welcome to "newsline." it's thursday february 14th. i'm catherine kobayashi in tokyo. we start with data on japan's economy just out. the country's gross domestic product for the final quarter of 2012 shrank slightly in the october to december period. this is the third straight quarter of contraction. cabinet office officials say gdp for the quarter fell 0.1% from

the previous three months. that's a decline of 0.4% in annual terms. this is due to weak global demand. exports shrank 3.7%. and capital spending at companies went down 2.6%. financial leaders in the u.s. are facing their own set of challenges. president obama nominated his chief of staff to be his next treasury secretary. and now jack lew is outlining what he sees ahead for the economy. ai uchida joins us now from the business desk. ai, good morning. >> good morning, catherine. jack lew, he has to win over the democrats and the republicans before he can be treasury secretary. so he's asking lawmakers for bipartisan support on fiscal reform. he says this is needed to keep the u.s. economy on the path to recovery. lew spoke to senators on wednesday. he's seeking their approval for his appointment to obama's second-term cabinet. lew said he's resolved to reduce the nation's huge budget deficit. he asked both democrats and

republicans to work together to avoid automatic spending cut march on defense and other programs. >> we must put our nation back on a path of fiscal sustainability. we cannot allow the series of harmful automatic spending cuts known as the sequester to go into effect. these cuts would impose self-inflicted wounds to the recovery and will put far too many jobs and businesses at risk. >> lew also responded to concerns the yen's rapid decline might encourage governments to lower the value of their currencies to boost domestic exports. >> the treasury has had a long-standing position through administrations of both parties over many years that a strong dollar is in the best interest of promoting u.s. growth, productivity, and competitiveness. if confirmed i would not change that policy. >> and as for markets, u.s. stock markets ended mixed with the dow jones industrial average down just about a quarter of a percent at 13,982.

as for the tech-heavy nasdaq, that ended up 3,196, actually, up a third of a percent. well, for more on how stocks are trading here, let's go to ramin mellegard, who's at the tokyo stock exchange. so ramin, we're really seeing a bit of a seesaw movement in stocks, one day up, the next day down. but we've also had some key gdp data for here in japan this morning. any direction for that? >> very good morning to you, ai. yes indeed. as catherine mentioned just earlier, we did have the preliminary gdp for the october to december period 2012, which came at minus 0.1 for the previous quarter. and on annual terms minus 0.4. now, that's three quarters in a row where it's been negative. but let's have a look at the opening levels here to see their reaction for the nikkei and the topix. both of them marginally in the positive. we'll see how the trade goes on during the day. 11,265 for the nikkei. 957 for the topix.

now, the nikkei fell back yesterday. investors really glued to the yen's levels, selling stocks as the yen rose against both the dollar and the euro. largely taking profits on some of those stock gains. now, the dips that we've seen have not really overturned or actually taken over some of the positive momentum that we've seen on the nikkei so far, and it's really going to be interesting to see how japan's currency is dealt with at the upcoming g20 meeting, which kicks off in moscow on friday. other leading exporters have of course raised concerns about the sudden and very fast and very short period of time where the yen has depreciated. so that's going to be a big topic. now, obviously, we're going to keep track of exporters here. given the gyrations of the yen. and also, we have seen some big swings in some of the key blue chip stocks as well. financial stocks also a bit of a focus here. investors really betting that

the nikkei's gains so far may mean that more companies may opt to actually issue new stocks or ipos, initial public offerings, and offer shares for the first time. we'll see. ai? >> we could really see them lining up at the rate the nikkei is rising. but ramin, let's switch to currencies now. where do we stand this thursday? >> yeah, this thursday morning here in tokyo let's have a look at some of the currency pairs here. dollar/yen currently 93.13-17. you're oh/yen 125.26-28. yen currently trading in a bit of aw narrow range following a move higher. investors cautious ahead of the g20 meeting. however, let's also focus on earnings out today. keep track of commodity-related companies. we have nippon steel and sumitomo metal as well as show shell providing earnings. also internet retail sector, rakutan, which is japan's biggest online retailer, they'll also be coming out with numbers

