this is "newsline." welcome. it's tuesday, july 20th in tokyo. i'm catherine kobayashi. former north korean spy kim hunion hee has arrived in. her case is expected to shed light on people abducteded by north korea 30 years ago. the former agent was sentenced

to death in south korea for her role in the 1987 bombing of a south korean airliner which killed 115 people. she was later pardoned. kim's visit is her first trip abroad since her arrest. the japanese ministry used her discretion to allowed kim to enter japan. she will spend four days in the country. shortly after 7:00 a.m. tuesday, kim arrived at a villa belonging to former prime minister hatoyama where she will be staying. later in the day she will meet with family members offan abductor who taught her the japanese language. kim meant the brother and son in south korea last year. kim will meet the parents of another abductee on wednesday. the former agent said she wants to tell the parents what she bpz their daughter. kim is known to have lived with japanese abductee taguchi in north korea from 1981 to '83. she learned japanese and customs from taguchi.

in march last year, she met ta gulch taguchi's relatives. kim said thattaguchi was a pers she could share her feelings with. kim said a fellow female spy was taught japanese between 1983 and '83. kim testified she heard the spy describe her as diligent and conscien conscientous. >> translator: she said she was a very down to earth person and would try to minimize her living expenses by buying cheap north

korean cosmetics. i heard that they bought her a dress, a pair of shoes and hand bag when they you parted ways in 1983. in an interview with a japanese government official last year, kim reportedly said she was secret leered introduced to yakota in the 1980s through the female spy. >> translator: i'd like to meet her parents and tell them everything i know about her. tensions over north korea and the democratization of mayan mar will top the jend as asiam foreign ministers meet in vietnam this week. a four-day conference of the association of southeast asian nations opens in the capital hanoi on tuesday. the north korean foreign minister is expected to take part in the regional forum

scheduled for friday. in a draft joint statement, the member countries expressed concern over the sinking of a south korean war ship in march, but stopped short of accusing north korea of the incident. the ministers are expected to press myanmar to hold free and fair elections with the participation of all political parties. but the statement does not demand the release of pro democracy leader aung san suu kyi from house arrest. they will decide whether to invite russia and the united states to the summit next year. amid worsening security in kabul, afghanistan and the united nations are to host an international conference to discuss the country's future and how you to restore order.cretare

hillary clinton and japanese former minister okada will take part in tuesday's meetings. the participants are expected to outline assistance measures and discuss ways to raise funds to fight corruption and train local security forces. the funds will also be used to reintegrate former taliban fighters as a society and break down remaining insurgents. the participants will confirm a gradual transfer of security responsibilities to the afghan government by the end of 2014. the participants hope to pave the way for the withdrawal of international troops. the death toll of international troops exceeded 100 last month and the security situation appears to be worsening. energy ministers and senior officials from more than 20 nations are gathering in washington for a two-day meeting to discuss clean energy. opening the meeting on sunday, steven chu said the total energy

use for the participating countries amounted to 80% of the global consumption. at the meeting japan and the u.s. will propose setting up joint government and industry task forces to develop energy-saving initiative for sectors including steel and electricity. other nations are expected to suggest promoting electricity vehicles and energy-saving appliances. a call to create an international standard for the so-called next generation smart grid electricity networks will also be discussed. japanese representative said the meeting is significant because talks on combatting global warming are not progressing. >> translator: china, india and brazil are taking heart, so we hope to take the initiative and make progress in this field. u.s. airplane maker boeing unveiled the 787 dreamliner to the media at an air show near london. about 1,400 companies from 38 countries are taking part in the

farmboro international air show that opened monday. the boeing 787 will consume 20% less fuel than the predecessor thanks to its lighter fuselage and wings matter of lighter composite materials. the mid-size airplane carries 200 to 250 passengers. japanese companies such as mitsubishi heavy industries and kawasaki heavy industries have been involved in the development of the model since the project started six years ago. delivery has been delayed due to glitches in parts from boeing suppliers. the airplane maker outsourced 70% of parts to overseas companies to cut development costs. >> there could be some unknown unknowns. it's possible that the airplane could slip into 2011. if it does, we are talking a matter of weeks. i think once this airplane is in service and people are flying it in, they will forgive us for the fact that we were late. >> japanese airliner all nippon

airways ordered all 55 but boeing delayed the delivery five times. the first order is more than two years behind schedule. an unprecedented heat wave and continuing drought in russia damaged 20% of the nation's crops. the russian government has declared an economic emergency in 17 western and central regions as temperatures remain at about 30 degrees celsius. the russian grain union, the agriculture industry group estimated this year's crop yield will be around 80 million tons, a 20% drop from the previous year. the union said the government is considering offering financial assistance to farms whose har vests have been destroyed. russia is one of the world's major grain exporters and the grain union says the country has more than 24 million tons of stock. it said there will be no major impact on exports or domestic consumption. in the euro region and other

