:00:00. > :00:14.Now on BBC News: All the latest business news live from Singapore.
:00:15. > :00:23.No second term. India's central-bank chief will step down in September
:00:24. > :00:27.after serving out 14 year term. And there is a long list of potential
:00:28. > :00:37.candidates to replace him. And the countdown is on to a crucial vote on
:00:38. > :00:43.Thursday. What would Brexit mean for Japanese countries doing business in
:00:44. > :00:49.the UK? Welcome to Asia Business Report, with me, Mariko Oi, in
:00:50. > :00:54.Singapore. He is one of the most outspoken and colourful of central
:00:55. > :00:58.bankers, at the head of the Reserve Bank of India, Raghuram Rajan, is
:00:59. > :01:01.leaving the post. There had been plenty of speculation about his
:01:02. > :01:03.future, and last weekend he announced he would not be signing up
:01:04. > :01:11.for a second term when his contract ends in September. Our correspondent
:01:12. > :01:14.has more from Mumbai. Raghuram Rajan's decision to leave the
:01:15. > :01:24.Reserve Bank of India has become a big talking point. He was the -- he
:01:25. > :01:28.announced his retirement over the weekend. He took office three years
:01:29. > :01:36.ago. And now his departure has thrown up lots of questions.
:01:37. > :01:40.Raghuram Rajan has said he had been opened to the idea of continuing,
:01:41. > :01:45.but took the decision after due reflection and consultation with the
:01:46. > :01:51.government. Those comments will certainly increase suspicion in some
:01:52. > :01:54.camps that he was told he was to go. He had plenty of public detractors.
:01:55. > :01:58.Some politicians and business leaders say that interest rates have
:01:59. > :02:02.not come down fast enough, and there have been personal attacks as well,
:02:03. > :02:11.including from a senior leader from the ruling BJP. While most central
:02:12. > :02:15.bankers refer -- prefer to stay low profile, Raghuram Rajan rarely did.
:02:16. > :02:18.He called for tolerance after a Muslim was lynched for allegedly
:02:19. > :02:21.eating beef and while India is the fastest-growing economy in the
:02:22. > :02:28.world, with GDP growing at around eight cents, he has cast doubt over
:02:29. > :02:34.the reliability of those numbers. Whether he walked or was pushed,
:02:35. > :02:37.Raghuram Rajan's departure will be damaging for India at least in the
:02:38. > :02:40.short term. He was seen as truly independent of the government and
:02:41. > :02:44.that is something that helped him win the confidence of both domestic
:02:45. > :02:49.and global investors. Pretty important at a time when investments
:02:50. > :02:54.are so crucial for India's economic growth, and most expect India's
:02:55. > :03:00.markets, which are already pretty volatile, to tumble when they open
:03:01. > :03:04.on Monday. Seven or eight names are already being discussed as possible
:03:05. > :03:09.replacements, but whoever gets the job will have to stay confidently --
:03:10. > :03:13.stay confidently why they are better at the job than Raghuram Rajan and
:03:14. > :03:16.what they would do differently. As for the man himself is back to the
:03:17. > :03:20.University of Chicago for now. But he has often been talked about as a
:03:21. > :03:24.possible head of the International Monetary Fund, an organisation where
:03:25. > :03:28.he was once the chief economist. While that job is not available
:03:29. > :03:35.right now, that is one that would be difficult for him to turn down if
:03:36. > :03:42.offered in the future. We will be analysing the impact of Raghuram
:03:43. > :03:49.Rajan's decision to step down as central bank of India Governor
:03:50. > :03:52.later. In other news:, the Chinese president Xi Jinping has arrived in
:03:53. > :03:56.Poland as part of a three nation tour aimed at strengthening ties
:03:57. > :03:59.between China and Europe. The Chinese president will be meeting
:04:00. > :04:03.with his counterpart in Warsaw as well as the country's Prime
:04:04. > :04:07.Minister. The two sides are expected to sign agreements in areas such as
:04:08. > :04:12.finance, civil aviation and migration. Bilateral trade between
:04:13. > :04:16.China and Poland reached $17 billion last year. Before Poland, Xi Jinping
:04:17. > :04:23.was in Serbia and will be having to Uzbekistan next. The strong Japanese
:04:24. > :04:27.currency, the yen, is curbing demand for its exports, as data this
:04:28. > :04:31.morning showed an 11% drop for the month of May compared to the same
:04:32. > :04:36.period last year. Week demand from emerging markets was also cited as
:04:37. > :04:40.one reason for the dip. Meanwhile, imports also slowed, falling by
:04:41. > :04:47.nearly 14%. The latest trade figures leave Japan with a deficit amounting
:04:48. > :04:50.to $390 million. Staying with a pan, because more than 1000 Japanese
:04:51. > :04:56.countries have operations in the UK, including heavyweights such as
:04:57. > :04:59.medicine and the touchy, and these companies have more than 100,000
:05:00. > :05:03.employees working for them all over the country -- Nissan. So as a
:05:04. > :05:07.result a lot of attention as you can imagine on a major vote taking place
:05:08. > :05:11.on Thursday over whether Britain will stay or leave the European
:05:12. > :05:16.Union. The preferred choice from the Japanese side, as it seems, is for
:05:17. > :05:19.Britain to remain in the EU. Let's hear what some of the business
:05:20. > :05:30.leaders told the BBC ahead of the vote. If Brexit is agreed, it would
