it's 9:00 a.m. in tokyo. the japanese government has decided to cut the corporate tax rate to help domestic businesses stay competitive. >> thank you very much. good morning. japanese prime minister naoto kan has instricted his cabinet ministers to reduce the corporate tax rate by five percentage points for the next fiscal year starting in april 2011. the country's corporate tax stands at 40%, the highest level in the world. kan delivered the direct irv on monday in a meeting with finance and national policy ministers.

he added that the move will spur economic growth and help the economy out of deflation. government has already secured around $7.7 billion to make up for the predicted drop in revenue after the tax cut. however, if the government lowers the rate, it will need another $5.9 billion or more to fully cover the loss. attention's focused on how the government will compensate for the projected shortfall when drafting the fiscal 2011 budget next week. now we go georgto the marke. stocks remain fixed. for more we cross over to emily wong at the tokyo stock exchange. good morning. first of all how are the markets

reacting to news on the tax cuts? japan? >> good morning. well the 5% tax cuts, investors i spoke to say that 5% was mostly in the cards already so they weren't surprised by the announcement itself but they do say they will be watching how it all plays out. now this morning in tokyo we are seeing a stronger yen and analysts say some technical indicators show signs after potential overheat in the markets so both those factors could weigh down markets. as you can see, both nikkei and topics open in negative territory with nikkei at 10,271. topix is also trading lower. these declines come after a directionless trading day on wall street with the dow closing higher but nasdaq ending lower. dow jones industrial closing at 11,428. while the nasdaq closed at 2,624. stocks in new york opened higher as investors were relieved to see that chinese authorities had not hiked key interest rates but

shares fell as traders moved to lock in profits. analysts point out u.s. stocks are still on solid trading ground but, in the positive sentiment could also be a affecter supporting stocks here in tokyo. but the dollar/yen moves could be a factor weighing down stocks because the dollar has been slipping into the lower 83-yen level this morning after news about that credit rating agency moody's had set the u.s. decision to extend tax cuts raises a likelihood of a neglect nif outlook on the u.s. trading. the dollar is xading at the mid 83-yen level compared to the 84-yen level we've seen yesterday and last week. the euro is gaining at 111. it was trading at the 110-yen level yesterday so that's also one factor to look at. overall analysts say traders could be watching out for the

statement as it is the last foc meeting for the fed this year. that's it for now, back to you in the studio. that's all for now in biz news. more news later but for now to katherine. one of the japanese winners of this year's nobel prize in chemistry has concluded a series of ceremonial events. he lectured at one of the most prestigious universities in sweden. the distinguished for tore of purdue university in the united states spoke to 200 students at upsela university on monday. he looked a little tired from his ten-day stay in the country but he told the audience how he developed a technique called cross coupling. he also spoke about how the

chemic reaction has been further developed by suzuki, the other japanese noble laureate. he was asked about how to win a nobel prize. he stressed the importance of persistently pursuing a subject of interest rather than aiming to win. suzuki and american scientist richard heck shared the prize for developing the technique with palladium as a catalyst. he is expected to return to japan on wednesday local time. russia's foreign minister told his north korean counterpart on monday that his country's deeply concerned about the north's uranium enrichment program. he stressed the sporns of resuming the six-party talks. sergei lavrov met with pack which choon in moscow on monday. lavrov said in a statement he expressed serious concerns about the uranium enrichment facility in yongbyon. he asked the north to abandon

its nuclear program. he said seoul is to blame for the north's artillery of a south korean island and also said the united states is obstructing the six-party talks. it is believed that he reits rated these views when he met lavrov. iran's president mahmoud ahmadinejad has fired his foreign minister in an attempt to apparently reflect the company's hardline foreign policy. om made the announcement on monday op the presidential office website. he said vice president alley akbar is a lay i had who heads the country's atomic energy organization will double as interim foreign minister. he did not disclose a reason for the dismissal. iran's media reported that the news came as a surprise as motaki is is visiting the african nation ofsenegal. mediaaised the possibility of a rift between ahmadinejad and motaki. it cited his o opposition to the president's appointment of six special foreign envoys in august

and also stressed the foreign relation between him and ahmadinejad's rparliamentary rival. iran is at odds with the country. it is speculated ahmadinejad intended to reinforce his tough stance on the nuclear issue by naming a foreign minister with similar views. u.s. president barack obama attending a signing ceremony with the first lady at an elementary school in washington on monday. michelle obama campaigns against childhood obesity. >> my husband worked very hard to make sure that this bill was a priority in this session and i am grateful to you -- >> because i would have been sleeping on the couch. >> the new law pledges $4.5 billion over ten years for schools to improve their menus and set nutritional guidelines.

