welcome to nhk world "newsline." japan's debt has been downgraded by u.s. credit rating agency standard and poor. it's the first downgrade in eight years and nine months for japanese government bonds. standard and poor's said on thursday it has cut the double-a credit rating on japan's sovereign debt by one notch to did you believe a minus. japan has the highest ranking out of 21 notches. it has the same rating as kuwait, saudi arabia and china.

>> our level of confidence of the ability of the government to carry through with fiscal consolidation had evaporated to a point where we thought we needed to lower the rating. >> the rating firm says japan's fiscal health is the worth among industrialized nation. s&p said it will consider an upgrade if the government takes steps to reduce the debts. it cited japan's net foreign assets, which are the largest in the world. the yen's role has a major reserve currency.

>> japan's cumulative national debt is nearly 200% of its gross domestic product. japan's finance ministry estimates its national debt will swell to more than $997 trillion yen or $12 trillion at the end of march 2012. social security and tax reforms are high on the agenda of naoto kan. he is aiming to improve the country's fiscal health with no debate with the opposition party scheduled. he has no specific plans for achieving those goals. the international monetary fund has urged japan and the u.s. to speed up fiscal reconstruction. in a fiscal monitor report released on thursday the imf said the pace of deficit reduction is likely to slow down. this is mainly because the u.s. and japan are preparing to increase borrowing. the imf report says last december japanese lawmakers agreed to boost stimulus measures. these have further scaled back the nation's modest plan to narrow the deficit in 2011.

on u.s. policies the imf refers to tax reduction and spending package passed by congress in december. it says that an extension of tax cuts for wealthy americans meant that the impact of the stimulus package will be small relative to its fiscal cost. the imf urged japan and the u.s. to devise plans to bring their huge fiscal deficits under control. in 2012, japan's consumer price index fell 1% compared to the previous year. the percentage decrease was the second largest since 1971. the internal affairs ministry said on friday, in december the consumer price index was down by 0.4% at 99.4. a reference value of 100 for the year 2005. this marks the 22nd straight months of declines. the index does not include volatile fresh food prices.

the consumer price index for 2010 marked the second largest fall since 1971. this downgrade trend is largely due to a decrease in tuition fees at public high schools and lower prices of goods such as electronic devices, food and gasoline. the ministry says the figures have supported the view the japanese economy is still in deflation. it is cautious how this trend will affect future prices of energy, such as crude oil, gasoline and electricity. japanese retailers are beginning to see a glimmer of hope in the midst of deflation as sales of items are picking up. >> reporter: this is the electronic shop. on week days, it packed with people who want to shop for smart phones. 2011 is expected to be a year of

smart phones. many makers are competing to roll out new models. high performance handsets sell for between $500 and $600. the prices are high, but the number of subscription contracts is said to have doubled over the past six months. >> translator: i know those phones are expensive, but i want to get one. some of their functions are good for job hunting. >> reporter: the restaurant industry has also noticed a change in customer behavior. mcdonald's japan says, high-priced hamburgers are selling well. the fast food chain launched to beat america this month. its beef patty is 2.5 times the size of its regular hamburger. the set plate goes for roughly $9, about $3 more than regular set menus.

the company says, big america sales have beaten its forecast. >> translator: i'd rather eat pricey, but good food rather than cheap and not-so-tasty items. >> translator: we are beginning to find that our customers are willing to pay more if the quality is worth the price. >> reporter: experts say, people have started loosening their purse strings on some specific products, even though many are still penny pinching. in this department store, sales of high-priced products are believed to be a sign of the times. luxury watches and jewelries with price tags over $36,000 are starting to find buyers. the uptrend is seen in this traditional doll section, too. ahead of an annual girls' festival in early march, people

are going after dolls over $12,000. the store says, customers are spending more time looking around. as a result, they are buying more things. its new year's sales picked up 5% from the same time last year. >> translator: consumers are getting tired of tightening their budgets and are coming back. the solid stock market is also having an impact on their sentiment. >> reporter: but the big question is, whether these recent changes in shoppers' spending habits will lead to a full-blown recovery in consumption. this economist is cautious. >> translator: we see two opposing price trends. prices of those goods with sufficient demand will rise, but things lacking demand will show a further decline.

