a statement warning of all-out action to defend north korea's sovereignty. >> translator: a series of satellite and long-range rocket launchers by the dprk and a higher nuclear level test are parts of an all-out action. this is a new phase in the anti-u.s. struggle that has lasts for centuries. we do not hide that the target of these actions is the united states, the sworn enemy of the korean people. >> the country's space agency launched a rocket last month. authorities claimed it was to orbit a satellite but other countries say north koreans were testing long-range ballistic missile technology. scientists in the north half carried out two previous nuclear tests in 2006 and 2009. experts have been suggesting for weeks that they could be preparing for a third. the united nations resolutions ban north korea from developing missile and nuclear technology. on tuesday the security council condemned the latest rocket launch and expanded its existing sanctions. the latest north korean statement says the country flatly rejects all u.n. security council resolutions. it also says that no dialogue on the denuclearization of the korean peninsula will be possible in the future. but u.s. officials say some sort of dialogue has to happen on the korean peninsula before they engage in direct talks with the north. analysts say the north koreans are applying pressure to speed things along, but a senior american diplomat is urging them to first improve relations with the south. special representative for north korea policy glyn davis sris met in south with south korean's chief of nuclear development. after the meeting he called on provocations and to work on ties with the south. >> without sustained improvement in interkorean relations, u.s./dprk ties cannot fundamentally improve. >> davies says the u.s. and south korea will consider imposing their own sanctions after carrying out the widened u.n. sanctions against the north's rocket launch. he will be visiting china on friday and then will head to japan to coordinate policy on north korea. all of the players in this high-stakes game have north koreans turn words into actions before. hiroki iwijima has been covering this for years. is the north in position to conduct a nuke year test? >> this came from the national defense commission which often doesn't make statements. we can see these as a final warning. the nuclear analyst tells nhk that north korean scientists are letting it go. they are in a northern area where the previous nuclear test happened. he knows this because it has been used before. but he says nuclear officials are making speculations of the other two and it could carry out a test at any time. a senior japanese intelligence official told me one of the tunnels could handle a nuclear test and the other a test involving highly enriched uranium, which is easier to turn into bomb-making material. experts believe that the north conducted a plutonium tide nuclear test twice in the past, but we should note that the north koreans say they will conduct a nuclear test over higher level. they have highly enriched uranium, so we cannot exclude the possibility that they will use the material in this next test. >> we saw american diplomat glyn davies visiting south korea, china and japan, what can these nations do about north korea's plans? >> the most important player in this process is china. it is north korea's closest allie and has influence, but north korean authorities snapped their neighbor this week. they said they were no longer in six-party talks nor its 2005 joint statement in which the north agreed to abandon all nuclear weapons and programs. the announcement is causing them to lose faith. korean party leader xi it is jinping said on wednesday he's against the nuclear test. people from the united states, south korea and japan will continue to pressure the north koreans to the chinese channels. the time to apply the pressure hiroki talked about may be running short. a south korean government source says north koreans appear to have almost completed preparations for their nuclear test. the source says satellite images show a tunnel at the punghari test side plugged with dirt and concrete likely to prevent a radiation leak. the images reportedly captured what appeared to be detonator cables extending out of the tunnel. a south korean defense ministry spokesperson didn't give us much detail but he said scientists in the north are on standby. >> translator: we believe north korea is ready to conduct a nuclear test whenever the country's leadership decides to go ahead with it. >> the spokesperson says south korean military commanders have been closely monitoring test preparations and other moves in north korea. japan is not exporting as much as it used to. ron madison is here with this story and more in business. >> gene, we saw a widening with the trade deficit here in the country. in fact, officials with the finance ministry say japan's annual trade deficit is the worst in its history. they say imports outweighed exports in 2012 by 6.9 trillion yen, that works out to just about $78 billion