first greece, and now italy. the european debt crisis has claimed another leader. hello and welcome to nhk "newsline." i'm keikichi hanada in tokyo. italian prime minister silvio berlusconi has promised to resign after an economic reform bill has cleared parliament. the presidential office made the announcement on tuesday. president giorgio napolitano met berlusconi earlier in the day after the prime minister lost his parliamentary majority in a vote that was seen as a test of his leadership.

the budget bill was passed when berlusconi's governing coalition garnered 308 votes but failed to win the majority in the 630-member lower house. many lawmakers abstained from voting. berlusconi spoke in a telephone interview in a news program of canale 5, a tv station owned by his relatives. >> translator: it's crucial to enact an economic reform bill. i will resign after it passes parliament. >> berlusconi cited the vere condition of parliament and financial markets as the reasons for his resignation. he said the record low prices for italian government bonds were another factor behind his decision. berlusconi said parliament is paralyzed and the only option after his resignation would be a general election.

berlusconi has been in the prime minister's seat for nine years. he's also a successful businessman. berlusconi is known as a media king, having acquired a major television station. he also owns the a.c. milan profession some soccer club. he was first elected to italy's lower house of parliament in 1994, leading a center right coalition. he immediately became prime minister. that government lasted just seven months due to allegations of bribery, but berlusconi returned to power twice. the prices of italian government bonds have been falling, as the credit crisis spreads in the eurozone. in response, berlusconi has proposed a series of austerity measures. italy has to reduce its government debts to obtain support from the european central bank. >> translator: i've said that the government will not reach into the wallets of italians, but the global situation has changed.

berle scone hee has been plagued by scandals, including an allegation of hiring an underaged prostitute. he's currently on trial for that case. berlusconi has been criticized for his low handling of italy's credit crisis. public support has plummeted and calls have been mounting for his resignation. to see how developments in italy is affecting market sentiment, let's go to the business team with ai uchida. >> market reactions differed on reports italian prime minister silvio berlusconi will soon step down. investors continue to sell italian government bonds on european markets on tuesday, due to italy's lingering uncertainty. prices of ten-year italian bonds hit a new low with the yield briefly leaping to 6.7% on

tuesday, that is close to the 7% threshold that forced ireland and portugal to seek international bailouts. in new york, share prices rose on expectation that berlusconi's departure will speed up italy's fiscal reforms. the benchmark dow jones industrial average gained 0.8% to finish the day at 12,170 on tuesday. market sources say the prime minister's announcement that he's quitting eased concerns for european credit woes, but many investors are keeping a wait and see stance to see how italy delivers on its reforms. share prices are rising here in tokyo as well this wednesday morning on hopes for the rehabilitation of italy's fiscal health. the nikkei index now stands at 8,740, that's up 84 points, a gain of nearly 1%. the topix is trading higher by 1.25%, currently at 747.

sources say investors are buying back shares after the italian prime minister announced his intention to resign. market players are showing expectations italy will come up with concrete measures for fiscal reform under its new administration. the dollar is falling against the yen this wednesday morning, as investors shifted funds to stock markets on easing european credit concerns. the greenback is now at 77.65-73. that's against the yen. the euro against the yen is at 107.44-50. market sources say investors sold the dollar in order to borrow money to move into stocks and crude oil. here's a look at the latest long-term interest rates. the yield on the benchmark ten-year japanese government bond up over half a basis point. and to discuss the unfolding euro debt crisis we are joined in the studio with dr. martin schultz. he's senior research fellow at fujitsu research institute. dr. schultz, thanks for joining

us. first of all, what do you make of berlusconi's intention to step down? >> well the europeans are currently cleaning up their governments. the greek government is on the way out, french is under pressure and mr. berlusconi finally had to resign. this is of course a problem in the middle of a crisis but it is a necessary step to get public support and getting their act together. >> i see, well let's talk about the european bailout fund. the european financial stability facili facility, 1 trillion euros. what do you make of this? >> will it be enough? 1 trillion is impressive and i'm optimistic the europeans will be able to come up with this huge sum. the question is, when the crisis is getting even bigger, when risks are getting bigger, when we lose trust in the incoming new italian government? will this be enough? it will never be enough.

