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Yen Plummets; Protecting Your Business from the Unpredictable

Aired March 17, 2011 - 14:00:00   ET


MAX FOSTER, HOST, QUEST MEANS BUSINESS: The currency curve, the G7 is poised to take up Japan's soaring yen.

Working in overdrive Nissan's senior vice president tells us how they're keeping supply chain open.

And from natural disasters to political unrest, we'll look at how to protect your business from the unpredictable.

I'm Max Foster in for Richard Quest. This is QUEST MEANS BUSINESS.

Hello to you.

Efforts to prevent a full nuclear meltdown are continuing through the night in Japan. Police and fire officers are turning high pressure water jets on one of the reactors of the Fukushima Power Plant. Engineers are also focusing on getting cooling systems up and running again. Earlier on Thursday, military helicopters dumped seawater on the site from the air. That is about seven and a half tons of water you can see there, raining down, on the No. 3 reactor. It is all about keeping it cool. There is a spent fuel pool next to the reactor and it, too, is in danger of running dry, allowing the fuel rods to melt and possibly release radiation.

Radiation levels remain up and down at the plant. Earlier, Tek Co (ph), the plant's owner, says the hourly reading is higher than the dose most people get in a year. The level has since dropped. At least 20 people have fallen ill, due to possible contamination; 19 people at the plant have been injured and two are still missing.

Snow is frustrating efforts to find more than 9,500 people who are still missing in Northeastern Japan. Police say nearly 5,500 people are confirmed dead in the disaster. It raises the prospect that more than 15,000 could have perished.

In Tokyo stoic commuters kept calm on a crowded Thursday afternoon commute. Train services have been slashed as rail operators try to conserve energy. The government says Tokyo may face more blackouts on Friday. Power supplies have been cut by a quarter, turning this city of neon lights, dark.

And when those businessmen do get to work, and businesswomen, there is precious little good news on the economy. The yen is coming back off an all-time high against the dollar. There is speculation that policy makers may intervene. Right now the exchange rate stands at 79 yen to the dollar, a shade weaker than the all time high of 76.25. Nikkei, the Nikkei is back on the slide. It ended the day down nearly 1.5 percent. Tokyo electric power, the company that operates the Fukushima Power Plant lost another 13 percent.

In New York the Dow is picking up ground, coming back from steep losses sustained over the past three sessions; up nearly 1 percent at this point. More on that later with Alison.

Finance ministers and central bank governors from G7 countries will hold a teleconference in about four hours. They'll talk about how to respond to the financial emergency in Japan. Jim has been taking a closer look at exactly what they're dealing with.


JIM BOULDEN, CNN FINANCIAL CORRESPONDENT: Well what they are dealing with, of course, is this rising yen. And with Japan in the grip of disaster you might be asking yourself, who would buy the yen? Well, very clearly there could be a huge repatriation of funds, Japanese investors, Japanese companies, hold some $2 trillion in foreign assets, according to "The Wall Street Journal". And if they are going to take that money back into Japan, they are going to sell foreign currencies by the end to bring that money back.

Now, investors know that. Speculators know that. So they are betting that funds will flow home to help the rebuilding. And means, of course, more money going into the yen. Also insurance payouts, foreign companies who have to pay out insurance, will have to transfer money into the yen to pay off those insurance bills. And that, too, means more money going into the yen. Now, what is the impact of that? Well, let's look at Toyota, for example. It of course makes it more expensive to export out of places like Japan. Toyota estimates that for every one yen rise against the dollar, it costs it $378 million annually. That is the kind of impact that the rising yen is having at the moment.

So what can be done? Well, the Bank of Japan may intervene. The markets have been looking all day for any excuse, any example that the bank of Japan is going to intervene. We haven't seen that yet. And that would be to sell the yen to buy foreign currencies. However, Japan my yet need to sell the yen later to buy foreign currency to help import goods to rebuild the economy, to rebuild the infrastructure. So, Tokyo may wait. Now, IMF says Japan has the financial mean, of course, to get through this disaster. And earlier the IMF spoke about the Japanese economy. Here is what one spokesperson had to say.


CAROLINE ATKINSON, IMF SPOKESWOMAN: I don't want to speculate about what else, or what the G7 might do. I'm sure that to some extent they are exchanging information. As I mentioned earlier, this is not an issue that is just limited to Japan. Obviously what happens, one of the world's largest economies, has an impact for the global economy. And everybody will be trying to work out what that is, and what is an appropriate response.


BOULDEN: So, Max, later today when the finance ministers talk in that teleconference, markets don't think there is going to be global intervention to help the yen get weaker. But they could support the bank of Japan with whatever decision it decides to make.

FOSTER: OK, thank you very much, indeed. Well, these G7 talks are less than four hours away now an already there is speculation that intervention will be needed whether or not there will be any. In a note to clients, (UNINTELLIGIBLE) at Nomura said, and I quote, "Foreign exchange intervention to stabilize the yen is eminent."

For more on what can be done I'm joined from New York by Jens Nordvig, he is the managing director of Nomura Securities International.

Thank you very much indeed for joining us. Some confusion about whether or not the international community needs to get involved in the intervention here. What do you think is most likely from this call (ph).