looking at japan's gdp, japan will fall short of supply by over $200 billion. so prices as a whole will continue to drop for some time. >> reporter: but he stresses that the recent changes in consumer spending are important because it is not spurred by government stimulus. others say the changes could eventually herald an end to deflation when demand rekindles a stable economic recovery. a key to putting an end to deflation is how much consumer spending gets the necessary boost to fill the gap between supply and demand. nhk world. china is introducing a real estate tax on two cities. this is another attempt to cool down the country's booming property markets. the tax was announced thursday and is being launched as a trial as rising housing prices are causing dissatisfaction among

consumers. in central west china, homeowners will be charged up to 1.2% starting today. the new taxes come after beijing raised the minimum down payment for second home purchases from 50% to 60%. home prices are soaring in china due to the growing economy. another factor is the inflow of foreign capital after measures to boost the money supply in the u.s. china raised interest rates twice since last october to curb speculation, but with limited success. tokyo stocks were down friday morning as banking shares slid following the downgrade of japanese government bonds. the nikkei average closed the morning session just below 10,382, down 96 points. investors shun banking and insurance sectors amid fears that downgrade will lead to losses on their holdings of government bonds. some move to sell export-related shares to lock in profit.

on the tokyo stock exchange, the dollar hovering with a narrow range. the euro had $1.3717-3718, a euro costs 13.39 to 42 yen. the yen's sell-off following the downgrade was short lived as the market has taken the news in its stride. concern about bird flu is spreading across japan. despite efforts to contain the outbreak. as of thursday six cases in four prefectures in western japan have been confirmed. japan'sing aconsult tur agriculture industry is sending experts to determine the route of infection among chickens raised at a farm there. some of the 186 dead chickens raised at the farm in the town were positive for the h5 bird flu strain in a preliminary test. ministry decided to call 31,000

chickens. the work was done by friday morning. this is the third case of bird flu infection this winter and the sixth in the country. in the neighboring prefecture, transport restrictions have been imposed around the neighboring city. the ban affects 160 farmers producing over 5 million chickens. authorities inspected all poultry farms for any new cases of infection. they also are running blood tests on 1,600 chickens. another team of experts has been dispatched to a poultry farm to check the route of infection there a member of the team thinks the farm was following procedures to protect any contact for birds.

the htv2 spacecraft lifted off in southwestern japan on saturday. the rocket was carrying 5.31 tons of cargo including experimental equipment and drinking water. thursday the craft began the final phase of its approach to the station around 11:40, astronauts on board the space station grabbed the craft with robotic arms. the docking procedure was completed around 1830 utc. this was the second successful docking for the unmanned japanese spacecraft following a mission in earlier 2009. it will become the only vehicle able to transport large equipment to the space station. the u.s. space shuttle program ends late they are year. >> translator: it will be

difficult to maintain the space station without the htv spacecraft. its global importance has increased following the successful mission. volcano in southwestern japan remains active friday morning. eruptions from mount shinmo sent columns of ash and debris into the sky. it is part of the mount shinmo range. it was the first major eruption since 1988 when the meteorological agency started observations. another huge eruption occurred shortly before 3:00 a.m. friday with volcanic degree reaching 18 meters high. a local observatory issued warnings for wide areas, mainly the south eastern side of the volcano.