central areas this week temperatures are predicted to rise to nearly 40 degrees celsius prompting the concern of further economic damage and spread of forest fires. welcome back to news line business. the asian development bank says it's now time to end government stimulus measures across asia. this is to avoid overheating and ensure steady growth in the years ahead. in a semi-annual report released on tuesday the bank says it expects economic growth of 8% for southeast asia this year. it covers 14 economies, including china, south korea and southeast asia. as economies expandsed rapidly, the report warns about overheating and rising inflation. it says governments some terminate extra spending and

other extra actions. in particular, china should continue to keep its fast growth in check, while letting its currency to go higher. looking at other countries, such as indonesia and vietnam, the report says they need to bring stimulus measures to an end as soon as possible. tokyo stocks opened lower over concerns about the u.s. economy. the nikkei 225 ended down 113 ticks over 1.2%. sources say consumer sentiment pushed new york stocks lower and dampened stocks in tokyo. there was a sell-off in exporter shares. to currencies. the weaker u.s. consumer data is pressuring the dollar earlier tuesday. it's lower against the yen as they sell the dollar overseas. it's 86.91-96.

here's a look at the late ef long-term interest rates. this is the yield on the benchmark ten-year japanese government bond. in other asian markets, the hang seng is almost unchanged. slightly up. the shanghai for major blue chips, up 1.1%. and in the sse composite is above the 1,000 level, up 1.2%. in japan, the ruling coalition led by democratic party lost its majority in the recent elections. looking ahead, what can we expect on japan's political and economic horizon? we spoke with the former vice minister and professor at a local university. >> taxation reform, including a consumption tax hike was one of the biggest issues in the latest upper house election. so how much of an impact did these discussions actually have on the results?

>> i think it was quite significant. kan has made a strategic mistake. he probably shouldn't have talked about the consumption tax hike. you know, because he's not going to raise the consumption tax until after the next lower house election. he doesn't have to talk about that at this moment. one of the most powerful persons in the party, has resisted that. he said, you know, dpj should not talk about the consumption tax at this moment. i think heap turned out to be right. and mr. kan was too much affected by the crisis and too much influenced by the ministry finance, i guess. >> now that the elections are over, the government will be

compiling budgets for fiscal 2011. what is going to be the focus? >> it depends on how the japanese economy sort of behaves. right now it's all right, okay? but if my prediction is right, the economy would go into the recession toward the end of this year or early next year. then the budget compilation needs to take that into account. they could cut the profit tax. you know, they -- corporate profit tax in this country is too high. so they have to cut if any way. and i think even dpj have promised they will eventually cut it. so they may sort of front road that. to use the corporate tax cut as a sort of fiscal policy. as a sort of stimulus to the economy. >> recent economic data show a mixed picture and he expects a slowdown in growth.

>> current situation is not really that bad as tonkin has predicted. but the future -- give the future indication of investment. the weak machinery orders indicate that the economy would probably start to falter after summer. but i think current situation is not bad. generally, much growth rate at the annual rate was 5%. probably april, june, allowing for 3%, 4%. japanese recovery so far has been fairly strong. but it will probably weaken after summer. >> will results of the european bank stress tests will be released later this month. what are possible inflictions or benefits that these results could have on the japanese economy?

>> well, this stress test is a very delicate test. if good results come out, people doubt the credibility of the tests, okay? they'd say that the disclosure is not -- is not enough. and it's not transparents enough you. if the bad result comes out, people say, well, i said that. here in japan, well, probably the yen would weaken further. i've been saying it will probably hit 100 before long. so japan will be hit through markets, stronger yen and a weak nikkei. >> that was a professor at the university and a former vice finance minister. next is our report, international interest in japanese animation or anime has

been growing each year. professional animators used to be the only ones able to create those cartoons. now a flash animation software is making it possible for other enthusiasts to make their own, opening the tdoor to new busines opportunities. >> reporter: this is a popular flash animation series on the web that began three years ago. this cartoon humorously depicts the friendship of mofu and the twin girls. the creator lives in osaka, winner japan. she uses flash software, which allows her to create the series at home. making the characters move is easy. all she has to do is draw a line. the character then moves along

the path of the line. for gestures, she sets the start and end point and the speed. she even does the voices herself. she used to work as a children's clothing designer. a year and a half ago, she started making a living with her animation and left the company. >> translator: i didn't expect this to happen. it started out early as a hobby. >> reporter: they showcase flash animation like oshima's. sales have increased to more than $3 million a year. the firm seeks out promising animators. so far, it helped nearly 100 people make their professional debuts.

