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CNN Live Event/Special

CNN International's World Business Today

Aired March 17, 2011 - 04:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

CHARLES HODSON, CNN ANCHOR: Good morning from CNN London. I'm Charles Hodson.

PAULINE CHIOU, CNN ANCHOR: And good afternoon from CNN Hong Kong. I'm Pauline Chiou.

You're watching a special edition of WORLD BUSINESS TODAY as CNN continues its coverage of the earthquake and tsunami in Japan.

HODSON: Seawater being poured from helicopters on to Japan's damaged nuclear reactors. That is the scene on Thursday as engineers attempt once again to avert catastrophic radiation leaks.

The Japanese military has been dropping tons of water on to two of the six reactors at the Fukushima Daiichi nuclear plant, trying to cool the plant's fuel rods. But the company that runs the plant now reports, says, that the radiation levels actually increased. They're also bringing in police water cannon. Officials say radiation levels right now are too high for personnel to venture inside.

(BEGIN VIDEO CLIP)

YUKIO EDANO, JAPANESE CHIEF CABINET SECRETARY (Through Translator): Self Defense Force conducted a spring of water from the air. And the police are also going to start the water spraying by the water cannon trucks. So we're trying to combine these two approaches to maximize the effect of water spraying.

(END OF VIDEO CLIP)

HODSON: Hundreds of thousands of residents in the area have now been evacuated. Many are seeking refuge in public shelters.

Japan has ordered people to move at least 20 kilometers away from the plant. But the United States is advising people to stay at least 80 kilometers, 50 miles away.

The death toll from Friday's massive earthquake and tsunami now has surpassed 5,300. More than 9,300 others are missing.

Well, engineers meanwhile have begun attempting to restore electricity to the Fukushima Daiichi plant to get its stalled water pumps running. The earthquake and tsunami of course cut power to those pumps and that's what triggered the crisis.

Well, our senior international correspondent Stan Grant joins us now from our Tokyo bureau with more.

Stan, tell us a little bit more about this operation which we understand is current of trying to put water on to one of those reactors from the air.

STAN GRANT, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, really crucial operation this, Charles. There were four drops of water today from the air. They've dropped about seven tons of water on to those reactors before they ended that operation.

Now the helicopters are only going to be used during the morning. That's the information we're getting from this Self Defense Force here. What is happening is that there are also going to be five water trucks from the military that are now being moved out there to be able to pump more water on to these reactors as well as the one truck from the police as well. Now those five military trucks will pump about 30 tons of water into the affected area.

Interestingly, Charles, they were going to get water directly from the ocean to the trucks and then on to the reactors. Now they had to abandon that plan because it would have made that the soldiers would have to actually get out of the trucks and expose themselves to potentially dangerous levels of radiation.

What's going to happen now, the soldiers are actually going to remain in the trucks. Now all of this is to try to get these reactors under control, to try to cool them down and stop the spread of potentially dangerous radioactive material into the air.

And the radiation really does swing wildly, Charles. We're going to track through some of the numbers today. At early this morning about 9:30, they were tracking in the central building there of the plant about 4,000 microsieverts per hour.

Now put that in perspective, normally during a year a normal person in their everyday life would come into contact with about 1,000 to 10,000 microsieverts. That's half a normal yearly dose in one hour. Now that has dropped throughout the day. At lunchtime they checked that on the perimeter of the fence, it had dropped down to less than 500, about 450 microsieverts.

So an enormous disparity there and that's because this radioactive material really just dissipates and disperses very quickly. But Greg Evans from the University of Toronto speaks directly to this and the risks posed by this radiation.

(BEGIN VIDEO CLIP)

GREG EVANS, CHEMICAL ENGINEERING PROFESSOR, UNIV. OF TORONTO: It is a very complicated situation. And then you're correct, there are a number of factors in play. And certainly weather and wind direction and the amount of dilution will be a very important factor.

But there are others as well such as how much the fuel overheats and what fission products actually get released to the containment, and then which of those fission products released are released into the environment because they all have very different radio toxicities and different half-lives.

So there are quite a number of play -- factors in play. We know what they are. But that doesn't mean that we can necessarily predict with a certainty what will happen. But we can put probabilities on it. And the probability suggests that communities at a distance such as Tokyo would not get a radiation dose that will be a significant impact to the people's health -- the people who live there's health.

