the leaders of china's communist party says he's open to high level dialogue between his country and japan. but xi jinping argues the right environment needs to be established first. japanese survivors of the hostage crisis in algeria are back home along with the bodies of nine colleagues. the nation's leaders vow to continue their fight against terrorism. welcome to nhk world "newsline". the head of the chinese communist party want leaders

from his country and japan to sit down and talk. xi jinping says he's seriously considering the possibility of high level dialogue but before it can happen he says the right environment needs to be established. japan/china relations have been strained since last fall because of a territorial dispute. xi made the comments after meeting with a senior japanese politician. natsuo yamaguchi leads the new komeito party. he delivered a letter from prime minister shinzo abe. natsuo yamaguchi told xi his visit marks the first step in improving relations. he says it's important to continue dialogue leading to a bilateral summit. xi jinping said he respects abe. he said abe was active in strengthening ties the last time he was prime minister and he said he hopes abe will continue with that work.

>> translator: i hope this meeting will improve japan/china relations. it reflects china's desire to improves ties. xi referred to the dispute over the senkaku islands in the east china sea. japan controls the territory but china and taiwan claims it. he said china and japan differ on the matter and it's important to resolve tissue through dialogue. he said facing up to history will lead to a better future. some experts on japan/china relations say the chinese leaders comments are too vague. we spoke with a professor to teaches international relations in kyoto. >> it's too ambiguous what they have in mind.

if they stop sending ships or aircraft to our territory, probably it should be a good sign. but it doesn't say that specifically in such an ambiguous statement. we need more better environment to be able to talk more frankly, but the point is that this will not be built in a day. mutual trust, we need something of mutual trust to discuss more details of the relationship. so probably we should continue exchanging some words of goodwill, this kind of words of goodwill so that we can eventually lessen the

psychological barriers of difficulties we might have between the two countries. the united states has imposed additional economic penalties on north korea in response to its rocket launch in december. the move is in line with sanctions the u.n. security council put in place. the u.n. resolution extends sanctions to four individuals and six organizations. they include the korean committee for space technology, that's north korea's space agency. their assets will be frozen. the individuals will also face a travel ban. the u.s. state department said they are adding the space agency and two related individuals to their sanction list. the u.s. treasury department black listed two beijing based representatives of a north korean bank and a hong kong based trading company. a spokesperson for the department said it's imposing further restrictions on entities that support the north's nuclear program. it wants to restrict the country's ability to use the

international financial system for illicit purposes. north korean authorities responded to the united nations sanctions by announcing they will carry out a nuclear test of a higher level. now they are warning their southern neighbor counter measures if it takes part in the international clamp down. a north korean statement criticizes south korea for pressing other nations to adopt the u.n. resolution condemning last month's rocket launch. it says sanctions amount to a declaration of war. it warns of what it calls strong physical counter measures if the south koreans participate directly. authorities in pyongyang say there's no more discussions. they added a 1992 joint declaration on that issue is no longer valid. north korea's words and possible actions are raising the heat in east asia along with threatening another nuclear test authorities

in the reclusive nation are promising more rocket launches. japanese defense ministry analysts say the north now has a missile that could travel more than 10,000 kilometers, far enough to reach the u.s. west coast. japan and other countries believe they were testing nuclear technology. they believe something went into orbit but doubt it's a functioning satellite. they say they believe the launch involved an upgraded model. they conclude north korea's missile development has entered a new stage, something they are calling a grave concern for global security. the japanese government has decided to revise the nation's defense guidelines and draft a new framework by the end the year. the decision is a response to recent changes in security issues surrounding japan.

>> prime minister shinzo abe plans to review national security policies amid an increasing number of intrusions by chinese ships into japanese waters. the government decided friday to revise the guidelines in 2010 by the previous administration. it intends to focus on boosting japan's capacity to defend its territory on land, sea and air. defense minister met senior officials of his ministry and the self-defense forces. he instructed them to speed up work to compile new guidelines. he underlined recent events that undermine japan's security. they include north korea's missile launch and the hostage crisis in algeria. >> translator: the security situation around japan has become severe. >> a ministry panel headed by senior vice defense minister

will compile an interim report on the defense guidelines by the end of june. the seven japanese survivors of the hostage crisis in algeria flew home safely on friday. the government plane also carried nine of their ten colleagues who were killed in the siege. the foreign minister welcomed the survivors and officials who accompanied them upon their arrival in tokyo. the japanese hostages were among hundreds of natural gas plant workers taken captive by islamist militants in algeria. they were working for an engineering firm. 27 foreign nationals were killed along with 10 japanese. one staff member who was missing and later confirmed dead will be returned to japan on saturday. prime minister shinzo abe met with his cabinet ministers to discuss the hostage crisis and offered silent prayers for the

victims. >> translator: please allow us to express our deepest sympathy for the victims and their families. we will soon repatriate the body of the last victim who was confirmed yesterday. >> abe vowed to continue the fight against terrorism together with the international community. >> the president of the corporation had expressed regret over the hostage crisis in algeria. he held a news conference just after returning to japan with seven survivors and nine victims. >> translator: jc kbmpb's employees involved in development projects abroad take pride in their work. which contributes to the economic development of the host

countries. each one of our engineers is an asset and jgc is supported by them. we have lost many extremely competent staff members who were involved in the algeria project. >> he said the crisis has forced jgc to tack tell crucial problem of how it can continue doing business overseas while ensuring the safety of its workers. he said the company will place top priority on this matter. he added that the company will do everything it can to confirm the safety of one foreign staff member who remains missing. norway's foreign minister said the militants may have got help from inside. espen barth eide said the terrorists probably found weapons waiting for them when they entered the complex. eide made the comments in an interview with a norwegian newspaper.