for the year, december 2012, for that period there as well. and of course any statements from bank of japan officials as the meeting wraps up today. ai, back to you. >> thanks a lot, ramin. sounds good. ramin mellegard from the tokyo stock exchange. both the nikkei and the topix are modestly higher this morning. but we're not the only asian markets open. take a look. ♪ ♪ south korea's president-elect says she may revise how she deals with north

korea. park gung kee has promised to engage leaders in pyongyang after she takes office later this month. but she tweaked her approach this week after they followed through on threats to carry out another nuclear test. >> translator: north korean actions affect our policy. the north should understand that any further provocation we will no longer be able to have a dialogue even if we want to. >> park spoke to members of a transition committee who are working on north-south relations and other foreign policy matters. she said the nuclear test clearly shows the difficulty of building trust and peace on the korean peninsula. she said she'll focus for the time being on preventing such provocations. she says she wants to spare south koreans from any further anxiety. south korean military personnel are trying to determine the type of bomb scientists used in the test. they've taken to the sea and the sky in search of radioactive

substances. a spokesperson for the defense ministry says air samples could help determine the makeup of the bomb. analysts suspect the scientists detonated an enriched uranium device. scientists used plutonium bombs in two previous tests, in 2006 and 2009. defense officials in seoul say they're on the alert for further provocations. >> translator: we have independently developed and deployed the world's highest class of cruise missiles. they have the accuracy and destructive power to immediately attack anywhere in north korea. >> kim says commanders are preparing for the possibilities of another nuclear test and an attack on south korean targets. u.s. secretary of state john kerry says world leaders have to mount a credible response. he says they need to show they're serious about containing nuclear arms.

>> north korea's nuclear weapons and ballistic missile program are a threat now to the united states of america because of what they are pursuing specifically as well as to global security and peace. >> kerry says he's also concerned about the nuclear program in iran. he says iranian and north korean officials have cooperated on nuclear development. he says the international community must react to the test with what he called a swift, clear, and strong response. kerry has reached out to his counterparts in a number of countries. he says he's pushing for new sanctions at the united nations security council. as officials scramble to figure out who'll be the next head of the roman catholic church, pope benedict xvi has made his first public appearance since he announced that he was resigning. the 85-year-old pontiff was

given an enthusiastic welcome by thousands of faithful as he entered st. peter's basilica. >> his announcement that he was stepping down due to old age and poor health came as a surprise for people around the world. he is the first pope to resign in nearly 600 years. vatican officials say pope benedict will give his final papal audience on february 27th one day before he steps down. they say they're making preparations to hold a conclave to elect a new pope in mid march. a section of roof at the chernobyl nuclear complex has collapsed, prompting workers to evacuate. ukrainian authorities say no one was injured. and they say there were no leaks of radiation.

officials say a 600 square-meter section partially covered the turbine hall. workers built it after the nuclear disaster in 19 86. it gave way under the weight of heavy snow. contractors are building a new protective structure to cover the number 4 reactor, about 150 meters away. foremen for a french construction company pulled out 80 workers as a precaution. experts are concerned the concrete and metal structure built after the disaster is too old to contain the radiation inside the reactor. people from japan are getting a chance to conduct a more thorough search for japanese war dead with the opening up of myanmar. the remains of about 45,000 soldiers are still believed to be in the northern part of the country. officials from a japanese humanitarian aid group and myanmar's ethnic minorities have met in chiang mai, northern thailand. the two sides have agreed to jointly collect information on places that might hold the

remains of japanese troops. they'll also investigate whether the soldiers left families in the country. >> translator: we hope to retrieve the remains of the japanese war dead as soon as possible. with the assistance of people in myanmar. >> it's estimated that as many as 137,000 japanese soldiers died in the area during a military campaign in 1944 targeting british strongholds in neighboring india. a long-running civil war between myanmar's previous military government and ethnic minorities has restricted access to most of the former battle zones. japan's meteorological agency has developed a new alert system to warn of tsunami after very powerful earthquakes. the news comes before the second anniversary of the quake and tsunami that devastated northeastern japan. the magnitude 9 earthquake on march 11, 2011 was initially estimated at just 7.9.