(END OF VIDEO CLIP)

GRANT: OK. Radiation, a big question mark, Charles. Many things we simply, simply don't know about. This would really comes down to this. Getting those reactors under control and stopping the spread of this potentially harmful radioactive material -- Charles.

HODSON: Absolutely. It does, Stan. And I think the question that everyone is asking from investors to really just -- actually everyone all the way around the world and that's certainly the picture we're getting on social media, putting all of this together, Stan, are the Japanese getting this under control? Yes or no?

GRANT: At the moment? They're fighting to stay just where they are. They are fighting to just maintain the status quo. Why? Because they have had so many different things to deal with here, Charles. They've had explosions. They've had fires. They've had potential or likely partial meltdowns at least within the reactors themselves.

The radiation levels are peaking and dropping as we say. At one point they had to evacuate all the workers from out there. And remember, while if these reactors continue to overheat, they can't get in and have a look. They can't make the assessments that they need to make.

And this is raising a lot of concern, a lot of fear, of course, amongst the general population, amongst the expat population, some of whom are fleeing Japan as we speak. And also with international -- the international government, a split between the U.S. and Japan on this -- over exactly how much danger really exists -- Charles.

HODSON: OK. Stan Grant joining us live from Tokyo. Many thanks to you updating us on the situation there, the operation to bring the things under control at the Fukushima Daiichi plant. Thanks again -- Pauline?

CHIOU: Well, Charles, the financial fallout continues to follow those nuclear reactor problems. And today the Japanese yen hit its strongest level against the dollar. That was one dollar to 76.54 yen which surpassed the previous its high of 79.75 set back in 1995. It has since pulled back and is right now trading at around 79.11 to one U.S. dollar.

Now a super strong yen is a very big issue because exporters want a weaker yen. And you see it there still at 79. It has still surpassed that 80-yen mark which is really that psychological mark.

Now this is because Japanese companies sell most of their products overseas. Now when they bring their overseas earnings back home and convert them back into yen, a weaker yen means they make more in profits.

Now I want to show you what's been happening this entire week since Monday, March 14th. Now the lower the line, the stronger the yen is to the dollar. And it's been gradually getting stronger throughout the week.

Then take a look at this dip right here. That huge dip. That was at around 4:00 to 5:00 p.m. Eastern Standard Time which is overnight in Asia. That is when the yen just surged.

Now we've spoken to several currency experts who believe this happened because many investors had taken high dollar yen positions and that means when the yen strengthened to that psychologically important 80- yen mark, it actually triggered a surge of automatic buy orders which is what we see here in this major dip.

OK. So how did the NIKKEI react to all of this? Let's take a look. It closed the session down nearly 1.5 percent, although at one point during the trading session, it had fallen nearly 5 percent. So this is slightly good news.

Now that rebound occurred on the news that Japan was going to make another cash infusion, this time of $60 billion into the financial system. That's on top of the billions that was injected on Monday, Tuesday, and Wednesday.

Now as far as stocks in some of Japan's major exporters, let's take a look at some household auto names. And we take a look at them right here to see how they did during the session here on Thursday.

OK. First looking at Toyota. It ended the session down by about 2.25 percent. Nissan Motor down by more than 1 percent. Same story there for Honda Motor, down by more than 1 percent.

So still treading in negative territory but looking a whole lot better than the past few days when it had been at one point these stocks were down by double digits.

Now the markets across the rest of Asia, how did they react to the latest developments in Japan? Let's take a look. Most of them still in negative territory. The Seoul KOSPI is the one renegade there. Well, it ended in positive territory but just fractionally.

Now with the Hang Seng, it was down by almost 2 percent. And Ten Cent Holdings had a steep slide on the Hang Seng. It's down almost 10 percent when the company said growth would slow down.

Now the Tokyo Stock Exchange has been operating all this week despite all of the upheaval that Japan has faced.

Let's go now to our Tokyo bureau to speak with Tomoyoshi Uranishi. He is the senior executive officer of the Tokyo Stock Exchange Group.

Mr. Uranishi, thank you very much for joining us. I know it's been a chaotic week for you.