>> on thursday night about 30 people voluntarily evacuated to a public facility about 10 kilometers away from the volcano. >> the observatory raised its column vannic alert level to three on a scale of five wednesday warning people to stay away from the volcano. alert lev of five wednesday warning people to stay away from the volcano. v scale of five wednesday warning people to stay away from the volcano. c alert level to three scale of five wednesday warning people to stay away from the volcano. an alert level to threea scale of five wednesday warning people to stay away from the volcano. ic alert level to threen a scale of five wednesday warning people to stay away from the volcano. anti-government demonstrations continued across egypt on thursday inspired by the recent uprising in tunisia. protesters are demanding an end

to the government of the president and more civil unrest is expected friday. civil troops and demonstrators clashed on thursday. on the previous day protesters tried to burn down a government building. security forces used tear gas and rubber bullets to disperse the crowds. the ruling national democratic party's secretary-general said that the ndp is ready for a dialogue with the public, youth and legal parties. however, he said the minority cannot force its will upon the majority. social networking sites are filled with calls for more protests on friday as millions of muslims gather at mosques for morning prayer. the former head of the nuke yar agency mohamm agency mohamed elbaradei returned to egypt on thursday night. he said it's a critical time for the country, and he expressed

his readiness to join the public protests. >> so i am here to work with everybody to ensure that we go through an orderly, peaceful process of change. egypt has to be a democracy. >> yemen's largest anti-government demonstrations took place in the capital of sanaa on thursday. protesters are demanding the immediate resignation of the president who has been in power for over 20 years. an estimated 16,000 people took to the streets in response to calls by opposition forces. the protests took place at four sites, including one near the interior ministry. collectively they are the largest in a series of protests inspired by the uprising in tunisia, which led to the ouster of the president. yemeni protestors are denouncing he and his family are corrupt in the wealth obtained from oil.

>> security troops were deployed around the protest sites, but there were no reports of clashes. tunisia's interim government has asked the world's largest international criminal police organization, interpol to help track down and arrest ousted president bene ali. the government said that it issued arrest warrants on wednesday for ben ali and his associates and asked for international assistance. it says they illegally accumulated assets and transferred money out of the country. interpol has asked 187 countries to provide the information on the whereabouts of bene ali and detain him if found. >> ben ali and his family fled to saudi arabia on january 14th after weeks of massive protests and riots ended his 23-year dictatorship.

over 10,000 prisoners have since escaped from tunisia's prisons. thousands of protesters continue to demand the removal of cabinet ministers from bene ali's government who remain in the interim administration. the united states and the united states agree to maintain alliance. senior foreign and defense officials from the two countries held their first strategic talks in manila to discuss security in southeast asia. a statement released at the end of the talks announced establishment of a joint working group to promote cooperation in maritime security in the south china sea among other initiatives. u.s. assistant secretary of state kurt campbell told reporters his country will help improve maritime policing in the philippines. >> we think this agreement should extend to a more formal

approach that will lead to greater peace and stability and confidence associated with the south china sea. >> campbell's remarks are being seen as a bid to keep china in check. beijing had been largely passive about drawing up guidelines for solving disputes in the region. the australian government is planning to impose a temporary income tax to finance reconstruction and redevelopment efforts in flood-damaged areas. prime minister julia gillard announced the tax proposal on thursday. flood victims would be excluded and the supplemental income tax would only apply to australians with annual income over $50,000. gillard said the flood tax would be in effect for one year from july, and the rate would be 0.5% to 1% according to level of income. we put out a hand to the flood victims at the heart of the crisis when they needed us.

>> the prime minister said the flood tax is designed to generate $1.8 billion australian dollars or about one third of the total cost to the federal government. her administration plans to cut spending to make up the difference. heavy rain has resulted in massive flooding in the northeastern state of queensland and surrounding areas. the death toll now stands at 33. the disaster destroyed houses and devastated infrastructure, such as roads and railways as well as coal mines and farm crops. the government is scheduled to submit new tax legislation to parliament next month. however, opposition parties are protesting the move, saying the government should eliminate wasteful spending first. >> hi, welcome back to your world weather update now. across japan we're still seeing a lot of cold air coming on in for the northwestern flank of the country again today. more snow is in the forecast for