JENS NORDVIG, MANAGING DIRECTOR, NOMURA SECURITIES INTERNATIONAL: So, I think we have a very important meeting coming up. And I think there is three types of intervention. A country can intervene alone, they can intervene in a coordinated fashion, and then there is the option between where the G7 just endorses, but they don't actually participate. And I think the last option is the most likely here.

FOSTER: What is the thing that is going to stabilize the markets most?

NORDVIG: So I think an endorsement from the G7 is going to be quite important. I think the impact of intervention is going to be much better if it has a coordinated response. And we saw in September last year, that if the BOJ goes alone that has a certain impact. And I think it could be bigger if the G7 endorses it.

FOSTER: Hasn't the G7 got enough of their own problems to worry about right, with their own financial stimulus?

NORDVIG: Well, but I think this really isn't everybody's interest, right, interest here. Nobody wants to see the Japanese economy implode. Nobody wants to see the Japanese financial system implode. So everybody wants the Japanese situation to be stabilized and that is why we get this extraordinary situation with a meeting by the G7, that is scheduled very, very quickly. And I think that is why that can get backing for the Japanese on this occasion.

FOSTER: The governments are going to find themselves in a tug of war, aren't they? Jim was talking there about the massive repatriation of huge Japanese savings from abroad. That is a huge tidal wave of currency heading back into Japan isn't it? The governments are going to have to battle that. Are they going to win that battle, when you are talking about trillions of dollars worth of Japanese assets?

NORDVIG: Yes, so we have gotten very many questions about this issue. And we have spent a lot of time analyzing it. I don't think the personal estimates we've done of insurance flows (ph) are going to be as big as the ones you mentioned. I think insurance flows could be in the region of $10 billion. And other parts of the Japanese investor base is very conservative; it is not likely to repatriate (ph). So, I think overall there is a big more speculation about this issue than that actual underlying flow from it.

FOSTER: OK, Jens Nordvig, thank you very much indeed for joining us from Nomura.

Well, more aftershocks, more frayed nerves. Japan's benchmark stock index struggles after Wednesday's rebound as well. The government says to say calm. You will also see here, what a top strategist thinks.


FOSTER: Rattled nerves sent stocks in Japan back into the red on Thursday. The Nikkei lost almost 1.5 percent in the session, one day after a 6 percent rebound. Since Friday, when Japan's disaster nightmare began, it stock benchmark has plunged 14 percent. Early on Thursday CNN asked a senior executive officer of the Tokyo stock exchange if foreign investment firms stopped trading, would he consider shutting the exchange?


TOMOYOSHI URANISHI, SR. EXECUTIVE OFFICER, TOKYO STOCK EXCHANGE: Domestic individuals investors are a little bit, sort of, panicked, but the foreign institutional investors is very positive to buy the stocks in Tokyo market. So, if the foreign investors power (ph) to buy is getting better, so I think tomorrow's stock prices can be expected to rise. (END VIDEO CLIP)

FOSTER: Well, the Japanese government says it is keeping a close eye on the markets, but would not comment on further possible currency intervention. The big talk today, of course, as Japan's economy minister is playing down the potential economic damage from this disaster. Kauro Yosano insists that neither Japan's stock markets nor its currency warrant emergency G7 action. Yosano says Tokyo is looking for moral support.

Japan's finance minister says he's closely watching any and all market moves. Yoshihiko Noda says speculators may be behind the spike in the yen, and the yen's record strength could make Japan's exports more expensive, creating problems for the recovery of the world's third largest economy.

Bank of Japan Governor Masaaki Shirakawa will join the G7 talks. The Bank of Japan has already pumped $400 billion into the financial system in four days. The BOJ is trying to calm the frayed financial markets amid Japan's ongoing disaster.

So, is Japan doing enough, really, to calm the markets? I put that question to Seijiro Takeshita; he is senior strategist at Mizuho International, here in London. He joins me now.

Thanks for joining me, Seijiro. Obviously government ministers have to talk up the economy, don't they? But are they being realistic right now?

SEIJIRO TAKESHITA, SR. STRATEGIST, MIZUHO INTERNATIONAL: Well, I think it is very difficult to assess or re-assess anything at this moment. But it is quite true that in the past we have clawed ourselves back quite strongly. As far as production as a concern, yes I think it will take three, four, five, maybe six months of clawing back. But most of the corporations will be able to make up for the loss.

I think the bigger consequence probably will be seen on the energy loss. Especially, because of this Fukushima plant problem that we are having which procures 20 percent of the electricity to the Tokyo area. And there could be various knock on affects on the production relating to the Tokyo area. Not that basically, probably will have graver consequences.

FOSTER: So how are you pricing this into the market? We get the sense that there is some sense of panic, at least uncertainty in the markets. They don't which way to go. How to price it.

TAKESHITA: Basically I do think that today's market, I can see there was some rationale that started to kick in. For example, we will be seeing quite a lot of Keynesian type of growth in the North Seas of Japan, which already had a very low multiplier to start out with, so that would help. And as you reported earlier, strong-at this point would help considering procurement of basic raw materials it would be a lot easier for us. And there are many diversified international conglomerates that would be, like I said, would be able to claw itself back fairly quickly.