u.s. dollars and nearly three-times greater than in 2011. daisuke yazima looks at the causes and the outlook for this year. >> reporter: they released the report for 2012 on thursday. it shows exports fell 2.7% near $20 billion. imports rose 3.8% to $798 billion. this marks the annual deficit. the decline in exports was mostly due to the global economic slowdown triggered by the european debt crisis. exports to china also dropped significantly. relations between japan and its largest trading partner have been hurt by a trade dispute in the east china sea. this also has an impact on much of 2012 with the yen remaining at historically high levels. japanese products became less competitive overseas. exports such as televisions, semiconductors and ships all declined. >> translator: an exchange rate of 80 yen to the dollar is too strong for us to continue production in japan. >> reporter: while exports hacked, imports jumped. crude oil and liquefied natural gas or llg, they accounted for one-third of all imports. llg imports were more than 25% from 2011 levels. that's because the gas was needed to fuel the power plants. most nuclear plants in japan are offline for inspection from the march 11 disaster and crisis at fukushima daiichi. the prices also stayed high throughout the year due to stronger demand from emerging countries. another reason for the boost in imports has been universal in currency markets. the yen began weakening after last year. the yen has continued to weaken and the new prime minister shinzo abe worked on policy. this corporation is one of japan's major trailing companies. it imports lng from asia and the middle east. they expect imports of lng to be at least as high as last year, but the cost will be much higher as the value of the yen continues to drop. >> translator: we are really getting a triple punch in the shortage of lng supplies, the high price of the gas and the depreciation of the yen. as an energy importing company, we are concerned about what level the exchange rate will subtle at because it has a big import on our costs. >> reporter: experts think a weaker yen will hurt importers more than it helps exporters. and it may cause a trade deficit to widen even further in 2013. >> another sluggish economic situation. we cannot expect that export will grow by enough paces, but huge imports of fossil fuels is expected to increase this year also. so i estimate that this year's trade deficit will lead to 7.6 trillion yen. >> reporter: japan has a reputation as a trade powerhouse led by exports, but now it has fallen into the red. the question is whether it can counter the deficit. the outlook is dim. this is a challenge of cultivating new overseas markets to keep pace with rising imports. daisuke azama, nhk world, tokyo. all right. let's get a check to see how markets fared start. starting in europe stocks are looking like this, fairly mixed picture right now with the majors there. we did have that strong factory data out of china's porting sentiment. apple's lackluster earnings did weigh on investors a bit as you can see there. the ftse 100 is up by .30% in london. we have declined for the dax in frankfurt down .15%. paris' cac40 is up by .20%. in early trading stocks, china data pushed up japanese stocks to rise 1.3%. we have australian shares also up today by about .50%. but the impact on mainland chinese stocks was moderate. shanghai ended down.80%. hong kong was .20% lower. to currencies now, the dollar gaining ground against the yen to the mid-89 level due to receding concerns about the world's largest economy after u.s. legislators passed a bill to extend the debt ceiling. we are seeing dollar/yen at 89.61. market players say news of north korea's possible nuclear testing also fueled geo political concerns. the euro is strong at 119.46. the japanese government has finalized a guideline for compiling next year's budget. it is designed to keep new bond issues to a minute mum. members of the cabinet and the council of economic and fiscal policy approved the plan. the proposal for the fiscal year that starts in april includes the government's latest economic stimulus. priority is put on cutting wasteful spending and also requires the budget to focus on two key areas, that's reconstruction work from the 2011 disaster and sectors with sustainable or promising growth. now the guidelines urge a 50% reduction in the primary balance deficit by fiscal 2015. that's aimed at clearing a milestone towards counter fiscal health. the governor will decide its draft budget on tuesday next week. japan's ruling coalition parties have been talking about tax as the basis for the new budget. they have agreed to introduce a new tax break for supporting the poor when the consumption tax doubles in 2015. the agreement is part of a tax reform plan for fiscal 2013, which the liberal democratic party and the new kuomot approved on thursday. under the plan lower rates take effect in october 2015 when the consumption tax is set to double to 10%. the two parties have also decided on an income tax hike. under their plan people with