>> educators working to provide healthier school meals because they know the connection between proper nutrition and academic performance. >> in the u.s., school meals are often pizzas and hamburgers and not enough fruits and vegetables. 1 in 3 school children is overweight or obese. naoto kan's popularity is almost at rock bottom. a rate of less than 30% usually triggers a re-election. kan took office in june. his approval rating has fallen six points since the november survey. during the same time the disapproval rating has risen seven points to 58%. almost half the people who

disapprove of kan's government cite a lack of leadership. nearly onthird say they don't have confidence in his policies. three-quarters of all respond ents, even those who support the administration, are critical of the prime minister's performance. even more believe he has not shown leadership. the results reflect a reversal of fortune for the country's two major parties. 22.6% now support the opposition liberal democratic party. the democratic party's left with 21.3%. a close aide to prime minister vladimir putin has visited 2 of the 4 russian-held islands over which japan claims territorial sovereignty. first deputy prime minister igor shuvelov litted two of the islands on monday and inspected hospitals and schools and an airport. he said although the government has carried out a number of projects in the area, much remains to be done. russia apparently wants to convey its policy of developing

the islands as its territory. >> translator: i expressed sincere regret over the visit. there is a strong protest launched with the russian ambassador to japan. >> in early november, president dmitry medvedev visited kunachi island, the first russian leader to set foot on the disputed japanese territory. a viworld renowned orchestr made the announce of the last week. the 31-year-old kashimoto spoke at a news conference in tokyo on monday saying the orchestra's string players retained the authentic german sound since the days of the maestro and that he has long admired it.

>> born in london, kashimoto has won numerous international competitions and has performed with various orchestras. he will debut as concertmaster in berlin at the famous three-day concerts which end on new year's eve. next, a horse that competes in sled-pulling races at an age when others have been put to pasture. you only find this sport in japan's northern island of hokkaido. it takes extraordinary strength as well as speed to full medal sleds on a 200-meter course. after retiring and almost being

put down, an old horse is trying to make a comeback and prove he's not past his prime. the spectators go to the races to pull for the old horse. >> reporter: golden barge is a 13-year-old veteran. in human years, he's about 56. after returning to the race course this july, golden barge has won three competitions. he is attracting a following as the star of the middle ages. fans always drop by just to touch gold be barge's horseshoes after a race because they've heard it brings good luck. >> translator: i'm a big fan. he's the star of middle-agers, of old folks. >> interpreter: we're all getting along in years, too, so to see a horse making a comeback after retirement is really powerful. >> reporter: golden barge debuted at the age of 2 and

quickly became favorite, but after turning 10 he began to lose too many races and was retired two years ago. but, despite this, golden barge still competed at local festivals. a horse trainer happened to see a competition and was amazed at the old horse's power. this man had heard that golden barge was going to be put down, so he asked the owner if he could buy the old horse. >> translator: his strong points are his endurance and ability to close the gap. he hasn't lost that strength. no other horse interests me this much. >> reporter: but, golden barge tends to freeze at small rises. they are where he used to get whipped and the shock made him stop so y o omida doesn't use the whip believing this helps golden barge break his habit.

>> translator: with this horse using a whip just isn't effective. it brings out his bad side. but i think he's got another two or three years left. >> reporter: on race day, fans crowd in to get a close look at their favorite. only one other horse draws more bets than golden barge. the old horse wears number 8. the jockey's strategy involves overtaking the younger rivals. golden barge approaches his biggest challenge -- the second rise. his owner worries that golden barge will revert to his old hab

habit. once over the rise, the old horse enters the homestretch. golden barge finishes just a few paces behind the winner. >> translator: it was so close. right up to the end. i'm over 60 myself so it is quite inspiring to watch. >> translator: i can relate because we're the same age. i look forward to his next race. >> reporter: golden barge, once retired, but now back in the game. many onlookers feel inspired when they watch the old horse competing so well against the young ones. >> hokkaido's poor economy keeps fans away from the races so revenue is going down. the race organizer says he hopes golden barge will improve business.

the world trade organization has rejected china's complaint over u.s. tariffs on growing imports of chinese tires. the wto's dispute settlement panel said in a report on monday that the u.s. action does not violate the trade watchdog's rules. chinhad fed a cplaint in september 2009 that came after the united states decided to charge additional duties on fast-growing imports of chinese tires in response to labor union requests. u.s. trade representative ron kirk welcomed the ruling saying it is a major victory for the united states and particularly for american workers and businesses. he added the obama administration will continue to make efforts to protect their interests. china is expected to consider whether to appeal the wto's decision. japanese automaker daihatsu has revealed a minivehicle with the highest rating of all cars.

the move can run 27 kilometers per liter, that's 20% better in fuel efficiency than the previous model. the new model has 15% fewer components which makes the body 30 kilograms lighter and cuts gasoline consumes by automatically shutting off the engine when stopped at traffic lights. the company's president says his company plans to release a new minivehicle with fuel efficiency of 30 kilometers per liter next year. next is our report. now that times our tough and spending is down, bartering is becoming a popular way to shop. almost every week exchange events are held across japan attracting big crowds. >> reporter: at a toy swap held in november, about 100 parents and kids swarmed this tokyo elementary school gymnasium. kids broht their old toys.

they were excited to dig through the piles and find the perfect toys to trade theirs in for. >> translator: i was just going to chuck this. i'm so happy someone else wants it. >> translator: i am so excited that i got what i wanted by trading in my old stuff. >> reporter: swap events are held in a variety of venues, like this popular bar in yokohama. in november, this event pulled in more than 50 people. most were women in their 20s and 30s. they brought in items like clothes and bags. >> it's so cute! i like it. >> translator: i exchanged this hat for this top. >> translator: it is a great deal.

