Japan crisis - the worlds economic outlook?

michaels

BBC version of situation updated today :

http://www.bbc.co.uk/news/world-asia-pacific-13017282

worldtraveller

Japan's economics minister warned on Tuesday that the economic damage from last month's earthquake and tsunami is likely to be worse than initially thought as power shortages will crimp factory output and restrict supply chains.

The more sober assessment came as Japan raised the severity of its nuclear crisis at the Fukushima Daiichi nuclear plant to a level 7 from 5, putting it on par with the Chernobyl nuclear disaster in 1986.

The Bank of Japan governor said the economy was in a "severe state," while central bankers were uncertain when efforts to rebuild the tsunami-ravaged northeast would boost growth, according to minutes from a meeting held three days after a record earthquake struck Japan on March 11.

Reuters

Thrugelmir

worldtraveller wrote: »

Japan's economics minister warned on Tuesday that the economic damage from last month's earthquake and tsunami is likely to be worse than initially thought as power shortages will crimp factory output and restrict supply chains.

The current estimation announced yesterday is that power outages will continue for the next 3-5 years. So people are being asked to cut back on usage of electricity.

michaels

Hmm - electricity usage tends to be a good proxy for GDP - can't help thinking Japanese stocks should have been marked down further. Will also be very interesting to see what the impact is on the global supply chain - generally a reduction in growth and output would be expected to be deflationary on a global scale, this one I am not so sure.

MrEnglish

Another 6 magintude today. 7.1 yesterday. Must be very hard having to evacuate the plant every big aftershock. I wonder how bad things really are inside the reactors?

ninky_2

Japan raises Fukushima to level 7 on the INES scale. Not before time.

http://www.bbc.co.uk/news/world-asia-pacific-13045341

As I've mentioned before, the Chernobyl 'big bang' was in many ways less dangerous than the ongoing multiple fission reactions / meltdowns occurring in Japan.

Generali

michaels wrote: »

Hmm - electricity usage tends to be a good proxy for GDP - can't help thinking Japanese stocks should have been marked down further. Will also be very interesting to see what the impact is on the global supply chain - generally a reduction in growth and output would be expected to be deflationary on a global scale, this one I am not so sure.

This could be inflationary if you're a Keynsian as global supply has reduced while demand has remained the same.

I'm less certain myself. It could be highly demand destroying as workers are laid off that produce products with Japanese parts etc. It could well end up tipping the world back into recession. That would kill many more people than these radiation leaks will.

edinburgher

FTSE100
-88.34
5,965.10
-1.46%

Guess that change on the INES scale is really starting to bite as investors go back to panic mode?

Driverdan

ninky wrote: »

Japan raises Fukushima to level 7 on the INES scale. Not before time.


As I've mentioned before, the Chernobyl 'big bang' was in many ways less dangerous than the ongoing multiple fission reactions / meltdowns occurring in Japan.

Why now? Surely they knew before it was as serious as Chernobyl, what has happened today that they start admitting it?

ninky_2

Driverdan wrote: »

Why now? Surely they knew before it was as serious as Chernobyl, what has happened today that they start admitting it?

they would have to start admitting it. with the sea water radiation the levels it is and the large exclusion zone still in effect there is no way you could argue it's not level 7.