— This is the script of CNBC's news report for China's CCTV on June 4, Tuesday.
Welcome to the CNBC Business Daily.
Volatility continues to grip Japanese markets. The Nikkei has been in correction mode - down more than 10 percent from its high of May 22nd, as doubts grow over the effects of Abenomics.
But guess who is upbeat about Japan: Dr. Doom: Nouriel Roubini.
[Sound on tape by Nouriel Roubini, Co-Founder & Chairman, Roubini Global Economics: Actually, I'm reasonable positive about Japan, where I spent a few days recently. I think that Abenomics is not just a monetary and fiscal stimulus. This year, he's also increasing nominal wages to boost consumption, he's also structure reform, is going to be announced now, and trade rebelization. And now if they do the first two, the monetary and the fiscal, not followed by fiscal tightening, the structural, the trade rebelization will have a good year of growth this year and then a slump back again. But if they do all these things, and it's likely they are going to do them because The LDP is going to control also the upper house, then deflation going to stop, the Yen going to weaken, the stock market is volatile but has gone up, even with this correction it's 50% higher then Abenomics.]
It looks like Prime Minister Shinzo Abe could be turning to government pension funds for help.
According to Reuters, Abe is set to ask the funds sitting on about 2 trillion dollars- to ramp up investments in equities and overseas assets.
The government will reportedly set up a panel to review the idea next month, with the results expected around September.
And that's not all Abe has up his sleeves. The prime minister is expected to tell parliament tomorrow he wants to create special economic zones to help support growth. They would form part of the third arrow in Abe's three-pronged strategy to revive Japan's economy. The Cabinet will vote on the program next Friday.
Meantime, a poor ISM reading stateside sent the yen below the key 100-level mark against the greenback overnight. So where is dollar-yen headed? Here are some expert views.
[Sound on tape by Robert Rennie, Global Head of FX Strategy, Westpac Bank: We think dollar-yen could easily get back to somewhere between 96 and 98, that seems a reasonable correction.]
[Sound on tape by Callum Henderson, Global Head of FX Research, Standard Chartered: The market is waiting for fiscal reform and until we get signs of that, dollar-yen is in a range, with again, the focus is on position reduction given how long the speculative community is in dollar-yen right now.]
Lots of volatility in Japanese bond markets amid an aggressive sell-off in JGBs in the past several weeks.
Are the dynamics now changing amid a rising rate environment around the world?
[Sound on tape by Shogo Fujita, Chief Japan Bond Strategist, Bank of America Merrill Lynch: I don't think the fundamental aspects of JGB investors have changed over the last two months after Kuroda has taken over the BoJ. I think people need to bear in mind that the BoJ intends to buy 70 percent of gross coupon issuance of JGBs for the next few months. That's a tremendous amount of buying by the central bank - it amounts to QE2, Twist and QE3 all done at the same time. Eventually, I think the market will start to get the fact that the BoJ will effectively own the secondary market, and they will be able to manage to control volatility and interest rates going forward.]
[Sound on tape by Jonathan Pain, Author of 'The Pain Report': The market is waiting for fiscal reform and until we get signs of that, dollar-yen is in a range, with again, the focus is on position reduction given how long the speculative community is in dollar-yen right now.]
I'm Chloe Cho, reporting from CNBC's Asian headquarters.