hello there. it's wednesday september 29th, 11:00 a.m. in tokyo. i'm catherine kobayashi. welcome to this edition of "newslin "newsline." the japanese government has stepped up a diplomatic offensive to explain its position on the impasse with china. tensions between the two countries have risen sharply since a collision of boats in the east china sea earlier this month.

foreign minister seiji maehara said on tuesday that he instructed japan's missions abroad to explain the incident to their host nations and china's reaction. prime minister naoto kan said he plans to do the same when he attends the asia-europe meeting in brussels next week. >> japan last week released the captain of the chinese fishing boat that collided with japanese patrol vessels near japan's senkaku islands. china also claims the islands. however, relations have since shown little sign of improvement.

chief cabinet secretary yoshito sengoku said on tuesday that the ball is now in china's court. but a chinese foreign ministry spokesperson said japan should first take concrete actions to mend ties. the latest quarterly survey of business sentiment in japan has been released. ines matsuyama from our business desk has the details. ines? >> thank you very much, catherine. the bank of japan says business sentiment among major manufacturers has improved for six straight quarters. but the strong yen is weighing down on their outlook for the future. the central bank released its quarterly tankan survey of short-term business confidence on wednesday, covering over 11,000 firms on various sizes. the closely watched index for large manufacturers stood at 8 points in the three months through late september, up 7 points from the previous quarter. the figure for non-manufacturers also rose 7 points to 2, marking the first positive reading in two years. but the survey indicates companies are viewing the future

with increasing caution. for the next three months the index for large manufacturers came to minus one point. that's nine points lower than the figure for the current period and the first decline in sen quarters. and with a look at how we've arrived at this gloomy economic outlook, nhk world's nahoko yamada has more. >> reporter: in the central prefecture of nagano home to several auto and electronic parts factories. even though the latest tankan survey showed some improvement, there's a growing concern that the recent strong yen will likely have the negative impact on manufacturers. towa plastic makes parts for cars and cell phones. its annual sales topped $7 million. but since the yen began surging in july, demand from the u.s. has plummeted a whopping 90%. the firm says it's now under pressure to cut prices.

>> translator: some customers say they'll ask for price cuts until the dollar strengthens to a 100-yen level. some already cancelled orders. on average, they ask for a 20% to 25% discount, but the best we can offer is 5%. >> reporter: the company has slashed profit margins in order to offer cheaper products and offset the yen's strength. it has also started accepting more small orders to boost output. in some cases they've even taken orders for one or two pieces. towa's management is increasingly worried. >> translator: if the strong yen continues and affects manufacturers like us, even big competitors may start taking small domestic orders. i'm afraid we might all end up losing in a price war.

>> reporter: the soaring yen isn't the only concern for these businesses. subsidies for fuel-efficient vehicles helped boost sales this month. but when they end in september, demand will likely drop. carmakers are already expecting to cut production by around 20% in october. also, the consumer spending boost because of the unusually hot summer is losing steam. having bought air-conditioners and other products to cool themselves off, shoppers may soon rein in expenses. chief economist torch heero nagahama expects a rough road ahead for japan. >> translator: the domestic economy will face a difficult business climate from october onwards. overseas economies are slowing down as well with the largest exporter, china, seeing slower growth due to credit tightening. the u.s. also losing momentum and has deflation concerns.

so economies are slowing everywhere. >> reporter: japan's economy may have been on a moderate recovery path this year. but the country's about to find out whether it can withstand the challenges it faces in the second half of the current fiscal year. nahoko yamada, nhk world. tokyo stocks opened higher on wednesday, lifted by the positive tankan survey of business sentiment by the bank of japan. the nikkei 225 ended the morning session at 9,555, up 0.6%. market sources warn the upside will be limited as investors keep an eye on the yen's continued strength against the dollar. the dollar slightly lower against the yen now following the release of worse than expected u.s. consumer sentiment data. the greenback now stands at 83.84 to 88 yen. the euro is at 113.87 to 92 yen.

sources say improved tankan survey results announced early in the morning were within expectations and did not have a major impact on the market. and here's a look at the latest long-term interest rates. this is the yield on the benchmark ten-year japanese government bond. in other asian markets, hong kong's hang seng opened 0.9% higher. the shanghai key index for major blue chips is up 0.6%. and in shenzhen the sse composite is slightly down. now back to catherine. >> thanks very much, ines. north korea's state-run media say that kim jong il's third son, kim jong un, has been named vice chairman of the central military commission of the korean workers' party. the announcement suggests that kim jong un has officially been chosen as kim jong il's successor. the wednesday morning report says the decision was made at the conference of the workers'