But, again, there still is a lot of ambiguity, including private (UNINTELLIGIBLE), and the sentiment of the people, as this is going to leave a very, very deep scare among people's minds.

FOSTER: And things aren't being helped, are they, by the speculators? Who seem to be at work, to some extent, effectively cashing in on this disaster. To what extent is the yen and the stock market being affected by that?

TAKESHITA: Well, at this point, I think Bank of Japan's first aim is certainly is not to cope with the yen, which is almost a scary thing to say, but basically like you say, it soothes down the market by pumping enough liquidity into the domestic market. But obviously, I think the corporations at this point is not screaming for help, but obviously, they will eventually put pressure if this persists. Obviously, most of these companies would not be able to survive at this rate. Even the most conservative Japanese exporters would have their rates at 80 yen to $1, so obviously, this is hurting them as we speak.

FOSTER: OK, Seijiro, thank you very much indeed for joining us with that.

Now, in a few minutes we take you back, live to Japan, as military helicopters try to dump water to cool the damaged reactors. Radiation levels are still high at the Fukushima plant. We will tell you, and show you, what Japan and the world are doing right now amid this devastation.



UNIDENTIFIED FEMALE: Emergency earthquake information, and people and residents in Chiba Prefecture, Ibaraki Prefecture, Saito Prefecture and Tokyo, please be careful and we are now feeling a slight shock-


FOSTER: Well, you are seeing pictures there of the chief area near greater Tokyo where a magnitude of 5.8 quake, on the Japanese scale, shook residents and rattled nerves only hours ago. Since Friday's initial monster quake Japan has endured numerous aftershocks and earthquakes with a magnitude of 6.0, or greater. That is when seismologists start defining a quake as strong.

It is getting on to 20 past 3:00 in the morning, in Japan, and workers are preparing to face another day battling to bring a nuclear accident under control. Our Stan Grant is in Tokyo and he joins me now, with the very latest.

What is the latest assessment there, Stan?

STAN GRANT, CNN SENIOR INTERNATIONAL CORRESPONDENT: Yes, they have been working during the nighttime hours here, Max, to try to establish an external source of power. What they are trying to do here is get some generators hooked up to be able to get the cooling system working again in the reactors.

Now, of course, this all started with a power outage caused by the tsunami. It took the power out from the plant and then the back up power system didn't work and then we have had the problem with the reactors ever since. So, if they can get those generators going, if they can get the cooling system working again. They are hoping that that gives them a greater chance to bring this whole situation under control. Still a long way off, though. As you were pointing out before, they have been relying on area water bombing today, from helicopters and also using hoses off the back of trucks to pump water into the reactors.

Officials here saying they are not sure how successful yet, that has been. But they are going to try to continue that process throughout the rest of today. There is still concern over a couple of the reactors, particularly Nos. 3 and 4; and 4 has a pool of water in there with spent fuel rods. Now the United States and Japan has have a difference of opinion over this. The U.S. is concerned that those rods may be exposed and that is what led to spikes in radiation. Japanese officials, though, are saying there is water in the pool. But again, they are not quite sure how much, Max.

FOSTER: We are just watching there, Stan, the images of this water bombing. And I'm no expert, but it strikes me that it is quite a random approach. What are the public making of these efforts? It does seem like a certain level of desperation, whilst the government is saying it is in control.

GRANT: Yes, it is really interesting isn't it? When they started pumping seawater into the reactors that was described as a desperate measure, now they are dropping water from, you know, a 100 feet in the air. It is certainly looks like a very, very difficult target indeed. And that is why the officials here have been describing this-they have been able to say that they are not sure how successful this has been.

So, yes, it is a very, very difficult-very difficult task but what else can you do, Max, they have sort of almost exhausted all of their options right now. So, what they need to do is they need to feed water into these reactors to try to keep the water level at a certain height, so that they can bring down the heat of the reactors. Everything else has failed so far, and it hasn't been helped by the fires and explosions and everything else they have had to deal with. Yet, this is what they've got. They can keep the water pumping in there. They are going to keep trying it again throughout the rest of the day and relying on this back up power supply to give them a hand, Max.

FOSTER: And how are people dealing with this? I presume they are moving further and further away from the area, aren't they?

GRANT: Yes, 200,000 people have been evacuated from immediate vicinity there. That is the 20 kilometer no-go zone. And people outside of that have been making their own decisions. And I can tell you here, in Tokyo, long lines at the immigration department, people seeking reentry visas, so they can leave and perhaps come back at a later date. You go to the airport, long queues there, as well. You speak to people there, particularly foreigners, who have these options of going somewhere else, and they say they just don't trust the information that they are getting. We know we hear the assurances from the government about the radiation level and scientists agree that at the levels that we are seeing it is not going to be dangerous to the population at large-right now. And people are saying it is the "what if?" And the "what if?" has people scared and that is why many people are deciding to just get out next.

FOSTER: And how are they coping with these power outages? I notice some lights behind you?

GRANT: Yes, there are still lights on here. These are rolling outages. Between three to six hours now it is going to affect about 45 million people across the country. It is going to continue for the rest of this month and they will reassess next month. But interestingly here, in Tokyo, it is very, very cold. You have seen the snow up north, and that wind is coming off. And that has caused a real drain on the power supply here. At one point, though, it was up to 98 percent of the supply. So there was a warning from the power company for people to ease off a bit, try to conserve some energy. They are saying 20 percent of the metro train routes have to be pulled back. And now the companies are having to conserve their power as well, because that could trigger a black out in the city, Max.

