Japan’s Market Stumbles in Wake of Disaster
Japanese financial markets fell sharply Monday, after the most devastating natural disaster in the country’s history, as eyes at home and abroad turned to its nuclear power industry.
With estimates of more than 10,000 casualties and over $100 billion in damages, investors looked for safe havens until specifics from the worst earthquake and tsunami to strike Japan history became clearer.
Shares of Japanese manufacturers of cars and electronics were among the sharpest decliners, with a number of firms such as Nissan and Sony closing some factories in the wake of the tragedy.
Economist Takuji Okubo said the disaster would eventually see substantial infrastructure investment that would help in Japan’s recovery, but limited energy supplies due to a widening nuclear power plant accident could hamper economic revival.
Okubo says, “I would say the biggest risk is power. If Japan is to lose relatively permanently, say for like a year, 10-20 percent of power generation, I think that would be severely negative for the economy.”
All Japan and the rest of the world are focused on efforts to prevent even greater nuclear catastrophe, after a hydrogen explosion at a reactor of the Fukushima power plant.
Japan-watchers say developments in what is already the world’s worst nuclear accident since Chernobyl over two decades ago will be crucial to any timetable for economic and financial recovery.
Bottom line: Japanese financial markets reopened to heavy losses after the most devastating natural disaster in the country’s history, with eyes on its nuclear power facilities.