welcome to "newsline." i'm catherine kobayashi in tokyo. first a look at the headlines. emergency crews in hiroshima are trying to find people missing in the mud after several hillsides gave way. the minister in charge of everything from revitalizing japan's economy to negotiating a major free-trade pact joins us for an exclusive interview. rescue workers have rushed in to find people trapped in

landslides. record rains in hiroshima softened the ground and then several hillsides came thereundering down. eight people were killed and 13 others are missing. torrential rain started early in the morning and just kept coming. more than 200 millimeters came down in just three hours. that's more than the average for the entire month. [ speaking foreign language ]. all that rain made the ground unstable, then it gave way. the mud slammed into homes and left a trail of debris. firefighters are trying to find those who've been trapped. they pulled a two-year-old boy but doctors later confirmed he had died. a firefighter working at another site got trapped and he, too, was killed. the rain has stopped for now but authorities are warning people to be on alert for more landslides and flooding. more on this later in the

program. investors around the world have been watching closely to see if prime minister shinzo abe can live up to his promise of bringing japan back. the man largely responsible for jump starting the economy and fulfilling that promise is with us today. ai uchida joins us from the business desk. >> akita amari is the one tasked with making abe nommics work and those around him have said this is japan's last chance for the economy. we have seen the stock market grow in the last 18 months and corporate earnings grow. but, gdp in the april to june quarter fell largely because of the consumption tax hike. amari has been watching it all play out. a business magazine says he has what it takes to deal with what's ahead. it has chosen him as one of the

top 50 most influential leaders in the world. he is juggling economic reforms including cutting the corporate tax to overhauling social security to negotiations to reach a free-trade pact with asia-pacific nations. minister amari thank you for joining us. for our viewers watching we are going to be switching to simultaneous translation now. >> translator: thank you for being with us. according to the economic report last week, the april-june growth rate was minus 8.6% which was the biggest contraction since the japan earthquake. even after july department stores are facing an up hill battle. could you give us your future outlook of this economy?

>> we >> translator: well if you raise the consumption tax of course peel will want to do major buying and you will have a buying spree before the hike and the more the tax goes up the bigger the spending spree. in the next quarter you would usually see a drop in spending. that's only nature but what's important is that you have to look at the average if you want to see the real economic trend. so from january to march and then from april to june, when you see this big jump and then a dip, you have to look at the average and see what happened from before that time. you then will see that you have this growing trend. so i don't think you is to be worried too much. the important thing is what happens from july to september, what kind of movements will we see? will it be a strong recovery or

not? many companies say that july to september you might see a 4% or so growth. that's the general view of the government has not given its official view yet. we are not in a position to give that yet but it's we do believe that we will see a good recovery. >> we believe that the government decide if the consumption tax be increased again i the end of this year. if the rate be uplifted what will be the minimum required growth rate? provided that the 3/4 average real growth rate between january and september be 2% which has been the government target, will you be ready to increase the rate, mr. amari? >> well, we don't have any specific figures that we will

follow to decide whether or not we will raise the tax again. in the end, the prime minister will look at the july-september period and also look at the monthly data to make the final decision. of course, that will include the job market situation and other economic indicators. we would like to have a lot of data and indicators and the prime minister will make his decision by the end of the year. the economic recovery trend, will this continue or not? that's the main thing we will be looking for. and the consumption tax, according to the law, are we going to raise it to 10% as scheduled? do we have the economic situation that allows that to happen? that would be the best scenario but it's if we raise the consumption tax hike but see the economy decline, of course

that's not going to be good. we have to look at what kind of impact we will see on the japanese economy, how big would that impact be. we will have to consider all these things together for the prime minister to make the final decision at the end of the year. >> translator: that is a concern. if the consumption tax be increased to 10%, that means the consumption tax be doubled in just 18 months. wouldn't it trigger an economic downturn which you, yourself, mention is a concern. >> translator: well consumption tax hikes of course have their own risks. but at the same time, consumption tax, like other income tax or corporate tax, it becomes a steady revenue source, meaning that for fiscal revitalization and also for the social security aspect, is it going to be very good.

so we have to look at the negative factors as well as the positive factors if we see a bigger -- we have to make that positive effect bigger. if we do not raise the tax it means we have to have another plan to rebuild or financial health -- the structure itself. the japanese bonds, confidence will have to make sure that it will hold. and consider if we will raise the tax again and when we will raise that. the best scenario of course is to see the japanese economy recover steadily and raise the tax again as scheduled and make sure that japan's economy overcomes that second raise of the consumption tax. we will have to make sure to look at all indicators so that this happens.