TOMOYOSHI URANISHI, SR. EXECUTIVE OFFICER, TOKYO STOCK EXCHANGE GROUP: You're welcome.

CHIOU: Several foreign investment firms have asked that the Tokyo Stock Exchange suspend trading so they can actually relocate their staff outside of Tokyo. Is this something that the Tokyo Stock Exchange is actually considering?

URANISHI: Yes -- no. Yes, our system is very (INAUDIBLE) so operating very well. And so we are very good condition to give trading service to the investors and outside Japan.

CHIOU: Now 60 percent of the trades done on the Tokyo Stock Exchange are done by foreign traders. And I understand that if 20 percent of the brokerage firms actually have to stop doing business, the Tokyo Stock Exchange does have the independent authority to actually suspend trading.

If it gets to that point where a certain amount of foreign investment firms have to stop trading, would you consider it then?

URANISHI: So honestly speaking, the domestic individual or investor a little bit panicked. But the foreign institution industry is very positive to buy their stocks in Tokyo market. So if the foreign investors power to buy is getting better, so I think tomorrow surprise can be expected to rise.

And also, as you know, what (INAUDIBLE) the target has swung. And it, too, has successful. I think it's a very good news to our global investors.

CHIOU: Mr. Uranishi, the rolling blackouts, those power outages have continued throughout the week. When do the blackouts actually hit Tokyo? And does it affect trading? Is it during trading hours?

URANISHI: So there is almost zero inference from the nuclear reactor accident in Tokyo because Tokyo is 250 kilometer away from the nuclear reactor. And so the nuclear reactor response is now being stabilized. So we don't worry about the nuclear reactors accident.

CHIOU: OK. Mr. Tomoyoshi Uranishi, a senior executive officer at the Tokyo Stock Exchange. Thank you very much.

Charles, back to you in London.

URANISHI: Thank you very much.

HODSON: You know, very interesting that it's actually international investors who are holding up the market at the moment as opposed to domestic institutions in Japan.

Let's have a look now at how that crisis there is affecting European stock markets. And here's where we stand in -- as the markets in Europe open. Of course, you know we are seeing a bounce but off some very steep falls on Wednesday.

For example, here we are, the FTSE up by -- between half and two- thirds of a percent. It was off by, you know, .7 percent on Wednesday. And six sessions in a row, so really it is coming from a very low level.

Paris CAC quarante up by about -- nearly 1 percent. Zurich SMI again up by about .5 percent and the Xetra DAX up by nearly 1 percent.

Now U.S. stock markets accelerated their selloff on Wednesday with all three major indices closing at their lowest levels so far this year. So all of the gains of 2011 are now gone in terms of the Dow, NASDAQ and S&P 500. Dow off by 2 percent. NASDAQ and S&P 500 not far behind.

Well, U.S. markets do look for a higher open when trading begins later on Thursday. So it looks like we're seeing a bit of a bounce in Europe and the United States. But not in Asia with the exception of Seoul.

So here's where the U.S. futures stand in premarket action. Up by about .5 percent for the Dow and the NASDAQ. But it seems that the broader market, the mid-caps actually doing a little better, up by between two-thirds and three-quarters of a percent, but that's just the futures market reading, Pauline.

CHIOU: All right. But still a good snapshot there. Thanks, Charles.

Well, the disaster at Japan's Fukushima Daiichi nuclear plant may actually prompt swift changes in global energy consumption and also in prices.

HODSON: Coming up, how natural gas, oil, and coal might lead a global energy shift.

(COMMERCIAL BREAK)

CHIOU: This is CNN iReporter Johnny Colt. And he says he was 60 to 70 kilometers away from the damaged Fukushima Daiichi nuclear plant. And he also says his Geiger counter was going wild. You could hear it clicking all the way to one extreme right there.

He says he was trained to get out as fast as he can if this happened. Now the Japanese government says most of the radiation is concentrated right at the plant and residents need to evacuate only 20 to 30 kilometers away. But keep in mind, he says he was 60 to 70 kilometers away.

Welcome back from CNN Hong Kong and London. This is a special edition of WORLD BUSINESS TODAY as CNN's coverage of the Japanese earthquake and the tsunami continues.