the agency then issued alerts for tsunamis that proved far smaller than those that pummeled the area. that warning system was designed to issue tsunami alerts three minutes after quakes of up to around magnitude 8. the new system can detect magnitude 8 or stronger earthquakes. the agency will now be able to issue warnings for massive tsunami and urge evacuation without saying how big they might be. >> translator: we want to keep improving the system so that we can issue useful and reliable alerts. >> the system will go into operation on march 7th. patients with spinal cord injuries typically lose movement in their lower body. and they must resign themselves to possibly never walking again. but a group of japanese researchers has made advances in repairing damaged spinal cords. and they say it might mean

paraplegics will walk again. nhk world reports. >> reporter: nozawa lost all movement in his lower body 13 years ago. but the 39-year-old keeps a positive attitude about being able to work again. >> translator: i sense that i'm gradually able to apply strength to my legs. i'm really surprised. >> reporter: nozawa used to be physically active. he loved sports, especially karate. but it all came to an abrupt end. at the age of 26 he was injured in a motorcycle accident that ruptured his spinal cord. >> translator: i couldn't walk. i couldn't eliminate waste. i couldn't feel anything, even

hot objects or when my legs hit something. how was i to live using just my upper body? >> reporter: but nozawa's outlook began to improve after he heard about research at osaka university hospital into regenerating injured spinal cords through transplant surgery. so he decided to have the operation. it's the first of its kind in japan. and it's performed by dr. koichi watsuki. the team operated on their patient for eight hours. they transplanted the main vein from his nostril. it was grafted near the damaged area on nozawa's spine. this tissue regenerated the nerves. when transplanted to a damaged

spinal cord, it helped stretch severed nerves and reconnect them. experts say patients under the age of 40 have a higher chance of success. before the operation nozawa couldn't sense electrical signals from his brain to his lower body. but the surgery helped to reconnect the nerves, so the signals could get through. >> translator: it's amazing. >> translator: the injury was more than a decade ago. >> translator: i hope that many patients will feel the joy of standing on their feet and walking again. the prospects look good. i consider this a major step forward. >> reporter: even though the operation was successful, it doesn't mean nozawa can walk right away.

he must undergo special rehabilitation. it's a new kind developed by the medical staff at the university of tsukuba. first the patient focuses on his needs, imagining he's moving them. he tries to send electrical signals to his leg muscles. but at this stage the signals are quite weak. so to boost them he relies on a machine. the robotic device helps nozawa perform the desired bending and stretching. as well as using the robotic attachment, nozawa tries to move forward on his own. >> translator: the signals are still weak, but they do reach his legs when he tries to move them.

he's starting from scratch, learning how to move again. he's trying his best. >> translator: i still have a long way to go but i think i'm getting closer to my goal. >> reporter: and that goal is to get around with the help of walking sticks by the spring. the new treatment devised in japan gives people like nozawa plent to look forward to. kiyoshi kasai, nhk world. >> three other patients have had similar transplants at the osaka university hospital. doctors say all have shown some improvement. 40 others are on the waiting list. but to treat patients from around the country more rehabilitation centers are needed. and the amount of time and money spent on rehab will have to be reduced.

japanese have no shortage of traditions. they pass them along from generation to generation. but some customs fade away. that happened to one in western japan that involved straw horses, sweets, and ice cold water. but a group of residents managed to pull off a revival. >> reporter: they call the custom torohei. quietly, youngsters arrive with good luck charms. after leaving the two small horses, the children hide. the grown-ups take the small horse and leave sweets. too tempting to ignore. but the adults were ready for the kids.

it's said the water makes children strong and healthy. in the chigoku region people took part in the tradition until about the 1930s. then it began to fade. in inancho they did away with it eight years ago. takashi ishikawa works at the community center. he persuaded the locals to revive torohei. >> translator: if people don't take part, torohei will die out. if that should happen, well, the only place we'll find it is in books. >> translator: this straw horse is a god. so it belongs on the family altar. >> reporter: they say straw horses protect a household all year. >> translator: if the straw horses stopped coming, it would be sad. if they do come, we're good for another year until the next ones come.

