choreographed affair, as we were expecting from north korea, very similar to what we saw 17 years ago for the funeral of kim il-sun. we saw the procession. coffin going through the streets of pyongyang, 40 kilometers was the procession. and along those snow-laden streets, there were tens of thousands if not hundreds of thousands of mourners who had come out to pay their last respects. this was a lot of emotion. we did see at the front of these crowds a lot of wailing and weeping and beating of chests. although further back in the crowds, there were some more passive looking people paying their respects. so this is as it was expected. kim jong-un obviously now called the supreme leader according to state media was also front and center. zain? >> will anything change in north korea under kim jong-un? >> this is what everyone would like to know. at this point, the consensus appears to be that nothing will change in the near term. what we did see today was kim jong-un walking alongside the car carrying his father's coffin. he was walking along the front towards the right. behind him he had his uncle who we understand was promoted just a year ago by kim jong-il and is expected to help him through the first years of his reign. and then on the left-hand side, he had the head of the military and other military personnel. so they really were showing that there was unity within north korea and that the military and the political leadership was behind kim jong-un. so at this point, analysts are thinking that nothing will really change in the months ahead, possibly even the years ahead. but what could happen when kim jong-un feels like he's consolidated his power and feels a little more secure. zain? >> cnn's paula hancocks reporting. thanks, paula. that's the top story from cnn, the world's news leader. i'm zain verjee, and "world business today" starts right now. good morning from cnn london. i'm charles hodson. >> we'll forgive you for that, charles. good afternoon from hong kong, i'm andrew stevens. you're watching "world business today." the top stories this wednesday, december the 28th. as japan eases its self-imposed ban on weapons exports, we'll look at how its defense budget adds up. it's already been a volatile year in the euro zone. now nervous banks have deposited record sums with the yeaeuropea central bank. and today we say bye-bye to the boss. now time in the corner office is coming to an end, but not before some final questions. stock markets in asia finishing broadly lower after another day of fin trade. that followed a quiet day on wall street. and in europe where an italian bond auction will be in sharp focus, the open was mixed just a short while ago. let's get straight to the numbers. charles, how's europe looking now? >> well, here's the overall picture, obviously, andrew, kind of mixed, really. most of these indices are close to the flat line. certainly the ftse playing catch-up, having been closed on monday for a bank holiday. but also the paris cac, the zurich smi. the one exception is the xetra dax, off by about 0.5%. i think what we're seeing is still fears remaining over the euro zone crisis on hold at best. there's also worries about that threat from tiran regarding the oil supply out of the persian gulf. more on that later in the show. of course, the other thing that's out there that people are worried about is that people are watching the italian debt auction. there's one of those almost inevitably every week. there's one later today and even another one tomorrow. in terms of the yields there on italian sovereign debt, that is on the ten-year, it's hovering near 7%. worth remembering, by the way, that italy, which is constantly issuing debt, the world's third largest bond market, and i think it is clearly the bellwether for the debt crisis. it's the largest of the various euro zone nations that is in the frame in terms of perhaps not being able to keep up with its debts. let's move on and have a look at the currency markets. and not really seeing an awful lot there. if you look at the euro, significant there. kind of stable. at least a cent higher than its low in recent sessions at 1.3068. andrew. >> yeah, charles, you sort of get the impression, don't you, and as usual, it's going to be a quiet week, the week between the christmas break and the new year. finn trading can mean a bit of volatility, but certainly it's going to be difficult to read too much into these markets the next few days. here's what happened in asia today. as you can see, they were mostly lower. traders keeping an eye on that bond auction in italy. the euro crisis remains very much a focus. hong kong, first day back from the holiday today, down by 0.6%. a lot of investors, not to mention brokers as well still on holiday. in australia, the gold price was falling. the markets, you see, down by 1.2%. copper prices were also down. and both of those commodities dragging the mining stocks lower. the nikkei was down. we've got more on that i just a moment. first, though, i want to talk about one stock in particular, a stock we've been talking about since march of this year, tepco, down almost 12% as you see there. that's now at its lowest close this year at 186 yen. japan's trade minister urging temporary nationalizedation of tepco today. tepco is the operator of the fukushima daiichi plant which had the nuclear meltdown. the stock now down just a shade under 90% this year in talk of nationalization, obviously, unsurprisingly spooking investors. now, meanwhile, releasing reams of data this morning. and on the whole it paints a pretty downbeat picture for the month of november. starting with industrial production, down 2.6% in the month of november from the previous close and down 4% on the same period last year. the flooding in thailand hitting many of japan's biggest exporters in recent months. inflation was also up today, and core