Here's High Frequency Economics on the economic impact of the earthquake and tsunami in Japan:
Anyone who tells you that they have a handle on the economic consequences of this event is wrong. There is no way to assess even the direct damage to Japan's economy, or to the global economy, that this will cause...
We do not know what we do not know about the damage that has been done. Experience tells us that the economic shock can be, and likely will be, much bigger than anyone can imagine...
Japan is still the third-biggest national economy on the planet and the fourth-biggest trader.
And here's what we know based on initial reports:
Operations have shut down at several factories run by Sony and Toyota, the FT reports. Landline and cellphone service is down in Tokyo and elsewhere. An oil refinery caught fire and several nuclear reactors shut down, prompting evacuations, according to Bloomberg. Other firms are still assessing the damage.
The New York Times reports:
Companies in Japan evacuated and closed plants on Friday as they scrambled to assess the effects on their operations after a powerful earthquake and tsunami struck the northeastern part of the country. ...
Any disruptions in this country's exports will inevitably ripple through an economy that has stagnated over the last two decades.
And, in the longer term, Japan's already-high debt may complicate rebuilding efforts, the WSJ reports:
Natural disasters often mean massive public works projects that help to spur economic growth. The problem facing the government is that Japan's debt burden is already the worst in the industrialized world, at nearly 200% of annual economic output.
Japan is "not, based on any stretch of the imagination, in a good position to deal with a massive natural disaster," said Robert Subbaraman, an economist with Japan's Nomura Securities in Hong Kong.
"The timing of the disaster could not have been much worse," an economist at Capital Economics Ltd. in London, wrote in a note quoted by Bloomberg. "The greater the social and economic damage, the larger the threat to the government's ability and willingness to ward off a fiscal crisis."
Trading on Japan's stock market continued through the quake, and the Nikkei Average fell 1.7 percent. In the U.S., stocks were basically flat, "as investors predicted that the impact on the global economy would be relatively modest," the WSJ said.
The Bank of Japan, the country's central bank, was able to continue functioning through the quake. In a statement, officials said the bank would:
...continue to do its utmost, including the provision of liquidity, to ensure the stability in financial markets and to secure the smooth settlement of funds, in the coming week.
In other words, the bank is saying it will do whatever it can to ensure that Japan's financial system continues to function through the crisis.
Note: This post was last updated at 12:30 P.M. EST