this is "newsline." welcome. it's tuesday, october 12th, 11:00 a.m. in tokyo. i'm catherine kobayashi with your updates. a u.s. biotechnology firm says it has started the world's first test using embryonic stem cells on a human patient. geron corporation said on monday that it's treating a patient with spinal paralysis. researchers are injecting embryonic nerve cells into the person's spinal cord. embryonic stem cells come from human embryos. they have the potential to be cultivated into any tissue or

organ. there is high expectation that they can be used in regenerative medicine. the company says the purpose is to establish that stem cells can be used safely on humans. through the research, it hopes to provide a cure for people with spinal cord damage in the future. stem cell use is controversial in the u.s. christian right groups say it's unethical to use fertilized eggs because it destroys human life. in august, a u.s. federal court issued a preliminary injunction in favor of the argument that it's illegal for the government to support such experiments. geron says it does not receive any government support. the issue is likely to become more controversial around the world as it deals with people's ethics and religious beliefs. jap japan's prove okado commented on the test. he specializes in stem-cell research to regenerate nerve

tissue. okado stresses the around of e.s. cells being employed would be small and since the purpose is to confirm their safe use on humans, he doesn't expect the trials to dramatically improve patients' conditions. still, he emphasizes the experiment is the first of its kind in the world and is likely to provide valuable data, such as details of immune system responses. now, in japan the focus of regenerative medicine research is shifting from e.s. cells to another type known as ips cells. three years a, go kyoto university professor yamanaka achieved a major breakthrough when he converted human skin cells to a more versatile type similar to e.s. cells. ips cells can be generated from a patient's own body tissue, making the procedure ethically acceptable. transplants of patient-specific ips cells would also be less likely to be rejected by the immune system. in the world of chess,

computers are said to have become better players than humans. with the japanese chess-like game of shogi, humans have always had the edge as the rules are more complicated. but that could be about to change. a match between a new kind of shogi software and one of japan's top human players took place in tokyo on monday in front of 700 fans. one of the biggest challenges for a computer is that shogi players can use pieces they've captured from their opponents. there's a huge number of possibilities to calculate. in a match between a computer and a human three years ago, the human player came out on top. researchers at the university of tokyo and the university of electro communications set out to create a new kind of software that could give human players a run for their money. and the result is a new kind of software called akara. the software has four independent programs that work together to find the best moves.

it's connected to 170 computers for huge processing power and it has new data from more than 50,000 matches between top human shogi players. in the match on monday, akara played aggressively against one of japan's top female players. six hours later, shimizu resigned on the 86th move. it was the first-ever win for a machine against a human player. >> translator: i played hard. so i'm frustrated getting beaten. i'd like to play akara again if i have a chance. >> you county have imagined this ten years ago. it's very moving. >> the shgoi association says it's going to analyze the match before it decides whether to

allow the software to take a higher-ranking professional human player. let's take a look at the latest business news with innis matsuyama. >> thank you very much, catherine. on the tokyo foreign exchange the dollar's moving in a narrow range against the yen on tuesday morning. the dollar rose after briefly falling to the lower 81 yen range overseas on monday. that's after u.s. jobs data came out much worse than expected over the weekend. it's now at 82.08-10, while the euro's at 113.87-89. sources say the green back is underselling pressure on speculation the u.s. may further ease monetary policy. traders are cautious in keeping the dollar's downside limited since japan may intervene to stem the yen's rise. checking stocks, tokyo shares slid tuesday morning. sources say there's little trading as investors keep an eye on the yen. the key index lost 0.9% or 85 points and ended the session at 9,504.

and here's a look at the latest long-term interest rates. this is a yield on the benchmark ten-year january meez government bond. in other asian markets, hong kong's hang seng opened down 0.2%. it's currently down 0.3%. the shanghai key index for major blue chips is down 0.1%. the sse composite is up 0.1% almost. a trade fair held in iraq aims to call in foreign investment and revive the country's domestic industries. at the fair, iraqi companies displayed domestically-produced industrial products such as refrigerators and tires, as well as textile goods, including clothing and carpets. many foreign investors from neighbor is countries were invited to the event. >> i am confident that in the coming months and years, more investors and private companies will come in to create joint ventures with the companies.