FOSTER: Stan Grant, thank you very much indeed, for joining us from Tokyo.

CNN is launching a new high-tech way for smart phone users around the world to take immediate action to help the disaster victims over there in Japan. Throughout our coverage we will show you special black and white codes, which you can see on our screen there. If you scan this image with your smart phone, it loads our "Impact Your World" web site automatically. No typing required. There you will find links to charities that are helping disaster victims in Japan. We'll air this code throughout the day on CNN. So, keep your smart phones handy if you have one.

Airbus, meanwhile, is facing preliminary manslaughter charges over the crash of an Air France jet. That means a formal investigation will now take place; 228 people died when the plane crashed into the Atlantic Ocean in 2009. Jim Bittermann joins us now from Paris.

And the investigation, so far, but the very idea of it is pretty damning isn't it?

JIM BITTERMANN, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, it is indeed, Max. I think that shows a little bit of the animosity that still exists between the relatives of the victims and the companies involved, both Airbus and Air France. They are really upset that there has not been more done to find out exactly why this plane went down.

It remains one of the biggest mysteries of aviation history, here, why the plane went down in the middle of a thunderstorm. There are a lot of people who believe that it is because of the pitot tubes, these tubes on the Airbus that were frozen over. And there are some accusation that Airbus knew there was a problem with freezing on these pitot tubes as early as 2002.

And as a consequence that is probably going to be the basis of the judge's investigation. Now this same judge has also indicated to journalists, this afternoon, that she is going to bring Air France into court tomorrow. She is not exactly saying what is going to happen, whether Air France, like Airbus, be told that they are now under investigation with the possibility of involuntary manslaughter charges being filed. This is under investigation, it means they are one step short of actually filing charges.

And just coincidentally, Max, another thing that is happening involving the crash is that tomorrow a renewed search effort, this would be the fourth search effort, is going to kick off. It will be four months of searches in the middle of the Atlantic, trying once again to find any sign of wreckage. They only recovered about 3 percent of that airplane in the search right after the crash, Max.

FOSTER: As you say, a lot of pressure coming from the families of the victims. What have they learnt, firmly, about what happened on that day?

BITTERMANN: Well, from the coded messages that were received by Air France, basically as the plane was running into difficulty, there was a clear indication that there were problems with the air speed indicators. That those problems lead to the automatic pilot being turned off and a number of a series of events that indicated the plane basically went out of control. More than that, though, isn't clear. And one of the contentions by both the Airbus and Air France is that their crews were trained to deal with this kind of a situation. Whether there were other factors involved is what Airbus and Air France would like to know. And they are, by the way, paying for this renewed investigation that is going to start tomorrow, Max.

FOSTER: OK, Jim, thank you very much indeed for joining us from Paris. We'll hear from you about those developments tomorrow.

Coming up, Bahrain sees itself as a business hub of the Middle East, but following the government crackdown does that reputation now lie in tatters. Join us after the break with a look at that.


FOSTER: Welcome back. I'm Max Foster. You are watching QUEST MEANS BUSINESS. Let's check the headlines this hour.


FOSTER: The death toll is rising all the time, as search and rescue operations continue in the freezing weather. More than 5,600 people are now confirmed dead. More than 9,500 are missing. Meanwhile, many people are fleeing Tokyo out of concerns over the nuclear emergency.

Libyan troops are closing in on rebels in the east who are trying to topple Moammar Gadhafi's regime. Opposition sources tell CNN pro-Gadhafi troops have taken control of the east and the west gates of Ajdabiya, but rebels are still fighting to hold the city's center.

With time running out, the UN Security Council is again debating the possibility of military intervention in Libya. So far, there's no consensus. But the circumstances have changed and the situation is certainly more urgent now.

CNN's senior UN correspondent, Richard Roth, is following the discussions at the United Nations.

How are things looking in these final hours of this latest debate, at least?

RICHARD ROTH, CNN SENIOR UNITED NATIONS CORRESPONDENT: There's going to be a vote. This resolution may, indeed, pass. One diplomat said it could be a close vote, but no vetoes are expected. This resolution is going to establish, if, indeed, passed, a no fly zone and more, potentially, regarding Libya and the government of Colonel Gadhafi.

Security Council ambassadors came in several hours ago, into UN headquarters. And then they were behind closed doors for a while, discussing -- updating this resolution text.

Now, the -- under this resolution, a no fly ban will, indeed, come into existence should the resolution pass in about three-and-a-half hours, when the vote takes place.

Under this resolution, there's wording that the ban would be enforced by all necessary measures. One Security Council diplomat told me that this means, potentially, airstrikes or anything that would, quote, "stop the slaughter" of the Libyan civilians by the government of Colonel Gadhafi.

In Washington today, on Capitol Hill, a senior U.S. political official also ruled out that it would just be a no fly zone established.


