a moment of transition. the u.s. president shifts strategy toward a leaner, cheaper military. barack obama has outlined a new u.s. defense strategy that will refocus on the asia-pacific. the president cut the military budget as part of a comprehensive overhaul of the nation's finances. the u.s. will strengthen its presence in asia in the face of cuts to other regions. military leaders say they want to counter the increasing strength of china.

obama made the announcement in the first news conference at the pentagon by a u.s. president. the strategy took into account the end of the war in iraq and the winding down of the one in afghanistan. pentagon leaders crafted this strategy in line with defense cuts of $450 billion over the next decade. obama says the u.s. will be able to ensure its security with a smaller ground force. >> our military will be leaner, but the world must know the united states is is going to maintain our military's superiority with armed forces that are agile, flexible, and ready for the full range of contingencies and threats. >> defense secretary leon panetta made it clear the military will no longer be large enough to conduct large-scale ground campaigns. still, he noted that american soldiers could win a conflict on the korean peninsula and counter the iranian threat in the strait

of hormuz. he said the u.s. will help its allies to defend themselves through diplomacy, development, and military assistance. hopes that north korea would alter its course on nuclear development under its new leadership are quickly fading. the country has announced that it intends to continue to promote its nuclear program under new leader kim jong-un. a statement released by the north's committee for the peaceful reunification of the fath fatherland on thursday referred to south korean president ba k's new year speech. he said if they halted the south would provide it with guaranteed safety and economic assistance through resumption of the six-party talks on the north's nuclear program. the north's statement says nuclear deterrents offer security and that it cannot be traded for some form of aid. it says as long as hostility

remains between twot counthe tw countries, the north would continue to strengthen its nuclear capability. the top u.s. diplomat for asia is calling on the chinese government to use its influence to stop the north's new leadership from provoking the south. u.s. assistant secretary of state campbell met south korean chief enjoy on north korea and other senior officials in seoul. after the meeting campbell referred to talks he had on wednesday in beijing with members of the chinese government. >> we also urged china to make clear the importance of restraint by the new north korean leeradership. we stressed north korea should take steps to improve relations with the rok and to abide by the international obligations and commitments. >> campbell said he and his south korean counterpart confirmed their countries will remain closely aligned. he said u.s. secretary of state

hillary clinton will meet in washington with fthe foreign minister in the near future. he hopes senior officials from japan, south korea and the united states will continue to meet to maintain a united stance on north korea. the south korean government is modifying the way it deals with its northern neighbor. the unification minister says his country will take a flexible stance in attempts to foster dialogue and keep the korean peninsula stable. >> translator: once dialogue begins, every issue concerning the problems between the two koreas can be discussed. >> the unification minister says his country will continue to demand an apology for north korea's attack on the south's island in 2010 and the alleged sinking of a navy ship in march of the same year.

it's no longer a precondition to starting interkorean talks. he also says high level dialogue may have to wait until the north's new leadership consolidates its power. the new year is a time for gathering together in japan, and apparently that's fru for the country's top executives as well. ai from business has that story. >> we took our cameras to this business party. many leaders expressed a view that a mike in the consumption tax is needed. this comes at a time when prime minister noda is pushing to double the sales tax to 10% by 2015. top executives representing the country's three major business groups gathered on thursday at an event to mark the new year. the chairman of nipon steel said the tax increase is necessary to prevent a sovereign debt crisis like greece.

>> translator: there's an urgent need to make progress in fiscal reform. if not, we'll have a risk of devaluation in japanese government bonds. >> the president of major mail order and online retailer japan net said the consumption tax hike helps to boost spending. >> translator: people will spend more if uncertainties over welfare are removed to raise the tax. that's because they'll feel more secure about the future. >> but the chairman of the holding, a major supermarket operator said while the tax must be raised at some point, it's premature right now. >> translator: japan is still in deflation. ail consumption tax hike will lead to a fall in tax revenues.

