:00:17. > :00:22.Tax hike pain, as we await fresh numbers on household spending in
:00:23. > :00:29.Japan, we look at the prospects for the next planned tax rise. And Apple
:00:30. > :00:39.shares dip on the eve of its big launch, is it a sign of what is to
:00:40. > :00:44.come? Welcome to Asia Business Report on BBC World News. I am Rico
:00:45. > :00:48.Hizon. After posting its worst performance since the end of the
:00:49. > :00:52.financial crisis, we expect fresh data on the state of the Japanese
:00:53. > :00:56.economy. Later today we will get a measure of consumer confidence. It
:00:57. > :01:00.comes after news that the world's felt largest economy shrank at an
:01:01. > :01:04.annual rate of 7.1% in the three rounds ending in June. Compared to
:01:05. > :01:08.the same period in 2013 `` three months. Japanese households have
:01:09. > :01:14.been cutting back spending followed a 3% rise in the tax in April. I
:01:15. > :01:19.asked our correspondent in Tokyo weather today's numbers will be as
:01:20. > :01:23.bad as the GDP. We think it is quite possible there are some negative
:01:24. > :01:28.sentiment that flows through off the back of the poor GDP numbers. But as
:01:29. > :01:32.investors, that doesn't give us so much cause for concern as we see it
:01:33. > :01:35.as an opportunity. We think the bank of Japan will respond very
:01:36. > :01:41.forcefully if consumer confidence dips too much, and if the economy
:01:42. > :01:46.continues to weaken. But in the meeting last week, the bank of Japan
:01:47. > :01:51.just held back on monetary policy and did not make any moves in terms
:01:52. > :01:53.of steamy leading the economy. When are we likely to see this
:01:54. > :01:59.materialising tube boost consumer confidence? If we start to get
:02:00. > :02:04.everyone panicking over bad numbers, you will see a move `` to boost. But
:02:05. > :02:09.when the GDP came out, the stock`market still went up is. So
:02:10. > :02:12.much of this was already priced into the market. Second`quarter numbers
:02:13. > :02:15.were going to go and down, everyone had accepted that. They were a
:02:16. > :02:21.little bit worse than expected, but not dramatically so. So if we have a
:02:22. > :02:28.third`quarter rebound, as we expect, we are back towards 2.5, 3% GDP,
:02:29. > :02:33.then the bank of Japan will likely not feel the need to take any
:02:34. > :02:37.action. With the current state of consumer confidence do you think
:02:38. > :02:45.that Shinzo Abe should still push through with the next land tax hike
:02:46. > :02:50.from eight to 10% next year `` planned. That is more of a
:02:51. > :02:54.challenge, we will need to see how the third and fourth quarter go to
:02:55. > :02:58.see where he is politically, to see whether that is a priority or
:02:59. > :03:02.something that he puts aside in 2015. After a decade of delays and
:03:03. > :03:07.disagreements, fresh hope in Australia and China that a
:03:08. > :03:11.free`trade deal could be signed by year's and. Trade between the two
:03:12. > :03:15.sides has already doubled in the last five years, and a free`trade
:03:16. > :03:24.arrangement would boost this even further. From Sydney, Phil Mercer
:03:25. > :03:28.has more. China's demand for iron ore and other natural resources
:03:29. > :03:30.helped Australians avoid the worst of the global recessions. Trade
:03:31. > :03:34.between the nations is only growing. Today China is a
:03:35. > :03:39.straight's largest trading partner in terms of imports and exports.
:03:40. > :03:46.2`way trade is worth more than $140 billion. Australia is china's sixth
:03:47. > :03:50.largest training partner `` trading partner, with almost a quarter of
:03:51. > :03:55.Australian exports heading to China. Although natural resources have
:03:56. > :03:58.traditionally dominated trade, future prosperity will depend in
:03:59. > :04:00.large part on the education and tourism sectors which hope to
:04:01. > :04:04.attract more of china's wealthy attract more of china's wealthy
:04:05. > :04:09.middle classes. In Sydney, the Foreign Minister has held talks with
:04:10. > :04:16.his counterpart Julie Bishop, who says that bilateral relationships
:04:17. > :04:22.are mature and strong. We are on track to sign a free`trade agreement
:04:23. > :04:26.with China later this year, which further strengthen this
:04:27. > :04:29.relationship. Over the past year, Australia has sealed free`trade
:04:30. > :04:35.agreements with Japan and South Korea. Canberra's close ties with
:04:36. > :04:40.Tokyo has caused some annoyance in China, but not enough to derail a
:04:41. > :04:44.prosperous economic relationship. TRANSLATION: China may not be a
:04:45. > :04:50.Australia's closest friend at the moment, but we can surely become
:04:51. > :05:00.your most sincere friend. Australia says it often challenges China over
:05:01. > :05:02.human rights in Tibet. Canberra's 60`year`old relationship with the US
:05:03. > :05:07.might be another source of tension. But diplomacy has allowed Australia
:05:08. > :05:10.to court close economic ties with Beijing while pursuing an even
:05:11. > :05:20.closer security relationship with Washington. In other business News,
:05:21. > :05:24.Facebook's market value, topped $200 billion, making it one of the
:05:25. > :05:30.world's biggest companies. Shares in the social networking site rose to
:05:31. > :05:34.$78 per share at close in New York, following investor optimism about
:05:35. > :05:37.the future of mobile advertising for the company. That makes Facebook the
:05:38. > :05:43.22nd largest company in the world, ahead of Toyota motor. For Apple
:05:44. > :05:48.enthusiasts, the wait is almost over. This time tomorrow the new
:05:49. > :05:52.iPhone shed six will not be shrouded in secrecy. Along with all the
:05:53. > :05:58.hype, should we expect a bounce in their share price? Actually, no. The
:05:59. > :06:02.share price typically dips on the date it releases a new phone. Its
:06:03. > :06:11.stock even dropped on the eve of this latest launch. Our analysts
:06:12. > :06:14.said this is part of a trend. Always ahead of an announcement there is a
:06:15. > :06:20.build`up of expectations and the hype, what features will it have?
