Putting a Price Tag on the Japan Quake
Japan’s nuclear crisis remains the focus of the markets. After the biggest two-day fall since 1987 Japanese stocks rallied more than 6 percent on Wednesday.
The Nikkei ended the day up 5.7 percent as some traders decided they may have oversold.
Stocks also rose in Hong Kong but market players remain on edge.
In currencies the yen remains near record lows against the dollar and experts are now saying the quake and nuclear crisis will have a far bigger financial impact than initially thought.
White smoke or steam is said to be rising from the Fukushima nuclear complex now with officials unable to say exactly what’s causing it.
The military are reportedly using helicopters to drop water onto stored nuclear fuel to try and stop it overheating.
But according to local media the first water drop failed after dangerous radiation levels forced the pilots to back off.
It seems the full extent of the disaster in Japan is only now becoming apparent.
Reuters Japan bureau chief Nathan Layne says the already massive cost estimates are likely to rise further.
“Obviously the short-term impact is going to be huge. A huge part of northeast coast of Japan has been devastated by this, the early estimates from analysts and economists is a $180 billion in damages. Of course the crisis is escalating if you throw in the radiation scare and people from overseas are going to stop coming to Japan, the hit on tourism, the obviously the number (of damage costs) could go up from here,” said Layne.
European shares retreated again as markets opened with Portugal’s ratings downgrade a factor alongside the concerns over Japan. The pan-European FTSEurofirst 300 was down half a percent after ending at a 3-1/2 month closing low on Tuesday.
Bottom line: Japan’s devastating earthquake and deepening nuclear crisis could result in losses of up to $200 billion for the world’s third largest economy but the global impact remains hard to gauge five days after a massive tsunami battered the northeast coast.