he said the government received a report saying workers at the complex had laid the groundwork for the attack. the report said they planted guns and equipment at the site. the newspaper quoted an algerian official who says the attackers crossed the border from libya. he said they drove what looked like government vehicles. the official said because of that border guards may have allowed them to pass without inspection. some investors are getting excited about japan again with the stock market rising for japanese exporters the drop in the value of the yen is just what they've been asking for. but not everyone feels good about all this. ron madison is here to explain. ron? >> government officials have been saying this is really all about getting the economy back on track, in particular battling years of deflation here. you can imagine really on the defensive today refuting claims of currency manipulation made by germany's leader.

this came after germany's chancellor said japan's easing monetary measures could devalue the yen. the finance minister denied the accusation. >> translator: japan is pursuing bold economic measures to pull the country out of deflation, not to manipulate the currency. >> the japanese currency is trading at its weakest level in two years and seven months. he said this is a sign that excessive strength of the yen is being corrected now. economic revitalization minister also said he in tends to seek more understanding regarding japan's financial policy at the annual meeting of the world economic forum. he's taking part in the meeting from saturday. meanwhile the head of the bank of japan stressed the central bank will continue promoting seamless and powerful monetary easing. the governor gave an address in

tokyo on friday pep said an inflation target and mormon tear easing to achieve it are needed because the japanese economy has a structural problem of declining growth. >> translator: when we looked at the current situation of the japanese economy we decided that it was necessary to fight deflation, and coordinate with the government. >> he also emphasized it was important to keep in check adverse effects on the real economy when carrying out monetary measures. he said the central bank's move is mistaken as a policy to blindly buy up national bonds. people may perceive the bank as shouldering the government's debt. he expressed concerns that this could then push up long term interest rates. that would be a blow to the business of financial institutions and hurt the economy. let's get a check of the markets now. first taking a look at currencies because we're seeing the dollar has been gaining a bit against the yen. market players are expecting that the bank of japan may take additional monetary easing measures.

u.s. currency trading at a 31 month high level right now at 90.89-93. now the euro is also changing hands much higher. at a 21 month high against the yen. we're seeing it at 122.30 roughly. also being bought now germany's key business climate data beat market expectations. let's see what is happening now with the equity markets there. we got markets turning upwards at this point. london's ftse 100 gaining by .10%. gains of more than a percent in frankfurt and paris cac 40 up by .7%. in tokyo the nikkei average was up near 3% ended at 10,926. that does mark this year's closing high. a weaker yen prompted investors to buy export related issues. different story in shanghai. composite index was down half of a per september today ending at 2291 that sent the index below

3,000 for the first time and the bench park is down. latter half of the week, shanghai stock prices were trading on a bit of a weak tone. we did take a look at this chart we can see the longer term trend. the index has been recovering to the same level as a year ago. so what's really been behind this? we had a chance to speak with the chief operating officer in hong kong to get his outlook for the market. >> china's economy has rebounded steadily since the fourth quarter last year boosted by internal consumption and investment against the background of improving economic outlook and lagging stock market performance. they are gathering more interest on china's asian market amid the prevailing improving condition. however as china asia's market has recently fall almost 20% in a month's time is undergoing a

consolidation. market outlook remains positive as the chinese will increase the quotas to allow more foreign participation and new chinese leaders expect to introduce more supportive measures to keep their economy growing steadily. we expect shanghai index will reach 2700 points this year. >> now another thing we're seeing chinese economic data also showing some positive signs. we were reporting just yesterday that the hsbc manufacturing pmi for january rose to its highest level in two years. what do you think we can see now from this trend and can we really expect the chinese economy to continue to recover? >> yeah. quite positive. hsbc pmi rose to 51.9 in january. 24 month high. also increased for the fourth straight month to stay above the line of 50 confirming that the

chinese economy is in a sharp turn upfriend. despite external demand the domestic driven restock process and production activities by manufacturers are likely to support china's ongoing recovery in the coming months. their first quarter growth can be up to 8.2%. we expect january official pmi to be released on february 1st to hit 51.3 compared to 50.6 in december last year. stronger domestic demand will continue off setting the sluggish growth. >> all right. that was chief operating officer in hong kong. 2012 certainly proved to be a goodyear for south korea's samsung electronics. both sales and operating profit rose to records driven by strong sales of smartphones. samsung said sales rose 22% from

the previous year to around $190 billion. operating profit was quite a jump. 86% to $27 billion. more than half of its profit came from smartphones. samsung launched many new models and posted higher sales in emerging markets like china. the strong yuan is weighing on samsung. company related losses could amount to roughly $2.8 billion. they say they will work hard to provide higher quality frouts become more competitive. that want does it for biz this week. let's check in now on the markets.