HODSON: And last -- until last Friday, Japan got 30 percent of its energy from nuclear power. Not anymore, though. So now Japan is scrambling to fill the energy gap. And as Jim Boulden reports, the disaster promises to affect future energy policies and prices not only in Japan but also around the world.

(BEGIN VIDEOTAPE)

JIM BOULDEN, CNN CORRESPONDENT (voice-over): Countries rely on a finely balanced mix of fuels to produce electricity. Japan is the world's biggest importer of conventional fuels like coal and liquefied natural gas or LNG. And the world's third largest oil consumer.

Up until last week, 30 percent of electricity was produced by nuclear. The earthquake and tsunami will change that mix at least in the short term.

TOM WALLIN, ENERGY INTELLIGENCE: This is a game-changer on a number of levels for nuclear and also secondarily for gas and for oil, too.

BOULDEN: Energy producers and companies are now having to scramble. Within hours of the earthquake, for instance, prices went higher for LNG in Britain. Shell, for one, says it's already diverting LNG to Japan to make up for the lost nuclear power.

HARRY TCHILINGUIRIAN, BNP PARIBAS: I think the preferred route is going to be more LNG coming to Japan. Now, of course, the implications of Asian LNG being diverted to Japan is that less carbos will head to Europe. So that could affect process in Europe.

BOULDEN: But it's not clear that natural gas prices should jump in the medium term, affecting gas bills for consumers around the world.

WALLIN: We've got an interesting situation globally with North America importing much less than had been expected now because of rising domestic production and so, therefore, there is some slack in the system.

And there's already talk about Middle East producers, particularly Qatar shifting volumes that were destined for the Atlantic basin to Japan.

BOULDEN: In a normal market, natural gas prices generally move with oil prices. But oil fell shortly after the quake since Japan will need less oil in the near term as factories are shut, refineries are damaged.

And what about coal? Could it now see a renaissance?

Emerging countries like China produce and use coal, so does the United States. Will Japan become an even bigger coal importer? Coal prices are expected to rise even before it's clear.

HAYDEN ATKINS, MACQUARIE SECURITIES: It can take somewhere around three to five years to build a coal fired power plant. I think in countries like Japan where they, you know, now have to think about a change in the generation mix, it's not clear where coal is going to fit in from that perspective.

BOULDEN: The big question now for long-term supply in prices, will the West move firmly away from nuclear? Roughly a third of Europe's electricity is generated by nuclear power, much higher, of course, in France.

More nuclear was becoming one way countries were planning to cut carbon emissions. Instead of burning more coal and using pricey oil to generate electricity. For now, LNG appears to be the fuel of choice.

Jim Boulden, CNN, London.

(END VIDEOTAPE)

CHIOU: We're going to head to northern Africa next and confidence and trepidation in Libya. Government forces press their advantage against rebel positions. But people in the east are not rolling out the red carpet for their arrival.

HODSON: Also, Japanese authorities take to the skies to tackle Fukushima's imperiled nuclear plant.

(COMMERCIAL BREAK)

CHIOU: Let's take a look at what's happening in the oil markets right now. Late sweet crude, NYMEX crude is up almost 1 percent in electronic trading. Up 87 cents to $98.85 a barrel.

Oil prices are rising as dealers turn their attention to fresh reports of violence in the Middle East on Thursday -- Charles.

HODSON: Well, let's update you on some other news.

The U.N. Security Council may vote on Thursday on a broad range resolution so-called that could impose a no-fly zone in Libya. The council has been discussing the escalating civil war there but there's been no agreement yet on the proposal.

On the ground, Libyan government forces look confident in Ajdabiya as they press their assault towards Benghazi. People in the eastern rebel stronghold are frustrated with the international community as our Arwa Damon reports.

(BEGIN VIDEOTAPE)

ARWA DAMON, CNN CORRESPONDENT (on camera): To say that people here are disappointed with the international communities' inaction is an understatement. They're angry. They're frustrated, and they feel completely betrayed and abandoned.

The failure of the United Nations to pass a resolution that would implement a no-fly zone, people are telling us is nothing short, they say, of having global leaders sign their death warrants.

(Voice-over): Carrying both the Qatari and French flags to show his gratitude to those two nations, Osama Mohammed (ph) says a no-fly zone must be implemented now. Simply to save the people.

