hello there. welcome to "newsline." it's wednesday, july 4th, 9:00 a.m. in tokyo. i'm catherine kobayashi. police have raided the home and offices of nicolas sarkozy. they're looking into illegal financing. they're looking into the claim a cosmetics chain gave money during the election. sarkozy and his family are on holiday in canada but he has denied all wrong doing. the lawyers said the raids were

futile. he already submitted all activities to investigators. sarkozy lost his challenger the presidential election in may. expired last month. former president was convicted last year of misusing public funds in the 1990s while he was mayor of paris. he was given a suspended sentence. the new french prime minister has blamed sarkozy for the state of the nation's finances. delivered his first policy speech to parliament. he called on the french people to tackle what he called a crushing crisis over debt. he slashed the economy growth. he said it's only to grow by 0.3%. but he vowed to keep his promise to raise taxes for the wealthy and for large corporations. he said they would go ahead with

plans to add teachers and servants over the next few years. >> translator: the government will try to use new sources of revenue. this is necessary to revive the french economy. >> auditors warned this week that the government must implement spending cuts to meet its reduction target. investors are wall street are wrapping up their day ready to take time for independence day. but they've got more than a holiday to celebrate. ai uchida is here to fill us in. what's the news? >> we're seeing gains on global markets. extended gains for a third straight day due to more optimism following the eu summit meeting last week. u.s. stock prices also rose on factory orders with the dow jones industrial average climbing to a two-month high

ending over half a percent higher at 12,943. for more we go to ramin mellegard at the tokyo stock exchange. so the u.s. markets wrapping up the day in the positive ahead of the fourth of july public holiday. >> yes, indeed, ai. markets in the u.s. taking good cheer out of the factories order data that came out. also positives from the u.s. european markets. let's see how all of that is trading in this wednesday july 4th. positive start here. and the topix 780 up half a percent. the nikkei did manage to close in the positive today. it may trade given the u.s. will be on holiday. however, we have been following the commodity markets of late and a bit of volatility there in

the gold and oil markets. we have been focusing on that. we did see a surge higher in crude oil prices as well as a volatility in gold prices. just looking at wti crude oil prices there, it shot up on the new york america tile exchange around 4% on concerns about oil supply disruptions after complaints from iran about sanctions which are taking effect in july. and this was after wti dropped around 1% the day before. oil markets are seeing some volatility here in japan. that have had also some caution not with -- not only with the oil shipments but also some of the insurance contracts as well. that's been a focus there for shippers. but looking at the currency levels, that also tells a story for stocks. and the dollar/yen currently trading at the upper 79 yen

levels and bit of a focus there on the euro as well. ahead of the european central bank meeting later on thursday. currently trading at around 100.60-67. and expected to cut rates by a quarter of a percent. >> all right, ramin. with u.s. independence day on wednesday, what should investors look for when the markets reopen on thursday? >> well, we could be in for some fire works there on thursday because there's still some key data for investors to watch out for. private sector jobs data as well as a services sector job. the unemployment data on friday to look forward to. quite a day for investors to come back to. >> thanks a lot, ramin. ramin mellegard from the tokyo

stock exchange. now, the head of the international monetary fund has warned the u.s. government about cutting the deficit too quickly. imf managing director called on the u.s. to review its belt tightening measures. she pointed out downside risks for the global economy. her statement follows the imf's release of a study on the u.s. economy. >> too strong a contraction of the u.s. economy as a result of the realization of the fiscal cliff. >> the report says the u.s. recovery is likely to remain modest over the next few years. the end of u.s. tax breaks as well as cuts in government spending are cited as downside risks. both these measures are saying

this could push the u.s. economy into negative growth. it's critical to have fiscal adjustable in the short run. executives are struggling renesas electronics have come up with a restructuring plan. renesas will cut jobs at their firms. it will slash more than 5,000 jobs in september mainly through voluntary early retirement. thigh also plan to close eight of the plants. the company aims to sell some of those factories instead of closing them to minimize the damage to regional economies. the company will also divert resources from unprofitable divisions to its core businesses. it hopes to begin negotiations soon to consolidate its loss making lsi chip business with

fujitsu. renesas was -- it has the world's top market share for the microcontrollers used in automobiles and home appliances. but it posted a net loss of nearly $790 million for the business year that ended in march. well, we're seeing gains in tokyo. both the nikkei and topix higher than half a percent each. i'll leave you with a check of the markets.

iran has launched ballistics missiles as a show of defiance against israel and the united states. iran's elite islamic revolutionary guards fired the missiles in a southern desert region. it included the long range and short range. israel is said to be within range of the shahab-3. the task took place after western nations stepped up nctions against iran. this included the european union's ban on imports of oil. y attacks on facilities. the sanctions have oil producers scrambling amid the threat of reduced oil supply, there's also opportunity.