>> translator: you also refer to the corporate tax. one of the pillars of the economic growth plan dmieled by the administration in june is a corporate tax cut. japan's corporate tax rate is said to be the second highest in the world exceeded only by the u.s. overseas investors are waiting the news for obvious reasons but can they expect about 2% cut in the initial year, which is a fiscal 2015? >> translator: we've decided that we will take several years to lower the consumption tax to less than 30%. so it means that we will be reducing the tax rate by about 6 percentage points. we are considering this over a five or six year span. if the economy looks better than we expected it may be brought forward. but basically, we are looking at

a five-year span in doing this. now, how do we allocate the reduction? that will depend on how much the economy recovers. toward the end of the year, we will be discussing this with experts on tax. is it going to be a 1% cut or 2% cut? right now, we can't say. >> translator: and so five years time it will down to 20% or between less than 30%. but i think that you have to be very bold in the first year. am i right? >> translator: within a five-year time span if we can hit the target, if we have a plan to make that happen that's the most important point. i believe it's important that the government commits to having that plan.

the prime minister has said that we will cut the corporate tax rate so that we reach the standard, the global or world-wide standard. and the prime minister would like to follow the plan as scheduled. >> translator: next we would like to change gears and ask about tpp. abe administration have been emphasizing the importance of being a part of the trade talks among 12 asian-pacific nations if all members come to an agreement the free trade zone will emerge which will account for 12% of the world gdp. but some cabinet members they cannot conclude by the end of the year. what is the biggest obstacle? >> translator: the important thing is that among the 12 countries, 80% of the gdp of

these 12 countries will be lead by japan and the united states and these two countries have to have a basic agreement and we also need to make sure that something that has been once decided is not reopened again. if we reopen discussions on what has been agreed upon, it will totally hamper the confidence and trust to whatever is agreed upon. so we will not open the discussion up once again after something is decided. and that means that stake holders within each country, including the assembly members and industries, et cetera, of course, everybody would like to see a 100% satisfactory deal for your own country which means it may not be that good for another country. but if -- even if the stake

holders said we are not really satisfied with this deal if it has been agreed upon we should not go back to discuss it again. so that has to be the understanding of the top negotiators and that has to be explained to all the stake holders that anything that has been discussed and that has been agreed will have to hold, will not reopen discussions again. you have to explain that to the stake holders within the countries and i believe whether or not each country can do that, it will be key. >> are you referring to that some countries are trying to reopen negotiations? >> well, of course, some stake holders will put pressure saying they are not satisfied with the deal. but even if that happens, you should not try to change other countries' positions to satisfy

the stake holders within your country. you have to explain and satisfy the stake holders within your own countries. >> translator: no doubt that the u.s. holds a key to move the tpp talks forward. do you thing that the negotiations will go smoothly after the coming mid-term election. >> translator: the mid-term election, how that will impact the deal, of course that is what we're looking at. yes, the people who are at stake with this election, of course they will be listening more to the domestic stake holders, meaning they would want to see the deal be more satisfactory for their stake holders. but of course, if you say what you want to all the other countries, we will have no deal in the end. we have to understand that having the tpp agreement is going to be positive for all countries involved.