>> translator: people who watch anime are creating them. we're trying to help as many amateurs as possible become professional. >> reporter: the web firm is now looking to expand. a major publishing firm was also impressed with oshima. a year and a half ago, they began publishing a print version of her series in magazines. the magazine is targeted at elementary school girls and has a monthly circulation of 200,000. this is one of the top three most popular in the magazine. >> translator: children begin web surfing in elementary school. it's advantageous to use the internet to find new content for publications. >> reporter: character guards also a big business. in the case of popular flash animation "the legend of the

tank" over 200 character-related items like key chains, toys and games were put on sale. total sales from goods surpassed $11 million, bringing in royalties of over $550,000. >> translator: flash animation has so much potential. i really believe the opportunities are limitless. >> reporter: flash animation production companies are also being seen. dream link entertainment began accepting projects five years ago, with 50 employees, the firm now has annual sales of about $11 million. the company's major advantage lies in the speed and low cost of its productions. it takes them only five days to make a three-minute flash advertisement for a car dealer. and it costs about one-fifth that of a regular animation. the firm is actively trying to

expand to overseas markets. last year, they received a request from a french cable tv station to air a 30-minute original animation once a week for half a year. the firm was able to produce one episode a week for around $9,000. now they're focusing on selling their productions to mainland china and taiwan. they've hired chinese employees and have set up a chinese language website. >> translator: it's perfect timing because the asian entertainment industry is eager to team up you with japanese firms to learn the japanese way of creating animation. >> reporter: flash animation will likely have a colorful future as fresh, new talent and low-cost production draw even more business opportunities.

next is a recap of the latest market figures. that's all for now in biz news. next is the weather fork with saki ochi.

hi there. welcome back to your world weather update for east asia. we're keeping an eye on the south china sea. you can see a cluster of clouds trying to organize a little bit more. this is a tropical storm system. it is heading in a northerly direction, that is. about 20 kilometers per hour. it is expected to slow down in the coming days and possibly strengthen into severe tropical storm system. winds could start picking up a lot more. of course, that's not good news. it's following the path of the storm system just last week too. we're really concerned about the rain as well. in the next three days, we'll watch that really heavy rain impact southeastern china and northern vietnam. we could be seeing heavy rains to come. of course, that follows all the rain we saw last week. a big area of concern here.

china will also have to deal with a tropical depression off the central coast here. low pressure system in the north. that all combined will bring a lot more rain to northeastern portions and down through central china, inland areas of china all looking at a lot more rain. the heavy stuff falling in the north right now. central china, of course, really can't handle any more rain. very saturated area. there has been serious flooding problems. here's a look at some of the latest we've got coming out. this is the dam in hubei province. they're trying to reducing water levels. flooding widespread across a lot of central provinces. the death toll starting to rise. 23 is the death toll from the weekend alone. in total, this rainy season, the death toll starting to approach 150. very, very dangerous and serious

situation. any additional rainfall will not be good news. tuesday, you will also have to go with pretty warm conditions. getting up to 33 in hong kong. very muggy conditions for you as well. tokyo will be sweltering once again. 35 degrees for you on tuesday. that falls days of mid to upper 30s we've been seeing since the weekend. looks like it will stay hot into a lot of this week as well. towards the americas and central america, caribbean islands continue to see a lot of tropical activity. showers and downpours for you. we're looking at this long frontal line that stretches across the united states, towards the mid-section, plains state, northwest, northern rockies could be looking at severe weather breaking out tonight. otherwise, that rain continues to head in an easterly direction and starts moving into the mid-atlantic states on tuesday. as for highs, we're looking at 34 in new york. and 34 in d.c. staying pretty hot in the east.

also, looking at a lot of reds across the mississippi valley. there are heat-related watches in effect for you. definitely take precautions if you are going to be out and about. denver will be pretty hot during the day. 32 degrees for your high on tuesday. that is a looka the your weather for now. here is your three-day outlook.

the asian development bank says it's time to end government stimulus measures across asia. this is to avoid overheating and ensure steady growth in the years ahead. in is a semi-annual report, the bank says it expects economic growth of just over 8% for southeast asia this year. the report covers 14 economies, including china, south korea and those in southeast asia. as economies have expanded rapidly, the report warns about overheating and rising inflation. it says governments should now terminate extra spending and other emergency actions in most countries of the region. in particular, the report says china should continue to keep its fast growth in check while letting its currency go higher. looking at other countries such as indonesia and vietnam, the report says they need to bring stimulus measures to an end as soon as possible. that's all for this edition of "newsline." i'm catherine kobayashi in

tokyo. do stay with us. we'll be back with more of your updates. jj