one area includes the capital, mogadishu where an estimated 100,000 people have come looking for aid. the u.n. says nearly half the country is suffering from malnutrition. egypt's ailing former president will next appear in court august 15th as his trial opened. hosni mubarak denied charges of corruption and playing role in the death of more than 800 anti-government demonstrators. the trial of his rmer interior minister is scheduled to get under way at this hour. in eastern australia, a teenage girl is safe but police don't know who strapped a fake bomb around her neck. police say 18-year-old madeline pulver went ten hours after a masked intruder came into her home in sydney. those are the headlines from cnn, the world news leader, i'm monita rajpal. "world business today" starts right now. good morning from cnn london, i'm nina dos santos. >> and a very good afternoon from cnn hong kong. i'm andrew stevens. you're watching "world business today." the top stories this thursday, august 4th, japan pushes back. intervention takes some of the pressure off the soaring yen but can it last? >> there's trouble in the banking sector. we'll be taking a look at the latest signs of weakness. we'll be hearing from one nobel prize-winning economist has to say about all this. >> and it's another case of deadlock in washington. lawmakers go on vacation without a resolution, leaving thousands of federal jobs in limbo. the japanese government intervened in its country's currency market fothe third time. in a year. the finance minister says the move is to stop a surging yen undermining japan's economic stability. an overly strong yen hurts the country's exporters. many like toyota are struggling in the wake of the march 11 earthquake and tsunami. after the intervention, the yen weakened against the u.s. dollar, quite substanally now. right now one dollar will get 79.88 yen. let's take a look at the day's trading in the yen. it's fairly flat around the 77.2 level until the bank of japan stepped into the markets. you'll see a pop of slightly officer 3% gets around about that 79 level or so. certainly an immediate effect there by the bank of japan on the yen. >> you can certainly see it, can't you, andrew? japan's large companies were bearing the brunt of the surging yen for months to come. with news of this intervention, the nikkei shot up right along with japan's economic news as well. kyung lah joins us from tokyo to explain all of this and these busy times over the last day or so. kyung, we should stress japan is an extremely economy. it needs to calm down the yen. it's made to exporters need to make more money on their sales abroad, don't they? >> reporter: well, absolutely. if you just go into your house, for example, and look at how many appliances or your vehicles may be from japan, you start to understand and get a slight glimpse into how much this economy relies on sell together global consumer. and the global economy survives on the u.s. dollar. what we've seen is over this u.s. debt uncertainty with weakness over the u.s. economy and continued uncertainty has been a plummeting dollar and then investors flocking to the yen. it's pushed up the yen. what that's meant for corporate japan,ndrew mentioned toyota, toyota in just the past month, according to many analysts, have lost about a billion u.s. dollar just in repatriating. they need to help out corporate japan in order to support the overall economy of the world's third largest economy. here's what the financial minister said to reporters as he was explaining why japan was intervening in its currency. >> translator: while japan is dealing with the reconstruction of the tsunami zone, if the surging of the yen continues it could negatively affect japan's economy and financial stability. >> reporter: another important step was taken by the bank of japan, the bank announcing this afternoon japan time they wou be further enhancing monetary easing. what the bank is saying it would essentially do is increase the size of its asset purchase program by 10 trillion yen. that in effect would throw more money into the market, throw more money at private companies and hopefully get them to re-invest. the bank's saying they hope that this in addition to keeping the interest rates flat and the all-out war against the yen by the government, they're hoping that all of this will start to control the surge of the yen. nina? >> kyung, that's an excellent explanation of how it affects corporate japan, especially corporate japan that is reeling from the effects of the march 11th tsunami. but we should also talk about the markets here. is there a sense where you are in tokyo that this is going to be enough to prevent hot money coming in and plowing into the yen, helping it to strengthen? >> reporter: well, if you look at what happened to the nikkei today, we saw an immediate reaction right after the governmentnnounced that it would be intervening in the yen. then we saw the market start to settle down toward the end of the day, ending up about a quarter percent. it's difficult to tell if this will correct the jitters of the market itself, of the investor. we have to look to the united states. what's going to happen to the united states? even though you and i have been talking about the yen through all this, what it comes down to is the u.s. economy and the strength of the u.s. dollar. >> it certainly does, kyung lah joining us from tokyo. many thanks for explaining it all to us and our viewers. andrew? nina, certainly a key point kyung raised there, it's all to do with the u.s. dollar and the u.s. economic policy. adjusting currency values can be tricky stuff. this is the third time this year japan's government has intervened to try to devalue the yen against the dollar. it comes a day after the swiss authorities move to take the heat out of their ever-rising currency, the swiss frank. there remains big questions about the effectiveness of such measures. wel joined by daniel houy. thanks for coming in. there are questions already on just how effective this can be in the long term. japan steps in unilaterally on its own to try to take the strength out of the yen. how successful do you think it will be over the weeks and months ahead? >> as this happened, that's one the big questions the market had, whether it would be unilateral like it was last september or whether it would be part of a coordinated activity by global center banks to try to weaken the yen. if you do it unilaterally, there's a muchesser chance of it being successful because the markets are so deep. it needs to expend quite a bit of energy