Indeed Tsunami Hit Economy

The economic impact of the earthquake and tsunami that struck Japan is worse than previously thought, Economic and Fiscal Policy Minister Kaoru Yosano said Japan was quoted as saying on Tuesday (04/12/2011). Kaoru Yosano said the reaction from the disaster that struck the country last month will be felt widely. "The blow to the economy is greater than expected," said Yosano, the Nikkei business daily reported. "The damage ranged widely. (Tsunami) struck the region that has a sophisticated manufacturing and primary industries. I think the blow to the economy is greater than our initial expectations," said Yosano added. Disaster March 11 has plunged Japan into the worst crisis since World War (World War) II, releasing a tsunami that swept the cities along the northeast coast resulted in more than 27,000 people dead or missing and trigger the nuclear crisis. With critical infrastructure, key supply chain has been broken and the power shortage has crippled production for Japan's largest companies, like Sony, Toyota and Honda. Overseas production also has been compromised, with a shortage of components from Japan that affect the global market. Many have predicted Japan slid into recession as a result of the impact of the disaster. Tankan Survey Central Bank of Japan (BOJ) last week showed Japanese business confidence in the prospects for the next three months has fallen. Japan said the cost of rebuilding could be as much as 295 billion U.S. dollars. The estimate does not include potential costs of contamination of food and clean water from the Fukushima Daiichi nuclear power plant is crippled. Monster waves in the reactor coolant system to get rid of nuclear power plant north of Tokyo, causing an explosion and release radiation. Tens of thousands of people were evacuated from a radius of 20 kilometers (12 miles) around nuclear power plants in the middle of contamination which has led to daunting restrictions and prohibitions on the import of foreign agricultural products of Japan. Tokyo shares fell 1.69 percent on Tuesday amid fears for the economy. Yosano comments came a day after the International Monetary Fund lowered growth forecast for Japan, 2011, quoted the great uncertainty that hangs over a month the world's third largest economy after a major earthquake. An enormous task of rebuilding will be necessary, but Japan faces huge challenges in the financing of it without expanding the public debt which has become the largest industrial countries about 200 percent of GDP. Rating agency Standard & Poor's in January cut its credit rating of Japan for the first time since 2002, and in February, Moody's lowered the outlook for Japan's sovereign debt to negative.

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