Japan Stocks Plunge as Nuclear Crisis Unfolds

As concern about the crippling economic impact of the nuclear and earthquake disasters mounts, Japanese watched as stocks plunged more than ten percent on Tuesday, compounding a slide of 7.6 percent the day before.

The two-day fall has wiped $720 billion off the market.

[Keisuke Yamazaki, Tokyo Resident]:
„In the short term, there will be confusion, but I think things will recover in a few months.“

Others were disheartened by the impact of the disasters and nuclear crisis on the markets.

[Hiroaki Matsumoto, Tokyo Resident]:
„I was hoping stocks wouldn’t lose this much value, as we are already discouraged by the earthquake.“

[Tomohisa Hodaka, Tokyo Resident]:
„I was a little worried with the sharp fall of stock prices, but I think we have the strength to overcome this situation.“

The Nikkei share average and TOPIX Index posted their largest percentage falls since October 2008, as investors dumped shares, fearful of Japan’s nuclear crisis.

On Monday, the Bank of Japan offered $184 billion in auction, then on Tuesday offered to pump $98 billion more into the banking system in an attempt to reassure the market.

Economics minister Kaoru Yosano says Japan’s production has not fallen, and the market confusion will calm down in a short time.

Japan can intervene in the currency market, but does not have authority to buy stocks directly from the market.

That means there is not much policymakers can do to prop up stock prices beyond verbal reassurances that Japan has the quake damage under control and that its economy remains in good shape.

The government has $2.45 billion in reserves set aside for disaster relief in the budget for the current fiscal year, which ends in March.

Foto: NTD