:05:31. > :05:35.have a significant, serious impact on the global economy. TRANSLATION:
:05:36. > :05:37.Hitachi has been investing in the UK's infrastructure and nuclear
:05:38. > :05:44.industries, because the UK as part of the EU, so I oppose Brexit. At
:05:45. > :05:47.the UK end up leaving the European Union, it will most likely lead to a
:05:48. > :05:54.major shakeup for businesses. Earlier I spoke to Simon Black from
:05:55. > :05:57.Tokyo. He has been advising clients about the upcoming referendum. Japan
:05:58. > :06:03.is the number-1 investor in the UK outside the US, foreign investor,
:06:04. > :06:07.and the access to the single market is a huge factor why Japanese
:06:08. > :06:12.businesses have established themselves in the UK. But beyond the
:06:13. > :06:16.relationship with the single market, it is the economic and political
:06:17. > :06:20.uncertainty I think that the Brexit vote would trigger that is a major
:06:21. > :06:26.concern for Japanese businesses. So tell us, how would it affect you,
:06:27. > :06:30.should the Brexit happen, how would it affect business operations for
:06:31. > :06:34.Japanese companies, assuming that many of them have their European
:06:35. > :06:39.headquarters in London? Well, I think for existing operations there
:06:40. > :06:46.will be probably a limited initial impact, and companies will assess
:06:47. > :06:50.the post Brexit scenario and there are various options that could play
:06:51. > :06:54.out. And I think Japanese businesses will take their time to assess the
:06:55. > :06:58.situation. They will want the best access to information, they will
:06:59. > :07:01.want to engage in some lobbying but I think it is really for new
:07:02. > :07:05.investment that there will be the major initial impact, because there
:07:06. > :07:08.is going to be uncertainty and for new investment they are going to
:07:09. > :07:13.have a higher hurdle to jump over, if you like. But I don't expect that
:07:14. > :07:18.the Japanese businesses will make very dramatic changes initially. I
:07:19. > :07:24.think they will let the scenarios play out, they will analyse it.
:07:25. > :07:29.There are many reasons why company headquarters would be in London,
:07:30. > :07:32.access to the market is one, the city of London is another, the
:07:33. > :07:35.attractiveness of employment opportunities, all of those things
:07:36. > :07:41.are major reasons why the Japanese have chosen the UK and they are not
:07:42. > :07:46.necessarily initially affected by Brexit. Of course, Japan is not the
:07:47. > :07:49.only country with corporate interest in the UK. Other Asian economies
:07:50. > :07:53.would also be affected should the UK leave the European Union. In fact,
:07:54. > :08:00.we're already seeing some impact on region's currency. Earlier I spoke
:08:01. > :08:05.with someone who specialises in Asia-Pacific currencies. Well, if
:08:06. > :08:10.the UK wants to leave the European Union we will see a spike in global
:08:11. > :08:14.risk aversion and high volatility. So in terms of other currencies in
:08:15. > :08:20.Asia, I currencies such as the Korean, the Indonesian, and the
:08:21. > :08:23.Malaysian will likely depreciate against the US dollar more than the
:08:24. > :08:27.others and the reason for that is that South Korea is one of the most
:08:28. > :08:32.open economies in Asia. So therefore there are currency tends to put
:08:33. > :08:37.reflect market sentiment more closely. -- tends to reflect. In
:08:38. > :08:41.terms of Malaysia and Indonesia are those countries have higher levels
:08:42. > :08:45.of government debt so a spike in risk aversion would mean capital
:08:46. > :08:49.would flow out of these markets more than the others. There has been a
:08:50. > :08:55.lot of uncertainty in the markets, not just the Brexit but also the
:08:56. > :08:58.Federal Reserve, the US central bank's interest rates. What have
:08:59. > :09:05.been the major factors? Well, I think the Fed seems more cautious
:09:06. > :09:09.now. And I don't think a rate hike is imminent so therefore it is going
:09:10. > :09:14.to be interesting to see how this plays out. If we see the UK, for
:09:15. > :09:20.example, voting to stay in the European Union, I could see a spike
:09:21. > :09:23.in risk appetite globally. And therefore, in that kind of
:09:24. > :09:26.environment I don't think there is any reason for the yen to continue
:09:27. > :09:34.to strengthen and vice-versa, of course, as well. In this rather
:09:35. > :09:40.volatile market, are you seeing any countries, any currency is actually
:09:41. > :09:44.having a positive? That is a good question. I think in the medium term
:09:45. > :09:48.India has the ability to surprise on the positive side. And the reason
:09:49. > :09:52.for that is that the economy is less export-oriented than its regional
:09:53. > :09:57.peers. So therefore domestic policy-making can have a big impact
:09:58. > :10:00.on the country's economic prospects. Us we had the central bank governor
:10:01. > :10:07.announcing that he would step down. Do you think that would have an
:10:08. > :10:11.impact? Well, India now enjoys high policy credibility and has a strong
:10:12. > :10:15.monetary policy framework. So regardless of who becomes the next
:10:16. > :10:20.governor, I would expect policy continuity in India. Let's take a
:10:21. > :10:23.quick look at markets before we go, because Japan and Australia have
:10:24. > :10:28.started trading for the week and they are actually higher. The UK up
:10:29. > :10:32.by more than 2% but that is after losing some 6% last week because