the iranian leader weighs in on an oil embargo by the west. he has lashed out at western leaders over new sanctions. iran's president dismissed the effectiveness of an oil embargo by the european union. he said the eu, not iran, will lose out.

he made his first public remarks about the sanctions in a speech in southern iran. he said iran won't suffer because only about 10% of its oil goes to the eu. other iranian leaders have said the share is closer to 18%. he said tehran is ready to revive talks with six nations over its nuclear program. he made no mention of threats from iranian leaders to close the strait of hormuz. millions of barrels of oil pass through the water way every day. nato secretary general urged iran to keep shipping lanes open. >> i urge the iranian leadership to live up to its international commitments including stop the enrichment program and ensure free navigation in the strait of hormuz. >> he said nato leaders have no

plans to intervene. the united states says it will downsize its army while maintaining or boosting troop levels in the asia pacific region to counter china's military buildup. >> it's something that obviously will cause some pain, but at the same time we recognize that defense has to play a role in dealing with the national deficit. >> at a news conference on thursday, defense secretary leon panetta released a budget plan for fiscal 2013. it features a $6 billion cut from current levels. the obama administration plans to eliminate $490 billion over the next decade. panetta disclosed over the next five years two army brigades would return from europe and the army would shrink to 490,000. the marine corps would drop by 20,000 to about 180,000 members. the air force would also delay

the purchase of some f-35 stealth fighter jets. the united states would maintain troop levels of the navy and marine corps stationed in japan, and those of the army in south korea. it would deploy marine units and a new model of vessels in australia and singapore. earlier this year, the obama administration announced a new defense strategy that puts prior on the asia pacific region. investors swooped out the european stocks on thursday and sold those on wall street. time to check in with the business team for that. >> katharine, investors were concerned about the extension of low interest rates. the dow jones industrial average turned slightly lower towards the close on thursday. investors were digesting mixed economic data and earnings. see how stocks open this friday in tokyo. we go to the tokyo stock exchange. how are things here reacting this morning? >> bit of a mixed reaction here,

actually. we're seeing the topics in the negative and the nikkei just in and out of positive. very small moves, in fact. you can see what i'm talking about. just marginally in the positive for the nikkei and marginally lower for the topix. the nikkei did end lower yesterday. let's not forget. but let me actually add it's been up over 4% so far this january. so the positive momentum does continue overall. signs of weakness in new home sales in the u.s. was enough to push the dow into the negative into the close, but if you look at the leading indicators and also the four-week average of jobless unemployment claims, benefits, they do suggest still a bit of an improvement in the u.s. economy as we head into 2012. now, here in japan earnings season is in full swing. yesterday after the bell we had earnings from nec and lp all posting losses. nec came out and said it's going to cut around 10,000 jobs globally. we're going to keep track of all

of those stocks and nintendo trading lower as well this morning following earnings from yesterday. next week we'll hear from sony, panasonic and honda. switch to currencies as well. let's have a look at the dollar/yen and euro/yen. dollar still slightly weaker against the yen. we may see further profit taking exporters. look at levels there. they're 77.45 to 47 yen. euro/yen holding strong, the euro in fact holding strong. >> you mentioned weaker housing numbers out of the united states. also key data due out today and next week should paint a clearer picture for the u.s. economy, no? >> definitely. later today we're going to have fourth quarter g. numbers out of the u.s. which may show strong gain for the last three months of 2011. but next week will be the big one. we're also going to have case shiler home price index, factory orders, ism manufacturing and

the big one of course unemployment numbers on friday. this time next week in fact. >> so some key numbers for economists in japan and the u.s. >> definitely. especially with a lot of japanese companies looking to make up the losses from the after the march 11th disaster and gain global market share. and the u.s. economy is a main driver of growth for japan's economy, as we know. back to you. >> thanks a lot for that update. now as he said, japanese appliance maker, nec, says it will cut 10,000 jobs globally as it forecasts a full year loss. that's about 10% of the total work force. nec says the company's business results for the fiscal year through march will plunge to show a loss of about $1.3 billion. the previous estimate was a profit of $193 million. the company expects a loss because sales suffered in the aftermath of the recent thai