:06:21. > :06:24.Will have solar charging, a laser pointer, a new size, all these
:06:25. > :06:27.expectations built up and then people look for excuses to take
:06:28. > :06:31.profit when an announcement come out, or if that doesn't meet
:06:32. > :06:40.expectations, and this time around, you have either cloud data leaks,
:06:41. > :06:45.new smartphones `` iCloud. And Amazon has also come out with a
:06:46. > :06:51.price cut on its new phone from $200 to 99 cents. Competition becoming
:06:52. > :06:57.tougher year after year as Apple releases its new iPhone. Now you
:06:58. > :07:01.have new competitors in China, as well as the competition from
:07:02. > :07:05.Samsung, which has already seen its revenue falling due to the major
:07:06. > :07:09.competition from the cheaper manufacturers. Yes, you are seeing
:07:10. > :07:15.the stage set up for another's similar thing to what we have seen
:07:16. > :07:17.before. And in China, the big Chinese telcos cutting back on
:07:18. > :07:26.subsidies to the tune of around $5 billion. That is bad news for
:07:27. > :07:30.handsets and more leveraged for Chinese manufacturers to take market
:07:31. > :07:35.share. The advantage of Apple is that it has its own operating
:07:36. > :07:39.system, compared with Samsung which uses the Android operating system.
:07:40. > :07:44.So what is the future of Apple going forward? We will watch very closely
:07:45. > :07:46.to see of Apple will come up with any differentiating features. If the
:07:47. > :07:54.iPhone will integrate with its upcoming line of variables, and
:07:55. > :07:58.whether I payment. With users already locked into the system, how
:07:59. > :08:02.that will play out with the payment system, and whether that gels
:08:03. > :08:09.together towards a lock in for more users. Could this be the most
:08:10. > :08:15.expensive video game ever created? Destiny is reported to have cost
:08:16. > :08:17.$500 million to make, and is touted as the most significant release
:08:18. > :08:23.since the next generation of consoles arrived late last year.
:08:24. > :08:27.Destiny is a game set 700 years in the future, but it is the next ten
:08:28. > :08:32.years that the publisher Activision will be most concerned about. The
:08:33. > :08:36.older games, call of duty and World of Warcraft aren't selling as well
:08:37. > :08:40.as they used to. The company is not taking any chances and spending $500
:08:41. > :08:47.million on making and marketing this game. We know that it is going to be
:08:48. > :08:51.a triple a blockbuster. So it is not a risk, it will be heavily marketed,
:08:52. > :08:56.we will work closely with retail and we think we have done all of that.
:08:57. > :09:00.Obviously Destiny is a massive new title for Activision. Tell me what
:09:01. > :09:07.it is all about. What is again going to be about? At its heart it is a
:09:08. > :09:10.first person shooter. You will be involved in a lot of firefights,
:09:11. > :09:13.whether that is on your own in a campaign or you can fight with
:09:14. > :09:18.friends. There will be multiplayer activities, fighting against other
:09:19. > :09:21.guardians in the game. You will also be going out and exploring different
:09:22. > :09:28.planet as well, and fighting the enemy of birth. So as I say, at its
:09:29. > :09:34.essence, it is a game where you are a guardian, protecting the last
:09:35. > :09:37.those city on earth `` enemies of earth. You have to go out and
:09:38. > :09:41.explore the planet and become legends. Obviously what happens to a
:09:42. > :09:47.lot of games on launch day is that the servers can't cope. How
:09:48. > :09:52.confident are you? It is a loosely critical, this is a persistent,
:09:53. > :09:55.shared, online world. We are confident that once the servers are
:09:56. > :10:01.turned on, as they have been, as people are enjoying playing it in
:10:02. > :10:04.Australia as I speak. We have tested this at length. We have in excess of
:10:05. > :10:08.4.6 million people on the beta test, and that is exactly what we
:10:09. > :10:16.wanted. To test the robustness of the service. We are confident that
:10:17. > :10:20.everyone will have a fantastic time and everything will be fine. And you
:10:21. > :10:27.can read more about Destiny on our website. Here is a quick look at the
:10:28. > :10:31.markets. Asian stocks are lacklustre in mid`morning Tuesday trade after
:10:32. > :10:35.Wall Street closed mixed overnight. Japan is currently on the rise, as
:10:36. > :10:39.the Japanese yen continues to weaken against the US dollar, which is
:10:40. > :10:46.benefiting exporters. Australia also in positive territory but Hong Kong
:10:47. > :10:47.lower by 50 points. On Wall Street, the Dow Jones ended lower after a
:10:48. > :10:59.drop in energy shares. The top stories this hour: Iraq's
:11:00. > :11:03.parliament has endorsed a new, more representative government. The
:11:04. > :11:04.United States has called it