"Moammar is killing the Libyan people," he says. "The world is taking so long. Moammar is going to finish off all of Libya and there will be no point to a no-fly zone."

UNIDENTIFIED MALE: This regime is as big a threat for all the world. We're defending the world peace, not just for our citizens. DAMON: It's already been a month of bombardment and bloodshed, Faraz Ibrahim (ph) tell us. "This is the U.N.'s responsibility. If the U.N. won't protect civilian populations, what's the point of its existence? And, yes, I am worried about my children," he continues. "We've already seen children massacred."

(On camera): The French flag has been hanging from the courthouse here in Benghazi since Friday when France recognized the legitimacy of the National Council. People then happy, anticipating that the United States would shortly follow suit, talking about how they would hang an even bigger flag to thank America for its support.

Since then, they have, of course, been bitterly disappointed. Many people telling us that this is an issue of money, they'll pay for it. If it's an issue of America fearing involvement in an Arab nation, well, they would be welcomed here. They say that if America and the global community continues to choose inaction, this will be a dark stain, a very dark stain in history.

Arwa Damon, CNN, Benghazi, Libya.

(END VIDEOTAPE)

CHIOU: Meanwhile, a new round of violence has erupted in Bahrain. Witnesses say security forces attacked opposition demonstrators in Manama's (INAUDIBLE) roundabout on Wednesday then stormed the city's main hospital where they beat up doctors.

But the government says it was the protesters who attacked police with firebombs as they approached the square. So you've got two different stories there. They say police retaliated with tear gas.

HODSON: Now Japan, of course, working feverishly to keep its damaged nuclear reactors cool.

Coming up, the country's defense minister tells us what's being done to pump water into their cooling systems. And we'll look at what's happening to Japan's exporters. That's right ahead.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

TOSHIMI KITAZAWA, JAPANESE DEFENSE MINISTER (Through Translator): After the aerial operations, deploying Self Defense Forces, in the afternoon, the Tokyo police fire squad with their water cannon trucks will conduct operations from the ground.

(END OF VIDEO CLIP)

HODSON: Japan's defense minister there on the decision to use helicopters despite concerns about radiation levels to dump seawater on the spent fuel pools of two damaged reactors at Fukushima's crippled nuclear power plant.

A U.S. official says there is no water in one of the pools which is resulting in the release of extremely high levels of radiation. But a Japanese official disputes that saying there appears to be water, just how much is unclear.

Well, from CNN London, I'm Charles Hodson.

CHIOU: And I'm Pauline Chiou at CNN Hong Kong.

Welcome back to WORLD BUSINESS TODAY.

HODSON: Well, nearly a week's worth of horrific images have come out of Japan since last Friday's earthquake and tsunami. But there are towns or what used to be towns that cameras are reaching only now. And once again the scenes defy description.

Angus Walker is in the devastated town of Miyako.

(BEGIN VIDEOTAPE)

ANGUS WALKER, CNN CORRESPONDENT (voice-over): Miyako. A fishing port where the harbor offered no sanctuary. A ferry is now marooned in the middle of town. You'd be forgiven to thinking this is a war zone. Instead, it's a place where soldiers are battling to find victims of nature's forces. More than 1,000 are missing.

(On camera): It took the Japanese army three days to get to Miyako. They're still here, still searching for bodies. And the weather conditions are getting worse. This town can only be reached by mountainous roads.

(Voice-over): The sergeant tells me they pulled 10 people out alive since Monday. And if they only find one more, it will all still be worth it.

This was a moment the tsunami smashed through Miyako's defenses. A boat is slammed into a bridge. The waters have receded, exposing the destruction in their wake.

(On camera): Now you get a real sense of the terrifying scale of this disaster. So much water poured over the seawall that it hit the bottom of the bridge which must be around 30 feet above me.

(Voice-over): These are the lists of the living, more than 5,000 in emergency shelters. And this woman is one of Japan's countless Good Samaritans.

KIKUKO, SEARCHING FOR THE MISSING: I have to help people because kids might contact me.

WALKER: Kikuko has collected the names of the missing posted on the Internet. She's come here hoping to find people she doesn't know on behalf of people she's never met.