WILLIAM BURNS, U.S. UNDERSECRETARY OF STATE FOR POLITICAL AFFAIRS: We're presenting, along with the Lebanese, the British, French, other partners in the Council, measures that include a no fly zone but could go beyond it. And I -- I can't, in this session, since the debate is going on in the Security Council right now, go into a lot of detail about that, but there are measures short of boots on the ground that could be taken by the international community, including active air participation, to address some of the real very -- the very real dangers that you mentioned.


ROTH: The main name of the game here is protection of civilians. That's how the French, leaders in the fight for this resolution, the Lebanese and the United States, that's how they're getting votes that they think will be enough to put -- pass this resolution.

The French ambassador says he knows of one abstention, maybe more, but no vetoes so far from any permanent member of the Council.

This resolution, Max, also does state that, yes, there will be a no fly zone and perhaps more, but, quote, "It would exclude any occupation force."

That language, no doubt, specifically put in to assuage any fears that we're headed for another Iraq situation, which did not go well at the Security Council in 2002 and 03 -- Max.

FOSTER: OK. Very interesting.

Richard, thank you very much, indeed, for that.

And we'll be watching that, of course, as the resolute comes in of the vote.

Bahrain, meanwhile, has been accused of using excessive force by Amnesty International. The human rights group says security forces have been using shotguns, tear gas, rubber bullets to subdue anti-government protesters who are demanding more democratic rights. CNN can't confirm the authenticity of this video, which appeared on YouTube. Opposition sources say it shows security forces near Pearl Roundabout in the Bahraini capital of Manama.

For the latest developments in Bahrain, let's bring in CNN's Leone Lakhani.

And she joins me now from the capital.

What's going on there now -- Leone?

LEONE LAKHANI, CNN CORRESPONDENT: Max, just over 24 hours ago, it was a different picture over here. There was gunfire, clashes heard around the capital. But today it's pretty calm. It's pretty quiet. We are under curfew here, 4:00 p.m. to 4:00 a.m. in the area that we are in. In the other areas, it's a shorter curfew, from 8:00 p.m. to 4:00 a.m..

But it's generally been pretty quiet today. We haven't heard any gunfire. We haven't really heard any clashes around the city. And some of the main roads have been reopened. The -- the main road in front of that Pearl Roundabout, that focal point, was reopened today. The Roundabout itself has been cleaned up overnight, overnight yesterday. And everything looks pretty normal.

It's just that people are still erring on the side of caution. There are still checkpoints around the city, tanks and military personnel, security forces around the city. People are generally staying home. They don't really want to be out on the streets. It's a weekend in Bahrain, where you would normally have a bustling Manama City. But it's been very, very quiet and pretty empty streets across the city all day -- Max.

FOSTER: Leone, thank you very much, indeed, for that.

Well, before this month, the long protests began. Bahrain prides itself on being business friendly. A large number of multinational corporations have set up offices there, among them, Citibank, HSBC, Coca- Cola, Kraft.

But following a three month state of emergency imposed on Tuesday, most have shut up shop and told staff to leave. Many of the expatriate workers in the kingdom have now been evacuated to nearby Dubai.

Standard Chartered and HSBC closed all their branches in Bahrain on Wednesday, but both banks say a few of them have now been reopened.

Well, with the turmoil in Bahrain and the nuclear crisis in Japan, more and more companies are now choosing to evacuate their staff until the situation improves.

So what should businesses be doing?

It's a very big question.

For more, I'm joined by Tommy Helsby.

He's chairman of the risk management company, Kroll Eurasia.

thank you very much, indeed, for joining us.


FOSTER: If you can, try to express how companies are feeling at this time, because it's so unsettling for them, isn't it?

HELSBY: I think they're worried. And they worried partly because they -- the -- the best made plans that they put in place aren't working out. People are beginning to realize that -- that the -- the careful forecasts and the analysis that they've done doesn't quite work.

And Nassen Pellet (ph), the -- the academic in New York, talks about this as black swan events, things that you simply weren't expecting.

FOSTER: How can you prepare for something that you can't possibly predict, an earthquake followed by the tsunami, for example?

Or an insurrection in a country -- in a country?

HELSBY: I think one of the things that you need to do is to make your business more resilient. You need to be prepared to deal with problems, not specific problems, but you need to be more capable of adapting quickly to unexpected circumstances.

FOSTER: So if you have to move operations to a backup center, for example...


HELSBY: That's a classic thing that you need to be able to do. But you think about what -- what you do with a building in earthquakes. Rather than having a rigid building, you make it flexible, so that rather than it standing up until it topples over, it flexes. And businesses need to be able to flex. So they need to be able to think about how to prepare for the unexpected.

FOSTER: There is a sense of panic when a company suddenly pulls out of a country. But that, in a way, is their only option, isn't it, because the staff are so worried. So they have to do that for the staff, whether or not it's the right thing for the company?

HELSBY: Absolutely. I think people need to be prepared. But I think one of the things that people need to do is put plans in in advance, what they're talking about doing now in -- in Tokyo is move out the non- essential. Don't -- you know, there are people who need to stay. And most likely, there will be no problem in Tokyo.

But for a sense of security and comfort, if your -- if your immediate family has moved out of -- of Tokyo -- my wife is in Japan at the moment. She's not in Tokyo, but members of her family have come down to Kobe (ph) and are staying with her.

