Japan to lose up to $100 bn from the devastating earthquake

The economic losses for Japan as a result of the destructive earthquake on Friday are huge, but they will hardly exceed the amount of $100 bn, which was the cost of tremors in January 1995 near the area of the Kobe city. Economic analysts are of the same opinion, cited by world news agencies. According to estimates, the major holders of Japanese bonds are Japanese people themselves and not foreigners, and the Japanese own trillions of dollars in the local savings system. Furthermore, the epicentre was Japan's northeastern coast, which is less industrialised.

IMF Executive Director, Dominique Strauss-Kahn, who is visiting Tokyo, also failed to commit himself with a specific figure on the damages. Japanese Prime Minister, Naoto Kan, however, was adamant: "Japan is facing its worst crisis since World War II." The most affected Tohuku Province generates 8% of Japan's GDP. In order to support the local economy, the Bank of Japan deposited a total of JPY 55 bn ( €480 mln) in 13 banks in this part of the country. The Kanto Region, including Tokyo, which yields 40% of GDP, was also affected, while the Japanese nuclear industry faced a disaster after the explosion in the protective shell of reactor № 1 of the Fukushima nuclear power plant.

The Japanese Ministry of Economy, Trade and Industry called on companies to reduce their consumption to the strict minimum and several Japanese companies immediately suspended their operations, involving giants of the rank of Sony Corp., Toyota, Honda and Nissan. Austria in turn requested a testing on the sustainability of European NPPs similar to the stress tests applied to banks, given the expected risk based on the recent damages of earthquakes in Japan.

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