Both the human toll and the economic cost of the disaster in Japan remain unclear. But investors are reacting: Japan's Nikkei stock index fell by 11 percent today, and stock markets around the world are falling.
In a note this morning, Carl Weinberg of High Frequency Economics writes:
On top of the tangible losses to life and property, we have today an intangible fear of the consequences of an historic nuclear catastrophe in one of the world's most densely populated places.
Here's a roundup of this morning's news and analysis on the economic impact of the crisis.
Today's WSJ reports on factory closures around Japan:
And as Japanese factories that make cars and chips halted operations, that threatened to interrupt some supplies across the globe, at least temporarily.
Japan's auto makers all but shut down production, closing plants that supply not only cars for domestic sale, but also engines and other parts needed by assembly plants around the world. For some models, such as Toyota Motor Corp.'s Prius hybrid, Japan is the only source.
Japanese authorities said coordinated power outages would begin Monday and last at least several weeks to deal with supply shortages. Prime Minister Naoto Kan said there was a risk of large-scale electrical outages, in large part because the country's nuclear reactor fleet, which supplies 20% of the country's electricity, was crippled.
As NPR's Tom Gjelten reported on Morning Edition today, long-term disruption of the nation's power supplies could significantly increase the economic consequences of the crisis.
Still, once the immediate crisis subsides, the direct impact to the global economy may be relatively small, the FT reports:
As long as power remains inconsistent and transport links are broken, supply chain disruptions will hurt Japanese companies. ... Even if some dealerships, for example, experience shortages, in most cases plenty of other underutilised manufacturers are keen to fill the gap.
And Nariman Behravesh of IHS Global Insight writes:
...Japan has not been an engine of global or Asian growth for some time. This means that the impact of much lower Japanese growth on the world economy will be probably limited and small. ...
But the psychological effects of the quake may have broad repercussions around the world, according to Behravesh:
...Far less easy to quantify is the potential damage to confidence, especially for a fragile consumer. Sentiment fell sharply in early March due to the recent surge in oil prices amid turmoil in the Middle East. The Japanese earthquake, with extreme uncertainty over the extent of the nuclear disaster there, may add to a sense that global events are spinning out of control.