so once the mid-term election is over, the election will not have any effect on whatever deal or negotiations take place, probably we will see things settle down a little bit. so maybe, yes, we will see a speeding up on the negotiations going forward. >> thank you very much, mr. amari, for being us with. switching gears let's check on the markets. tokyo stocks are moving in a narrow range today. investors are nervous about the recent gains and some are selling stocks. currencies are trading in a tight band. the dollar is close to the 103-yen level last seen august 1st. dealers bought the dollar and sold the yen on stronger than expected housing data. and the euro is under selling

pressure. the currency dipped to a ten-month low against the dollar and six and a half month low against the yen. south korea's kospi is in the negative. and negative in shanghai and hong kong as well. citigroup executives are concluding that their retail banking unit is not making enough profit. they're drastically reviewing their strategy and are considering selling the business. citi bank japan offers retail banking at more than 30 branches. its total deposits as of june stood at about $37 billion. sources say company executives have begun sounding out other domestic banks about acquiring citi bank's banks and other facilities. prolonged low interest rates in japan have made it difficult for them to boost earnings. citibank japan plans to continue with its corporate banking business. some welcome news for travellers flying out of japan. officials at japan airlines and

all nippon air ways have decided to cut fuel surcharges for international flights for tickets issued in october and november. it's the first cut in 14 months. the surcharges are added to international air fares based on the price of fuel and are reviewed every two months. j.a.l. and ana officials say they decided to lower the fees because fuel prices have been dropping. the two carriers will slash fuel surcharges for one-way flights connecting japan with north america and europe by 16% to about $200. fees for flights connecting japan with hawaii as well as india will be lowered by about 15% to about $130. and that's the latest in business. back to catherine. the sound of air strikes and rocket-fire have once again echoed through the gaza strip. israeli negotiators pulled out of peace talks with hamas, and the two sides started fighting again hours before their latest

truce was set to expire. three rockets were fired from gaza into southern israel. israeli commanders responded with air strikes. officials in gaza said three people were killed, including a 2-year-old girl. 45 others were wounded. the israeli military issued an order to open all bomb shelters within 80 kilometers of gaza, so residents can take shelter. negotiators had been holding talks in cairo over a permanent cease-fire. palestinian representatives issued a statement saying they made a final proposal, but they say they're still waiting for a response. israeli media quoted sources close to the government as saying the negotiations had failed. a spokesperson for the u.s. state department called for an immediate end to hostilities and asked negotiators to return to talks. >> we hope that the parties can reach an agreement on a sustainable cease-fire or if necessary, agree to yet another extension of their temporary cease-fire so they can continue in conversations.

>> harf blamed hamas for the breakdown in the talks. japanese diplomats are following a number of leads as they try to track down a japanese man missing in syria. they believe islamist militants took him captive. haruna yukawa says earlier this year he started a military and security company in tokyo. he went to syria late last month to do some research. a senior member of an opposition group said yukawa wanted to see first hand what was happening there. he was traveling with his group near the northern city of aleppo, but they got separated and members of the group islamic state took yukawa captive. >> translator: the man is our friend and brother, and he's important to us. >> he says he doesn't know where yukawa is or how he's doing. he says members of his group have proposed a prisoner exchange with islamic state, but he says they have not received a response.

hotel owners in japan are seeing more and more guests from abroad coming through their doors. more than 10 million foreign visitors arrived last year. the government wants that number doubled by the 2020 tokyo olympics. and with competition heating up, hotel operators are thinking outside the box. >> a dragon poised to leak from -- leap from the ceiling. sumo wrestlers looming over the bed. guests in this hotel are confronted with japanese culture and art at every turn. this arresting interior design has a real world function. to grab the attention of foreign tourists. since opening in 2003, visitors from abroad have accounted for an increasing share of the hotel's business, but a brief slump in arrivals after the 2011 earthquake got the managers thinking, how could they attract more guests from overseas?

they came up with the answer last year when the hotel began remodeling its guest rooms. artists were invited to contribute graphic motifs. it's a way of standing out from the competition. and the word is spreading through the internet and foreign publications. >> translator: we have been successful in connecting with the foreign market, thanks to international pr. we aim to spread our brand name. >> since the japanese government kicked off a campaign to attract more foreign tourists in 2003, arrivals have risen by an average of 9% per year. the number of hotel rooms has increased to match this. tokyo has seen a 20% rise. however, some analysts are concerned this may lead to a possible surplus of accommodation.