inflation prices which exclude the cost of fresh food fell compared to a year earlier, was in line with expectations. but it does continue to raise the issue of deflation in japan. meanwhile, the unemployment numbers were out. they remain steady at 4.5%. that, too, was in line with expectations. elsewhere, household spending fell by more than 3% from 2010. retail sales also fell. but charles, seeing that spending by japanese households is something that they'll obviously be worrying about. >> indeed they will. clearly as you mentioned, deflation is a worry. but one thing that might help is the fact that the country, japan still, has ended its cold war era restrictions on weapons exports. that allows japanese companies to take part in multinational weapons projects. it's expected to prop up japan's arms industry and reduce national defense spending. the government says the exported military equipment will be for nonaggressive purposes such as peacekeeping missions, andrew. >> yeah, charles. we've witnessed little fluctuation in the stock prices for the key suppliers of japan's defense industry in trading in tokyo today. those restrictions were designed to stop weapons getting into the hands of three types of countries, those with communist regimes, those subject to u.n. arms embargoes, and those which are involved in international conflicts. now, japan's government says the so-called three principles will not fundamentally change. and when you put japan's defense spending into context, it's clear that the country is certainly not currently at least a major player relative to its wealth. in 2011, japan set aside $61 billion for defense. in 2012, the provisional budget is awaiting approval and it's closer to $60 billion, actually going backwards. compare that with u.s. spending, it's almost 15 times more in the u.s. even the uk with an economy at roughly half the size of japan's spends more in real terms on defense. charles. >> very, very interesting, that. let's get back to stock markets and swing back across the pacific or perhaps the north pole to wall street where trading was thin on tuesday. it was their first session back after the holidays. when the closing bell rang on tuesday, there had been little movement on major stock markets. here's how the numbers looked. the dow and the s&p settle either side of the flat line. the nasdaq added just a quarter of 1%. investors failed to be cheered by upbeat consumer confidence figures. they showed confidence in the united states economy spiked in december to its highest level since april. the conference boards index beat wall street's estimates. let's have a look at what futures are planning to do. this is just a moment ago in premarket trade. as you can see, a little bit of a selloff there. the dow perhaps weaker than the others. continuing the trend that we saw on tuesday, off about a quarter of a percent perhaps at the open and just edging down very slightly for the nasdaq, off by about 0.13% for the s&p 500. now, a dismal holiday scene has led to more woes for sears. it says it will close between 100 and 120 sears and kmart stores after sales over the past two months dropped more than 5%. shares of sears holdings dropped nearly 19% after the announcement, andrew. >> okay, charles, let's take a look at what's been happening on the oil markets. and the price of crude is up this week. and reasons range from the optimistic to the ominous. now, while a rise in u.s. consumer confidence suggests a possible rise in demand for crude, events in iran could seriously dent supply. now, this is the journey of nymex futures over the past month. the prices, as you can see, has been rising steadily since the west threatened oil sanctions on iran over its nuclear program. it's currently more than $101 a barrel and tuesday's steep upward curve followed tehran's threat to close the vital strait of hormuz at the entrance to the persian gulf if those sanctions go ahead. so why does it matter? well, about one-third of the world's seaboard supply passes through that waterway. and iran's clearest signal yet. one energy boss gave richard quest his take. >> i am concerned because there are too many threats being issued too frequently, you know. the persian gulf's a very crowded area militarily, and we could just get in an accident. that happened with the shooting of the iranian airliner some years back. coming up on "world business today," the euro zone's economic woes took center stage in 2011. financial leaders get warning. the fate of the euro hangs in the balance. but will 2012 see the last of a push towards recovery? we'll take a closer look. and currency spat simmers between two superpowers. will china or the united states blink first? that's all ahead on "world business today." you're looking there across the tallest j on the left-hand side of your screen there, the icc building here in hong kong as we head to quarter past 5:00, you'll also notice a fairly thick layer of ugly looking brown stuff. welcome back. you're watching "world business today." we're live on cnn. in this final week of 2011, euro zone banks are depositing a record amount of cash for the european central bank. the big number is $539 billion. the flood of deposits comes just days after the ecb doled out new three-year loans to banks in an effort to stave off another credit crunch. more than 500 banks took up the offer, making it the ecb's largest ever single liquidity operation. the banks just got the cash only on friday, and now some appear to be putting it right back with the ecb, perhaps because of continuing anxiety over the financial future. well, 2011 began with a warning from hungary's prime minister saying, quote, we have to save the euro over the next six months. but here we are, 11, 12 months later, and the single currency's fate still hangs in the balance as the new year, 2012, dawns. this year saw portugal, greece, italy and spain struggle for financial survival. athens and lisbon received bailouts in 2011, but there's no quick fix. and while the arab spring toppled some middle eastern leaders, financial woes pushed several leaders out the door. gone from power, greece's george papandreou and italy's silvio berlusconi, two big political figures. 