

There?

You know, all all products are actually produced either in Japan or the Australia, so that we are doing the mainly through our e commas, including the crossboorder economas. So now this is the time for us to really consider to establish uh their domestic.

Or local sales channels there.

And also you know, sometimes we need to consider their local production. However, because of the size at this moment, it's too early to think about it. So uh, this kind of diplomatic tension is really uh you know uh uh you know, the area we need to uh got carefully watch and I strongly hope you know this kind of direct attention will be eased by the administration. Uh, especially for the assound trade marketing environment.

Do you see that already happening with the Taga administration now that she has a strong romandate, how do you assess her business support?

We are not sure yet, you know, from the deportion of the government and uh probably just uh a new uh. You know, the administration has started, so we we will see what's going to happen. But in the meantime, we really need to select our winnable area carefully for Kring and also Black manson funcles. Uh then probably operate with and the discipline.

It's a strategy m and as because it seems you purchase fan call blackmore so your expansion of receipts. Will that be inorganic through purchases?

Well, actually, uh, we.

Don't have you know, any specific transaction I can discuss here in public, but you know, because.

They're some under consideration.

Yes, and because we are acquired the blackness of Hong Kong, our primary focus is to grow organically to leverage the existing on the business units. However that we really would like to explore the opportunity if it helps to grow or enhance the health science business. Uh from the view of the brands to market and the any capability were lack.

Of so uh.

And also you know, to the point that I mentioned earlier, Uh, you know, we are looking at our focusing in the Asia Pacific.

However you know probably will.

Would uh look at outside of Asia PACIFICA as well. The one example in the United States because it is the biggest you know, wellness market in the world.

Given the high entry barrier that you mentioned earlier, and M and A would potentially make sense if they already had the channels.

Established it it would be but still again, you know, our primary focus in the growth and CIBA and in the meantime we have long list short lists, so that will we'll keep looking at it.

What about Southeast Asia because it's such an important market as well or is it for killing I guess is my question. Because you have big markets like China, you have Australia, but what about the smaller countries in Southeast.

Well, Southeast Southeast Asia is a really important for us because uh, this area is really growing almost a double digit and one of the fast the world's fastest growing uh you know, probably the space for our health related hispanic over the next ten to twenty years. However, the consulman needs a really differ you know, among these markets, so we really need need the market specific approach.

How are they different, they are different from each.

Other, regulations and also we need to consider the religious part as well, and also some in some countries for skin, some countries for the gut system, some country you know and has an East for the anti jing anti aging is actually becoming more and more more popular. But number one is that regulations so and but unfortunately black mars are already there and we can leverage their capabilities and regulation part as well.

That is Toro Yoshi Mura, senior executive officer at Kiaran, speaking with Bloomberg TV host Cherry On and April Home. We're bringing it to you here here on the Daybreak Asia podcast. Welcome to the Daybreak Asia Podcast. I'm Doug Chrisner. It's difficult to avoid the debate over how AI may disrupt various business models. We know software shares have been a notable casualty. For a closer look, I'm joined by Tim Pagliari, He is the chief investment officer at cap Wealth.

So I think it's just the uneasiness about what's it going to cost, first, how are they going to get a return? And then how fast it's evolving. And I know even as an analyst, we are experiencing that. I mean, we're working with different tools and it's amazing how quickly, like Claude six, it is revolutionary. And we have this

So there was some evidence today of dip buying and software names. The IGV ETF was up nearly one point three percent. When you take a step back and you look at various software companies, is it likely that this route that we've seen recently has been a bit too aggressive and we just have to maybe approach this with a little bit more sobriety when it comes to the longer term view on how AI will disrupt the industry.

Yes, And I think that's a real good point. If we could use Oracle for an example. You know, Oracle has seventy eight data centers under construction. Their revenue is going to you know, expand exponentially. And after they did an earnings report last summer, the stock nearly doubled, I mean almost overnight, and then it completely retraced that and went back because of the concern about how much money

So maybe we can pivot and talk a little bit about the minutes from the last FED meeting that we're released on Wednesday. They indicate that officials are worried over inflation, and a number of FED members suggested maybe the next move is to raise interest rates if inflation were to stay above the Fed's goal. Does that sound a little dramatic? To you or do you think there's a real concern here that we need to consider the possibility of higher interest rates.

You've got to put that in the context of Worsh's nomination. And Kevin Warrish is an academic, he's well respected. He was unanimously confirmed the last time he went to the FED. And what Warshoes focused on is reducing the Fed's balance sheet. So the Fed's balance sheet got up to eight trillion dollars. They've cut it to six trillion. Now. That is tightening. When they reduce their balance sheet, they're tightening, they're taking money out of circulation. So I believe Worsh looks at

I'm wondering whether you think there is a risk that any balance sheet reduction could potentially put asset prices under pressure.

Oh, I think they are under pressure. And I think you know, part of what's happened with the FED is, you know, they compete with the private sector because they're borrowing the money, you know, from the banks with the FED funds rate. So they printed some of the money and they borrow it also. And so if you reduce the balance sheet, then you leave more money out in

Let's talk a little bit about the macro, because we had a number of data points today on the American economy that basically indicate things are holding up pretty well. Industrial production up in the month of January by the most in nearly a year. We also had news that orders for business equipment rose in December by more than expected. And housing starts, to your point on the housing market,

Yes, well now it is because you still have, as we speak directly to housing, housing costs or the shortage of housing is still real. I mean, we're anywhere from four to eight million units short in housing. And so this uptick today just kind of counterbalances the losses that we had and the stagnation that we had in housing starts, you know, most of last year. So I do believe

Tim, we'll leave it there, Thank you so very much. Tim Pagliara is the chief investment officer at cap Wealth. On the line from Nashville, Tennessee. Joining us here on the Daybreak Asia Podcast. Thanks for listening to today's episode of the Bloomberg Daybreak Asia Edition podcast. Each weekday, we look at the story shaping markets, finance, and geopolitics in the Asia Pacific. You can find us on Apple, Spotify, the Bloomberg Podcast YouTube channel, or anywhere else you listen.