KIKUKO: It is just horrible. I want to think it is a nightmare what happened in my country. But I can't say anything.

WALKER: And all along Japan's northeastern coast, the nightmare never seems to end.

Angus Walker, ITV News, Miyako.

(END VIDEOTAPE)

CHIOU: A day after markets seemed to be on the mend, Asian stocks slipped back again on Thursday. The NIKKEI sank almost 5 percent in early trading, but then it got some gains by the end of the day to end the session down nearly 1.5 percent there.

That afternoon reprieve in Tokyo came after news that the Bank of Japan was pumping another $60 billion of emergency cash into the country's financial system.

Now in Shanghai, nuclear energy firms were hit by the news that China is suspending the approval of new nuclear projects. Meanwhile, in Sidney where the main Aussie benchmark ended down just fractionally. Uranium companies also posted some losses. But both the Shanghai and the Sidney indices managed to keep their losses to just under .5 percent while the Hang Seng here in Hong Kong ended the day by -- down by more than 1.8 percent.

Now let's look at how the yen is moving against the dollar right now. In afternoon trading, the yen pulled back from its record high of $76.25 against the U.S. dollar. Now this surge alarmed exporters. That eased the worries about how a strong Japanese currency would hit the country's exporters by the time it weakened to about $79.11 by the end of the trading day.

Now there is talk in the markets that Japan may be preparing to rein in its rising yen by injecting more liquidity into the system. Now on Friday, that's tomorrow, finance chiefs from the G-7 countries are set to hold talks on the country's ongoing crisis. But Japanese officials, no surprise, they won't comment on the possibility of any intervention.

And the last time they did intervene in the currency market was just a couple of months ago back in September -- Charles.

HODSON: OK. Let's have a quick update on how the crisis in Japan is impacting European stock markets.

We're 37 minutes into trading. And we are seeing some decent gains there, 1.25 percent for both Frankfurt and Paris. The London FTSE a little way behind there but still up by nearly 1 percent. And Zurich SMI up by two-thirds of a percent.

Banks like Barclays here in London took a hit in Wednesday's trading. See where -- we're seeing a little buying back of that stock now. Yes, we are. Up by .5 percent there for Barclay's and indeed for other banks as well.

Now in terms of the major U.S. stock markets, all three of those closed at their lowest levels so far this year. The Dow sank by just over 2 percent on Wednesday. NASDAQ and S&P, they have thrown away all of their gains for the year. They were off by, again, nearly 2 percent.

Now the nuclear crisis in Japan and in particular that very strong yen is pushing stocks in exporters in Japan down. But there are a lot of implications really for stocks all the way around the world.

Well, CNN's Emily Rubin joins me now with more on that.

So I understand that one sector that is definitely feeling the ripple from what's going on in Japan is the car making sector, right?

Well, exactly. I mean, Charles, we're seeing stocks that lost across the board and across all sectors, too. Let's just take a look at some of the big players in Japan for a start.

And we'll go to those carmakers, Honda. They fell by 1 percent. Tokyo -- Toyota said that they will resume production. But their shares still down 2.2 percent.

Stocks also being hit by the yen's 10-year high against the dollar. And Sony saw their shares fall by .8 percent.

Now what's been the effect worldwide? Well, markets here in Europe have been plunging. They slightly rallied this morning as you just said. Among the stocks worst hit, utility providers to the nuclear industry, uranium producers took a hit. Paladin Energy fell 9.5 percent in Sidney this week.

And energy stocks are also down. Shares in the world's largest manufacturers of nuclear reactors Ariba have plunged losing nearly 18.5 percent at one point this week.

Now Japan is the third largest consumer of oil. So of course, worries over its economy saw (INAUDIBLE) North Sea down 53 cents to $110 a barrel.

And we're also seeing big contagion in the global automobile sector. As you said, car manufacturing is a huge part of Japan's economy. Especially because they manufacture parts as well. Now -- so companies around the world are relying on them. And they're worried that the shortages may have a huge impact on global production.

Renault which has close ties with Nissan saw their shares down. They've been falling this week. Also BMW, Ford, and General Motors.

HODSON: OK. We'll -- you know, clearly there are some -- all those unlikely customers, clearly nuclear power companies and those associated with them, their supplies obviously continue to take a hit, I imagine, as this situation gets worse also. I mean fails to get better.