>> there may be a time when demand stops increasing, particularly once the olympics are over. there's a risk there will be an oversupply of rooms. >> some of the newcomers are looking for ways to minimize their risk. one example is this company. this pickle producer was founded 120 years ago. with demand for its core business fading, the company decided that hotel management could be a promising side business. so it converted its former headquarters. the building was renovated and last year it reopened for business. as a capsule hotel. the compact sleeping units can accommodate a large number of guests. that's not the only advantage. because the units can be removed easily, it will be relatively simple to convert the building for other uses.

>> translator: if we fail in the hotel business, we can just remove all the capsules and turn this back into our headquarters. >> okay, we are a capsule hotel and your room -- >> already about 30% of the guests are from abroad. to meet the needs of customers with more baggage, number of wider capsules are available. >> this doesn't look like a capsule hotel at all. oh, this is good. this is a hard one. i like it. >> positive responses like this are encouraging. >> translator: during cherry blossom season, over half our guests were from abroad. we'll need to open a second hotel and even a third. >> foreign arrivals are increasing, but so are their accommodation options. hotel owners know they'll need to get creative if they want to stand out from the crowd.

it's time for a check of the weather, as we reported earlier, people in western japan are dealing with torrential rains and landslides. mai shoji joins us with more in world weather. >> torrents of rainfall over a short time span has caused deadly flooding over hiroshima prefecture. this is due to a stationary boundary stretching through the korean peninsula and china. and it is surging the ample moisture, building rain clouds especially over the mountains and dumping huge amounts of rainfall. buckets full of rainfall caused this kind of picture here in hiroshima prefecture. you can see this red spot that is continuing. it is hitting a similar area. the buckets full of rainfall has generated these numbers, 200 millimeters in some locations. certainly a record-breaking one. it's double the previous record for this date. and some other locations saw about 100 millimeters in just three hours.

certainly, an undoubtedly one of the reasons for the landslide to cause but it's also, because the land is very prone to flooding, in fact, hiroshima is known to be the most hazardous area for landslides. 32,000 hazardous locations are in hiroshima for landslides. and on top of that, some of the houses are built on the hillside of the mountains. so all combined with the geological factors, these are the reasons why the deadly flooding has occurred. and unfortunately more rain could target similar locations in kyushu, 200 millimeters rainfall. and the surrounding countries as well. south korea will receive up to 200 millimeters of additional rainfall due to that system. and the seasonal band stretching into southern areas of china has

led to landslides here in deijang. look at a video coming out from there. the same stationary boundary that is bringing heavy rain to western japan is bringing damaging floods to central and southern china. it has caused landslides and damaged roads and flooded 120 hectares of crops. at least ten homes were destroyed and 10,000 people were impacted. in hong kong, 150 millimeters of rainfall has been recorded in the past 24 hours. and similar conditions will be prevailing across locations. there is a low pressure system here. this used to be a tropical depression that travelled north up here and is exasperating the situation in and around shanghai now. so the bulk of the heavy rain will be around the southeast coast of china yet again. we want the rain in the drought locations but not seeing any

precipitation there. beijing, 33 degrees. it's still hot there. talking about heat. up to 35 in tokyo and nagoya with 36 degrees. with plenty of sunshine. heat also is another life threatening dangerous factor. watch out for heatstroke. in europe you see the spiraling clouds. it's a similar picture from yesterday. it has been creating wet and windy conditions across the northern locations and the front will bring thunderstorm to the alpine regions. it's pulling a lot of the northwesterly flow into the british isles. so you'll see autumn-like temperatures continuing through the rest of your workweek. it's going to be chilly and umbrellas could be handy for you throughout this week. but kiev looking at 30 degrees. it's still really hot there. i'll leave you now for your extended forecast.

good evening from los angeles. i'm tavis smiley. tonight, a conversation with actress anjelica huston who can now add author. she has a memoir that details her childhood growing up in an irish castle with her legendary father, jon huston. ♪