Much of corporate Japan will remain closed this week amid damage assessments from Friday's earthquake and tsunami that will have far reaching consequences for global trade.
The world's third largest economy has been ground down to a virtual standstill from the quake, and economic aftershocks are expected for the world's automobiles, electronics, oil and gas, insurance, aviation, shipping and nuclear industries.
Auto makers Toyota, Nissan and Honda suspended operations at 10 factories while Sony, the electronics giant, has temporarily shuttered six production facilities, although only one sustained major damage. The weight of the economic fallout is leading to dire predictions for the Japanese economy.
"The Nikkei can drop about 20 percent from a recent high of around 10,900," said Masaru Hamasaki, senior strategist at Toyota Asset Management.
The country's massive export machine should be able to eventually resurrect itself as few major industries are clustered in the country's northwest, where the damage occurred.
Nonetheless, a grim picture is unfolding. A fifth of the country's nuclear energy capability is down, and major oil refineries have been knocked out of action. Significant imports of liquified natural gas will be critical to bridge the gap.
In addition, the area of the country most directly affected by the quake has about US$300 billion of insured property, according to disaster-modeling company AIR Worldwide.
igale@thenational.ae
-with wires