>> reporter: at this vintage emporium in nagoya, central japan, you can buy items with cash or barter, whichever you like. the number of customers at the store has doubled since the economic downturn. the store is filled with about 100,000 items, including table wear, paintings, and even a collector's edition set of the beatles' cds. this woman brought pottery. >> translator: isn't it gorgeous? >> reporter: she traded it for a fur coat. >> translator: i wasn't using the bowl. but i can start wearing this coat right away. what a bargain! >> reporter: companies are also joining the bartering boom. this website launched a year ago is restricted to businesses. so far, more than 50 firms have

joined. member companies exchange everything from used cars to office equipment. this hotel in eastern japan is one of the members. the hotel decided to barter off-season weekday vouchers. during the week, the hotel rarely gets booked up. this is a way to fill those vacant rooms. they were able to get 80 l.e.d. light bulbs from a manufacturer and an air conditioner, and a coffee machine from a wholesaler. by bartering, they have saved about $10,000 in overhead costs. >> translator: these supplies are absolute necessities for the hotel. if we're able to barter for them, we don't have to use up

our ready cash. this system is really ideal for us. we'd like to continue to barter for things this way. >> reporter: as people become more interested in saving money, and more concerned about the environment, the old-fashioned art of bartering is making an impressive comeback. next is a recap of the latest market figures.

that's all for now in biz news. next is the weather forecast with sumi sushi. hello there. time now for your world weather update. we'll start off in eastern asia. the sis emthat brought quite heavy showers across japan yesterday is still with us bringing rain in central and northern region. that is set to clear out by the afternoon and then we can expect brief warming throughout the day but by nighttime, winter spells likely to arrive from the west. that's going to be producing snow and sleet again for northern regions on wednesday. the korean peninsula stays dry and fair. here it is bitterly cold as the northern china covered by a high pressure system and it is going to be chilly for you. entering a little bit of milder air for central and southern china. then we have this widespread showers for your tuesday. some of the air is going to be quite heavy with the risk of thunderstorms and gusty weather. now the remnants of tropical

depression of the south china sea will continue to produce widespread rain for places like vietnam. particularly unsettled for the philippines. that mill la coming in at 33 degrees today. mild in bangkok, 32. it is going to be very nice and warm in tokyo, 16 degrees for your daytime high but in seoul, minus 1. pretty chilly out here. let's look at what's happening in north america. middle part of the continent will stay dry and settled but over towards the west and towards the east, containing lots of wet and stormy weather. now eastern canada is due to pick up some more significant snow especially eastern ontario, quebec, looking at up to 20 centimeters of snow and it will be blowing snow and lots of lake-effect snow over towards the northeastern side of the u.s. new brunswick set to pick up lots of torrential rains on tuesday. now as i said, it is going to be largely dry across the east and central portions but lots of cold air ushering from the

north, dropping temperatures dramatically again. down towards the southeast we've got freeze warnings in effect for you. then towards the northwestern corner dealing with lots of showers. it's been raining here for days now so the ground here is quite saturated and we have had had reports of much later occurring in washington so more rain is not particularly welcome. 17 in seattle. 18 in denver. towards the east it is going to be cold. minus 9 in chicago, and dropping to minus 2 in new york city. finally heading into europe, the extreme cold weather will continue to dominate central and eastern areas. a little of this precipitation you'll find is going to be snow for germany, poland, all the way into western russia. some areas in the northern balkans picking up snow flurries, too. around the black sea we'll find lots of heavy showers especially for turkey. lots of thunderstorms and stormy conditions. then out towards the west it will stay mild and calm for places like spain and portugal.

central mediterranean picking up a bit of rain for italy but nothing on the severe side. the british isles looking good today, dry and settled. some light showers touching the eastern side here. london coming in at 5 degrees. paris still struggling to rise. 10 for the daytime high. minus 1 in berlin and lots of subzero figures as we head into central and eastern europe. all right, here is your extended forecast now.

taking a look at our top story once again, japanese prime minister naoto kan has instructed his cabinet ministers to reduce the corporate tax rate by 5 percentage points for the next fiscal year starting in april 2011. the country's corporate tax stands at 40%. that's right, 40%, the highest level in the world. kan delivered the directive on monday in a meeting with finance and national policy ministers.

he added the move will spur economic growth and help the economic out of deflation. the government has already secured around $7.7 billion to make up for the predicted drop in revenue after the tax cut. however, if the government lowers the rate, it will need another $5.9 billion or more to fully cover the loss. attention is focused on how the government will compensate for the projected shortfall when drafting the fiscal 2011 budget next week. that's all for this e"newsline." i'm katherine kobayashi in tokyo. thanks very much for joining us. we'll be back at the top of the next hour. see you then. -- captions by vitac -- www.vitac.com

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