what the europeans are doing is producing a leverage. when the crisis gets deeper, the target floats further. they need to reset the capital markets and talk to westerners in japan, asia, and the u.s. so the key is trust. will the mechanism be stable enough? i think they will come up with something rather convincing by next month. >> and even though speaking of investors', a potential investor, china, seems to be dragging its feet you're still optimistic? >> well, china and japan and many investors have already put a lot of money on the table and this crisis is just dragging on and unfolding all the time, so everybody is looking at everybody. when will it end? and the europeans think well there's a deep crisis so it takes time to solve. international investors say it's a deep crisis so be fast and in the end, everybody will meet somewhere in the middle, the europeans will become more convincing and westerners will realize they cannot live without europe so they will bail out

europe in the end. >> i see. well what about contagion is on everyone's minds, european debt crisis contagion, italian benchmark yield is refreshing its highs, so with european and american banks, who have large exposure to these sovereign bonds, if they have to recapitalize, that will have a huge effect on the world economy, but since we are here in asia, i would like to ask you, what will be the impact on asian economies, specifically east asia? >> well we are already feeling this crisis and we feel it even more every month that is, this crisis is dragging on. the main problem here is not so much the direct impact of the financial crisis so far in asia. the japanese financial system is very stable. the chinese financial system is very controlled so there is no direct risk as in the u.s. or in particular in europe. what we are feeling right now that is with this crisis, european is gradually getting

deeper and deeper into a recession, and that hits exports in china. this affects the world economy, and it hits profits for japanese companies, because everybody is now looking for safe havens. we really don't know where this crisis is going. i would be optimistic, but we don't know, so everybody is buying the japanese yen, is trying to get in. the exchange rate goes through the roof. this produces a big problem for japanese companies, so for next year, we are still seeing a strong impact from this crisis, whichever direction it is going. >> speaking of next year, what would be the key focus for being able to contain this crisis as much as possible? >> well, first of all, this rescue fund needs to be really in place and be convincing. i would be optimistic that this is working. the next step is that the incoming european governments need to make sure that they will be able to protect and support this crisis, these

risks are getting out of the market. the last and final step, and this is very, very important, is the europeans need to recapitalize their banks. this has happened in asia. this was basically one of the most important developments during the asian crisis. it was the key to solving the u.s. crisis, and it will be the key to solving the crisis in europe. first steps are done. we need to see more in this account. this will be the job of european governments next year. >> dr. schuls thank you so much for your insights. look forward to have you in the studio once again. that was dr. martin schulz, senior economist at fujitsu research institute joining us in the studio. here in japan the current account surplus fell for a seventh straight month due to a surge in energy related imports for they werical power plants to make up for reduced nuclear power generation after the march disaster. the finance ministry said in a preliminary report on wednesday

the current account balance fell 21.4% in yen terms from a year earlier to about $20.4 billion. the trade balance also fell by 59% from a year ago to a surplus of $4.8 billion. the trade balance posted a surplus in the month of september, but calculated over the six months up to september the balance posted a $16.2 billion trade deficit, the biggest on record. the march disaster shrank exports particularly in the auto sector and saw energy related imports expand. a price hike in oil also affected the balance. that's all for this hour in businessis. back to keikichi. >> thanks, ai. prime minister yoshihiko noda intends to convey japan's policy on the negotiations trans-pacific partnership agreement when he meets u.s. president barack obama later this week. coordination is under way for noda's second meeting with the

u.s. president when the two leaders attend the summit of the asia-pacific economic cooperation forum on saturday. the agenda for the japan/u.s. summit is likely tocally japan's possible participation in talks on the tpp, designed to create a free trade bloc in the region. obama is expected to convey his stance that the u.s. is determined to step up its involvement in the asia-pacific region. japanese government sources say say noda is expected to convey his administration's position on whether japan will take part in the tpp talks. meanwhile, about 6,000 protesters held a rally in tokyo to oppose japan's participation in the tpp talks. agricultural cooperatives and other groups organized a rally on tuesday. the ruling democratic party hopes to draft a proposal on wednesday on whether japan should join talks for the tpp.