And that gives them -- it gives them and their husbands who are still at work the comfort that they're out of danger.

FOSTER: I can say -- if you assume that things aren't going to get much worse in Japan, how much longer do you think until businesses can go back there confidential and get up and running again properly?

HELSBY: Well, an awful lot depends on how circumstances unfold.


HELSBY: But -- but when you think about the disasters that have occurred, the -- the ability of life to move on and to adapt to the new situation is part of what separates the -- the good businesses from the bad. And I think that -- that you see that across the world.

FOSTER: OK, Tommy Helsby.

Thank you very much, indeed, for joining us.

At the Nissan factory here in England, there's a growing fear of a shortage of vital components shipped from Japan. After the break, one of the company's top executives will tell us how the car makers are battling the current crisis.


FOSTER: Well, the Japan story is affecting not just Japan, of course, it's affecting the world.

And we're going to head to Wall Street now, where stocks are reversing their steep declines of the past few days, easing worries about Japan's economy is one of the factors helping sentiment.

Alison is at the New York Stock Exchange.

Is this because they're -- they're getting a proper grasp there of the -- the cost of all of this to the world?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: Yes, I think that investors are telling me that, you know, they're more at ease today. Some of their questions about how to fix the problems at that nuclear plant were kind of answered overnight.

Also, what's factoring into the rally that we're having now on the Dow and the other major averages, is investors are hoping a conference call in just a few hours between the Group of Seven finance leaders will wind up calming the volatility in the markets that we've seen this week. And the problem is that there is going to be some sort of policy action taken, whether it's monetary, fiscal or otherwise, to help shore up Japan's economy.

Something else that's helping to boost the markets today, we got some upbeat economic figures here in the U.S. You know what, ever since the earthquake and the crisis in the Mideast, investors have kind of put domestic economic news kind of on the back burner. But today, we got a positive report on the job market, keeping the stocks in the green. We found out that weekly unemployment claims fell by 16,000 last week, down to 385,000.

It's better than what was expected. We also got a strong manufacturing report, as well, and a separate reading on inflation, showing that prices at the consumer level were a little hot because of food and energy prices, but overall, the underlying inflation pressures remained in check.

So it's that domestic data that is also helping to keep markets in the green today -- Max.

FOSTER: OK, Alison, thank you very much, indeed, from New York, of course.

And the head of the UN's nuclear watchdog is on his way to Japan, meanwhile, top visit the devastated Fukushima plant.

Senior international correspondent, Matthew Chance, joins us from Vienna, Austria with more on an emergency fact-finding mission by the chief of the International Atomic Energy Agency -- and, Matthew, have you learned more via the IAEA about what's going on in the plant?

MATTHEW CHANCE, CNN SENIOR INTERNATIONAL CORRESPONDENT: Well, of course, the director general hasn't arrived organized yet in Japan. He's expected to do that in the -- in the hours ahead. He just left this afternoon on that fact-finding mission.

There's been a lot of criticism, of course, leveled at the IAEA, the UN's nuclear watchdog agency, that it hasn't intervened sooner in this nuclear crisis, that it hasn't been able to, you know, help in, perhaps, sending experts into the field.

It's defended itself by saying that's not it's role, by saying it clearly responded to requests of member state countries, member states, in this case, of course, Japan.

But what -- Yukio Amano is, of course, himself a Japanese national has gone. He's gone on this fact-finding mission. He's going to be meeting with Japanese government officials, nuclear officials, as well, and trying to assess how better the UN's nuclear watchdog agency can help in dealing with this crisis in terms of the events on the ground around Fukushima and the various reactors there where there are still problems.

We've had, obviously, confirmation from UN -- IAEA officials here that efforts are still continuing to try and douse those reactor cores with water, to try and bring the temperature of them down.

It was described here, the situation, as serious still, but no more serious than, for instance, it was yesterday. And so some people have taken some reassurance from that.

Radiation monitoring, according to the IAEA, has been continuing in 47 Japanese cities because there's a big fear that radiation from these Fukushima reactors could be spreading or is spreading around Japan. But Tokyo, we're told here in Vienna, has no change in radiation levels. So that may come as some solace to the residents of the -- the Japanese capital -- Max.

FOSTER: Yes, Matthew, I'm just wondering what is IAEA's role in this if they feel that the Japanese aren't handling it properly?

Can they step in and take over or is that -- am I being a bit too simplistic?

CHANCE: No, well, there are lots of calls, actually, for them to have those kinds of powers, to be able to intervene, to be able to take over nuclear crises, to make sure that the best possible practices are employed.

But in the meantime the fact is, at the moment, they don't have that mandate. They can merely do what their member states ask them to do. They can't, you know, for instance, engage in inspections without the invitation of member states. They can't impose regulations on civilian nuclear industries of -- of member states.

And so, in that sense, their mandate, when it comes to civilian nuclear technology, is much more toothless than it is compared to, for instance, nuclear weapons, where they can seek, you know, action from the Security Council, resolutions from the Security Council. It can mean they put in (INAUDIBLE) and they put inspectors on the ground and they can demand access to various facilities. And so there are calls now, in light of this -- this latest unfolding disaster in Japan, for the -- the mandate of the IAEA to be strengthened.

FOSTER: OK, Matthew, thank you very much, indeed.