>> in the meantime nissan motors chief operating officer expressed concerns about the strong yen and its impact on jobs and wages. he said the biggest challenge will be to stop manufacturers moving their operations out of japan. japan's leading department stores got off to a good start in the new year. sales were strong through wednesday. they saw sales rise by about 4% from a year ago at its main stores in the tokyo area. daimaru showed an increase of 3.6%. soga a rise of 2%. department store operators say that sales of new year's grab bags priced between 130 and $260 rose. these bags contain surprises such as women's clothing and food. looking ahead the operators are not so optimistic. they say the continued strong

yen and uncertain outlook may work against consumer spending. personal consumption is key to forecasting. consumer spending plunged last year right after the march 11th disaster, but it has been recovering since. today we talk about a new shift in spending hablts among japanese people. on our guest is the vice president of the think tank sofia bank. >> you said that the way japanese people use money has changed in a major way. what exactly do you mean by that? >> the key was to the trend i'm referring to are social and sympathy. what i mean is that you choose product and services that allow you to contribute to society. that lets you feel sympathy with the community as a whole. as a concept for consumers, sympathy is a recent phenomenal

that happens after the march 11th earthquake and tsunami. since japan people are making efforts to buy items from affected areas to help them. i think the feeling of sympathy has become a main pillar of personal consumption in japan. >> so would you say that since the disaster people are more aware of where their money is going? >> yes, exactly. the movement has spread from individuals to companies. i think it's great, great news. for example companies announced it will donate about 13 cents per case for everybody for the reconstruction of tohoku. that will add up to around $180 million in donations for tohoku. i think you can see how these feelings of sympathy have

changed the approach to investing money. after the disaster many people in japan are investing in france that pay something to help anonymous fishermen, farmers and shop owners get back on their feet. when you make investments, what is your first priority? i think usually it's a profit. but now people are putting their sympathy with the disaster victims ahead of their own profit. >> so these changing attitudes towards consumption and investment, do you think that this reflects a fundamental in perhaps japanese people's values? >> yes. i think the phenomena of sympathy based on consumption and investment can be seen not only in japan but also in many developed countries going you through deficiencies since the lehman shock. i guess people are becoming more

aware that many of the world's problems today stem from conventional self-centered thinking. as you know, conventional economic theory assumes people to be self-centered beings. sympathy does not exist as a motivator. in many countries more than half the gdp comes from the personal consumption. so if one of the leading people's consumption could be the idea of sympathy, this could overturn conventional economics and even change whole societies. it could be a new paradigm that can help solve global issues. >> thank you so much for your insights. >> thank you. now, let's get a check on the markets. tokyo share prices are down slightly friday morning as

investors refrain from active trading. the nikkei stands at 8,416, down 71 points, a loss of 0.85%. the topix trades lower by 0.85% currently at 730. sources say that investors are trying to get a clearer view of the u.s. and european economy. they're discouraged by the fall in the euro amid the ongoing debt problems. market participants wait for u.s. jobs data out later on friday. in currencies the euro is down to an 11-year low in tokyo trading following a weak auction of french government bonds on thursday. the euro is currently 98.73 to 87 yen, while the dollar is changing hands at 77 th.19 to 2 yen. this is the yield on the benchmark ten-year japanese government bond. let's take a quick look at other market figures as well.

and that's the latest in business news. recently top fashion houses in paris have been finding inspiration in exotic garments such as caftans, the traditional dress worn by women in north africa. one design ner in morocco is

making her own waves in the fashion world. >> reporter: sweeps silk that accentuates the curves, luxurious fabric and beautiful design. women in north africa wear traditional caftans on special occasions like weddings or festivals. western fashion is everywhere in morocco, but women still love to wear customs. >> translator: they're charming, and they're totally unique. >> translator: it's our tradition. i love it. >> hanna runs a caftan shop in casablanca. recently she's been getting much

attention abroad for her caftan designs. her most wanted pieces are traditional caftans with rich designs. it can take up up to three mont to make a single piece by hand. while hanna has a deep respect for tradition, she updates them to meet more than trends. >> translator: in this kaftan, the motif is music. the sleeves are shear, and i've added musical notes in the embroidery. >> hanna showed her latest pieces in october. it is a wedding dress of pure white materials with gold trim.

