welcome to "newsline." i'm catherine kobayashi in tokyo. first a look at the headlines. japanese prime minister shinzo abe is bringing new faces into his cabinet as he looks ahead to challenges at home and abroad. islamist militants claim to have executed another american hostage and are making more threats against the u.s. and its allies. and japanese car manufacturers are coming up with new models to ramp up sales and they're designing them by hand.

the prime minister of japan is shaking up his administration as he prepares to deal with a number of challenges down the road. members of shinzo abe's cabinet will resign in about an hour and the reshuffled line-up will be unveiled later in the day. it will include 12 ministers and more women. he is appointed outgoing justice minister, sadakazu tanigaki to the key post of secretary general. he will be responsible for managing funds and handling elections. tanigaki replaces shigeru ishiba who wanted to stay in the job. ishiba is expected to take on a new cabinet portfolio dedicated to regional revitalization. the post of reconstruction minister will likely go to wataru takeshita. he will be in charge of overseeing rebuilding efforts in areas hit by the 2011 disaster. takeshita is the younger brother of a late prime minister. the new justice minister is

expected to be --. abe is planning to bring yuko obuchi into the cabinet. she is a daughter of a former prime minister. she will likely take on the role of economy, trade and industry minister. the next several affairs and communications minister is expected to be --. yasuhisa shiozaki is being tapped as the health, labor, and welfare minister. he was in abe's first term in office. the science and technology policy minister is expected to be -- abe is planning to give akinori eto the new post of minister in charge of security administration. the next agricultural forestry and fin industry minister will likely be --. the abductions issue minister is expected to be --.

she will be working on bringing home japanese nationals abducted by north korean agents in the 1970s and 80s. and -- will likely be the environment minister. the chief cabinet secretary announce the new line-up. the new cabinet will be launched in the evening at a ceremony. and we just found out the latest. -- is expected to become the minister in charge of the empowerment of women. she will likely take over the administrative reform portfolio too. arimura is a ldp member in the upper house. she has been elected three times since 2001 but never been in cabinet. she was the parliamentary secretary of education and chair of the upper house environment committee. the prime minister says he wants to renew his team to launch the

second chapter of his administration. i spoke earlier with our senior political congressmmment about the changes that abe is making. >> tanigaki was the party president and led the ldp when it was in a position from 2009 to 2012. during that time, tanigaki worked hard to rebuild the party's support base from the local level up. he led the ldp to victory in the upper house election four years ago which helped turn the tide in the party's face. abe may want to take advantage of tanigaki's experience to prepare for upcoming local elections including the nationwide votes next spring. he wants to make sure that ldp or ldp supported candidates win

and this would boost abe's popularity and increase his influence in japan. he will face his own election a year from now at the ldp leadership review. he needs to secure our second three-year term so he can stay on as prime minister. >> could you tell us a little bit more about the other key posts in the ldp that are affected by the shake up? >> abe chose tomomi inada to chair the research council. she has been the minister toed a form minister. abe was impressed by how she has worked to deregulate the farming and medical sectors. and prime minister -- the prime minister named toshihiro nikai chair of the ldp's decision-make body. he is a lawmaker and has ties with new komeito. abe knows that having an

influential position in a key post in the party will benefit his administration. i think. >> that was our senior political commentator. japan's cabinet reshuffle will also affect the business world. ai uchida has the details. >> prime minister abe has made it his mission to reare survive the economy and drag the country out of deflation. investors have driven up the nikkei by more than 50% since he returned to the prime minister's office and consumer prices have been rising for 14 months in a row but abe has been confronting new challenges since he raised the consumption tax in april. he's seen consumer spending fall and economic growth slump. nhk world's kyoto fujita has more. >> reporter: government officials say that the economy continues to recover at a moderate pace.

but consumers are less optimistic. many people say they have been feeling the pinch. they've seen prices going up and up. people watched as the consumption tax was hiked from 5% to 8%. but they haven't enjoyed an increase in wages to match. so they're becoming more reluctant to spend. >> translator: food prices have gone up. it's hard on our budget. my growing kids eat a lot. >> translator: i don't think my salary will increase any time soon. >> reporter: prime minister abe is struggling to build new engines to drive growth. in june he said he'd lower the corporate tax rate to below 30% in the next few years. company executives have complained for years that japan has one of the highest rates among developed nations. abe wants to give businesses a stronger hand in the global market and attract more foreign investors.