We'll wait to see what they find when they get on the ground.

For rescue workers, it's the cold that's causing a real problem in the quake-stricken regions of Japan -- and, Pedram, I gather there's going to be more fierce weather over the weekend for them to contend with.

PEDRAM JAVAHERI, CNN METEOROLOGIST: Yes, you know, it's not necessarily just the conditions from above. Now we're talking about conditions down below when it comes to some flooding concerns associated with tides out there that we'll speak of momentarily.

But the cold temperature is certainly going to be a concern over the next couple of days here, before we begin to warm it up, above seasonal averages, believe it or not. But this picture here comes out of Sanan -- Karasuma out there, showing you really how cold it is even if your indoors. The wind chills, when your exposed to the elements out there, as cold as minus 12 reported on Thursday in Sendai. Around Fukushima, minus 11. Again, inland, some of the observation points recording temperatures at minus 12 degrees, what it feels like to the human skin outside. And, of course, we know how many people are displaced. And we know the rescue operations are taking place. And the officials there doing whatever they can, amongst all the white, all the snow there, making it very difficult to discern, you know, what's going on out there, when -- when the eye looks out toward the snowy surfaces.

But, fortunately, the conditions are going to improve. We still have that offshore flow, so any sort of a probable -- possible nuclear concerns, those are going to be remaining offshore or pushed offshore. But high pressure from the south, that begins to work its way a little more toward the north and also the west. And as it does, you begin to see a little more of a southerly flow. That's a warmer flow right there. So the temperatures, one, going to get a little warmer, two, going to begin to see kind of these bad conditions also clearing up a little bit.

This is sunshine returning to the forecast, as we head toward a Saturday and Sunday.

But new concern, Max.

Take a look at this. The earthquake, of course, we know it's moved some of the areas within Honshu in Japan about 2.5 or so meters to the east. That's caused some of the coastal regions to sink. A lot of elevation change right along the immediate coastal regions. So the highs that we've had, they've had a tendency to go a little farther inland because of the displacement of the beaches being washed a little farther inland from the quake.

And, of course, Japan moving a little to the east. So you put it all together and that's an increased risk rate there for flooding during the normal high tides. We know that we have a high tide approaching here, going on into Saturday. And that's going to cause problems out there.

And the Japan Meteorological Agency actually issuing tidal surge advisories along the coastal regions of those four prefectures right along the northern coast there of Japan, because some flooding concerns are certainly going to remain there, as the water has had those -- some measurements here observing, we're about five or so meters above normal. And we are approaching a full moon. It is going to be the closest approach a full moon has made to the earth since 1993.

So, certainly, the tidal implications on this, Max, are going to be serious and water working its way into some of the areas even inland, a little bit, is certainly a possibility, as well, as we head into the weekend.

FOSTER: OK, Pedram.

Thank you very much, indeed, for that.


FOSTER: Now, tonight on QUEST MEANS BUSINESS, we've shown you how a surging yen can impact exports. One company that relies on a weaker yen is Nissan.

Earlier, Monita Rajpal asked Nissan's senior vice president, Andy Palmer, how exactly the current crisis is affecting his company's bottom line.


ANDY PALMER, SENIOR VICE PRESIDENT, NISSAN: I mean, obviously, it's a -- it's a tough time for the -- over -- over the past week or so. Clearly, our priority at Nissan has been to secure, first and foremost, the -- the safety of all of our employees. And we have rather some good news there.

After that, of course, we've been trying to make sure that our supply trains are up and running and that we've been able to produce cars.

The good news is today, we managed to produce our first cars out of Kyushu. We -- we basically, of course, are producing from the stock that we have. And the challenges for us right now are making sure that our supply chain is in -- is in good shape. And that's -- that's occupying every -- every waking hour right now.

MONITA RAJPAL, CNN CORRESPONDENT: What does that -- tell me a little bit about what that entails in terms of the supply train?

You get -- you get some of the -- the supplies, also, from China.

But in terms of getting these -- these parts into the country, obviously, the whole country is in an -- in an emergency situation right now. Getting back -- getting all of that production back into normal mode must be extremely difficult.

PALMER: It is. It is. Speaking for Nissan, we -- we've created a, if you like, an emergency bunker on the eighth floor of our -- of our building. We've got hundreds of people working there day in, day out, 24- 7, basically contacting with suppliers to -- to open those -- those supply chains up, see what kind of capability they have and obviously making sure that our factories are capable of producing cars.

Now, as I say, the good news is that we -- we managed to start production in Kyushu, at two of our plants in Kyushu today. And we'll -- there will be another four go up on Sunday.

Now, the problem for us is, is securing continuity of supply and, you know, there's a -- there's a lot of issues. Some of our suppliers have been hit by the tsunami. It gives -- it gives us some issues. And some of our supplies even exist within the nuclear exclusion zone.

So, obviously, we're working with them to see whether we can take parts from our -- from another location, can we bring parts into the country from other locations.

It's -- it's tough but it's -- it's what -- it's what Nissan and -- and the Japanese car industry does best.

RAJPAL: What kind of impact is this going to have on your output in the long run?