>> reporter: the youngsters learn how to make the horses. >> translator: i hope people who receive the horses believe they'll have good health all year. >> reporter: it takes two hours of hard work to make a horse. tonight is the night. the children wear ski clothing so they won't get too wet. >> translator: i want to dodge the water. >> translator: i'll be embarrassed if i get dunked and laughed at. >> reporter: and what are the adults up to? >> translator: i'm going to drench the kids today. >> reporter: the youngsters begin the torohei. the straw horses are left with care. and the adults leave sweets.

they coordinate their timing for pouring water. the candies tempt the children. as the children size up their bounty -- the adults strike. joyous whoops shatter the evening quiet. >> translator: it's fun because it's a little scary. >> translator: this was my first time, and i'd like to do it again. >> translator: i hope the

children will remember tonight's fun after they've grown up. wouldn't it be wonderful if they could pass this tradition onto their children? >> reporter: torohei has come back. and once a year the village will echo with the joyous sounds of children. all right. well, children in tokyo are starting their day under fair skies. sayaka mori joins us now with world weather. >> good morning, catherine. dry skies will persist in tokyo throughout the day. the expected high is 10 degrees. so quite seasonal. nice conditions for couples to go outside on valentine's day today. but things are going to change on friday as a system is approaching from the west. right now we have an area of rain over southern china as well as taiwan. this one will then head toward the east while developing like the one we saw on wednesday yesterday. if you remember, we saw some sleet in metro tokyo. snow showers in inland

locations. but that could happen once again on friday. so again, metro tokyo will see snow showers on friday. meanwhile, snow -- rain -- excuse me. dry conditions for the korean peninsula as well as northern china. dry weather can also be pounds in the indo-china peninsula with the exception on the east coast. scattered showers for the philippines. and temperatures are scorching hot in bangkok at 36 degrees. 21 for hong kong. tokyo at 10 degrees. so a couple of degrees cooler than yesterday. very frigid up toward the north. minus 24 in ulan bator. that's about 15 degrees colder than average. now, in north america we've talked about severe weather in the southeast. 250 millimeters of rain, hail, thunderstorms, and even tornadoes over the deep south. but conditions are changing. this system amoving away from the deep south. things are getting dryer here. but the eastern seaboard is

going to be the next target. we're going to be seeing rain showers, heavy snow showers in some locations. snow is likely in washington, d.c. as well as new york city from wednesday night into your thursday. there's still leftover snow showers on roads due to last week's snowstorm. traveling is going to be more dangerous. meanwhile, drenching rain will persist in the florida peninsula into your saturday at least and up towards the north. an area of blowing snow is reaching the great lakes region. within the next 24 hours up to 20 centimeter is likely in the next 24 hours. and an area of snow is also toward the viechth the central rockies. out toward the west and the next system is moving into the west coast of british columbia, bringing heavy rain for the coastal areas, including vancouver. tefrpz are not too bad in vancouver at 7 degrees on thursday. meanwhile, about five degrees colder than average in winnipeg at minus 13 degrees and 3 for

toronto and down toward the south, very hot in miami at 27 degrees. all right. finally, in europe a thick cloud mass is drifting over the british isles. underneath it heavy rain, heavy snow, and extremely strong winds. winds over 70 kilometers per hour have been reported with much higher gusts. but the good news is that the peak of severe weather is over. so conditions will gradually ease through your thursday. but a mixture of rain and snow will be moving into the western continent. meanwhile, severe weather is still erupting across the southeast. we are seeing heavy rain, hail, thunderstorms, and extremely strong winds. this while we're slowly moving toward the east, reaching western turkey. snow is also a big concern. western hungary, you could be seeing as much as 20 centimeters of snow. hoorz your highs on thursday. and i will leave you now with your extended forecast. ps ♪

♪ ♪ ♪ that's all for this edition of "newsline."

i'm catherine kobayashi in tokyo. thanks for joining us.