Japan's PM Kan Wins DPJ Election Vote

This is a transcript of top stories presented by China's CCTV Business Channel as produced by CNBC Asia Pacific.

Hello to our viewers all over China.

You're watching “Asia Market Daily”, co-produced by CCTV Business Channel and CNBC, first in business worldwide.

I am Saijal Patel and here are the top stories across Asia today.

Japan's Prime Minister Naoto Kan is keeping his seat and staying in power.

The Democratic Party of Japan has voted him back as leader of the party.

Prime Minister Naoto Kan had faced a tough challenge from Ichiro Ozawa in a party vote.

And right up to the end, the race between Kan and Ozawa, a veteran strategist was a close fight.

Kan, who took office three months ago as the country's fifth premier in three years has vowed to cap spending and debt issuance to rein in a public debt.

He also wants to debate raising the sales tax to fund growing social welfare costs of a fast-ageing population.

(SOT) Melissa Otto, Director, TIAA-CREF:

“I think Kan probably brings a much better posture to Japan's stance for a new regime, a new sense of direction Japan needs to go in, he doesn't have any hair on that, I mean he doesn't have any scandals, and I think that's something Japanese themselves are welcoming."

We take a look now at how stocks in the region performed this Tuesday.

It was a mixed session in Asian trading with some markets giving up recent gains, leaving unclear whether a rally that lifted global equities to the highest in four months can stay alive.

In Japan, the benchmark Nikkei 225 closed 0.24 percent lower, dragged down by the yen's strength to fresh 15 year highs and caution before the DPJ elections.

Exporters the biggest losers.

But, Mitsui and Co gained on plans to team up with China's Shenhua Group to bid for a coal mining tender in Mongolia.

Meantime, South Korea's KOSPI finished 0.2 percent lower led down by retailers.

Bucking the trend, Hyundai Motor managed to advance on its plans to up capacity in China.

In Australia, the S&P ASX 200 was up by 0.3 percent at the end of trading day.

Rio Tinto gained on news it will spend more than $800 million to expand a diamond mine in Western Australia.

Some U.S. lawmakers are pushing to get tough on China over its currency regime.

93 members of the House of Representatives have signed a letter urging a vote on a bill which would impose duties on imports from countries that persistently undervalue their currency.

The Senate has a similar bill but its version gives the White House discretion to avoid taking punitive action.

This comes ahead of a crucial testimony this week by Treasury Secretary Tim Geithner on China's exchange rate policies.

And there's still much debate on how effective the measures will be.

(SOT) David Carbon, Managing Director, Economics & Currencies, DBS Bank Group Research:

“We have had big 50%-100% swings like dollar-yen, and euro-dollar, the 3 crosses okay, it makes absolutely no difference to China's import pattern. This is something that people really never see. But if it does make a difference to their import shares, it doesn't make a difference who they are importing from. This whole idea, as everybody knows, currency makes a very big difference, well we studied this in the text book, but it takes a huge swing in the currencies before you get a swing in the trade balance."

Morgan Stanley celebrates its 75th anniversary.

And its top executives marked the event by ringing the closing bell at the NYSE.

Like its peers — Morgan struggled through the financial crisis, which saddled the company with billions in mortgage related losses

Morgan Stanley has since emerged from the crisis, a very different bank.

CNBC's Maria Bartiromo spoke with CEO James Gorman, Chairman John Mack and former Chairman Parker Gilbert, and started by asking Gorman about the implications of Basel Three.

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Gormam: What we needed was certainty. We are finally getting some certainty. The new capital requirements, liquidity requirements are not unanticipated. We are comfortable with that. What we and the markets, shareholders are looking for is certainty and will make for stronger banks as we move forward. We are comfortable with it.

Bartiromo: You are very much focused on not only the institution, but the retail investor. So let me get your thought ounce where that retail investor is today, given the fact that that flash crash seems to have sent them run and we are still trying to figure out where that confidence comes from to get them back. Do you worry that you have got too many feet in that retail bucket?

Gorman: Well, no, I don't worry about that delighted to have that, it gives us great balance. Very stable revenues and it is a business we know and understand. The bad news is the flash crash represented a low point for the retail investor. Four weeks after that was some of the worst activity we have seen since September 11th. The good news is clients did not take money out and put it in other assets, they held it back in cash and short-term fixed income that is now starting to creep back slowly into the market. So confidence is beginning to come back. And it will take some time but it is beginning.

Bartiromo: Parker, you have seen so much change over the years in business. What strikes you most? What struck you when you saw the details of financial regulation and now Basel? Is Wall Street very different, you say you have been doing this 50 years, years ago?

Gilbert: Clearly it is very different. So many things have influenced, technology has expanded the universe of opportunities and created some of the problems there is more business being done today and more different kinds of securities and niches than ever before. When I started, Morgan Stanley had 150 people Now James — 60,000. It is mind-blowing.

Bartiromo: James what about you, two years after that fateful weekend when Lehman declared bankruptcy what do you say about the business today?

Gorman: The business has obviously changed but it is just as exciting. Companies and governments need access to the capital markets. Investors need investment choices and asset managers need to prudently put that to work. So we are in the middle of the vortex of a lot of activity going to take place the next ten years. Frankly, I’m very excited about it. John, i know that you — the firm has a ties to a bunch of hedge funds. Are you looking for twice change that as a result of the Volcker rule? A lot of people talk about the Volcker rule as one of the changes seeing and yet it is not how we got here.

Mack: Well, clearly things will need to be analyzed and looked at. Greg Flemming is running that for James and will be doing that analysis but it is too early to make any decision on that rule and what's going to happen. As you know it is 2200 pages. It goes to committee and workout. You got to interpret it. It is going to take a while let's not jump to any conclusions, we go and get through all that paperwork.

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Well, that wraps up today's business highlights.

I'm Saijal Patel from CNBC.

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