:00:03. > :00:13.Pakistan today. If convicted, he could face jail.
:00:13. > :00:14.
:00:14. > :00:18.Let's get you up-to-date with the latest financial news.
:00:18. > :00:22.Thanks for joining us on World Business Report.
:00:22. > :00:26.Nintendo is ready to report its first ever annual loss as it
:00:26. > :00:29.battles a strong yen and loses ground to the smartphone.
:00:29. > :00:33.The Federal Reserve boost its outlook for growth but warns that
:00:33. > :00:38.housing market is holding back the recovery. We take a closer look.
:00:38. > :00:48.South Korea's economy picks up speed, boosted by strong industrial
:00:48. > :00:50.
:00:50. > :00:56.output and government spending. Nintendo is expected to post its
:00:56. > :01:00.first ever full year loss in the next few hours. The Japanese gaming
:01:00. > :01:03.company posted a sharp drop in quarterly profits back in January
:01:03. > :01:07.and forecasted that it would rack up bigger than usual annual losses
:01:07. > :01:17.as it battles a strong yen and loses ground to gadgets like
:01:17. > :01:25.Apple's iPhone. It is now struggling to keep up as more
:01:25. > :01:30.versatile smartphone and tablet sales boom. Joining us from Tokyo
:01:30. > :01:34.is our correspondent. Give us your understanding of why Nintendo has
:01:34. > :01:37.got itself into this difficult position.
:01:37. > :01:42.Essentially the problem for Nintendo has been that it is being
:01:42. > :01:46.overtaken. It is losing out to the likes of Apple and other tablet
:01:46. > :01:48.make us, because people are playing games differently. Instead of
:01:48. > :01:54.playing the Wii in their living rooms they are increasingly playing
:01:54. > :01:57.games on their iPhone or other devices. Instead of playing in
:01:57. > :02:02.their living room they a plane while commuting or in the bedroom.
:02:02. > :02:08.People's lifestyles are different. -- they are playing. This means
:02:08. > :02:15.that Nintendo had to radically revised its forecast. They had
:02:15. > :02:21.expected to sell 30 million Wiis, now they are looking at 10 million.
:02:21. > :02:26.This will push Nintendo into its first ever operating loss. It was
:02:26. > :02:31.forecasting 45 billion yen. That is just over $550 million. We will
:02:31. > :02:35.find out in 1.5 hours or so when the Stock Exchange in Tokyo closes
:02:35. > :02:43.and the announcement is made. It is one thing to radically re-
:02:43. > :02:48.adjust your forecast - what investors would like to see his
:02:48. > :02:52.Nintendo coming up with some way of combating the problems.
:02:52. > :02:55.In the financial year we are in now, Nintendo should do better, they
:02:55. > :03:05.have some popular games coming along that should put them back
:03:05. > :03:05.
:03:05. > :03:10.into the black. It also has the Wii YOU coming along, which should what
:03:10. > :03:15.it on better standing against its rivals. That should help it along
:03:15. > :03:18.as well. Some analysts are saying that if you can't beat the tablets
:03:18. > :03:23.and smart phones, then maybe Nintendo should join them. They
:03:23. > :03:31.should try to sell their games or other devices, not just its own
:03:31. > :03:37.hardware. I think one positive thing is this - unlike the likes of
:03:37. > :03:41.Sony, they have a large cash pile of about $14 billion from the
:03:41. > :03:45.success of the Wii, so they have some time to think about whether
:03:45. > :03:48.the company needs to change its strategy and where to go next.
:03:48. > :03:51.Thank you for that, and we will bring you those results as soon as
:03:52. > :03:55.we get them. Let's talk now about South Korea,
:03:55. > :04:02.economic growth there picked up speed in the first three months of
:04:02. > :04:06.the year. We are in the BBC Singapore office. Industrial output
:04:06. > :04:11.is one of the factors for that growth?
:04:11. > :04:16.Absolutely. We are seeing improving governm
:04:16. > :04:24.government spending. When you talk to analysts, they are warning the
:04:24. > :04:30.outlook remains uncertain. There is slowing expansion in Europe and
:04:30. > :04:38.China, bringing growth 2.9 % in the three months to the end of March,
:04:38. > :04:42.up from a 0.3% in the first quarter.... Economists say that the
:04:42. > :04:46.data at face value may appear healthy, but the picture becomes a
:04:46. > :04:51.little more bleak when it is broken down by monthly performance where
:04:51. > :04:55.growth is seen to slow down strongly in February and March
:04:55. > :04:59.after a strong January. They say it is too early to judge whether the
:04:59. > :05:02.economy is on a path of steady recovery.
