It’s just on a fortnight since the terrible earthquake, tsunami and nuclear crisis shook confidence in Japan and world markets, and you’d be entitled to think that all is right in the world.
Share prices have bounced back, commodity prices have firmed and risk aversion has again been relegated to the backburner.
But Japan weakened yesterday after early strength.
The Nikkei fell in late trading on reports that higher-than-allowed levels of radioactive iodine had turned up in Tokyo drinking water.
The index fell 1.7% to 9,449.47 after the Tokyo city government warned infants from drinking water.
So we saw yesterday that in Japan there’s no confidence, like there is in offshore markets that the worst is over.
While the situation improved at the Fukushima reactors of Tokyo Electric (Tepco) the region was rocked by five quakes early yesterday, starting at 7 am local time, with the peak rattler one with a 6.0 magnitude.
No damage reports were issued, but it certainly unnerved locals, judging by the media reports.
The government yesterday provided an initial estimate of the cost of up to $US300 billion, much more than most forecasts from the private sector.
And Reuters reported that Japanese banks and financial groups are considering providing emergency loans totalling more than 2 trillion yen ($US25 billion) to Tokyo Electric Power Co. by the end of this month to tide it over and boost electricity supply.
Tokyo and the surrounding area face months of power shortages that could hit 25% in summer, according to other reports yesterday.
Power shortages continue across much of northern Honshu and especially around Tokyo because of the problems at Fukushima and other power plants (mostly nuclear).
Reuters said that lenders including the country’s three megabanks — Mitsubishi UFJ Financial Group Inc., Mizuho Financial Group Inc. and Sumitomo Mitsui Financial Group Inc. — as well as trust banks and insurers, are among those offering the emergency funding to Tepco.
While power has been connected to all six stricken reactors at Fukushima and repairs and other work is underway, the impact of the triple disasters continues to be played out.
Production across the northeast region of the country and in many other parts remains impacted with a long list of companies from Sony to Toyota continuing plant closures, restricted production and other work because of damaged facilities or parts shortages.
That is extending off shore to a growing list of companies and industries elsewhere in Asia and in the US and Europe.
They are not as serious as in Japan, more niggling, but for some Japanese companies, it’s revenue and profit destroying.
Radiation continues to be a problem and Japan’s Prime Minister Naoto Kan yesterday ordered two prefectures affected by radiation leaks from the stricken Fukushima nuclear plant, to stop shipping a range of farm products.
Kan told prefectural governors to halt shipments of green leaf vegetables and broccoli from Fukushima, and untreated milk and parsley from neighbouring Ibaraki.
Public broadcaster NHK said Kan had also told people in those areas not to eat the vegetables, which were found to have abnormal radiation levels because of releases from the nearby crippled nuclear power plant.
Reuters also reported that the US has stopped milk, vegetable and fruit imports from areas near the Fukushima reactors and power plant.
The newsagency said the Food and Drug Administration’s decision to stop imports is likely to be followed by other formal bans.
Australia has also introduced bans, according to media reports Thursday morning.
Morgan Stanley estimated that damage to the northeast, including disruptions to power and distribution systems may see second quarter growth contract by 6% to 12% on an annual basis.
Company plant closures continue. Sony has now has 12 plants closed across Japan (three others have resumed production, such as batteries).
Toyota said all domestic car-assembly will be stopped until March 26 (they were due to restart on Tuesday), while Honda extended its closure at three plants until March 27.
Bloomberg also reported that companies ranging from Fujitsu, to Hitachi, Toshiba Kikkoman, Mitsubishi Motors and Panasonic are maintaining closures at plants impacted by the disasters.
Nissan Motor restarted operations at six factories on Tuesday and Canon has resumed work at three plants in the north, but it had to close a plant at Nagasaki in the south because of component shortages.
Police say 9,199 people have been confirmed dead and nearly 14,000 are missing after the earthquake and tsunami. Around a quarter of a million are in refugee shelters or have left their damaged homes and are staying elsewhere.
A meeting of the Japan cabinet yesterday heard a damage estimate of 15 trillion to 25 trillion yen ($US185-308 billion).
Economics Minister Kaoru Yosano gave the estimate to the meeting. It was leaked to the Nikkei newspaper yesterday morning.
That estimate exceeds the 10 trillion yen damage bill from the Kobe quake in 1995.
The estimate covers damage to roads, homes, factories and other infrastructure but does not include losses in economic activity from planned power outages and the nuclear power plant accident in Fukushima.
The most recent private estimate was on Monday from risk modelling agency RMS which put the total cost to the Japanese economy to between $US200 billion and $US300 billion.
RMS added that only a "minor proportion"