PALMER: In the long run, hopefully -- hopefully nothing. In the short run, of course, it's -- it's creating those problems day by day. And what -- what kind of impact that will have, it really, really depends, over the next few days, how quickly we can that -- that supply chain up.

Our factories bar -- bar two. All of the car factories -- all of the 70 factories in Japan, bar two, will be ready to run by this Sunday.

But as I say, basically, it's in the supply chain that supplies them, which is -- which is our greatest challenge, number one.

Of course, number two is making sure we can get our people to the factories. That -- that relies on a transportation system.

And number three is making sure that we've got electrical supplies, which, obviously, we're working with the government to try to protect that supply.


FOSTER: Well, we've just had some news into CNN, actually.

GM says it's facing a parts shortage due to the disaster in Japan. It's suspending production at its assembly line in Shreveport in Louisiana for a week. G.M. says it will restart operations as soon as possible. The automaker says it has enough vehicles to meet customer demand, so reassuring its drivers.

And the world's biggest container shipping company has suspended services to three of Japan's tsunami hit ports. Maersk Lines says services to and from Sendai, Hashinoi (ph) and Onahama are stopped for the time being because of Japan's ongoing disaster.

The U.S. expects to send less food to Japan simply because hard-hit areas will be impossible to get to. Maersk also warns that services to Tokyo could be delayed.

CNN's Gary Tuchman has seen for himself one of the ports affected.

GARY TUCHMAN, CNN CORRESPONDENT: The snow is coming down again in this northeastern port city of Hachinohe in Japan, one of the most important port cities in the country. And look what the tsunami did.

This huge fishing vessel, about 40 meters long, 130 feet. It weighs 180,000 kilos, 400,000 pounds -- just tossed like a toy on its side.

The harbor of the port, right over here, the Pacific Ocean, farther in that direction. This is one of six ships, maybe more -- the six ships that we see tossed out from the tsunami. Here's another one just tossed out a little bit out of the harbor. That gives you an idea of the power of the tsunami.

More problematic, though, for this port is that there are an unknown number of ships that have sunk. And because the ships are under the water in the harbor, they've had to close this entire port.

There's a large fish market here. Not only is this an important port city, it is apparently the number one destination for fish that comes into Japan.

So the economy is suffering here. This area is suffering with deaths, with people missing. Thousands of people still in shelters. A very difficult and trying time for people of northeastern Japan.

This is Gary Tuchman, CNN, in Japan


FOSTER: Well, with supply chains disrupted, shortages have become an everyday reality in Japan. Well, the Sendai -- the Sendai Market has a serious food shortage close to the disaster zone. Supplies are hard to come by and there are long lines of people waiting to buy vegetables.

And it's not just Sendai with supply problems. The residents of Central Tokyo are seeing hardships, too, as Japanese public broadcaster LHK reporter Iya Chida (ph) tells us.


IYA CHIDA, LHK CORRESPONDENT (voice-over): People line up at this supermarket in Central Tokyo, waiting for the store to open. Many of them are here to buy rice, bread, instant noodles and canned foods -- items that are non-perishable. They sell out in 30 minutes.

UNIDENTIFIED MALE: I come here every day to stock up on food that won't spoil right away.

UNIDENTIFIED FEMALE: This store has more stock than others. You can't buy anything at the other stores.

CHIDA: The supermarket can only stock 60 percent of their normal amount due to delays in delivery. Demand far exceeds supply.

UNIDENTIFIED MALE (through translator): We cannot provide sufficient amounts. It's hard to see customers looking troubled.

CHIDA: Gasoline and other oil products are also in high demand. Many gasoline stations have no choice but to close shop while they await the next shipment. But no one knows when that will be.

UNIDENTIFIED MALE (through translator): We don't know when we'll get the next supply. As soon as we get a delivery, we start selling gasoline. And when it's all gone, we close up the station.

CHIDA: These cars are waiting for one of the few gasoline stations that are open. Some believe this is aggravating the consumers' emotional state.

UNIDENTIFIED MALE (through translator): I've been waiting for about 40 minutes. I need gasoline for work.

UNIDENTIFIED FEMALE (through translator): I want to fill up the tank just in case something happens at home.

CHIDA: The Petroleum Association of Japan says after the disaster, refining capacity has fallen to 3.1 million barrels a day. It's considered a minor shortfall from demand of about 3.3 barrels during normal times. The Association says three refineries have been suspending operations due to safety checks, but expects they will reopen by the end of next week. In that case, output will exceed normal demand by 300,000 barrels.

Meanwhile, consumers in Tokyo are being urged not to over stock on food and gasoline.

Iya Chida (ph), NHK World.


FOSTER: What's been going on in Japan affecting the markets around the world.

Let's check on Wall Street today.

Things are stabilizing, actually, after some falls earlier in the week. The market actually up. The Dow Jones Industrial Average up 1.26 percent today.

European stocks staged a strong recovery earlier on, after a sell-off seen in the past few days. Traders say investors moved back in, lifted by hopes that the G-7 will step in to calm the markets. We find out about that soon.

Some were also tempted back, attracted by the lower prices. The insurers, the most beaten down sector in the wake of Japan's crisis, were among the day's biggest gainers, would you believe?

That is it from us.

I'm Max Foster in London.

Hala Gorani is just ahead with more on Japan.

Stay with us on CNN.