>> translator: i'm committed to boosting the competitiveness of japanese companies and helping them survive in the global market. >> reporter: exporters hoped to benefit from the weaker yen. but instead they've been disappointed by their sales. government officials reported a current account deficit of $5 billion from january to june. company executives have been moving their manufacturing bases overseas to cope with global competition. abe is also aiming to give japan better access to foreign markets. he's determined to sign up to a free trade pact in the asia-pacific that would cover around 40% of global gdp. he hopes the trans-pacific partnership will boost the country's export. but the delegates are trying to iron out differences with their u.s. counter parts and the ministers of the 12 negotiating nations haven't met over the summer.

experts say upcoming mid-term elections in the u.s. could cause further delays. one analyst says some investors now believe that the implementation of abe's growth plan is too slow. >> last year foreign investors purchased japanese stock more than 15 trillion yen. but this year, they sell japanese stock about 230 billion yen. and this shows that the foreign investors expectation to the abenomics is starting to fade out. >> reporter: abe faces another major challenge. he has to manage the country's debt that has expanded to a record level of around $9.6 trillion. the japanese government has a plan to raise the consumption tax to 10% next year. abe will decide by the end of the year whether he will carry on as planned.

a further tax increase may drag down personal consumption. even some in abe's own party have been voicing concerns. but an expert warns of a substantial risk if abe puts fiscal consolidation at the bottom of his agenda. >> abe administration is taking the risk of long term interest rate surge or losing -- risk of losing the credibility of not only jdp but also the administration itself. >> reporter: prime minister abe is entering another phase of his leadership. he needs to juggle conflicting challenges. and find a path to further economic growth. kyoko fujita, nhk world. even those who have not served in cabinet before are well aware of the size of japan's debt. the ministers who are appointed

will face the challenge of curbing spending as they compile the budget for next year. agencies have requested a record amount for 2015. extra demands for boosting economic growth have pushed the total above 100 trillion yen for the first time. that's about $968 billion. finance ministry officials received about $38 billion in extra requests for the projects that would push forward the prime minister's growth plan. much of the amount accounts for an increase of more than 4% in policy spending. requests for pension and medical expenditures grew by $7.9 billion. that reflects the age population and more than $245 billion are needed to repay the country's ballooning debts. let's check on what is happening on the markets. the dollar is above 105 yen for the first time in eight months.

traders lifted the u.s. currency above 105 yen in new york after better than expected manufacturing data confirmed their views that the recovery is solid. and the stronger dollar and weaker yen is driving investors to buy japanese stocks. tokyo shares popped higher at the open taking the nikkei above 15,800 for the first time since january before settling at a narrow range. investors are waiting for policy decision from the central banks. and on friday they will see august job numbers out of the u.s. let's look at the other asian markets. the kospi is pretty much flat. in shanghai the key index is higher by .6%. and in hong kong, the hang seng is up more than .8%. japan's three major brewers

have launched new beer-flavored alcoholic drinks for health conscious consumers. they contain almost new puina, a chem ka compound that can cause gout. they began selling the drinks tuesday, they spent more than ten years developing the products aiming to cut the levels of purine and sugar while preserving the flavor. -- top marketing executive takeuchi fusei visited the market to promote the new product. he said he's confident consumers will like it as it was developed using the latest technology. another major japanese brewer, sapporo has also begun selling a beer flavored beverage in july. the country's major breweries have reported falling beer shipments for nine years in a row. they hope to expand the market by attracting more health conscious consumers. and i'll have more business headlines for you next hour.

i'll leave you with a check on markets. politicians are gearing up to battle for control of the u.s. congress. republican lawmakers already control the house of representatives. candidates hope to win enough votes on november 4th to end the democrat's majority in the senate. some democrats have been trying to win over voters by distancing themselves from bo. mary andrew has served three terms in the senate. she has seen voters turn away

from obama because of his stance on energy and the environment. landreu has released a tv campaign. obama would have trouble with his agenda if republicans gain both houses of congress. in other news making headlines today, militants with the group islamic state claimed they've executed another american hostage. they've released a video that they say shows the beheading of journalist steven sotloff. the footage shows a man believed to be sotloff kneeling before someone in a mask. the video resembles one last month that showed the execution of another american journalist, james foley. the masked man seems to be the same person in both videos. he speaks with a british accent. he warns the group will continue killing hostages until president obama stops air strikes against militants in syria and iraq. then he beheads the hostage. sotloff was working as a freelance journalist. he was kidnapped in syria a year ago.

his mother issued a video message last week asking the militants to free her son. >> the intelligence community will work as quickly as possible to determine its authenticity, if the video is genuine, we are sickened by this brutal act taking the life of another innocent american citizen. >> the militants have issued another threat. the end of the video shows another hostage believed to be british aide worker, david haines. the masked man warns governments to back off what he called this evil alliance of america against the islamic state. experts with the world health organization have been studying an ebola outbreak in the democratic republic of congo. they say the virus has left 31 people dead and they say it's a different strain to the one affecting west africa. authorities reported the outbreak last month. they say it began in rain forests about 800 kilometers

northeast of the capital --. ebola hit the country 40 years ago. w.h.o. officials say there have been seven outbreaks since then. they say the latest started with someone handling infected meat from wild animals. public health officials in tokyo are working hard to identify the source of an outbreak of dengue fever. the number of people infected has been brought to 36. than ahave installed traps to catch the mosquitoes that are making people since. everyone infected was in or near a park in central tokyo last month. the officials believe all of them were bitten by mosquitoes. authorities are draining ponds in -- park to try to prevent jeelts from breeding and they installed traps at ten locations. the traps contain dry ice that

emit carbon dioxide to attract the mosquitoes. the officials will take them to a laboratory for testing. car manufacturers in japan have seen sluggish sales since the increase in april in the consumption tax. so they're coming up with new designs to try to lure customers back and the models all start by hand. >> reporter: new car models always seem to be coming off the production line to. make a favorable impression they have to have an attractive outer design. >> translator: of course i love it. really cool. >> translator: it all starts with appearance. >> reporter: this is where a major auto company makes its product. tight restrictions govern who can enter the office where the cars are developed.