floods forcing local plant to shut down. sluggish demand for mobile phones also a factor. nec president endo said on thursday the planned job cuts include about 5,000 nec corporation employees and 5,000 at affiliated firms and sub contractors. endo went onto say the company had no option but to cut jobs. >> translator: we were hit hard by the floods in thailand, the march disaster and also the european debt crisis. we may face extreme difficulties if we don't take action now. >> nec is not alone in the electronics industry in bearing the brunt of the strong yen. and more intense competition from overseas. tdk, another leading electronics partsmaker announced last october that it would slash 11,000 jobs in its entire corporate group. tokyo electric power company may join forces with other electricity and gas utilities to get natural gas resources.

the goal is to curb the higher costs in operating thermal power plants. tepco estimates that its fuel costs will rise by more than $10 billion in the current fiscal year through march. the increase stems from the suspension of its nuclear power plants following the accident at its fukushima daiichi power plant. tepco is considering a joint investment with gas utilities to set up an entity that will specialize in getting natural gas supplies. also thinking about the joint management of facilities with oh companies. specifically, these include natural gas pipelines to supply power plants. well, that's the latest in business. thanks very much. the accident at the fukushima daiichi prompted the japanese government to implement a new inspection system for its network of nuclear plants. these so-called stress tests are meant to ensure reactors can withstand strong earthquakes and towering tsunami.

first results came back last fall. they're from the ohi facility on the japan seacoast. now, experts from the international atomic energy agency are checking the findings. the ten-member iaea team is trying to gauge the effectiveness of the safety procedures. it will report to japan's nuclear watch dog, nisa. the iaea inspectors watched drill on thursday. plant workers connected cables to an energy generator. they based the drill on the assumption that external power was cut off. that's what happened last march at fukushima daiichi. all four of the reactors at the ohi plant are offline. the operator carried out safety tests on two of them and submitted the results to nisa last year. the utility says the reactors could withstand a strong earthquake and stsunami more thn

11 meters high. >> it gave us a much better view and understanding of how the utilities across japan are going to be implementing the instructions that nisa provided them. >> more than 90% of japan's reactors are not operating right now. they need to pass the safety checks before they can be restarted. we're focusing on japan's new reactor test stress system on this week's "nuclear watch." we'll look at the process and the concerns it's raising. engineers ran computer simulations on reactors three and four at the ohi plant. based on this data, they concluded the reactors are ready to go back online. members of nisa held a panel discussion last week to analyze the findings. some people who have doubts about the stress tests process demanded to sit in on the meeting. nisa turned them away. then one of its panel members walked out on the discussion.

>> translator: i doubt the safety review process is any different from how it was in the past before the accident at fukushima daiichi. >> nisa ended up approving the stress test results on the ohi plant reactors. a team of experts from the international atomic energy agency is now reviewing the entire stress test methodology. nisa will get a report from the iaea by the end of this month and then finalize its conclusions on the two reactors. after that the government will consult with people who live in the areas surrounding the ohi plant. they will try. then it will make its final decision. we wanted to find out why some people in japan lack faith in the government's approach to nuclear safety and why they say this stress test system is flawed. so we asked nhk world comen at a timer to explain it to us.

we'll provide simultaneous interpretation. >> translator: conflict at the plant was caused by the decision to shut the anti-citizens out of the room. underneath there's a public distress in the government. stress tests check the margin to greater than expected disaster such as tsunami before the reactors core is damaged. there's a mistrust of the validity of the test as a measure of the government should use whether or not to restart the power plants. most of the assumptions used in the test are based on the safety standards designed before the march 11th disaster which proved the standards were not relevant. if they adopt stricter standards in the future, even if the facilities are pronounced safe based on the old safety safe standards, it would only be natural for people to be unwilling to accept that. and that is why there's a view that the tests are being conducted with a fore gone

conclusion to restart the nuclear power plants. many power plant operators claim they're taking procedures by putting power supply vehicles and fire fighting pumps in place at the facilities. but they're not more than makeshift measures. there's no doubt it will take time to entirely rewrite the current nuclear safety regulations. but the committee appointed by the government to probe into the causes of the fukushima accident has released interim report last month. and i think the government needs to work on regaining public trust by drafting the tentative safety standards based on the lessons shown in that report. the iaea team will only examine whether the procedures involved in the stress test are appropriate or not. they're not going to decide if the nuclear facilities are fit to restart operation.