>> reporter: saudi arabia is the world's largest oil producer. a number of countries including japan are pressing the kingdom to make up for any drop in oil exports from iran. >> we have over 70 customers worldwide. so we respond to their demands. >> reporter: they've been kept as a trump card to use to boost output in the future. development of offshore oil fields are underway at about a dozen locations. this japanese factory opened last month at the invitation of saudi arabia. it produces submarine cables needed for constructing offshore oil fields. with a diameter of 170 meters,

the cables have special features to minimize any damage with contact with the ship's anchor. the company won the deal with its world-beating technology and long experience working with many countries to develop offshore oil fields. >> translator: we decided to open the factory because the country had a strong desire to introduce japanese technology. >> reporter: across the persian gulf from iran is the united arab emirates. currently all produce eoil prod uae is shipped through the strait of hormuz. should conflict escalate, the strait may be closed. that's why the uae is turning to fujairah facing the indian ocean. it's hurting construction there to allow country to continue to

export oil without sending ships through the strait of hormuz. connecting habishan and fujairah. they are expected to start operations as soon as august. even if the strait is closed, the country said it can continue exporting 70% of its oil through the pipeline. in april mahmoud ahmadinejad made a visit to the state claimed by both iran and the emirates. that behavior is concernable for the uae. >> translator: we are building the infrastructure so we can continue exporting crude oil which japan and other countries need. >> reporter: while the situation

along the gulf is uncertain, they're doing all they can to maintain stable supplies. nhk world. prime minister demetri medvedev says russians won't give in in a territorial dispute with japan. he made the comment over one of the islands claimed also by japan. medvedev made his second visit in two years. >> translator: russia will not concede one inch of the small lands. even a small concession could lead to the division of a nation. >> russian foreign minister says he'll hold talks with his

counterpart in the near future. officials with the japanese foreign ministry complained about the visit. they told afanisev they are part of japanese territory. and they said the trip was unacceptable. >> translator: the latest visit runs counter to japan's stance on the issue. it also spoils efforts in bilateral relations. >> prime minister noda agreed last month. they would relaunch negotiations over the islands. japanese government officials say they'll demand that russian leaders stop visiting the islands. afghan president hamid karsai has put a price on the financial help he says his country needs. he made the appeal just days

before international donors will gather in tokyo to discuss aid to afghanistan. >> life in afghanistan in spite of all the problems, in spite of insecurity, in spite of unfortunate incidents we have, in spite of corruption, in spite of deficiencies in aid defect e defectiveness has improved. >> reporter: speaking in kabul, karsai appeared to the international committee for longtime aid. he said afghanistan is $3.9 billion a year for development.

>> the 3.9 billions annually is a figure that we believe is in moderation and we hope we will get the funding required in tokyo. >> reporter: the afghan government originally planned to request $5 billion a year. but nato members and other countries already promised more than $4 billion annually for security. it seemed that prompted afghanistan to lower its expectations. karsai wants international financial aid to develop afghanistan's natural resources and build infrastructure such as airports and railways. even so, ongoing violence by taliban militants raises questions about what can be achieved. >> how is it in the interest of

the taliban to kill civilians? how is it good for the patriotism to kill civilians and innocent people? rather than doing that, my recommendation to the taliban is to join the peace process and become a political force in afghanistan. enter politics. >> reporter: most groups are planning to withdraw from afghanistan in 2013. karsai is expected to step down as president the same year. that combination threatens the power virtue. karsai says he hopes peace talks with the taliban can be restarted in order to improve security of afghanistan and raise the prospects for development. nhk world, kabul.

a lot of japanese don't rely on expensive gym memberships or fancy equipment to stay fit. they work out the old fashioned way. all they need to do is rise early and turn on the radio. he's more. >> reporter: early in the morning at the tokyo park, some people exercise before work. others just enjoy the fresh air. around the corner, these people are getting ready. >> reporter: at 6:30 on the dot, they move to the instructions from the radio. everyone seems to find easy to follow along. well, almost everyone.