aviation authorities in the united states and japan are keeping an even closer contact these days. most of their discussion involve the 787 dreamliner. the boeing made plane has been grounded following a series of problems. the biggest involves the jet's batteries. nhk world bring us up to speed on the investigation. >> translator: investigators are hoping to find out why the battery in the 787 caught fire while the plane was on the tarmac in boston. >> we do not expect to see fire events on board aircraft.

this is a very serious air safety concern. >> reporter: the lithium batteries play a key role. dream liners have two sets of them. one is under the cockpit. it provides back up energy in an emergency. the other is under the passenger cabin. it starts the jet's engines. the batteries way half as much as conventional batteries but provide same amount of power. the problem is they are more susceptible to catching fire when they overheat. in the japan airlines case the battery caught fire. ntsb chair says there's evidence of short circuiting in the chemical reaction. that's when high temperatures trigger an uncontrollable reaction. >> the photo on the right, and you can see the cells that are outlined in red, show the eight

damaged cells of our battery that we're investigating in the lab. >> reporter: among the batteries eight cells three were heavily damaged just as investigators are trying to figure out why those differ differently than others. >> we're working very hard to determine what happened and why it happened. we're going to be completing examinations into failure scenarios and coordinating with our colleagues around the world. >> reporter: aviation authorities in japan also are looking at the battery program. they have been examining the battery from an old nippon airways 787. they detected smoke coming from it last week. the crew made an emergency landing in western japan.

investigators say the flight data recorder gives no indication of excessive voltage ran through the battery, but they aren't ruling out the possibility of an overcharge. >> translator: we do not see evidence of overcharging. but it is too early to say whether there was no excessive voltage. we would like to uncover the cause of the troubdamage throug examination of the battery. >> reporter: no one can say when the examinations will wrap up and how it will affect the 787 dreamliner. until then dozens of these jets will stay grounded. boeing continues to build the plane but the company won't make deliveries. the eight airlines operating the 787 and dozens of airlines

hoping to add these hi-tech jets to their fleet have to remain in a holding pattern. there's heavy snow in west coast japan blocking roads and causing havoc. meteorologist robert speta is here with the latest. robert? >> well, gene, all this rough weather really due to this low pressure area that's now cruise ago cross the sea of japan, starting pushing off hokkaido. what's setting up is this sea effect snow machine. it's bringing absolutely windy conditions, creating those blizzard white out conditions. that's why we're seeing road closures and then the very heavy snowfall continuing to set up here. up to 100 centimeters. a meter of snow expected across portions of hokkaido into the south. it's really going to be coming down here. definitely if you have any travel plans out across much of the sea of japan side of the country here, it does look like

it's going to be rather dangerous even those waves kicking up, five to seven meters high. good news in tokyo and down around kyoto and osaka the mountains will act as a barrier keeping the snow off towards the west. as we pull back the picture much of china remaining dry. into the philippines also still seeing a persistent area of thunderstorms. this is bringing flooding conditions. looks like that will continue through the week. and if we don't look farther to the south, look at australia. say clone oswald has been bringing torrential rainfall. in rockhampton in the past 24 hours you're seeing record break rainfall up to 350 millimeters has fallen here and does look like all of the queensland coast is seeing heavy rainfall and brisbane and south wales. improving conditions further to

the north. into the americas also we've been watching some bitter cold temperatures across much of the midwest over towards the northeast. very cold here. i want to show you a video coming out of chicago just demonstrating how just chilly it has been. this is a warehouse on chicago's south side. the second time this has caught fire. the firefighters had to go out there. they fought the fire and while they were doing that, the hoses were freezing up here causing all sorts of problems. you can see all that water as it was sprayed on the warehouse it froze and looks like an ice sculpture. just demonstrates how very cold and chilly it is and does look like the next storm system will be come through and drop some snowfall on top of that as well even push off to the east into the appalachians about 1020 centimeters and then freezing rain threat, specifically across portions of tennessee over towards north carolina. does look like this will be dangerous. any freezing rain falling, power

lines here top of trees and accumulating up very well can create that risk power outages. further out there in the west into los angeles even around san diego something you don't see quite too often some heavy rain showers, actually about 50 millimeters at times in the next 24 hours. very well could be seeing heavy burst thunderstorms flaring up. definitely want to watch that. that will be make being roads slippery. los angeles with a high of 18. denver look at you, 14, well above average. winnipeg at minus 21. does look like you'll get a heat wave and by heat wave in winnipeg it's getting up near the freezing mark by next week. something you have to look forward to here. here's a look at your extended forecast.

we'll be back in 30 minutes with more news. i'm gene otani in tokyo.