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Welcome to the Daybreak Asia podcast.

I'm Doug Krer. Crude oil prices were

higher in the New York session as Iran

continued to attack energy

infrastructure around the Middle East.

And at the same time, President Trump

abandoned efforts to recruit partners to

reopen the Strait of Hormuz. Now, in the

Asian session, oil prices are drifting a

bit lower. At the same time, Nvidia said

in New York trading it's firing up

manufacturing of the H200 AI

accelerators for customers in China. CEO

Jensen Hong said the outlook is very

different than it was just a couple of

weeks ago. For a closer look at today's

trading activity, let's bring in

Bloomberg's Leanting Tu. She is managing

editor for Asia Equities. Leanting joins

from our studios in Singapore. Thank you

for being here. There is so much to talk

about. One of the things that struck me

in the US session was the positivity in

stocks tied to the server market. I'm

looking at a memory chip maker Micron

that's up 4.5% on the day. And then if

you look at the storage makers like

Seagate and Western Digital, Seagate was

up more than 5.5%. Western Digital was

up more than 9 and a half%. And I'm

wondering whether this is kind of

filtering into some of the price action

that we're seeing in South Korea at the

moment.

>> Yeah, I think South Korea is a big

beneficiary uh from Jensen Juan's

bullish comment on AI demand uh in the

last two days. Uh Samsung in particular

also unveiled its uh HBM chips and right

now there is AGM going on uh with within

Samsung. I think it's answering a lot of

shareholder queries and the latest

headlines talking about how uh Samsung's

feeling continue to feel I should say

the memory chip tightness and that again

is boosting Samsung I believe shares are

up more than 6% this morning and think

yesterday Samsung was outstanding winner

as well so that is uh boosting the Cosby

to almost 4% this morning and of course

it's not just uh Korean names if you

look across Asia tech supply chain All

the hardware names are jumping including

the ones in Japan chip tester uh testing

company Avant test and of course TSMC in

Taiwan is doing quite well as well. So

overall it feels like people are

shifting their attention back to tech

and AI bullishness uh versus the whole

you know attention on the Iran war in

the last two and a half weeks.

>> So I know we're going to get results

from 10 cent in a few hours from now. Is

the focus really going to be on AI where

10 cent is concerned?

Yes. So for Tencent uh today I should

say and Baba tomorrow uh the dynamics is

slightly different uh in China the

latest craze is all about open claw

which is aentic AI tool. Uh so it is

really about uh what Tensen has to say

about the deployment of this tool. Um,

of course, leading up to this uh

10-centent earnings, 10 cent shares have

been doing quite well this month to

date. I believe it's up uh 5% also

really outperforming Alibaba. I think

best outperformance in about two years

or so. The idea is Tencent uh which has

been lagging behind Alibaba in the AI

race in China is now going to be a

serious challenger for Alibaba just

because Tensen can leverage its

everything app WeChat which has 1.4

billion users. So if Tensen rolls out an

agentic AI on top of its WeChat app to

help its users uh um automate daily

tasks, Tensen can all of sudden become a

dominant player in this agentic AI space

in China. So that is you know very much

the focus basically about competition

between uh the two big giants tech

giants in China Tensen and Alibaba and

about how how much they're going to

spend on AI and how they're going to

deploy the agentic AI. So, you mentioned

the commentary from Nvidia CEO Jensen

Hong. Talk to me a little bit about what

Nvidia is doing with some of the EV

makers in China like Gile and BYD.

>> Yeah, it's uh it's interesting that

Nvidia is uh talking a little bit more

on this partnership with a bunch of uh e

automated vehicle sort of uh companies.

Of course we in China there is a lot of

EV EV names and and Jensen talked about

partnership with BYD with J and by the

way JD is reporting earnings today. So

all these names have have really jumped

as well and it's not just in China in

Korea. Hyundai also jumped on uh

Nvidia's sort of uh uh vision to partner

with uh not just these AI sort of

related chip names but also in the auto

sector as well. And uh bear in mind all

these biggest automakers are actually

all based in Asia. So that definitely

played a positive role yesterday uh in

terms of uh market reactions.

>> To what extent is geopolitics entering

the story here? Obviously there is the

oil story given war with Iran. But we

also have President Trump saying that

the summit that he had intended to do at

the end of the month with Chinese

President Xiinping will now take place

in about five or 6 weeks from now. Is

that a distraction or is it having any

significant impact?

>> I wouldn't say there is any significant

impact out of the delay uh of the

summit. Uh there's probably a very

marginally negative impact uh for the

onshore market. Uh right now we're

seeing of course we've been writing

about how uh Chinese markets are a

relative haven in this Iran war just

because of their diversified energy

sources. Uh but it seems uh the momentum

is losing a bit of steam in the onshore

space you know after the MPC and also we

don't really have a lot of fresh

catalyst. Of course, this um potential

summit could provide some kind of

positive catalyst for traders to trade

on. So, I would say it's marginally

negative, but mainly people are still

very much trading around the Iran war.