annual incomes of more than $450,000 will get a tax rate of 45%. that's up from the current 40%. the new rate set to go into effect in january 2015. all right. that's going to do it for biz tonight. i'm going to hand it back to gene. ron, thank you for that. a japanese citizen considered missing after last week's hostage siege at a natural gas plant in algeria is now confirmed dead. this brings the number of japanese victims to ten. islamist militants attacked the desert facility and kidnapped hundreds of workers. chief cabinet secretary yoshihide suga just confirmed the death of this man who is 66. he was a top executive with the japanese firm jjc corporation which was working at the gas facility. he died along with more than 30 other foreign nationals. the algerian army used force to bring the hostage crisis to an end. sources with ties to jjc say he was at the exec toif to meet officials from bp which leads the gas development project. u.s. regulators say they have yet to determine the cause of the ongoing problems with boeing 787 passenger jets. they say they have no timetable for the resumption of dreamliner flights. >> we don't know what caused these incidents yet. and we are working very closely with our partners at the ntsb, the japanese authorities and the boeing company to try to focus on what has caused these and once we have a better understanding of the cause we are going to take appropriate action. >> regulators at the u.s. federal aviation administration grounded all 787s there last week following the emergency landing of an ana flight in western japan. they say it was because of the risk of in-flight battery fires. meanwhile, the u.s. national transportation safety board has released its latest findings. inspectors are looking at earlier problems with a 787 operated by japan's other major carrier jal. that plane's battery is where a fire believed to have started eight individual lithium ion cells. each cell had a different level of damage but they aren't speculating on what this might mean for their investigation. ntsb chairman debra hurstman is scheduled to provide a comprehensive update later on thursday in her first news conference on the dreamliner problems. a government spokesperson says japan will likely revise its target for cutting greenhouse gas emissions. he says the 25% reduction target set by the previous government is excessive and unrealistic. chief cabinet secretary yoshihide su g, a said his liberal democratic party said the target was unachievable. previously the last democratic party government pledged to reduce emissions by a quarter from 1990 levels by the year 2020. japanese researchers have succeeded in using stem cells to reproduce hair follicles. the project involved using induced stem cells or ips cells which have the potential to develop into any tissue or organ. medical applications using hair follicle cells have been limited until now because scientists lacked ways to reproduce them. the researchers at keio university managed to cultivate human cells into fallicular cells by adding certain proteins. they cultivated the cells with skin cells from a newborn mouse. then they transplanted the cells into another mouse. they succeeded in nurturing follicular cells in two to three weeks. >> translator: we have demonstrated the future possibility of producing hair through the use of these cells. >> reporter: but they caution that the team still had a number of hurdles to overcome. heart surgery is taken for granted these days, but the procedure still carries risks. and those risks are multiplied when the patient is a child. one doctor decided to take on this problem and he started the way many investors do by making a model. >> reporter: heart surgery is a common procedure at this osaka hospital. this doctor is a cardiovascular pediatrician. he says operating on children presents special problems. the small size of the heart is one. genetic deformities can further complicate surgery. >> translator: the big difference is the size of the heart. this is a baby's heart. this is an adult's heart. as you can see the sizes are totally different. >> reporter: doctor shidoshe wondered if there was a way to make heart surgery on children less risky. a method for doctors to test their treatments without endangering lives. this is his solution, a 3d model. it is an exact replica of a patient's heart. you can hold it, probe it, even cut it. it's an ideal tool for a surgeon to practice on before an operatio operation. here's where the hearts are made, a specialist model fabricator in kyoto. the doctor approached the company with his idea and the president took charge of the development process himself. >> this is a heart simulator, which is called cardio simulator. actually, this is my heart and it's based on the c.t. scan data. >> reporter: the key to this project is a technology called rapid prototyping. it starts with a 3d computer model. technicians are given a c.t. scan of the patient's heart. they feed the data into the computer. now they have a blueprint to make a scale model. this is the next