you. there's been a lot of snow piling up here this whole week. been steady onflow, in fact. we're hearing of some delays and cancelations, so do keep updated with local reports if you are in the area. elsewhere it stays dry for a large part of the korean peninsula as well as china. china saw a lot of precipitation yesterday. it's headed out. it should settle more for areas like shanghai as we head into the weekend although there's moderate snow in the forecast for those of you here. as for temperatures today, minus 4 in seoul. stays very cold here. minus 2 in beijing. 2 degrees in shanghai. quite chilly four as well. 17 degrees in hong kong. for australia we're still keeping an eye on the western end here. we got this system, this will be severe tropical cyclone bianca

packing winds of over 150 kilometers per hour while gusts are hitting 220 kilometers per hour. it's a powerful storm system but does remain offshore. looks like the gale force winds will remain away from land. that is good news. warning are no longer issued for the area. however, there's still the chance of some strong winds developing as well as at times being a little bit higher than normal. looks like the system is now going to weaken and hopefully become a low as we head into the weekend. however, still a couple of showers will impact those of you along the coastline so do watch out if you are going to be in the area. as for north america today largely settled for the united states. finally looking a little bit calmer today even in the northeast. all that snow is finally pulling away. just edges of new england and canadian maritime is looking at that remnant snow to impact you

tonight. however the great lakes area will see a new system drop in from central canada. also western central sections of canada looking at snow spreading again today while coastal areas, british columbia, seattle will be looking at more rain. 9 for your high in seattle and 8 degrees in vancouver. 16 in denver and 24 degrees in l.a. still looking at some above average temperatures here across north america. as for europe still very messy here in the south. multiple systems pulling on through and they are creating rounds of wet weather. some severe thunderstorms have been impacting southern italy as well as greece. also snow has been falling across parts of the iberian peninsula and temperatures remaining quite cold again today. minus 9 in moscow. minus 2 in warsaw. getting below zero in berlin as well, 2 in vienna coming in at minus 2 and also only 2 degrees in paris as well as london. all right. that's a look at your weather

for now. i'll leave you with your three day outlook.

here is another look at today's headlines. japan's debt has been downgraded by u.s. credit rating agency standard and poor's. it's the first downgrade in eight years and nine months for japanese government bonds. standard and poor's said on thursday, it has cut the double-a credit rating by one notch to double-a minus. japan has the fourth highest rating out of 21 notches. it's the same rating as saudi arabia, kuwait and china. >> that's our level of confidence of the ability of the government to carry through with the fiscal consolidation had evaporated to a point where we thought we needed to lower the rating. >> the rating stirm says japan's fiscal health is the worst among industrialized nations. s&p will consider an upgrade if the government takes steps to

reduce debt. it cited japan's foreign assets and the yen's role has the major reserve for currency. >> japan's cumulative national debt is nearly 200% of its gross domestic product. japan's finance ministry estimatesist national debt will swear to more than 997 trillion yen till the march of 2012. social security and tax reforms are high on the agenda of naoto

kan. with no debate with the opposition party scheduled, he apparently has no specific plans for achieving those goals. the international monetary fund urged japan and the u.s. to speed up fiscal reconstruction. in a fiscal monitor report released thursday, the imf says the pace of deficit reduction among advancing economies is likely to slow down mainly because the u.s. and japan are preparing to increase borrowing. last december japanese law makers agreed to boost stimulus measures. these have further scaled back the nation's already modest plan to narrow the deficit in 2011. on u.s. policies, imf returns to the tax reduction and spending package passed by congress in december and says the extension of tax cuts for wealthy americans says the impact will be small relative to its fiscal cost. the imf urged japan and the u.s. to quickly devise plans to bring their huge fiscal deficits under control. we'll be back with more news

in 30 minutes. i'm geen otani. -- captions by vitac -- www.vitac.com