party and the general meeting of the central commission, the party's leadership body. no images of kim jong un have been made public so far. members of the party's central military commission lead the korean people's army. 19 people, including kim jong il, have been chosen as members of the commission. ♪ kim jong un, who was earlier given the title of four-star general, has been named vice chairman of the central military commission, a new post. 30 years ago, when kim jong il first appeared in public as the successor to his father, kim il song, he was also chosen as a member of the central military commission. kim jong il's younger sister, kim kyong hui, has been named as a member of the politburo and her husband jang song thaek has been chosen as a member of the central military commission and is a candidate for a plit boouro host. the couple is expected to act as kim jong un's guardians. kim jong un is to succeed his

father as leader but little is known about him. even basic facts have long been shrouded in mystery. >> reporter: such things as the year of kim jong un's birth cannot be ascertained with certainty. it is widely thought that the heir apparent was born in 1983, but some experts suggest 1984 as the more likely year. in the late 1990s, kim jong un studied in switzerland for several years. at school he used the name pak un, and it is said that he identified himself as the son of the north korean ambassador to switzerland. one of his former classmates says he was polite and quick to learn the german language. kim jong un apparently enjoyed playing basketball and dreamed of becoming a professional player. kim jong un is said to have returned to pyongyang around 2000 and to have attended university in the north korean capital.

no information has been available on his whereabouts since that time. there is speculation that kim jong il has chosen jong un to succeed him due to his son's leadership abilities and strong-mindedness. china's special envoy to the six-party talks, wu dawei, has said he heard that kim jong un is tall like his grandfather, kim il song, who established communist rule in north korea. >> hiroki yajima covering issues regarding the korean peninsula joins us in the studio. thank you for joining us. north korea has named kim jong il's third son, kim jong un, vice chairman of the central military committee of the workers' party. now, this is a key post. tell us a little bit behind this. >> it seems that kim jong il hurried the transfer of power because of his poor health. actually, he has been -- it's

reported he has been suffering from a stroke which hit him two years ago. kim jong il took over the power from kim il song more than 20 years. during the intervening years he strengthened his grip on the workers' party and pardoned his rivals. however, kim jong un suddenly appeared in public way four-star general and vice chairman of the central military committee. kim jong il and his family act as guardians for kim jong un because he has no military experience and is still in his late 20s. but the transfer of power will not be smooth. north korea postponed the party conference, originally it was set on september 7th, so there is a speculation of dissatisfaction among some party members. but now it has been revealed the purpose of the conference was to show the succession of power. >> i see. so if the change of power continues, what do you foresee happening in the future in north korea? >> well, the country is now

faced with many tasks and much international controversy. north korea has been suffering from a devastating economy, and the priority is to get foreign aid and a guarantee of political stability from the united states. at this moment there is no sign the obama administration will lift economic sanctions. in order to get foreign aid, the north has no choice but to return to the six-party talks. however, north korea cannot stop nuclear development because it's the country's card for negotiating with the united states. normalizing the south/north relationship is another task. after the sinking of south korea's warship in the yellow sea in march the relation worsened. this tension will cause a negative impact on stability in the north. in order to get economic cooperation from japan, the north has to first solve the abduction issue, but there is no sign of restarting bilateral talks with japan. attention is now focused on how kim jong il will handle

diplomacy and administration with his son, kim jong un, who has little national experience. >> we'll have to see, and we'll keep you updated how the story develops. hiroki, thanks very much for joining us. hiroki yajima, covering korean peninsula issues. a survey shows the annual shipments of japanese manufacturers in 2009 marked a historical decline of more than 20%. the economy trade and industry ministry surveyed manufacturers with a workforce of 10 or more across japan on the value of shipments during 2009, when businesses slumped due to the global financial crisis. the survey found the manufacturers' shipments totaled about $3 trillion, down 21.7% from the previous year. that's the biggest decline since the ministry began collecting manufacturing data in 1950. the figure is also more than

triple the previous record of 7% set in 1998, when a series of collapses of major financial institutions in japan hit the country's economy. overall, the number of manufacturers at the end of 2009 showed a year-on-year decline of 7.1%. the number of workers including management and employees was also down 7.8%. both figures mark the largest drop on record. japan's communications ministry and private telecom firms are to propose joining hands with india to create new business in the field of information communication technology. a japanese consortium will go over the proposal on wednesday. the plan is aimed at gaining market share in the growing indian economy, where 19 million new mobile phone subscriptions are made each month. the number of subscribers has topped 600 million. the second highest figure after china. ministry officials and the firms set up the project in march to discuss japan's communications

strategy in asia. the project team will use technical assistance from ncc doak noe to build a next generation mobile phone system for the country. japanese electronics maker sharp will also help india to test digital textbooks to see if they can be put to practical use. in the u.s. consumer confidence worsened in september, casting a shadow over the country's economic recovery. u.s. research firm the conference board released an index of consumer sentiment on tuesday based on a survey of 5,000 households nationwide. the firm said the index stood at 48.5, marking a worse than expected decline of nearly five points from the previous month. most observers had predicted the index would remain flat for september. the survey showed just over 46% of households have an unfavorable view of the economy, up nearly four percentage points from august. as for the future outlook of the next six month, more than 16%

said the situation will worsen. that's also an increase of three percentage points. the conference board said consumer confidence remained quite -- remains quite grim due to less favorable business and market conditions. it also said the pace of economic growth is not likely to pick up in the coming month. u.s. home prices showed a slowdown in growth for july due to the end of a tax credit, resulting in softening demand. the standard & poor's case shiller home price index for july released on tuesday showed prices rose 3.2% in 20 major u.s. cities from the previous year. the gain was in line with expectations but down from a 4.2% increase in june. the chairman of the index committee said home prices seem likely to stabilize judging from recent trends. he also noted the next few month will give a clearer indication of the true strength of the housing market as the temporary economic support will have ended.