RUBIN: Well, yes, I was talking about the global supply chain there when it comes to the automobile industry. But of course, there's a similar problem with the tech industry now. One analyst I spoke to said that Japan produces 10 percent of the world's memory chips, 35 percent of flash memory. Now the prospect of delays to the availability of flash memory is causing investors great concern. Because that's an integral part of smart phones and tablets like the iPad. And we have seen shares in technology stocks like Apple, Dell, and HP down.

And, of course, Charles, just one final point to think of. The Japanese consume 11 percent of the world's luxury goods. So all this week, we've seen falls in LVMH, their rival Hermes, their shares are also down and also in the British company Burberry.

HODSON: OK.

RUBIN: So the effects are widespread.

HODSON: Emily Rubin, thank you very much, me joining here live. Pauline?

CHIOU: Well, Charles, I'm going to touch a little bit more on some of the points that Emily just made, especially with the electronics sector.

Let's get more now on how some of Japan's biggest companies are being affected by the disaster. Now think of it this way. Japan produces about 40 percent of the world's electronics and 60 percent of the silicon used in semiconductors. They come from Japan.

So let's take a look at a couple of companies like Toshiba, Canon and Sony. I'm going to start with Toshiba. Product shipments could drop by 20 percent because of this disaster. Now Toshiba makes a third of the world's flash memory which is crucial of course for tablet computers and smart phones.

Now let's take a look at Canon. Now Canon also from Japan, three plants there have been shut down. One of them is really badly damaged which is affecting the production of lenses for camcorders and also for office machines.

And then finally, we're going to take a look at Sony. Now as Emily just mentioned, this is Japan's biggest exporter of consumer electronics. At least eight facilities are closed and the Miyagi plant is heavily damaged. Blu-Ray disks are made in this particular factory.

So these are just a few examples of a manufacturing that cannot be carried out in Japan right now because of the earthquake and tsunami from last Friday.

Now CNN is launching a new high-tech way for smart phone users around the world to take immediate action to help disaster victims in Japan. Now throughout our news coverage, we will show you special black and white codes which you can see on the screen right now.

Let's take a look to see if we can bring that up. We'll see if we can do that. But in the meantime, I'll tell you about this bar code. If you can scan this image with your smart phone -- there it is. There it is at the bottom of your screen. If you can scan that image, it loads our "Impact Your World" Web site automatically. No typing required and there you will find links to charities that are helping disaster victims in Japan. And we will air this code throughout the day on CNN. So keep your smart phones handy. Just get really close to your TV screen and you can download it right away.

WORLD BUSINESS TODAY returns in just a moment. We'll be right back after this break.

(COMMERCIAL BREAK)

HODSON: Scenes here of -- the port of Hachinohe in Japan on the far northeastern shore of the island of Honshu. Ships tossed about by the tsunami, some on their sides. And others meanwhile are being flung on to the dock.

At least 10 ports along the northeast coast of Japan are decimated. Lloyd says the closures are costing Japan $3.5 billion in lost sea trade each day.

Ports south of Tokyo are operating normally although fuel and electricity shortages are hampering some operations at Tokyo and Yokohama.

Welcome back to WORLD BUSINESS TODAY. CNN's special coverage of the earthquake and tsunami in Japan continues.

CHIOU: Thousands of Japanese and foreign nationals are trapped in Tokyo airports trying to escape the devastation and the nuclear threat. Narita and Haneda International Airports were jammed on Wednesday with travelers heading to southern Japan or just trying to get out of the country.

The U.S. is warning Americans not to travel to northeastern Japan. And it is sending planes to evacuate the families of U.S. diplomats. Meanwhile, Britain and Australia are telling their citizens not to go to the north either. And also to avoid Tokyo as well.

France is advising its citizens to get out of Japan entirely. And France is sending planes to take them out of the country.

International airlines are keeping a close eye on the situation in Japan. And not all are changing their flight schedules. But there are some. Air China says it has canceled some flights to Tokyo from Beijing and Shanghai. But that's due to aircraft capacity.

British Airways and Virgin Atlantic say that for the time being flight schedules to Narita and Haneda airports will stay the same.

