SHOWS: HONG KONG, CHINA (April 5, 2013) (REUTERS - ACCESS ALL)

TAI HUI, CHIEF MARKET STRATEGIST ASIA, JPMORGAN FUNDS

1. REPORTER OFF CAMERA SAYING:

'Markets seem to generally welcome the Bank of Japan's easing measures. What are the challenges for the BOJ and Kuroda going forward?'

2. TAI HUI SAYING:

'I think a lot of the hard work has been done by the BOJ. Now the question is - can the government, Prime Minister Abe and his adminstration deliver on other two areas or two arrows, as they call them in Japan. One of which has got to be on the fiscal side, whether they can continue fiscal spending in order to drive the economy. We are somewhat cautious given the very high level of government debt in Japan. As well as the proposed government sales tax that could be raised some time in 2014. So that may well be a challenge. Secondly, a lot of the reforms that is again being promised by Prime Minister Abe, whether they will actually materialize. I think that again it's a challenge for the Japanese economy. So on monetary policy side, I think the BOJ have come a long way. In terms of delivering what it has promised to do and now the Board is very much in the government's court in order to deliver the other two areas of economic revival plan.'

3. REPORTER OFF CAMERA SAYING:

'Is it time to buy Japanese equities in a big way now after Kuroda's aggressive plan to bring back inflation in Japan? And what impact will all the money flowing into Japan's equities and its currency have on Asia?'

4. TAI HUI SAYING:

'Well I think if you look at earnings expectations by analysts. Japan is one of the first major markets in the world to see more upgrades than downgrades. And that trend continues really on the back of the weaker yen. It was the general expectation that the economy will do better. So in that sense, based on earnings outlook, I think Japan equities still look very attractive. I think valuation-wise, although it has come some way since the end of last year, valuation on the P/E or P/B basis is still below their ten-year averages. So again that offers some interesting propositions there. In terms of the currencies, in terms of the rest of Asia. I think what you've seen in this quarter, or rather, the first quarter, is that Japan has significantly ourperformed Asia markets. And many would argue that the Japanese stores and factories have sucked in a lot of inflows. Otherwise, it would have gone to the rest of Asia. I think that's probably true to some extent, but also if you look at earnings expectations, earnings outlook. Again Japan have actually been much better compared with emerging markets or Asia. So overall, I don't expect Japan's rise is necessarily at the expense of Asia or emerging markets in general. But until we see a real turnaround in earnings outlook for Asia ex-Japan, I think Japan will still probably outperform in the short-term.'

5. REPORTER OFF CAMERA SAYING:

'Which key data out of China will move equity markets more next week - inflation, trade or money lending - and why?'

6. TAI HUI SAYING:

'Well I think the inflation data, we are still expecting inflation in China to be relatively benign, despite the potential for pork prices to rise because of the diseased pig situation recently. But nonetheless, I don't think there's going to be a huge impact on government's thinking when it comes to monetary policy. Money data I think is critical. Simply because when we start to see money growth or lending growth are starting to pick up nd that's going into long-term lending - which typically would be infrastructure or equivalent spendings -that typically drives infrastructure spending in three to six months ahead. We've started to see that already in earlier part of 2013. And that has already led to some degree of pick up in infrastructure and related investments. And that's a very important driver to headline growth in China. So I think my top focus for next week will be on the money data and also in particular - how much lending or financing is going into infrastructure and equivalent projects.'