The power names um they were the biggest

gainers and also in the last two days,

people are looking to pick up some kind

of very cheap consumer names. So I would

say very much driven by the Iran

headlines and also the do domestic eco

data headlines.

>> Yeah, I was going to ask about that.

Some inflation data that suggests maybe

that China is moving out of this kind of

disinflationary or deflationary trap and

the retail sales number I think was

better than expected, right?

>> Yes, it was uh up 2.8% yearon year for

the two first two months of the year I

believe and which was uh better than the

previous reading. Yeah, I think it was

it definitely played a role in how

people are turning slightly more bullish

on consumer stocks. Um, but I would say

it's more to do with their beaten down

valuation because the data was quite

backward looking and in terms of u

reflationary trade. Yes, I see some

economists and some strategists started

to talk about that about how you know

this uh uh energy price surge could be

definitely a boost for uh consumer

prices. Uh but this is very much sort of

supplied dynamic, right? Um for the

whole economy to really benefit from

this reflationary uh environment,

potentially reflationary envir

environment, it would really need to be

demanddriven. uh but we are not really

seeing the kind of uh rising demand for

all sorts of things. Overall, I think

still very much people uh really care

about their savings. They're concerned

about the jobs prospect. So, you know, I

would say it's a it's it's a battle

that's going to be a long-lasting one

for the Chinese government.

>> But can't we take away from these data

that maybe the consumer in China is

beginning to become a little bit more

optimistic or at least positive?

Yeah, I think um one data point I mean I

I would agree with you on that but it's

just one data point right to really show

the consumers are turning more positive

we need to see continued data points

pointing to that I would say yes the

spring festival holiday was quite

positive in terms of their spending um

but fundamentally we don't really see

much changing I think we're still seeing

a lot of crackdown on uh you know fat

banker pay yesterday there was a scoop

about banker bonuses is getting cut by

30% or so and the jobs market is still

quite bad and I think the unemployment

rate for the young generation is still

very concerning. I think a lot of people

are still choosing to uh to be you know

so-called lying flat uh type of

generation. Um so yeah I mean I believe

there's uh sort of pockets of uh of

excitement because of this AI

development. There is more hiring going

on of course with all the listings going

on. some uh entrepreneurs or founders

getting uh getting wealthy but still

that's a still a very small part of the

economy overall.

>> I have to ask about the export data for

Japan in the month of February. I think

the growth rate was about 4.2% which was

way above estimates and that seems to be

pretty stunning. Do we have a sense of

what's driving that activity?

>> Yeah, I think for Japan you know Japan

has uh quite a few sectors that are

really competitive. I think chip sector

I would say Japan has a lot of machinery

sectors and also ship making as well. So

I would say the industrial uh sectors

are all benefiting uh right now and I

think the dynamic is may be similar to

Korea and China. I think Korea's latest

export numbers are also very good really

driven by chip exporting uh and also uh

uh even for China we're seeing you know

power transformers becoming one of the

the hottest sectors being exported and

that has a lot to do with the all the

you know AI development the data center

buildout. Uh of course one thing

interesting about Japan is the kind of

defense related export as well. Um and

yeah and then one thing we want to

really watch out for is the uh summit

between Trump and Takahi which is coming

up on Thursday and we'll get market

reaction I believe on W uh on Monday

because Friday Japan will be off.

>> So would you expect Taki to announce

some sort of deal where Japan would be

spending money to acquire defense

hardware or military hardware from the

United States?

>> I think it's a bit hard to say. One

thing everybody's watching out for is

whether Japan can be convinced by Trump

to help out uh to reopen uh the straight

of Homos by sending um you know ships to

escort uh to by sending warships to

escort some kind of tankers. Japan has

already openly said that it's not going

to do so because there's there are a lot

of things at stake. Uh but just because

Takahuchi is among the first leaders to

meet uh Trump after Trump called for

help. So that's still going to be very

much um where people's attention will

be.

>> Leanting, we'll leave it there. Thank

you so very much. Bloomberg's Leanting

2, managing editor for Asia Equities,

joining from Singapore here on the

Daybreak Asia podcast.

Welcome back to the Daybreak Asia

podcast. I'm Doug Krer. On Tuesday,

President Trump abandoned efforts to

recruit partners to reopen the Straight

of Hormuz. And he criticized NATO and

allies in Asia who said they didn't want

to get involved. That's where we begin

our conversation with Fred Fle. Fred is

vice chair of American security at the

American First Policy Institute. He

spoke with Bloomberg TV host Heidi Strad

Watts and Sher on.

>> How's the war going? Because you say

that this is entering the final chapter.

Do we really know that? Because so far

the the strategic goals overarching as

they may be have been still quite

undetermined.

>> Well, the the goals are to stop Iran

from getting a nuclear weapon and

destroying Iran's missile program. And

those goals have been achieved. A

related goal is not regime change, but

weakening the regime. so the Iranian

people can take back their country. And

I think the mark of a good leader is to

recognize that when you've achieved your

goals, it's time to declare victory and

take the win. I think President Trump

will will do that within about two

weeks. President Trump has talked about

regime change, right? He's also not

ruled out putting boots on the ground.