in fact, james lyon, the iaea team leader told reporters it's up to the japanese government whether or not to restart the power plants. on tuesday the number two reactor at the plant will shut down for a periodic inspection leaving 51 out of all 54 nuclear power plants in japan into idle. there's a concern for the power shortage. the government wants to get some nuclear facilities restarted before spring when all nuclear power plants in japan are due to shut down for regular checkups. they say prime minister noda will make final decisions on that matter. however, it looks difficult for the government to have its way since local residents near the power plant say they will not let the facilities restart. given a grueling public opposition, the government needs to make its case on the tests including if they will continue to use the current tests as a measure to decide whether or not to restart the facilities.

>> form eer microsoft chairman bill gates has expressed willingness to invest in next generation compact nuclear generators designed to be safer and more efficient. he spoke to nhk on thursday in davos, switer land. he's among the leaders attending the world economic forum. the billionaire stressed the need for nuclear power to help reduce climate change. he pointed out that conventional reactors lack the ability to prevent radioactive substances from leaking during an accident. gates stressed that nuclear reactors need to be safer and more efficient. >> no matter which technique we use, we need safer, cheaper forms of energy that emit no co2. i back a lot of energy companies, one in which is looking at a new nuclear design that would be inherently safe. >> following the accident at the

fukushima daiichi nuclear power plant last year, momentum is building in many countries to abolish nuclear power altogether. nevertheless, emerging economies are looking at small reactors as a way to meet rising industrial energy demands. news-tribune . "newsline" is the place to turn to. we have two unique perspectives on the fallout of the earthquake and tsunami. "nuclear watch" and "the road ahead," don't miss on "newsline." people who live along japan's northeast coast rely on trains to get from city to city. the tsunami last march knocked many of them off the tracks. miraculously this train was spared. all 60 passengers survived. now, ten months after the

disaster, trains on that line are running again. >> reporter: this is the same train that survived the tsunami unscathed. one of the passengers on that day was this woman, a vocational school student. now ten months later, she's come to ride on that same train again. >> translator: i don't know what to say. i can't believe this is the same train i was riding on that day. >> reporter: the train was about one kilometer from the coast when it was hit by the massive jolt of the quake and made an emergency stop. there are about 60 passengers on board. the train crew guided them to the exits and they gathered outside. but one passenger who was familiar with the local terrain

suggested that it would be safer to stay on the train. this is where the train came to a stop. the track runs through some hills. and it's slightly higher here than surrounding area. it was this person who suggested they get back on the train. >> translator: i knew that when the tsunami reached the hills it would go to the left and to the right. so the train would be safe where it had stopped. >> reporter: back on board the passengers anxiously waited and wondered whether they had made the right decision. she started writing a farewell message on her cell phone. >> translator: i wasn't sure we'd be safe, so i wrote a message to my family just telling them thank you for everything. >> reporter: the tsunami arrived about 30 minutes after they got back on the train. this photo was taken by one of the passengers.

the water surged close to the tracks but stopped just short of the train. >> translator: i'm so glad we didn't leave the train. if we had, no one would have survived. >> reporter: the surrounding area was left flooded and the train was stranded. the passengers all gathered in one car to try to keep warm. they plugged the gaps in the doors with advertising posters to keep out the freezing air and shared what food they had. as night fell, people began feeling more and more worried. then something happened that changed the whole atmosphere. there was a young schoolboy who had been traveling alone. his mother arrived at the train out of the dark soaking wet. she'd come looking for him. >> translator: everyone on the train started clapping. it was the moment we first started to feel hope that we

would survive. >> reporter: they spent the whole night in the train. by the next morning the water had receded and they were all able to leave the train safely. ten months have now passed. service is resumed on this line on january 16th. six days later she traveled on it again. >> translator: i will never forget the kindness of all those people on this train that day. i feel a deep gratitude to them. knowing that this train is up and running again will inspire me to keep on trying in my own life. >> a story of recovery in japan's northeast. people are up early in tokyo