:05:02. > :05:06.I want to ask you a little bit about how the Asian markets have
:05:06. > :05:10.been reacting to the latest update from the head of the US Federal
:05:10. > :05:19.Reserve, because he delivered a fairly upbeat message about the
:05:19. > :05:22.world's largest economy. Absolutely. That upbeat report from
:05:22. > :05:28.the head of the US Federal Reserve saying that interest rates will
:05:28. > :05:32.remain low in the US until 2014 gave a big lift to Asian markets in
:05:32. > :05:36.early trading. After the strong start we are seeing Asian shares
:05:36. > :05:46.losing ground with afternoon trade. Share prices are moving low laugh.
:05:46. > :05:48.
:05:48. > :05:53.Earlier they were led by gains in US stocks -- moving love....
:05:53. > :05:56.Investors in Japan as a Korea have given up their earlier games and
:05:56. > :06:03.are in negative territory. Australia and Hong Kong are still
:06:03. > :06:07.seen some minor gains in late trade. As we said there, the chief of the
:06:07. > :06:11.US Federal Reserve raising his forecast. The one sticking point,
:06:11. > :06:15.he says, it is the sluggish housing market. Millions of house owners
:06:15. > :06:23.are still struggling with their mortgages four years after the
:06:23. > :06:27.housing bubble burst. We report from Long Island in New York.
:06:27. > :06:32.Charles is behind on his mortgage payments. He has lived in his Long
:06:32. > :06:36.Island house for more than 20 years, now he could lose his home. If I
:06:36. > :06:41.walk away from my house I will be losing everything - nothing. I will
:06:41. > :06:48.have nothing. The about he goes on his mortgage far surpasses the
:06:48. > :06:55.value of his home. He is not alone. More than 10 million home owners
:06:55. > :07:03.across the USA it no more money on their mortgages than their homes
:07:03. > :07:07.are worth. People say their options are limited. The deputy mayor of
:07:07. > :07:11.this city says that they have been hard hit by the housing crisis and
:07:11. > :07:18.he is not immune. The valley of his house is less than what he does on
:07:18. > :07:23.his mortgage -- value. I can maintain my mortgage, where other
:07:23. > :07:30.people are losing their homes. troubled borrowers and people tried
:07:30. > :07:34.to help them, a housing recovery seems a long way off. -- trying.
:07:34. > :07:38.think we are still in the middle of the crisis. Some experts say the
:07:38. > :07:42.housing recovery is on the horizon, even if it doesn't happen right
:07:42. > :07:47.away. The latest data over the last few months suggests that a recovery
:07:47. > :07:50.may be starting. We have had better levels of sales and prices appear
:07:50. > :07:54.to be stabilising. Things are pointing in the right direction, we
:07:54. > :07:58.hope that will continue as long as the economy continues to improve.
:07:58. > :08:01.But with millions of home owners still struggling with their
:08:01. > :08:09.mortgages, a sustained recovery for the wider US economy could be out
:08:10. > :08:14.of reach. Volkswagen, the world's second
:08:14. > :08:18.largest carmaker, is expected to report a fall in second-quarter
:08:18. > :08:25.operating profits, even though Audi is doing well at the luxury end of
:08:25. > :08:29.the market. It has been a challenging start of
:08:29. > :08:33.the Year. Volkswagen's home market in Europe has been battered by the
:08:33. > :08:37.debt crisis and slower economy. It still managed to sell over 2
:08:38. > :08:47.million cars around the world. This is the first time the two million
:08:48. > :08:53.
:08:53. > :08:58.quarter of an ear. Volkswagen is quarter of a year. It has a
:08:58. > :09:03.particular focus on the Asian market now. The strong sales
:09:03. > :09:10.figures are down to demand in China, North America and Russia. In fact,
:09:10. > :09:14.sales in China are now more than double Volkswagen sales in Germany.
:09:14. > :09:23.Having a range of friends right up to Lamborghini means that
:09:23. > :09:27.Volkswagen can continue turning over no matter what conditions are.
:09:28. > :09:30.Even though conditions might dent its bottom line out, it hopes for
:09:30. > :09:34.continued economic improvements across the board. Every company
:09:34. > :09:37.would love to have the struggle that Volkswagen is having - they
:09:37. > :09:41.have everything lined up correctly, they are set to dominate the market.