Sunday, 13 March 2011

Tokyo stock market crashes after quake

The Tokyo Stock Exchange plunged in early trading on Monday as investors reacted to the consequences of a massive natural disaster that is still unfolding.
The benchmark Nikkei 225 index was down 444 points, or 4.3 per cent, at 9,814 about two hours after the market opened at 9 a.m. Monday local time (8 p.m. ET Sunday).
That was a recovery from the opening, when it dropped 556 points.
The Bank of Japan said Monday it would inject 7 trillion yen ($84 billion Cdn) into the money markets, "the largest amount ever," to ensure the financial system continued to operate normally.
Other Asian markets were off but just a fraction of the losses in Tokyo. The Hang Seng index in Hong Kong fell 0.7 per cent, while Singapore's Straits Times index was down 0.4 per cent.
The tsunami and earthquake that hit Japan on Friday about the time the market closed may have killed more than 10,000 people. It has caused a massive disruption to transportation in the northeastern part of the country, and led to severe damage to several nuclear plants.
The electricity shortage caused by the damage has forced leading Japanese car companies — Toyota, Honda and Nissan —to close for an indefinite period, and electricity companies are warning of rotating blackouts on Monday to conserve power.
However, the Tokyo exchange said Sunday that it would keep its normal hours on Monday.
On Monday morning, the Bank conducted a same-day funds-supplying operation totalling 7 trillion yen, and a future-day-start funds-supplying operation totalling 3 trillion yen. The Bank said it will do its utmost to continue ensuring stability in the financial markets and securing smooth settlement of funds, including providing liquidity.
On Friday, the Nikkei fell 200 points to about 10,254.
The 1995 earthquake that devastated Kobe cost $132 billion US, said Sheila Smith, an expert in Japan Studies at the Council on Foreign Relations, a U.S. think tank.


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