>> this was the second time for the iraqi government to hold such a fair. it was held once in 2006 but it was discontinued due to the escalation of the war in iraq and conflict among religious sects. iraq is a producer of industrial and textile products and cement. however, the country currently depends on imports as many factories were destroyed during the war which led to a plunge in production. back to the main news with catherine. >> thanks very much, ines. the south korean president said north korea should address the nuclear issue regardless of a power succession. president lee myung bak met foreign correspondents in seoul on monday. he referred to recent moves in the north to promote kim jong-un as kim jong-il's successor. he said three generations of inherited power has become clear in the country.

>> lee added that pyongyang should respond positively to the nuclear issue to make progress on dialogue between the south and the north. ♪ >> in pyongyang, kim jong-un attended a military parade with his father on sunday to mark the 65th anniversary of the ruling workers party. it apparently shows people at home and abroad that he is the successor. the footage shows that china seems to be giving support to the succession of the younger kim. a chinese communist party politburo standing committee member stood next to the north's leader. but the gesture has drawn some criticism in china. this online message says china should not be used again by north korea. any key word search for kim jong-un on china's search engine baidu is being denied.

the chinese authorities seem to be restricting internet access because of the sensitive nature of the subject. the territorial issue in the south china sea was not on the agenda at an asean meeting, seemingly to avoid confrontation with china. defense ministers from ten asean countries met in hanoi on monday. they'll meet on tuesday with their counterparts from eight other countries including china, japan and the united states. the ministers agreed to set up meetings of senior officials to strengthen cooperation in five areas such as maritime security and anti-terrorism measures. the agreements are expected to be incorporated in a joint declaration to be adopted on tuesday. some asean countries have had disputes with china over the sovereignty of the spratley islands in the south chain that sea. it seems the asean ministers want to skip the territorial issue to avoid a rough start. tuesday's meeting would be the

first regular session with china to discuss regional security. and defense chiefs of the united states and china also had a meeting on monday. robert gates has suggested to liang guanglie about setting up a dialogue framework so future confrontation would not lead to suspension of bilateral military exchanges. it was the first of such a meeting between the two countries in about a year. china froze military exchanges with the u.s. earlier this year to protest the u.s. decision to sell arms to taiwan, but the two countries agreed last month to restore them. the two agreed in the meeting that gates will visit china early next year. china is showing more displeasure about the nobel peace prize going to liu xiaobo. beijing is calling off a bilateral fisheries meeting scheduled for this week. the cancelation comes amid growing tension between the two countries after the oslo-based

committee made the announcement. norwegian fisheries and coastal affairs minister hansen was supposed to meet with china's vice fisheries minister in beijing on wednesday. the norwegian government says china did not give any reason for canceling the meeting. the chinese government has criticized the committee's decision. it said liu is a convict under the country's law. he's currently serving an 11-year prison sentence. the authorities have set up checkpoints around the prison in liaoning province where liu is being kept. they are also denying media access to the vicinity. surveillance was also stepped up in beijing near the apartment where his wife lives. everyone except residents is being denied access. on sunday she was allowed to meet her husband but supporters say police are posted just outside her apartment, effectively keeping her under house arrest. outside china, the dalai lama commented during a stopover on his way to the united states.

the tibetan spiritual leader also won the peace prize about a decade ago. >> definitely. person, right moment. china must show world open. transparent. then trust will come. >> the dalai lama said he supports liu's case and that hundreds of thousands are campaigning for democracy in china. he also stated that liu's award will be a turning point for the country. two americans and one briton share this year's nobel prize in economics for their theories on how economic policies can affect unemployment. the royal swedish academy of sciences announced the winners on monday. the professor peter diamond of the massachusetts institute of technology, dale mortensen of northwestern university in evanston, illinois and christopher pissarides of the london school of economics. their research shows why many

people remain unemployed at times despite large numbers of job openings. it also explains the jobless rates do not necessarily decline based on economic policy and regulation. the three economists claim that improving public services can actually raise jobless rates. the royal swedish academy of sciences says their theories are applicable to monetary policies and public economics. >> an important phone message from sweden. to my surprise. i thought i was hallucinating for a moment. >> professor mortensen was giving a lecture in denmark where his father was born when he heard the news. >> well, at the moment, very overwhelming. i imagine it will get worse before it gets better. but happy, too. in northern chile, trapped miners are finally likely to be lifted out.