2011 also saw summit after summit after summit. and the world watched as finance chiefs burned the midnight oil at a final summit in early december in a last-ditch effort to save the euro. jim boulden takes us now through the rocky year that was for the euro zone. >> reporter: the euro was in safe hands surely. by the time the irish wept to t went to the polls in february, its bailout was secure. greece was promising reform, but then events conspired to undermine the best hopes. bond yields kept rising. fear was growing aut whether portugal and spain might need a bailout. the japanese earthquake, nuclear safety and libya put the euro on the back burner at the euro zone leaders march summit. by july, italy was in the firing line. and greece was not going to be able to pay its bills. europe's leaders held a crisis summit. overnight, they agreed to give greece huge debt relief as part of a stunning second bailout. >> the head of states and government of the euro zone showed a real determination to defend the zone to make sure that greece was taken care of and had a comprehensive package. >> reporter: by september, the unthinkable wasn't anymore. the euro zone itself might just be in danger. people harked back to its very foundation. >> you see, when the euro was set up, a lot of people said, well, it's very good. you have a currency without a government, but actually, it's turned out to be a minus point because no one is in charge. >> reporter: by the time finance ministers met in poland in september, italy's prime minister, silvio berlusconi, was himself in the firing line with italian bond yields heading towards unsustainable levels. there wasn't enough money to bail out the zone's third biggest economy. the european central bank stepped in to the relief of finance ministers. >> fortunately, the european central bank has given us more time by intervening on the italian and spanish bond markets and providing a kind of protective shield. >> reporter: then acronyms hit the airwaves. the european financial stability facility, or efsf, hit the headlines when the 17 euro zone national parliaments had to vote to expand its power. to great relief, they all did. >> the facility's not going to last forever. and it should be phased out in a few years' time. so for the time being, it is the best way to escape the current crisis. >> reporter: but then a threat by greece's prime minister to let greek's vote on austerity brought down its government in november. a technocrat took over. so did one in rome. both pledged huge austerity packages. markets responded well and took off some of the heat. >> entering the critical period of ten days. >> reporter: then european commissioner ali rehn set the clock ticking in december. there was just ten days left to save the single currency. so now it's early december yet, another eu leader summit in brussels to save the euro. it's the third one i've been to in brussels this year alone. the question is, have they done enough this time to save the single currency? are the markets pleased? will the leaders do enough to actually put the sunshine back into the single currency? britain balked at a new treaty to enshrine fiscal discipline. the other 26 countries say they will try and agree ways to force each other to balance budgets and enforce penalties on those who don't. >> treaty change or not, i still believe that that is not really into the heart of the problem which is more related to economic problems and need reforming into countries and need increased firepower. >> reporter: after countless meetings, has europe done enough to restore confidence? and therefore not need more firepower in 2012? jim boulden, cnn, london. and coming up next, a spat between the world's two biggest economies 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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. welcome back. you're watching "world business today" live on cnn. well, europe has stolen most of this year's business headlines. a spat between the world's two biggest economies continues to simmer. china's currency, the yuan, has appreciated by 7.5% against the u.s. dollar over the past 18 months. but on tuesday, the u.s. treasury department said it remains undervalued, putting american businesses at an untenable disadvantage. the obama administration is walking a diplomatic tightrope and has again stopped short of calling china a currency manipulator. but some of the president's political opponents have no such reservations. >> one, we've got to say to china, no more of that. and we keep talking about that but not doing anything. and if i'm president, i'm going to label on day one china a currency manipulator which will allow us to apply tariffs to their products where they're artificially and unfairly pricing relative to their own. >> most economies estimate that the r&d is undervalued by 20% to 25%. that means our exports to china are that much more expensive, and their imports into the united states are that much cheaper. now, there's been slight improvement over the last year, partly because of u.s. pressure, but it hasn't been enough. and it's time for them to go ahead and move towards a market-based system for their currency. >> now, the slight improvemen you heard president obama refer to there can be seen quite clearly on this chart. now, since china took steps to boost flexibility in its currency last year, the appreciation of the yuan, you see clearly, has been pretty steady. but if you look from there to there, it's an appreciation of about 7.5% against the doll