As expected Japanese shares were hammered yesterday in the wake of Friday’s quake and tsunami, and the explosions at nuclear reactors at Fukushima on Sunday and yesterday.
And we could have more today. Wall Street fell, a third reactor at Fukushima is having trouble and more concerns about the rising death toll and losses which could top $US100 billion.
Shares in Tokyo fell more than 6%, to be down almost 8% after the 1.7% fall late last Friday afternoon after the quake happened.
The Nikkei ended down 6.2% at 9620.49.
Tokyo Electric Power shares plunged 24% yesterday as more bad news emerged about its stricken Fukushima reactors.
There was an explosion in the Number 3 reactor in the late morning that injured 11 people; then a third reactor, Number 2 at Fukushima Daiichi, began to experience cooling problems and a rise in temperatures.
Last night Japan asked the US and international authorities for help.
The combination of the news meant Tepco shares were the worst performer in the Nikkei index yesterday as investors quit the stock in droves.
The market could fall again today following more the latest worrying news about the stability of the reactors at Fukushima.
Tepco is a real concern, it has a reported $US90 billion in debt and only $US30 billion in equity and some analysts wonder if it can survive without Government support.
Yesterday’s fall was the biggest since December, 2008 when the GFC was in full swing.
The Bank of Japan on Monday made 21,800 billion yen (or $A265 billion)) available to financial institutions in a bid to stabilise markets yesterday.
It is the largest ever liquidity operation by Japan’s central bank which said it would make 15,000 billion yen immediately available and a further 6,800 billion over the next two days in order to deal with an expected rise in demand for funds.
The Bank of Japan attempted to steady nervous markets by flooding the financial system with a record amount of cash and late yesterday revealed that it would expand its asset purchase program (which is quantitative easing) to further support the economy.
That will be doubled to 10,000 billion yen.
It also left unchanged its reasonably optimistic outlook for the economy.
Shares outside Japan rebounded in late trading. Australia reversed big early losses, but South Korea ended higher. The MSCI non-Japan Asia Index rose, thanks to a late rebound outside Japan.
The sell off came as Japanese businesses, especially many manufacturers, already hit by Friday’s earthquake, grappled with power disruptions in and around the greater Tokyo area and to the north east.
Some companies have shut for the day at least, others are switching production to plants further south in Japan.
Toyota Motor Corp said it is suspending production at all domestic factories until tomorrow to re-balance supplies of parts and cars across its countrywide- network of factories.
As well it is adjusting output to take account of the power cuts from Tepco.
Sony has closed six plants in the region and Honda has shut all its car plants across Japan until Sunday.
Other markets in Asia, including Australia were sold off as well.
Stocks saw a post-quake sell-off with carmakers, banks and electronics firms taking a hit on fears for the economy as power shortages prompted rolling blackouts and plants remained closed in quake hit areas, hitting production.
But one sector stood out with big gains, construction related stocks.
Some of the gains included constructor, Shimizu – construction up 18.5%, Daiwa Housing Industries – up 12%. Another constructor, Kajima saw its shares up 37% at one stage and Taiheiyo Cement shares jumped 27%.
(In South Korea, the shares in Posco, the giant steelmaker, jumped more than 6% on expectations it will do better).
The yen briefly surged to 80.60 against the dollar, the highest since November 9, before retreating to 82.15. It rose overnight to around 81.60.
A government warning against the yen rising to high helped send currency lower after it approached the all time low of just over 79 yen to the greenback.
The explosion at the Daiichi No. 3 nuclear plant in Fukushima afternoon battered confidence, especially when they came with a false tsunami warning.
Eleven people were injured in the explosion, although the government said no radioactivity problems were generated by the bang.
The Nikkei index fell 556.06 points shortly after opening to 9,698.37, despite the cash injected by the central bank.
In Tokyo, "bento" box meals and instant noodles are in short supply in convenience stores and supermarkets across the Tokyo region.
Petrol is in short supply across the north east of the country.
Some train services were cancelled and The Tokyo Electric Power Company said suspended the first round of planned power outages that were scheduled for 6:20 AM on Monday.
But rationing was carried out last night resulting in traffic and transport disruptions.
The electricity shortages in the wake of Friday’s massive earthquake were not as severe as initially estimated in the early morning.
But some cuts were reported outside the CBD.
The government urged people in the city to stay home if at all possible to conserve electricity.
At home they were also urged to turn off all non essential power consuming appliances and to cut back on other usage.
The blackouts will see water supplies curtailed across much of Tokyo and northern Japan.
In Tokyo the government of