next for you is a recap of the latest market figures. ♪ ♪ >> and that's all for now in biz news. all right. and in other news, germany's cabinet approved a new energy plan on tuesday that includes postponing a shutdown of the country's nuclear power plants. the move is expected to cause heated debate on germany's

nuclear policy. the new energy plan reverses a decision by the previous government, led by gerhard schroeder to shut down all german nuclear plants by about 2022. chancellor angela merkel's government says it will extend the life span of the country's 17 nuclear reactors by an average of 12 years. the merkel administration cites the expansion of renewable energy sources such as wind and solar power as the reason for the policy change. it hopes such ecofriendly energy sources will make up 80% of germany's total generation in 40 years. but the government says the country will have to depend on nuclear energy until it can achieve that goal. russian president dmitry medvedev has arrived at the far eastern peninsula of kamchatka. and this is after changing his plan to visit the four disputed islands off hokkaido. the islands are claimed by japan. medvedev had been scheduled to visit the islands on wednesday

in the first tour by a russian or soviet leader. but russian government sources say the president will now attend a ceremony for the energy industry and meet local officials in kamchatka. the council visit had been seen as reinforcing russia's position on the sovereignty of the islands, which were occupied by soviet forces in the confusion at the end of world war ii. a forecast of bad weather appears to be the reason for the itinerary change. medvedev has sacked veteran moscow mayor yuri luzhkov. the 74-year-old mayor ran the capital for 18 years and was the last of the powerful officials. medvedev told reporters during his visit to shanghai on tuesday that he lost trust in luzhkov. russia's presidential office said it asked luzhkov to voluntarily resign amid recent corruption charges, but it says he refused and opted for a dismissal. since taking office medvedev has

been placing or replacing provincial governors and presidents would ethnic minorities in an effort to rejuvenate regional leadership. observers say he appears to be solidifying his political base ahead 206912 presidential election. luzhkov is strongly opposed to his dismissal saying it is an attempt to remove him from politics. he indicated he will continue his political activities. a massive landslide in southwestern mexico has killed at least seven people. it engulfed over 100 homes, and more than 100 residents are missing. local media say the 4 avm landslide occurred before dawn on tuesday in a mountainous area about 70 kilometers east of the provincial capital, oaxaca city. oaxaca governor ulises ruiz said he did not know the full extent of the damage. he feared that many residents were unable to flea as they were sleeping at the time.

local authorities say rescuers were having difficulty reaching the area, adding that the landslide had followed days of heavy rain in southern mexico. hi there. welcome back to your world weather update. now, east asia looking at a lot of clear skies today for the majority of japan, the korean peninsula and across the northern tier of china looking at some nice dry skies today. welcome sunshine for japan. now there is a pretty big system to the north and it is producing rather windy conditions across the hokkaido region today. also by the evening hours we are going to start seeing rainfall come in from the south. it looks like another wet day will be coming in on thursday. now, elsewhere that same rain is going to be seeing the southern half of china here. still a couple scattered showers showing up. it's going to remain a little bit on the unsettled side today and then we've got tropical

showers and downpours across the indo-china peninsula as well as throughout the philippines. highs today looking at 33 degrees for manila, 26 -- or rather 28 in taipei. 20 degrees in seoul, so definitely on the cool side. 24 degrees for tokyo, the sunshine should help warm it up just a little bit today. now over towards the caribbean and we are seeing a tropical depression that has formed just south of cuba, already getting very close to the country here. still tropical depression but definitely showing signs of strengthening, so wind speeds are likely going to be picking up in the next day or so. also rainfall amounts already quite ample across this region, we're going to see that rain really head northward over the next 24 hours, impacting even the coastal areas of the carolinas, so a big area set to produce, see some heavy rainfall amounts and then winds, too, will pick up, coastal areas may see some high waves, that will be something to watch out for as well. over towards europe today, and still seeing that frontal system

here towards the east. it's been pretty stationary, not moving a whole lot the past couple of days. finally, though, showing some signs of weakening. however, it has been dumping quite a bit of rain across central and eastern sections of europe. we're now hearing of flooding reports coming out of the region. here's lat the suation. impaarpola ooding has been b nalso similar situation in s onay months.rain band will mo

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