she even attached a wedding style. on this piece the shoulders and arms are exposed. this would never be done on a traditional kaftan, and it's won her high praise. hanna's new kaftans have been featured widely in magazines in many countries. in europe hanna is planning to bring her designs to america and asia. >> translator: i hope my work will help morocco's tradition and culture become better known around the world. >> just beautiful. one of hanan's kaftans costs up

to $2,5 hundr00. the citizen runner harks back to the glory days of amateur athletics. this japanese marathon runner has become a national hero who aims to compete in the london olympics. let's find out more in the second part of our series "standouts r ffor 2012." >> 36,000 running enthusiasts from elites to amateurs lined up at the start of the tokyo marathon in february. 24-year-old uki stunned the nation by leading the pack just three kilometers from the finish line. he wound up finishing third, tops among all japanese. the unknown runner became a national hero overnight and qualified for the world's championships in august. >> translator: i want to show

japanese and people all over the world how much amateur runners can accomplish. i'm going to do a commute run today. >> yuki works full-time as a civil servant northwest of tokyo. he often incorporates training into his daily routine by running the 20-kilometer route to his office. most elite runners in japan are hired to run for a corporate team, but he turned down company offers and chose to stay on his own. he says he never regrets his decision, despite the limited resources available to him. he trains three days a week according to his own regimen. he uses no professional trainers

or facilities, so he practices each weekend with running buddies in a local park. he also employs an unusual bit of freezing raining, trail running. many other runners avoid this because of the risk of injury. >> translator: running uphill makes you stronger mentally, and downhill challenges you physically am it's like killing two birds with one stone.s it's two birds with one stone.o it's two birds with one stone. >> after all that hard training, he doesn't neglect to give himself a treat, a big one. he's appetite catches everyone's attention. he says he has once tried to go on a diet, but it didn't improve his running. so now he eats what he wants to eat to the last drop.

>> translator: i can create my own training menu and train the way i like. that's an advantage of being an amateur runner. i don't have resources like corporate athletes, but i think it's possible to make up for that if you're committed enough to your goal. it's better to pursue a career with your own determination and passion and not for somebody else. >> he tries to push himself to the limit in each race. that's his strength, but also a risk as he often ends up in the medical tent. during the oki mare none in western japan last summer, he went too far. he was dehydrated and collapsed just 400 meters before the finish line. his breathing grew weak, and an ambulance was called. he was released from the hospital hours later. >> translator: i'm sorry to

create so much trouble, but i'm actually happy to push myself really hard. i like to use what i learned today to run better in the next race. >> his next goal is to win the olympic marathon in london. he's seen as a strong candidate for japan's national team. whether he punches his ticket depends on his performance in the 2012 tokyo marathon next month. he leaves for work like any other morning. >> translator: running to work? >> translator: no, no. just to the station. i'm running late. >> his goal may be to become a champion like many other top athletes, but he's making it happen at his own pace in his own was. . >> luckily for him most of the country is enjoying dry conditions. let's get the bigger weather

picture for here and elsewhere from sake mori. hello. welcome back to your weather update. let's look at what's happening happening across east asia. the western side of japan is dealing with heavy snow, although the worst of it is over. we're expecting an additional 20 to 30 centimeters of snow in this area by saturday morning, and snow has been piling up. so the riskf of avalanche is extremely high here. the pacific side will be high today. that high pressure system is creating dry weather across most of china and the korean peninsula. some showers in the southeast gradually are tapering off, but it looks like northern taiwan and the southern islands of japan will stay wet throughout today. down towards the philippines, showers may become heavier across the central and southern

areas. these areas have been dealing with very heavy rain over the past several days, so the risk of flooding as well as landslides are extremely high here. as for the interchina peninsula, central vietnam has ongoing rain, but the precipitation is not on the severe side. temperature-wise we're expecting 9 degrees in tokyo and 0 degrees in seoul. still cooler than average in shanghai with 7 degrees in taipei and heating up to 32 in bangkok with a chance of thundershowers. heading over to europe, multiple systems have been creating very gusty and wet conditions. on thursday the northwestern portions were severely affected. let's take a look at some video out of the area. thscene was taken in the u to his roofo ineaeras b

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