they have been in a shelter about 700 meters underground for more than two months. >> the minister spoke to reporters on monday, saying rescuers finished reinforcing an escape shaft with metal tubes in the morning, earlier than anticipated. golborne has said that in a test, a rescue capsule was lowered 600 meters without a hitch, just 100 meters short of the chamber. as part of the final preparations, rescuers have rehearsed transporting the miners by helicopter to a hospital 50 kilometers away. in july, u.s. president barack obama signed the financial reform package into

law. the purpose to head off another financial disaster by increasing scrutiny of financial institutions. but some of the new rules are beginning to affect smaller local banks in unexpected ways. nhk world's davit savino has more. >> reporter: this summer, president obama signed the financial reform package into law. former federal reserve chairman paul volker was a key proponent of reform. at a meeting of senior executives of the services industry in chicago, mr. volker insisted that strong and meaningful legislation is absolutely crucial to protect consumers from banks acting irresponsibly. >> commercial banks can go out and do the same speculation and proprietary activity anybody else can do that you don't want to protect. >> reporter: but ironically, the new legislation may unexpectedly impact mid and small-sized banks

disproportionately. community banks like kalamazoo county state bank in michigan play an important role in supporting their regional economy by making loans to local consumers and small businesses. miss schaffer is an assistant vice president in charge of compliance at the bank. every day she struggles to keep up to date with all the new reports and procedures. >> i do quarterly reports, monthly reports, and i submit policies to the board monthly for them to review. we used to do that annually. now i do it monthly. >> reporter: one of the biggest areas of concerns for banks these days are debit cards. similar to a credit card, but instead linked directly to a bank account. each time they're used the bank receives an interchange fee from the retailer. these fees are an important source of revenue, particularly

for smaller banks. one aspect of the new law is that it will lower interchange fees for banks of over $10 billion in assets. the main purpose of this is to redirect some of the profits back towards consumers and retailers. even though the law only affects larger banks, a combination of market forces and pressure from retailers, card networks and said larger financial institutions may force smaller banks to do the same in the end. if their interchange fees decrease, however, some banks say they'll have to make up the difference with cuts in a variety of areas, including lending to consumers and small businesses. >> it's getting harder and harder for us to do what we've always done for our communities. so therefore, they're being punished and can't get a loan that they need to because of the regulations. >> reporter: as the rules

continue tightening, the banking industry is being forced to adapt to the new environment. >> hi, how are you? mike. >> nice to meet you, mike. >> reporter: michael anaconi who runs an advisory business has been busy recently. >> and since now they're not in we've had 25 customers so far this year, so we have seven projects that are going on right now, either restructuring, mergers and acquisitions or capital raising entities, so it's a very busy time for our company. >> professor lawrence white of new york university's sterns school of business is concerned that a lack of clarity as to the actual meaning of the regulations may affect the availability of credit. >> we're clearly much more sensitivity to risk, arguably excessive sensitivity to risk. but it's the uncertainty of what are the regulations look like. that's adding to the uncertainty.

>> reporter: one of the key arguments president obama cited when he pushed through the financial reform package this summer was consumer protection. however, new rules and increasing regulatory burdens on small and regional banks may carry unintended consequences and end up causing the opposite result. davit savino, nhk world, new york. and what's happening in japan this week after a three-day weekend? monday was a national holiday here. machinery orders for august will be released on wednesday. this indicator of corporate equipment investment has climbed for two straight months. they surged nearly 9% month on month in july. we have two indicators coming out thursday, the wholesale price index and condominium sales for the tokyo metropolitan area both for september. the wholesale price index known as the corporate goods price index remained flat in august compared with the same month last year, after dipping 0.1% in july. condo sales in the tokyo area climbed for a seventh consecutive month in august as