He's talked about a set of potentially

strategic goals that may not be achieved

without ground troops. You talk about

giving the Iranian people an opportunity

to come in and seize that leadership. Is

there any evidence that we have to see

that the opposition the the ground swell

is strong enough and organized enough to

do that?

>> The president has been clear that his

main objective is stopping Iran from

getting a nuclear weapon. I think their

nuclear program has been set back

decades. The power projection

capabilities of this regime have been

destroyed. The world is much safer today

because of Donald Trump and what

Benjamin Netanyahu did. I don't want US

troops on the ground in Iran. I don't

think that's going to happen. The only

the main remaining task is to neutralize

drones and missiles that are being fired

to the straight of Harmuz. I I wish our

Asian and European allies are with us on

that. But I believe the US Navy and US

Air Force can take out these positions

that are threatening the strait.

>> Do you believe there was an imminent

nuclear threat? Because the United

Nations doesn't think so. Joe Kent, who

just resigned, doesn't think so either.

He his accusation is that Israel misled

President Trump and the United States

into starting this war.

>> What a shameful thing to say to engage

in anti-semitism and Israel hatred

because you happen to have policy

differences. Let's be clear here. Marco

Rubio said, and I believe this is

exactly right, that Iran was assembling

what would be a missile shield that

would have been impenetrable by the end

of 2026. It would have used this shield

to protect its nuclear weapons program,

which it resumed after the 12-day war.

That made this an imminent threat. Rubio

spelled that out very clearly. Kent

knows this. Why he resigned, I don't

know. But frankly, his reasons made no

sense.

So, how close are we to ending this war

then?

>> I think we're looking at a couple of

weeks, maybe three weeks. President

Trump has called it an excursion. He's

very particular that this not be a

quagmire, that this not be an unending

war. I think after most troops and ships

are sent to the region are withdrawn

that were sent for this conflict, there

will be a residual naval force in the in

in the Arabian Sea to keep an eye on

things, maybe to attack again if if Iran

escalates. But this regime is broken and

there are signs just in the last 12

hours of Iranians demonstrating, well,

they're actually celebrating an Iranian

uh uh uh holiday in defiance of the

security forces. They're yelling death

to the dictator. They're they're they're

hoping that the son Sha will become the

leader, that the the the Sha son will

become the leader. I don't know that

will happen, but there is evidence right

now that the Iranian people are going to

challenge this regime.

>> Given how justified

this war seems to be according to your

views, why do you think allies are not

chiming in here?

Well, I I think it's a shame that we

have and first of all, I might add that

we're very grateful this for the support

of the Australian and Canadian prime

ministers for this effort. I wish that

our allies in NATO were with us. I think

we have a number of liberal leaders who

simply aren't standing by their

principles. It sounds like uh President

Mcronone is prepared uh to join the US

in in this operation some way after we

win. Well, I guess that will be welcome,

but it's a shame that the French and the

British and the Germans were not with us

at the beginning.

>> Do you think they would have been more

willingness to participate from allies

if they were consulted on these

operations to begin with?

>> I believe they were consulted on these

operations. What I think they're upset

about is that there wasn't a UN Security

Council resolution approving it. They're

claiming that it was not consistent with

international law. There was no way to

get a Security Council resolution

because of vetos by the Russians and the

Chinese. And I think that this is an a

an unfortunate but necessary action

against a state that's been at war with

the United States for 47 years and has

operated outside of international law.

It's a state sponsor of terror and

President Trump decided to take it down.

>> I guess the issue right now is weighing

the benefits against uh the cons of this

war, right? especially when it comes to

bringing global order and also when it

comes to other of President Trump's top

priorities. I mean this war in itself as

President Trump says has delayed the

China summit that he was planning with

President Xiinping. Will it endanger his

other priorities that might be more

important for the American public at

this point?

>> I don't think so. That's why I believe

the president is going to uh wind this

war down in a few weeks. He's still

determined to pursue a productive

relationship with President Xi. And

look, it was Trump who want wanted to

postpone the summit. And frankly, it was

a good move because Trump really needs

to remain in Washington until all the

details of this operation are done. Then

he can put his full attention on a

successful summit uh with the Chinese

leader.

>> How happy are the American public right

now, especially as we heard to the

midterm elections?

You know, the conservative movement is

surprisingly supportive of this. You're

not hearing that in the national media.

I think there's considerable opposition

uh by Democrats and the strong

opposition by independents. That's

because the news media has been just so

incredibly overwhelmingly negative. I

think the Trump administration has do a

better job selling what was

accomplished, explaining that this

mission is concluded successfully, and

we'll then move on to the midterm

election. That was Fred Fle, vice chair

of American security at the America

First Policy Institute, speaking with

Bloomberg TV host Heidi Strad Watts and

Sherry an bringing you their

conversation 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

stories 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. Join us again tomorrow

for insight on the market moves from

Hong Kong to Singapore and Australia.

I'm Doug Krer, and this is Bloomberg.