here, experts have made a clay model of an auto. it weighs about 800 kilograms. is it the same size as the one it replicates. making a clay model is a key step in the design process. the final design is set. workers measure it so that metal parts with the same dimensions can be made on the production line. professional clay modelers are in charge of this stage of the process. how is a model made? first, the designer makes hundreds of sketches. later they are consolidated into one final image. it represents how the designer sees the car as it is being driven down the street. also taking to consideration is what kind of person will drive it?

the clay modelers transform the designers sketches into 3-d form. -- has been working as a modeler for 22 years. ever since he graduated from a specialized vehicle design school. we convert the design from 2-d to 3-d and turned into a real object. this lays the ground work for the process. >> reporter: even though they rely on machines to make cars they can't do without the touch of a human hand. just by running his hand over the surface, an expert can detect even the tiniest bumps and dents. they can be repaired as the clay is easier to modify than a metal car made we machine.

as well as making the autos attractive, the modelers improve the functionality. in his tool box, kawasaki keeps specialized implements as well as pieces of wood and sheets of stainless steel. how can the vehicle's fuel economy be improved? he prechecks the air flow by observing the motion of colored smoke. here by bending the sheet slightly, kawasaki looks for the point where the curve offers the least air resistance. he relies on experience and instinct. >> translator: at the end of the day, we're creating our own form. so it's a huge responsibility. but it's also really rewarding.

>> reporter: from a designer's drawing, an actual model takes form. and what makes it so appealing is the most precious step of all, the touch of a human hand. it's time now for a check in the weather. people in tokyo are seeing sunny skies but that's not the case for other areas of japan. mai shoji has more. >> clear skies in the tkanto region of japan. but a system is affecting the korean peninsula right now. that is carrying in to other areas of japan including hiroshima. any additional rain could trigger flooding and landslides. this is affect the korean peninsula with 120 millimeters of rainfall in a few hours.

and that's likely to add up to 200 millimeters. an additional 80 millimeters could be possible throughout the day today. and as i mentioned this is surging a lot of the moisture to western locations of japan and that's likely to continue throughout the day as well. this system is a very slow-moving system and will be intensifying over the sea of japan but likely going to be taking quite some time to pull into the rest of japan. so tokyo will still see the clear skies. please enjoy the weather while you can. seoul at 22 with heavy rainfall. and down to the south we have a tropical development east of the philippines. numerous thunderstorm reports and flooding already occurring across many of these locations. looking messy across these locations as well. out in europe, a cutoff low is lingering over the same area. this has spawned some tornados. this looks like it could even

spawn some more strong gusts as well as heavy rainfall have already been occurred in greece and croatia. it will be continuing longer. wet and windy in the scandinavian peninsula. a high pressure system dominates much of this continent. so the temperatures and beautiful skies here in paris at 25 degrees. madrid at 34. dangerous heat from africa will keep it going until friday. watch out for heat exhaustion and heatstroke. in mexico it is hot here too. and strop call developments are still kicking up. dolly is a tropical storm that is likely to make landfall any time soon, possibly wednesday early morning hours. we have a tropical storm warning all the way posted up to the north. rip currents could be life threatening, storm surges as well as flooding. this is a really heavy rainmaker. it could add up to 380 millimeters in isolated locations.

so certainly people in the low-lying areas, please watch out and take precautions for flooding. another system is affecting baja, california as well as southern areas of mexico. that will add up about 200 to 250 millimeters of rainfall. that is another system that we're tracking called norbert. the system that has spawned a dozen tornados in kansas and michigan is finally pulling away. severe thunderstorms are in the forecast for you out here in new york and tennessee but it's more toward the dangerous heat that we're looking at in new york. 33 degrees was reported yesterday. that's the hottest day so far this year. and the heat is still likely to continue. so really mid summer like here but on the flip side looking at winter weather advisory in the northern rockies. and it is really winter down toward southern hemisphere. and we have a strong system. take a look at how big this system is. it's more of the gust, not really the rain. but sydney has already report of

115 kilometer-per-hour winds. i'll leave you now for your extended forecasts around the globe.

and that wraps up this edition of "newsline." i'm catherine kobayashi in tokyo. thanks for joining us.

>> good evening from los angeles. tonight a kfs with grammy winning singer and song writer rosanne cash. a road trip she took with her husband through the south. it also deals with her life as an artist, wife, mother, and of course her heritage, particularly her relationship with her father, johnny cash, and as the stepdaughter of one of country music's legendary dynasties. rosanne cash, coming up right now. ♪