an increasing number of home buyers took advantage of lower mortgage rates. sales went up about 19% in july from a year earlier, and finally the bank of japan's branch manager also get together at the central bank in tokyo on friday. they will report on the state of the economy in their regions. they are also expected to discuss the impact of the strong yen and a slowdown in exports to the u.s. and emerging economies. and here are the economic indicators due out in the united states this week. the fed on tuesday will release the minutes from the last federal open market committee meeting held in late september. they should give us a better understanding of the fed's decision to continue maintaining rates near zero to support the economy. the trade balance for august will come out on thursday. the trade deficit narrowed to $42.8 billion in july mainly because the weak economy hurt demand for imports but the markets are expecting the deficit to widen. the producer price and consumer

price indices for september will be released on thursday and friday. both advanced in august and are expected to move up again in september. next is a recap of the latest market figures. >> and that's all for now in "biz news." next is the weather forecast with saki ochi.

hi there. welcome to your world weather update. we're starting with a look at australia, where queens land towards the east here saw pretty stormy conditions on sunday and monday. here's a look at the situation on monday. this was from the coastline here. rough sea conditions still impacting the coastline of queensland. then there has been some pretty severe bouts of flooding reported here, especially in and around the brisbane region. heavy rains leading to widespread flooding of roads and leaving many vehicles stranded. along with those rains, there were pretty strong winds reported as well, bringing down power lines. about 20,000 homes left without power as of monday. right now, conditions are looking a lot more calmer. the storm system is pulling away.

much fewer clouds along the east coast here and in and around the brisbane region, very little in the way of rainfall here. morning hours of tuesday, still a couple showers may impact you, but then all that rain heads a little bit more up towards central coastline so hopefully a lot more drier conditions and that will allow those water levels to ease. over towards east asia, looking at clouds moving in across japan today. overall, it will be pretty cloudy and unsettled, changeable weather with a couple showers showing up, especially as we head into the afternoon and evening hours. a couple showers may show up across the korean peninsula as well tonight, then over towards northern china, dry and clear picture for you. however, central sections here looking at this rain band mainly along the yangtze river valley. then down towards the south to the south china sea area, still looking at showers

impacting you, severe flooding, very, very heavy rainfall has been impacting in this region since last week. looks like a couple more wet spots will continue to impact you today. as for highs today, on tuesday, 31 in manila, 30 degrees for taipei, coming in at 21 degrees for shanghai. over towards the americas, taking your attention towards the south here, we do have a tropical storm system which has developed. not a terribly intense storm system although it's showing signs of strengthening. winds now at 100 kilometers per hour. it could become a hurricane within the next 24 to 48 hours. definitely impacting this region here. areas like nicaragua and honduras and in the yucatan peninsula will be looking at heavy rains as well as storm surges and strong winds over the next couple of days. as for the americas, stormy picture possible for central-southern plain states tonight. looking at a bit of severe weather threat for parts of the

mid-atlantic region. out west should stay largely dry. a couple showers along the northern rockies, then british columbia will see pretty wet conditions, especially along the coastline. vancouver's high coming in at 16 on tuesday. likely a couple showers impacting you here. still quite hot for houston at 31. 30 degrees in miami. remaining at 27 in d.c. so quite mild but for new york, definitely a much colder picture coming in at 17 degrees only. all right. now here is your three-day outlook.

taking a look at our top story once again. a u.s. biotechnology firm says it has started the world's first test using embryonic stem cells on a human patient. geron corporation said on monday that it's treating a patient with spinal paralysis. researchers are injecting embryonic nerve cells into the

person's spinal cord. embryonic stem cells come from human embryos. they have the potential to be cultivated into any tissue or organ. there is high expectation that they can be used in regenerative medicine. the company says the purpose is to establish that stem cells can be used safely on humans. through the research, it hopes to provide a cure for people with spinal cord damage in the future. stem cell use is controversial in the u.s. christian right groups say it's unethical to use fertilized eggs because it destroys human life. in august, a u.s. federal court issued a preliminary injunction in favor of the argument that it's illegal for the government to support such experiments. geron says it does not receive any government support. the issue is likely to become more controversial around the world as it deals with people's ethics and religious beliefs. that's all for this edition of "newsline."

i'm catherine kobayashi in tokyo. we'll be back at the top of the next hour. hope you'll stay with us.