stage. a laser prototyping machine. simply put, this device turns a computer image into something you can hold. it does this by bombarding liquefied plastic with a laser, but in a very precise manner. the part hit with the laser hardens. a tiny layer is formed, only 1.1 millimeters thick. this process is repeated. layer upon layer. to create a three-did mentional object. the master model is complete. it's an exact replica of the patient's heart. the final stage is to pour liquid eurothane into a casting mold. the whole process can be completed within five days of receiving the patient's data. the rubbery model has the look and feel of a real heart. that includes the muscle tissue and internal chambers. the surgeon can even examine the valves for abnormalities. this model was replicated from the doctor's team operated on the baby last year. >> translator: there's a whole here. and when i did the surgery, that's exactly what i saw. it's perfectly reproduced. >> reporter: the infant was born with multiple holes in its heart. using the model, the surgical team could see and feel exactly where the holes were located. and crucially the operating surgeon was able to perform a simulated operation before going into the operating room. the doctor's ideas are attracting attention, both in japan and overseas. he hopes children around the world will soon benefit from this innovative technique. >> that's quite amazing. dry weather here in tokyo but all of japan is not sharing that fair weather. meteorologist robert speta is here with more. robert? >> well, yes, gene, out there towards the west here across portions of western onshu and hokkaido we are seeing a cold front coming in to bring absolute rough weather. actually, thunderstorm activity will be flaring up here with frequent lightning. hail could even be mixed into this. about 100-plus gusty winds continuing to push onshore here. but as the front pushes to the east, these blinds continue to come in from the northwest. that's going to set up the sea snow effect snow machine again. here we talk about the snow effect snow machine, but we are diving into what brings the heavy snow into west honshu. dry weather comes out of siberia. as it goes over the sea of japan, it creates clouds larger and larger. once it hits the mountains, it squeezes it out like a sponge. that's why across much of the western portions of japan, talking up into the mountains, we see absolutely staggering amounts of snowfall. but then as you look over there toward the east, they all dry out into the eastern portions, and that's why into tokyo, they don't get a fair share of all the snow out there towards the west. and the same setup is what's happening in the next 24 hours. winds gusting up to 126 kilometers per hour, mainly coming in from the northwest here. also seeing that snowfall here farther down to the south, up to about 70 centimeters piling up here throughout friday evening. so definitely going to be seeing the next storm system continuing to ramp up here. if you are travel plans, it will be rough going, but skiers will be enjoying it into this weekend. china is rather dry across the region, although back to the east we are still going to be seeing the weather continuing to pile up. i want to show you video out of northern honshu here first. we are talking about that sea-effect snow. this is actually what is already on the ground here. that's already occurring here. these images from the ski resort here, famous for its hot springs here, but also these snow monsters, which many people here get the pleasure of skiing down through these sculpture-like objects on the mountain side caused by the heavy snow. farther down to the south in the philippines and the tropics, also seeing heavy rainfall continuing to pile up here. we are seeing flooding conditions near this area. temperatures remain in the 30s across the region. hong kong, 19. talking about cold air off to the north. seoul at minus 6. expect that to get over to tokyo going into the weekend as well with temperatures start to drop down below the freezing mark. now here into europe a series of storm systems coming from the west towards the east. the next one on tap from the british isles impacting us friday into saturday. we are seeing rain showers here on top of the snow we already have on the ground. so that is going to be bringing the risk of some flooding. that snow mountain and heavy rain showers. the iberian peninsula is sharing in this and the same weather pattern is creating some lightning and damaging winds up to about 120 kilometers per hour in the southern portions of the balkans. to the north, 20 centimeters of snowfall out of this as temperatures remain rather chilly off to the west. moscow, minus11. back to london and paris, you're going to be sharing in on the cold temperatures, too. london and paris both at 2 to zero for your high. here's a look at your extended forecast. we'll be back in 30 minutes with more news. with more news. i'm gene otani in tokyo. -- captions by vitac -- www.vitac.com

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