Air France has been helping to evacuate French citizens out of Japan. And Korean Air has increased the number of flights for people who want to return home.

Meanwhile, German carrier Lufthansa says it's diverting flights away from Tokyo to Osaka and also to Nagoya via Seoul until at least the weekend -- Charles.

HODSON: Well, the freezing temperatures and snow in Japan are making the situation there even worse. And winds are complicating efforts to cool the nuclear reactors.

Our meteorologist Ivan Cabrera is at the CNN Weather Center with more on that.

Good morning, Ivan.

IVAN CABRERA, CNN METEOROLOGIST: Hey, Charles, the winds, in fact, canceled many of those flights that were supposed to drop 100 drops of water there in that plant, the spent fuel rods, and were only able to get four.

The winds have been significant. The helicopters could fly in the wind. The problem is a lot of the water they're dropping is either evaporating or essentially by the time it gets down to the plant, it is droplets and not significant enough to certainly do what it's supposed to do.

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CABRERA: We'll stay on top of the winds and the forecast which remains abysmal there for continuing efforts on the ground.

HODSON: OK, Ivan Cabrera joining us there live from the International Weather Center. Thank you very much.

Now parts of Tokyo are in the dark. Just ahead, we'll look at the impact of power outages on people's -- on people and businesses in the Japanese capital.

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CHIOU: The Tokyo Electric Company has started rolling blackouts across the Japanese capital. The outages last until April 8th and they will affect eight prefectures but not downtown Tokyo. The power cuts last for three to six hours in some areas and some 45 million people will be affected.

Remember, Tokyo is the largest city in the world. Already, people are having problems as a result like one woman who was stuck in an elevator.

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UNIDENTIFIED FEMALE (Through Translator): I'm still upset. My heart is still racing. I knew the power was scheduled to go out. I just forgot. This is the first blackout we've ever experienced. So I just hopped on the elevator. I got stuck on the elevator going to my apartment on the fifth floor.

I was stuck for about 30 minutes. I was lonely and scared. So I banged on the door and luckily a neighbor heard me. I would like to get a definite schedule for exactly when the blackouts are going to happen.

(END OF VIDEO CLIP)

CHIOU: That poor woman. What an ordeal.

Welcome back. Live from CNN Hong Kong and London. This is WORLD BUSINESS TODAY.

HODSON: Now Tokyo Electric Power says it's expecting a short fall of about 25 percent of capacity with its imperiled Fukushima nuclear plant offline. That, of course, is bad news for commuters and business.

Steven Nagata is an IT consultant who lives in Tokyo. Earlier, he told us how the outages are affecting businesses at the moment.

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STEVEN NAGATA, TOKYO RESIDENT: There are some issues with the blackouts that have concerned companies. Primarily they're not exactly sure when the blackouts will take place. They don't start exactly on time. And often -- very often, they just been canceled for specific sections of the blackout areas.

And without that information, it's very hard for them to properly shut down their servers and make sure that everything is prepared for such a blackout. And so it has some companies a little concerned. I don't think it would be considered a major problem.

(END OF VIDEO CLIP)

HODSON: Well, these rolling power outages may have a serious impact on Japan's data centers. Also called server farms. They're facilities used to house computer systems as well as hosting Web sites and cloud computing services.

Well, that's all a big worry. Earlier, John Lennon, director of Matterhorn Capital Data Center here in London, explained the potential scope of the problem.

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JOHN LENNON, DIRECTOR, MATTERHORN CAPITAL DATA CENTRE: They're going to have lots of dependency for the financial institutions for data center backup. Obviously, they will have worldwide coverage on that. And not only is the power probably something to look at, it's also fiber network as well.

So especially with what's happened there, fiber networks internationally are run on a seabed. So they're going to have to look at redundancy networks should something happen to the fiber.

(END OF VIDEO CLIP)

HODSON: Well, Japan accounts for about 10 percent of the worldwide cloud computing services market -- Pauline. CHIOU: That is it for this edition of WORLD BUSINESS TODAY. Thanks for joining us.

I'm Pauline Chiou at CNN Hong Kong.

HODSON: And I'm Charles Hodson at CNN London. "WORLD ONE" is next with continuing coverage of the aftermath of the earthquake and tsunami in Japan.

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