Despite some optimism that Japan would bounce back quickly, there are now signs the recovery will take longer and the impact on the economy will be greater than expected.
All those confident forecasts and comparisons with the March 11 quake and tsunami with the 1995 quake in Kobe are starting to look a bit thin.
A 6.1 magnitude quake yesterday saw a brief tsunami alert off the northeast coast of Japan, further adding to fears.
The daily battle to control the problems at the Fukushima reactor complex goes on, and on balance you’d be optimistic to say that the situation has improved. That it hasn’t worsened into a full scale crisis with reactor cores melting down is a small mercy.
In the past two days, high radioactive density detected in 3 turbine buildings may further delay work to restore the cooling systems for the overheated fuel rods.
Water again leaked from one of the stricken reactors and shares in Tepco (Tokyo Electric Power) fell sharply and are now down 67% since March 11 and looking very weak.
There are reports radioactive iodine is seeping from the damaged nuclear complex and may be making its way into seawater farther north of the plant than previously thought.
Japan’s chief Cabinet officer and spokesmen in the crisis, Yukio Edano said yesterday the highly radioactive water detected at the No. 2 reactor of the Fukushima Daiichi nuclear power plant was due to a partial meltdown of fuel rods there.
These and other reports of problems with high radiation levels saw another down day on the Japanese stockmarket and across Asia, including Australia.
The Nikkei fell 1.1% and the Australian market was off 0.2%. But the Australian dollar hit a new high of $US1.0314 overnight before falling back under $US1.03.
The tsunami has been one of the reasons for the fraying comparisons with the Kobe disaster. The 9 magnitude quake on Match 11 didn’t cause much damage, the giant waves did and the scale of the destruction was much greater than seen in Kobe in that the infrastructure of the coast northeast of Tokyo has been wiped out, or so badly damaged that it will have to be completely rebuilt.
That will take time, money (of which Japan can afford) and a lot more political will from government and business that we have seen in Japan for the past decade.
But the big, big difference with the Kobe quake has been the Fukushima nuclear power station disaster (debacle might be more accurate), which has triggered radiation alerts and cut power supplies to a much bigger area than happened in Kobe.
The disaster as has seen Japanese food products banned across Asia (Singapore, China, Australia for example) and in the US and parts of Europe, while inside Japan, sales of a range of products from in and around Fukushima are banned.
At the weekend Singapore extended its ban to some foods from in and around Tokyo in the Kanto region.
Tohoku Electric Power said all its nuclear reactors at the Onagawa and the Higashi-dori plants (further north than Fukushima) are safe and are not in operation at present.
It said that at the time of the March 11 earthquake, the 3 reactors at the Onagawa plant automatically stopped and the Higashi-dori plant was undergoing a regular inspection.
The stories and scares about drinking water and, seawater contamination, food quality concerns, radiation leaks, workers being rushed to hospital, not to mention the continuing power shortages (now projected to continue into the Japanese summer) mean if anything confidence remains battered, especially among Japanese consumers.
And of all the problems flowing from the March 11 disasters, it is the combination of the radiation scares, loss of confidence and power shortages that look likely to slow the Japanese economy for months to come.
The production losses in cars, electronics, steel, other metal processing, beer, agriculture and power will cut industrial production figures for March, April and probably May.
That could see the economy lurch into a nasty contraction in the June quarter after March drags first quarter down.
A lot of the comparisons point to the smaller share of the Japanese economy in the damaged areas from this quake, against the impact of the 1995 quake on Kobe and its larger share.
But those comparisons ignore the damage being caused on a wider scale in and around Tokyo, which is the economic centre of Japan.
The cuts in power supplies has cut production, the radiation scares have forced residents and foreigners to flee, or cut food purchases, or to binge buy supplies of bottled water.
Tepco cancelled two power cuts for late yesterday in and around Tokyo.
Japanese manufacturers face a cut in summer power supply of about 15% because of the damage done to power stations by the quake and tsunami.
Led by Japanese car companies, there’s talk of rotating factory openings among each other to try and limit the impact of the power cuts.
Carmakers including Toyota and Honda Motor have stopped domestic car assembly for more than two weeks now and Toyota has lost an estimated 140,000 units of production so far.
Toyota started making Prius models yesterday at two plants.
Some estimates claim that if the car parts shortage continues for another six weeks, global car production could be cut by 30% in coming months.
Bloomberg reported that Tepco had capacity to supply 38,500 megawatts of electricity as of March 24 and plans to boost that to 46,500 megawatts by the end of July by buying supply from other utilities and opening closed thermal (oil and coal) plants.
It expects a daily shortage of 8,500 mega