>> translator: i feel a sense of crisis that i've never felt before over this issue. if japan ever joins the tpp, it'll cause irreversible damage to regional economies, job security, stable food supplies, and the medical system. >> more than 100 lawmakers also took part in the rally. the politicians included members of the ruling democrats and opposition liberalemocrats and communists. the united states and eight other countries in the asia-pacific region are aiming to reach an outline on the tpp at the apec meeting. south korea will resume humanitarian aid to north korea through a united nations agency

after a one and a half year freeze. south korea suspended aid after it determined a north korean torpedo attack was responsible for the fatal sinking of a naval ship in march last year. on tuesday, a south korean official said the country will release $7 million in funds to the world health organization for assistance to north korea. the money is part of $13 million in aid to the north that was frozen after the naval sinking. it was allocated to the w.h.o. in 2009. the move comes amid easing tensions on the korean peninsula. interim talks have been held twice since july. observers say south korea hopes to make its neighbor soften its attude through more aid delivered by unicef and other organizations.

officials from japan's transport ministry and railway companies met dinish triverde on tuesday. the indian government plans to introduce a high speed railway system on six of the country's lines to help the economy grow further. the japanese delegation explained the shinkansen has not had any fatal accidents since its introduction in 1964. they were impressed by the safety of the japanese bullet train. >> translator: this is a dream project. the railroad reigns supreme in india. we'll do our utmost so that we'll be able to see shinkansen trains running all over that vast country. >> european firms have already begun surveys of the estimated number of passengers on four of the six lines to lay the groundwork for winning contracts from the indian government, but

no japanese companies have taken part in the project so far. talking robots have been around for over 20 years. now they can communicate through sign language. japanesemaker honda motter released its humanesque model with dextrous fingers. at the news conference on tuesday the new asimo robot demonstrated it can communicate in sign language. with its improved hands, asimo is now smarter and more flexible. asimo's smoother hand movements come from an increase in metals from 2 to 13. now the robot can even twist open a bottled top.

asimo using sensors to get a more accurate reading of its environment. this allows the humanoid to run faster and move through crowds. children the world over are familiar with skipping rope, but the game is so well established in japan that many schools include it in their physical education classes. last month, an elementary school held a rope jumping event and as we see in this report, the training taught the children more than the importance of how to be good rope jumpers. >> reporter: the students jump through as many times as a rope that seems so fast it seems to blur. in just three minutes. with backs bent, the students,

30 of them, jump fastly during the fast-moving rope. the formation resembles an eight. this is yanna public elementary school in eachie prefecture, central japan. for 25 years skipping rope has been part of the curriculum. it helps strengthen young minds and bodies. >> translator: you should concentrate for three minutes. >> reporter: as the annual event approaches, the whole school practices class by class to break the school record. students start learning the skill when they first enter the school. the training also teaches the children how to get along.

>> translator: this is one way for everyone to learn how to work together toward the same goal. i hope this event is one the students will never forget. ♪ >> for sixth graders, this is their final challenge before moving up to junior high school. they hope to beat the school record with 500 jumps in three minutes. >> translator: have confidence. believe in yourself, and do your best. >> reporter: the day they've been training for. it's time for the children to put their skills to the test. parents and some alumni cheer on the youngsters.