buying up dollars and printing a lot of yen if one bank does it alone. >> if a concerted action you have more chance of success. but even then, over the longer term, we haven't seen that success. >> you do need to expend a lot of resources to try to move the price considerably. it's because of the deep liquidity in the japanese yen market which is why investors and risk managers have been fleeing to japan recently. they see japan as a safe haven. it's a bitf an ironic situation, i think. >> let's have a look at the yen graph, because it's increased against the u.s. dollar just 4% in the last month or so. it's already strong as we know. you have to feel sorry for japan, don't you? this is really a u.s. dollar story. japan is purely a hostage to u.s. economic policy. as we've seen, politics as well. there's very little japan can do about this, isn't there? >> if you look at the dollar more broadly, it's been weakening and for good reason. the global financial crisis emanated from the u.s. and problems and imbalances it had in its system. the balance sheet problems that the u.s. still faces continue on. so really the dollar should be weaker and you say it's holding all these other currencies hostage because from these other countries' perspectives, their currency relentlessly appreciates against the dollar. >> you would say as a currency strategist that the chances of the yen strengthening again would outweigh the chances of the yen being weakened by the japanese government or concerted action at this stage? >> our expectations is that this will only slow the strengthening of the yen. i think it's inevitable, in part because the dollar itself needs to be so weak. >> give me a number, 75. that's what some people are saying to the dollar? >> i think in the next couple of months we could see 57. >> i have to leave it there. daniel hui, currency strategy wift hsbc here in hong kong. nina? silvio berlusconi has broke his silence, finally admitting that italy is facing a crisis. he urged lawmakers to act without panic. he insists that italy has solid financial foundations and that the current crisis is more to do with confidence than it is cash. take a listen. >> translator: it is clear to everyone that the emergency that we had to tackle recently is the direct consequence of a confidence crisis that has hit the international markets. uncertainty regarding the euro and uncertainty regarding the financial speculation. this crisis needs to be tackled with determination, without any panic in order not to worsen the situation. >> speaking of panic, silvio berlusconi's speech was delayed until after the close of markets in milan yesterday. italian investors are just getting a chance to react to the country's debt crisis. the ftse is up by 0.25%. the bond yields are moving as well, currently trading just shy of 6%. berlusconi's comments seem little to affect bond yields. the yield is the interest investors demand to hold this debt. i have a report in high haand t italy may default but spain may just escape. this is coming from the center for economics and business research. it's not just the italian bond markets that investors and traders are shying away from. we have the head of trading services in italy for that company. max foster asked him for his own assessment of the country's financial needs going forward from here. >> what we assist in the last session is a self-fulfilling loss of confidence. if you look at maturities for the debt is basically seven years. it's true we got a massive amount of debt outstanding that's equal to 120% of our gdp. we have 1.9 billion euro. the average maturity is seven years. i'd focus more on growth rather than worrying about the short-term problem about italy. >> these debt yields that we've been talking about, these bond yields and the way they've been creeping up, everyone is watching that. it affects confidence, doesn't it? at what point do you get concerned by those figures? >> certainly they affect the economy. we saw a breach in the 6% level on the ten-year yield and they didn't reach the 7%. hopefully they won't reach that level. if you look at other countries, european countries, ireland and then greece, we see that when their ten years bond market went over 6%, they had like a couple of months before they had been bailed out. i don't think that's the case for italy. what i was saying basically is we have much longer maturities. in a way i think it is quite worrying. the cost of funding is too high for italy to stimulate growth in the next few years at this level of funding. >> effectively what he's saying is that italy doesn't need cash in the short term but what it has at the moment is a problem of potentially having to pay much, much more interest on its outstanding debt as the yields head ever closer to that point of 7%, which is what economists say is unsustainable. let's move on to the bond markets. it seems as though the main indices have been buoyed by wall street's positive ending. the lloyds banking group having to put out far more money than expected to pay for misselling of pay protection insurance. the rest of the markets rising and the ftse down to the tune of 0.22%. andrew? a bit of optimism in asia as well. investors in tokyo and shanghai. you can't say this has any great long run here. there's still so many concerns about the position of the global economic recovery. and that indeed did lead to losses in other parts of asia as well. let's start in japan. the nikkei there, it overcame a lackluster start, obviously before the intervention. after the intervention the market turned positive, not convincingly, less than 0.25%. exporters getting the lion's share of the buying today as the currency weakened. that certainly helps to reign in the appreciation of the currency. if you look at the other markets as well, the shanghai, up just a fraction. up about 0.25%. hong kong, the hang seng is down 0.5%. financial stocks among the biggest decliners of the day. rio tinto, one of the big mining companies in the world, bringing out its first half results. and a little weaker than expected, actually. $7.6 billion, that's a net figure, after-tax figure. doesn't look too bad. less than analysts community had been expecting. the ceo, coming out with a couple of key warnings. one on rising interest rates in its key developing markets like china and also some real issues about the euro debt crisis and also the debt problems in the u.s. which he says could lead to destabilizing commodity prices which have worried the big mining houses. if you want to know more about what he's saying, he'll be on our