The US embassy website said it all about the situation in Japan on Thursday:
The U.S. Embassy in Tokyo informs U.S. citizens in Japan who wish to depart that the Department of State is making arrangements to provide transportation to safehaven locations in Asia.
The US move is the most chilling sign yet of how grave the situation is at Japan’s crippled Fukushima nuclear power plant. It is also an acknowledgement that available transport simply can’t keep up with the growing stampede out of Tokyo.
The scene in Tokyo
Those of us remaining in Tokyo — and among expats, there aren’t many — started the day seeing images on Japanese television of helicopters hovering above the stricken plant, trying to drop water on overheating reactors to cool melting fuel rods.
That set the tone for another disturbing day.
The yen strengthened to a post-war record high against the dollar, for reasons earlier explained by FT Alphaville but which still makes it all look very odd.
Those power cuts
Power cuts may begin kicking-in in Tokyo soon, though these will probably be in such a way as to create utter confusion, leaving businesses from restaurants and bars to banks and brokers, mystified by when electricity would be cut and for how long. That combined with food shortages, transport disruptions, the closure of many businesses, cancellation of all key events, from concerts and conferences to big business meetings and even the annual Tokyo Fashion Week — and a general sense of rising panic.
Tepco, the greatly vilified operator of the crippled nuclear power plant and the largest electricity provider to the Kanto region around Tokyo, had already further blotted its copybook by announcing power cuts and then not proceeding with them.
Bizarrely, it had to apologise on Monday for NOT cutting power when it said it would — only to then spring cuts in Tokyo unannounced, on Wednesday, trapping people in elevators and earlier catching crucial public services such as hospitals and transport unawares. It has since reversed course again, cancelling tonight’s Tokyo blackout.
The power cuts added to the rush to buy supplies, as people already desperate to stock-up on water, rice, canned food and first-aid supplies tried to buy flashlights and batteries, cleaning out the big electrical suppliers and variety stores earlier in the week. That sparked a run on candles, which also are now in scarce supply.
Shelves in Tokyo’s supermarkets and convenience stores, meanwhile, look like something from the Soviet era, with many ‘convenis’ displaying just a few forlorn — and least-loved items such as ageing ‘yaki soba dogs’ – cold fried noodles in a hotdog bun smeared with mayonnaise and ketchup.
An expat-led exodus
The exodus from Tokyo, led by expats relocating their families but increasingly, including Japanese families, widened on Thursday, as more companies began implementing relocation plans.
Up to Tuesday, the word “evacuation” was a sensitive one, with many big companies reluctant to alarm their employees or, in the case of foreign companies, nervous about how to approach the issue of evacuating expatriate staff overseas while leaving Japanese staff in their home locations.
Some resolved this situation by offering all workers the chance to work from locations west of Tokyo, such as Osaka and Kyoto. This of course has created a mini-boom for big hotels and the entire services industry in cities such as Osaka, Kyoto, Kobe and Fukuoka, where hotels are nearly full to capacity after being hit by cancellations in the immediate aftermath of the quake.
Among companies that are not moving employees, more and more individuals took matters into their own hands — leaving the capital or at least sending their families out by train or plane.
Getting out
The television showed images of enormous queues at international airports around Japan. Some people, unable to make reservations by phone, went to Narita or Haneda airports near Tokyo to try to buy tickets over the counter.
Train stations were also packed with people trying to head west, particularly expatriate families seeking to relocate to cities such as Osaka, Kyoto and Fukuoka near international airports.
In fact, one expat wife who was taking her children to Kyoto earlier in the week described the bullet train, normally half full with besuited Japanese businessmen and a smattering of other travellers, as a “rolling high-speed nursery,” packed with screaming kids and foreigners all fleeing Tokyo.
Travel agents said they had been inundated with calls from people — mainly expatriates, trying to secure seats on planes leaving Tokyo. The most popular destinations are in Asia, primarily Hong Kong, Singapore, Bangkok and Sydney, they said. The price of economy class seats on some of these routes had more than doubled, with a flight to Hong Kong costing more than Y200,000 ($2,240).
Increasingly, expat staff are negotiating to work out of these Asian hubs.
Companies that are relocating employees from Tokyo or at least are telling staff they do not have to come to work include manufacturers, professional services such as law firms, management consultants and accountants, as well as asset managers.
But one Japanese woman who works for a big Japanese tech company observed:
“A foreign company means what it says when it says, ‘make your own judgement’ about coming to work. When a Japanese company says this, using the term ‘jikko handan’, it really doesn’t mean it. We’re made to feel bad if we say we don’t want to come into work.”
However by Thursday, it wasn’t a matter of choice.
Many companies had chosen to close down until later next week, or further notice.
The big banks
But one lot completely out of step with the rush — at least, up to Thursday evening – were the big western banks, particularly US and some European banks. Among them, JPMorgan, Morgan Stanley, UBS and Barclays Capital all reconfirmed on Thursday that they are conducting ‘business as usual’.
French bank Societe Generale said that 90 per cent of its 450 staff are still working as normal in Tokyo — despite advice by the French embassy on Monday to its nationals to leave Tokyo.
That is not going down well with a growing number of nervous staff at the banks. While expatriates are leading the push to leave Japan, reports of the exodus are unnerving some staff – both foreign and Japanese – at investment banks.
More than 15 people who work at investment banks on Thursday told us they were alarmed at the escalation of the crisis and were unhappy that the banks were insisting on the ‘business as usual’ line. At the very least, said one trader, they could help people work elsewhere or for non-essential staff to stay at home.
Some banks, even might feel the need to boost staff morale.
Ivan Ritossa, one of 10 executive committee members of Barclays Capital, flew into Tokyo this week from Singapore, along with five other business heads from the region, to “reassure staff that their safety is paramount”. BarCap has almost 1,000 employees in Tokyo and counts Japan as its biggest operation in Asia.
The ‘keep calm and carry on’ approach of the banks has seen many of the staff send their families out of Tokyo or Japan and return to stay on their own in Tokyo.
“You don’t argue with your wife when she says it’s time to go,” noted one British banker who had sent his wife and three children to Singapore to stay with friends.
Meanwhile, among numerous expat and Japanese families from Tokyo now holed up in big hotels in Kyoto, Osaka and Kobe, some are beginning to feel uncomfortable with being in the country at all — as evidenced by the US move to send in planes.
Said one British man, who is a partner in a hedge fund:
“For me, anyway, 500km from any kind of radiation cloud that could develop is not far enough for me, I want out – but I am not sure we can get out.”
Related links:
In-depth: Japan earthquake – FT
Martin Wolf – Japan can meet the earthquake test – FT
David Pilling: The Japanese miracle is not over – FT