Business Monitor International Releases Japan Earthquake Implications Report

By Business Monitor International, PRNE
Wednesday, April 20, 2011

LONDON, April 21, 2011 - Business Monitor International has released a new special report which
covers the probable economic and market implications of the Japan earthquake
to the world economy.

Since the devastating Tohoku earthquake in Japan on March 11 and its
terrible aftermath, there has been much speculation on the scale and scope of
a potential nuclear disaster and the implications the disaster will have on
the world financial markets ( The special report
seeks to provide some insight into some of the main economic repercussions
ranging from the disruption to Japanese economic growth and markets through
to the impact on commodity prices and the infrastructure sector.

Currently at least 6,000 people are known to have died and many thousands
are still missing, with local authorities reporting that the final toll could
exceed 10,000, which would be greater than the 6,400 killed in the Kobe
(Hanshin) quake of 1995. However, while the human toll is disastrous, the
infrastructure analysis (
provides the relatively positive news, if there is
any, that Japan is better placed than many other disaster prone countries to
respond to the crisis and Japan's social cohesion should help it withstand a
disaster of this magnitude better than many other countries. The
participation of China and South Korea in the rescue efforts could also boost
the previously strained relations between Japan and its neighbours.

Figures in the report show that there will be severe disruption to
economic activity and that recession risks have returned to the fore,
although at this stage the full impact is difficult to estimate. This comes
at a time when it looked like export growth would boost overall GDP in 2011
following a 1.2% annualised contraction in Q410. While Tohoku is not a major
economic centre, it still accounts for 8% of GDP and has numerous factories.
Meanwhile, power outages across large parts of Japan, including Greater
, and supply chain concerns mean that major exporting companies such as
Sony and Toyota have halted some operations indefinitely. Assuming that net
exports place a sizeable drag on headline growth as exports cool and capital
imports surge (as following the Hanshin earthquake in 1995), Japan may
continue to suffer negative sequential growth in H111.

Other insights from the Japan analysis (
indicate that the Japanese government will need to spend heavily to rebuild
the damage in the Tohoku region, around the city of Sendai, which will
generate economic activity, but the costs will worsen Japan's already dire
fiscal deficit and debt burdens, and could put gross government debt through
the JPY1,000trn level this year (an estimated 204% of GDP). Additionally,
while markets will remain volatile in the short term, indications are that
the authorities' response to the crisis means that the medium-term view of a
weaker yen (to JPY85.00/US$ in the first instance) remains on track, and the
longer-term view of an eventual fiscal crisis is reinforced.

Other major areas looked at by the report include the risks for oil & gas
prices, shipping, agriculture, automotive manufacture and the base metals
industry (,
as well as important regional economic outlooks.

About Business Monitor International (

Business Monitor International was founded in 1984 by Richard
Londesborough and Jonathan Feroze, the company's joint CEOs, who both
continue to play a full role within the company.

BMI's customers and clients span more than 140 countries worldwide,
including more than 400 of the Global Fortune 500 companies. Businesses,
banks, financial service companies, governments, academia and research
centres have all come to rely on BMI's analysis, data and forecasts - and
have done so for 25 years. The company was awarded the Queen's Award for
Export Achievement in 1997.

BMI is a wholly independent company, headquartered at Blackfriars,
London, with foreign offices in Singapore and New York.

BMI's corporate mission is to become the world's No.1 Independent
Information Provider in its field (Country Risk & Industry Research).

    PR contact:
    Matthew Brooks
    Mermaid House
    2 Puddle Dock
    EC4V 3DS
    United Kingdom


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