show later this day. as you see there, we'll be talking to him from the london stock exchange at 9:00 p.m. here in hong kong, 2:00 p.m. in london. nina? okay. you're looking there at the closing delve the new york stock exchange. and some relief on the street on wednesday as markets snapped an eight-session losing streak to stage a modest recovery. would you believe that had there been a loss would have been the longest losing streak for the dow since 1978. didn't quite get there. trading volume also pretty high. at times it was a volatile session. investors trying to square the disappointing numbers with generally good results from corporate america. earnings aren't too bad at the moment. certainly the eight-day sell-off was long, more than three decades long. it raised the market gains for most of the year, the dow shedding 6.5%. the s&p down by 6.3% and the nasdaq just under 5%. big falls for the market as they digest with what's going on with the u.s. economy and it doesn't look good. another round of layoffs at yet another bank. who is it this time that's sending scores of work tortz unemployment lines? keep it here and we'll let you know. you're watching cnn. medicare card, i realized i needed an aarp... medicare supplement insurance card, too. medicare is one of the great things about turning 65, but it doesn't cover everything. in fact, it only pays up to 80% of your part b expenses. if you're already on or eligible for medicare, call now to find out how an aarp... medicare supplement insurance plan, insured by unitedhealthcare insurance company, helps cover some of the medical expenses... not paid by medicare part b. that can save you from paying up to thousands of dollars... out of your own pocket. these are the only medicare supplement insurance plans... exclusively endorsed by aarp. when you call now, you'll get this free information kit... with all you need to enroll. put their trust in aarp medicare supplement insurance. plus you'll get this free guide to understanding medicare. the prices are competitive. i can keep my own doctor. and i don't need a referral to see a specialist. call now to get a free information kit. plus you'll get this free guide to understanding medicare. and the advantages don't end there. choose from a range of medicare supplement plans... that are all competitively priced. we have a plan for almost everyone, so you can find one that fits your needs and budget. with all medicare supplement plans, there are virtually no claim forms to fill out. plus you can keep your own doctor and hospital that accepts medicare. and best of all, these plans are... the only medicare supplement plans endorsed by aarp. when they told me these plans were endorsed by aarp... i had only one thing to say... sign me up. call the number on your screen now... and find out about an aarp medicare supplement insurance plan. you'll get this free information kit... and guide to understanding medicare, to help you choose the plan that's right for you. as with all medicare supplement plans, you can keep your own doctor and hospital that accepts medicare, get help paying for what medicare doesn't... and save up to thousands of dollars. call this toll-free number now. [clucking] [clucking] [ding] [clucking] announcer: separate raw meats from other foods by using different cutting boards. 3,000 americans will die from food poisoning this year. keep your family safer. check your steps at foodsafety.gov. a warm welcome back to you. from cnn london and hong kong, you are watching "world business today." britain's lloyds banking group has swung to a first half loss. the state-owned group posted a loss of $3.8 billion for the six months ending on june 30th. they had to set aside 5.2 billion today's pay back customers who were missold payment protection insurance on products such as mortgages and other loans. meanwhile, the royal bank of scotland has already some problems of its own, it's preparing to cut as many as 2,000 jobs from its investment banking operations. those cuts come as rbs completes its integration of the dutch lender abm amro. andrew, layoffs among european investment banks it seems at the moment are coming at quite an alarming rate. earlier this week, hsbc said it would be slashing no less than 30,000 jobs over the next two or three years to come. and then barclays says it will be cutting 3,000 jobs by the end of the year and ubs is going to lay off 5,000 stof over the years to come. and credit suisse, about 2,000 jobs. that amounts to 4% of the work force and societe generale said it will be missing its forecast thanks to a $500 million writedown on sovereign debt. the stock lost more than 8% and was temporarily suspended from trade yesterday. as you can see, there's quite a bit of turmoil in the banking sector. the question is how worried should we be and how likely is it we might even be in for another banking collapse like the one we saw during the global financial crisis a couple years ago? joseph stiglet said the banking sector lacked sufficient capital to ensure it against another big disaster. he told a u.s. senate banking committee that regulators should act now to demand that banks beef up their capital even though that may take out liquidity from the economy. >> i want you at the same time to be aware of the large risk especially under the current circumstances of delay. it is precisely because the b k banks are fragile, it's more concentrated before the risk, that the risk of a financial catastrophe of the kind we experienced in 2008 is so great today. the downside risk of not doing something are especially grave now. >> it turns out that the recent spate of signer atacks might just be the tip of the iceberg. a new report from a security firm has pretty sobering statistics. we'll have more details, including where the hack attacks may come from later on in this very program. but with 24-hour zyrtec®, i get prescription strength relief from my worst allergy symptoms. so lily and i are back on the road again. with zyrtec® i can love the air®. announcer: when life's this hard, it's no wonder 7,000 students drop out every school day. visit boostup.org and help kids in your community stay in school. one of the staples there of the hong kong tourist business not to mention just getting across the harbor. that was the ferry, of course. beautiful day in hong kong. not often you see a sky that color these days. welcome back. you're watching "world business today," live on cnn. we're keeping an eye on two tropical storms on opposite sides of the world. let's go to jen delgado at the cnn weather center with a