>> translator: i've been coming here for 25 years with my dog. >> translator: i push myself and come here to enjoy the morning. >> reporter: kimuri is a certified radio instructor. she turns 80 this year and comes here every morning rain or shine. >> translator: if you try to do all the moves perfectly, you get tired and sweaty. you can't fool around. >> reporter: japan's national radio exercise federation estimates that at least 20 million japanese take part in this workout every day. it's been a tradition in this country for decades. but the original idea came from overseas. americans in new york and other cities were among the first to do radio exercises in the

mid-1920s. soon the japanese government developed a similar program. only the exercises were a little less complicated than this. japanese did their first radio workout in 1928. wrote a book about the phenomenon. it fits in perfectly with the japanese way of life. >> translator: the japanese like to do it with their neighbors because it feels great if you do things in a group. if you do it alone, it's quite boring. so in a way, they did the exercises together as a way of communicating solidarity with their neighbors. >> reporter: for more than eight decades they had only a brief interruption after the war. for school children on their summer break, radio kpersss are

morning duty. factory employees work out before starting their daily shift. and in outer space. the astronauts turn the workout into a scientific experiment. recently the radio exercises have gained even more fans. women's magazines and fitness books are telling readers the three minute workout is an easy, effective way to lose weight and gain a shapely figure. many have bought into the concept. especially women. a few weeks ago, akaga suggested to her coworkers that they do the radio exercises together. now the exercises are part of their morning routine. but being part of the generation, they get the radio show through their cell phone.

>> translator: i like it because it warms up my body. >> translator: it could be a new trend like yoga. >> reporter: after more than 80 years, the exercise program over the radio waves is gaining a second wind. it could be a brand new start for the old way. nhk world, tokyo. >> i should try doing that with my fellow anchors here on "newsline." looks good. well, residents in southern japan are dealing with heavy rain and flooding. rachel ferguson gives us the latest on the situation there and more in her world weather forecast. >> all right. you're absolutely correct. it was raining very heavily yesterday in western japan. let's start off showing you what it was like. this is oita prefecture where

more than 200 millimeters of rain was reported over the space of just three hours in some places resulting as you can see there in landslides as well as flooding. the roads just turned to rivers. there was flash flooding. very dangerous stuff. and in fukuoka prefecture, a man was killed when a landslide swamped his house. they are expecting more rain into this afternoon up to 40 millimeters of rain per hour. additional landslides are highly likely. it is a serious situation. now, into tomorrow you'll be pleased to know the rain is going to start to subside. but that very active front that's bringing the rain is going to move in towards kinkou region. if you follow that along the system, you'll be finding maybe 100 to 250 millimeters of rain

over the next 24 hours. still very active and high risk of flooding and landslides here. also potential for flooding. this has been producing thunderstorms, gusty winds, and hail. it will continue to do so into our wednesday. and then down to the south, heavy rain's been targeting the central philippines. it's going to move farther towards the north. really enhancing the southwest monsoon as we head into the middle of the week. just south of that active front, we're seeing temperatures rise as all that heat and humidity from the south flows into the front. it is bringing temperatures up in places like shanghai. we're going to see 30 in beijing and expecting 30 also in japan. or in tokyo i should say. much of japan is going to be hot and dry. apart from down there in the west of where that very active front is bringing the heavy rain. all right.

as we head into north america, it is of course it is july 4th. an independence holiday today for those of you in the u.s. i don't think many of you are going to be feeling much like celebrating. we're seeing a very difficult situation. more heavy thunderstorms, serious thunderstorms across the northern tier and then south of that, the heat is just persisting. and in fact, temperatures are even a few degrees higher than they were yesterday and the day before. for example, we've got chicago 38 expected on your wednesday. thursday you're expecting 39. in washington, d.c. 36. that's going to go up to about 38 on thursday as well. do try your best to stay cool. the coolest part of the continent is of course going to be up in the northwest. vancouver 18 degrees for you. let's head into europe. more heavy rain targeting the

british aisles. sending front after front in. this is going to be rain falling and saturated land. and then again the same thing going on. and the reason it stays in the same place is this high pressure out east is not letting those storms advance very far. this dome of high prsure is also helping to bri theeat and kp that heat wave ee en pcee

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