>> translator: i skipped rope, too. it's amazing how skilled they've become. >> reporter: and now it's time for the grade six students to show they have the right stuff. they've all written the word "bond" on their hands. it's a way of reinforcing solidarity. >> reporter: the youngsters' final challenge together begins. at first they keep getting their legs tangled in the rope but they don't give up. they put their trust in each other and keep on jumping.

[ whistle ] three minutes of performing as one comes to an end. the final tally, 472 jumps. they've fallen a little short of 500, but they come clees ose to their best performance. >> translator: you all did it for yourselves, not because i told you to do it. you all worked towards a goal, and i'm really happy about it. >> reporter: skipping rope together, the children have learned the importance of forging bonds with their classmates. >> up next, the world weather forecast with sayaka mori.

>> hello, time for your weather update. let's start off with east asia. a high pressure system is bringing dry weather across most of japan, but the exception is southern islands that are under heavy thundershowers. we're expecting an additional 150 to 200 millimeters by thursday morning, so watch out for flooding. the rain will also spread to kyushu and shikoku by tonight. meanwhile we've got a tropical depression over the south china sea and this one is bringing heavy rain across guandong and fujian provinces as well as hainan and much of taiwan and this system is moving very slowly to the rainfall total could be significant. high waves and rough seas are going to be a concern all aening lo the coast of this area. for the indochina peninsula as the system moves eastward, things are getting drier across most of the region.

bangkok is expected to be 35 degrees and 30 degrees in man a manila, with a chance of afternoon showers. tokyo highs drop into the teens with 17 degrees, and 15 in seoul. heading over to the americas then, we are monitoring a newly developed tropical storm over the atlantic, that is sean. sean is now a stationary system, but it is expected to make its way toward bermuda later this week. we have tropical storm watches in effect across the country. torrential rain and strong winds are going to affect this area by late thursday or early friday, and the only concern for mainland u.s. is weak currents as well as swells and the southeast coast will be looking at rough sea conditions over the course of the next few days. an active front is moving through the mississippi valley, bringing heavy precipitation. the most severe weather can be found as kro the southern plains. you see severe thunderstorms, large hail, damaging winds as

far as tornadoes here into tonight. the rain will weaken and head to the deep south region on wednesday. for the upper mississippi valley, some of the rain will turn to snow and will move to the great lakes and to eastern canada in the next 24 hours. you'll see up to 20 centimeters of snow in wisconsin wednesday night. on the other hand a high pressure system builds in bringing drier weather across the western half of the u.s. we're expecting 10 degrees in vancouver and only 2 in winnipeg. the east coast is looking at pleasant weather, we're expecting 18 in new york and the same goes for washington, d.c., with plenty of sunshine. finally, let's go over to europe. we've got a very developed low pressure system here but that's gradually easing. some areas like southern france and northern italy are still looking at severe thunderstorms, so that will gradually weaken as we head into thursday. down towards the south, southern italy and the western balkans are looking at severe

thunderstorms. meanwhile, rain is moving into the british isles and the iberian peninsula. you'll see scattered thunderstorms as well as locally heavy rain on wednesday. as for wednesday's highs, warming up to 15 degrees in london and 16 in paris. remaining in the 20s in rome, in athens. all right, that's all from me now, and here is your extended forecast.

japanese children from disaster-hit areas sang their hearts out during a concert to show thanks and appreciation for international support offered to japan. ♪ more than 80 students from fukushima and iwate prefecture performed in tokyo on tuesday. they have practicing for two months for the concert. professional musicians also performed. guests included about 120 foreign ambassadors to japan.

the foreign minister says japan received donations and supplies from 126 countries and regions as of mid-september. on top of that, more than 20 countries and international organizations have sent medical teams and other personnel for search operations in disaster-hit areas. the final number of participants and the japanese pop song sukiyaki. >> considering what they've been through it's really emotional. >> translator: we wanted to show our heartfelt thanks to all those who supported us. i really enjoyed singing in front of everybody. and that concludes this edition of "newsline." i'm keikichi hanada. on behalf of our team, thank you for staying with us.