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Japanese leaders scrambled to calm panicky financial markets Tuesday as a deepening nuclear power crisis looked certain to worsen the economic burden. Economists estimated that recovery and reconstruction costs would total at least $180 billion, or 3 percent of Japan's annual output. Others suggested the cost could soar to 5 percent of GDP. In the face of the country's biggest crisis since World War II, Japanese leaders urged calm as the stock market fell. "Japan's production and the economic power have not fallen. I think the market confusion will calm down shortly," Economics Minister Kaoru Yosano said at a press conference. Markets seemed inclined to prove Kaoru wrong as the Nikkei closed down 10.5 percent, its biggest percentage fall since October 2008 at the height of the financial crisis. More than $600 billion in market value has been wiped off the slate since Friday. The Bank of Japan stepped in to keep the banking system stable for a second day, offering $98 billion in cash if needed. It also lined up a record $183 billion in funds Monday and doubled an asset-buying scheme to support prices. Carmakers, shipbuilders and technology companies worldwide have been working to secure their supply chains after the disaster shut down a large swathe of Japan's production capacity. Prices for key technology components spiked, and global supply disruptions were expected to last for months. Research firm IHS iSuppli said the disaster could result in significant shortages of some electronic parts and lead to big price hikes. Reuters |
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