this morning faced some cold. let's go for the weather picture here and elsewhere. welcome to your weather update. let's begin with japan. a cold wave is still impacting much of the nation and bringing heavy precipitation on the western side. the heaviest snow can be found in the tohoku area, i should say ho cori ku area. already this area has experienced a lot of snow. however, there's more to come. an additional 70 centimeters still expected over the next 24 hours, even in the lower elevations. that's quite a lot. and in fact very strong winds are blowing. so that is leading to blowing snow conditions. and snowy weather more likely continue here into next week. so the risk of avalanches is getting very high here. across the south showers are

moving into the southern islands as well as kyushu as we head into tomorrow. meanwhile a high pressure system is in control bringing dry weather across most of mongolia and china. showers there are developing over the southeastern corner of china. as for the indochina peninsula, it will stay largely dry here today. so today's highs are looking like this. we're expecting 16 in hong kong. and the same goes for taipei. and in seoul slightly warmer than average with 4 degrees. in tokyo the sunshine will help temperatures rise. we're expecting 9 degrees today. now, heading over to the americas. a developing low pressure system is still impacting the southeastern corner bringing a slight risk of severe thunderstorms, large hail, damaging winds and even tornadoes in the deep south region. as the system moves northward, the threat will move to north carolina as well as virginia. and the northeastern states as well as eastern canada will

start to see winter storm conditions on friday. that could of course lower the visibility as well as make the dangerous driving conditions. now, across the west a couple of systems are moving into the central and northern plains bringing some light to moderate precipitation on friday. and in british columbia the coastal rain will continue to see some light snow or rain throughout friday. so expected highs on friday are looking like this. we're expecting 7 degrees in vancouver and 6 degrees in seattle. and across the east way above average. 12 degrees expected in new york. and 15 degrees in washington, d.c. now, finally, let's go over to europe. we can see lots of clouds in the nor northwestern corner. these are slow-moving low pressure systems. strong winds in the british isles and norway as well as scattered rain and snow in a wide area will likely persist here all day friday. meanwhile, the blizzard

conditions have much eased in the balkans peninsula. lots of heavy mountain snow as well as coastal rain is impacting this area. but the conditions will finally ease as we head into friday night. so that's good news. temperatures are looking like this. still way below average in moscow with minus 12 degrees and minus 13 in kiev on friday. and across the west 7 expected in london and 9 degrees in paris. here's your extended forecast.

our lead story this hour, iran's president has lashed out at western leaders over new sanctions. he dismissed the effectiveness of an oil embargo by the european union. he said the eu, not iran, will lose out. he made his first public remarks about the sanctions in a speech in southern iran. he said iran won't suffer because only about 10% of its oil goes to the eu.

other than iranian leaders have said the share is closer to 18%. he said tehran is ready to revive talks with six nations over its nuclear program. he made no mention of threats from iranian leaders to close the strait of hormuz. millions of barrels of oil pass through the waterway every day. nato secretary general urged iran to keep shipping lanes open. >> i urge the iranian leadership to live up to its international commitments including stop the enrichment program and ensure free navigation in the strait of hormuz. >> he said nato leaders have no plans to intervene. france's louvre museum will

hold a traveling exhibit in april. at a news conference in tokyo on thursday the museum said that during times of hardship, it's all the more important for people to have the opportunity to see art. it honored that the theme of the exhibition is encounter which will hopefully envoek feelings of hope and trust. the exhibition features about 20 sculptures and paintings including relief of a mother with an infant at her breast from the ancient civilization. there's also a medieval european painting of the virgin mary. >> translator: we don't know how much enjoyment this exhibition will give to people in the disaster zones. we want to make an effort to rebuild and develop culture in our area. >> the exhibition became possible when they contacted art-related groups in japan. the show will travel through e

prefecture museums from late april to mid-september. and that wraps up this edition of "newsline." i'm catherine kobayashi in tokyo. thanks for being with us.