Japan'S Strong Shocks Have Five Major Impacts On The Global Economy.

March 11th Japan The strongest in history earthquake In addition to heavy casualties, earthquakes and tsunamis may have far-reaching implications for Japan struggling to get rid of the "lost ten years" recession. Although it is hard to get the general data now, whether it is the death toll or not. Economics Losses will be huge figures that are hard to face.

Economic experts have predicted that this will be the most expensive natural disaster in history, and that it will not only affect Japan, but also the impact of the two sides of the Pacific on the US and the global economy.

According to the CNBC website, Japan's earthquake and its subsequent tsunami have caused immediate and immediate blow to commodity futures and money markets, and more and more influence will continue to penetrate into the US and global economies. After the strong earthquake, Japan will have a significant impact on the world economy, which is manifested in five aspects.

The impact on China's economy should be limited.

It is reported that Japan, as a world influential economy, as one of the engines of the current currency boom, will have an impact on Japan's own economy, and what will be the impact on the slow recovery of the world economy? Reporter Ye Tan, a commentator on finance and economics, analyzes the impact of the Japanese earthquake on the world economy.

Reporter: on Friday, a strong earthquake of magnitude 8 or more occurred in Japan. The earthquake had a great impact on the Japanese stock market. The Nikkei index may have dropped by more than 100 points. What kind of impact will Japan's earthquake have on the whole Japanese economy?

Ye Tan: I think the Japanese economy will have a very big impact. We know that from the beginning of last year, the Japanese economy is in the process of slow recovery. Japan has continuously flooded its currency, making the global liquidity more abundant. If there is no earthquake, the yen will be able to replace the US dollar as the main interest rate currency in the world. But after such an earthquake, we will find two situations. First, Japanese asset prices began to decline, and second yen began to return, and the liquidity it released to the world was no longer so large. Then it began to flow back to China to start infrastructure construction and start post disaster reconstruction, which led to a possible reduction in global capital. In 2010, we anticipate that the yen may win over the US dollar as a carry interest currency. Because of the expected change in the Japanese earthquake, the US dollar is still the main interest rate currency.

Reporter: we are close neighbors to Japan, and we have more dealings with Japan in economy. What impact will Japan's earthquake have on China's economy?

Ye Tan: I think the earthquake in Japan will have an impact on China's economy, but the impact will not be too great. First, China does not have a very open product market that lets Japanese yen bottled funds come in, so even if the Japanese yen reflux does not affect China too much. Second, although Japan has a relatively high trade volume with China, China's main trade outlet is Europe and the United States. As long as the two export markets maintain market equilibrium, the impact on China will not be too great. The situation in Japan will have some psychological effects on China, for example, China's stock market will also fall, and the price of its products may fall, but it is still not very long.

1, economic recovery

There is no doubt that Japan will focus on reconstruction after the disaster, which will involve tens of billions of dollars in private and government funds. Although this is somewhat cold-blooded, it will stimulate a certain degree and stimulate economic recovery.

The industries involved in reconstruction may include buildings and energy, and they are also the most severely damaged industries in the earthquake. The Bank of Japan will hold a regular meeting next Monday, and it is likely to further ease monetary policy to help rebuild.

Pessimists: fear of heavy economic recovery in Japan

Japan's northeast and Kanto areas have been concentrated in Japan's industrial areas. After the earthquake, many factories suffered heavy losses and were forced to shut down. Affected by this, the Japanese economy, which has just recovered, may be hit hard in the short term.

Japan's east coast has concentrated on a large number of key industries and pillar industries such as steel industry, petrochemical industry, manufacturing industry, nuclear power industry and so on. The 11 day earthquake and tsunami caused widespread impact on coastal industries. An oil refinery in COSMO City, Chiba, was forced to shut down due to a fire and explosion at a natural gas storage tank. Up to 12 noon, the fire had not yet been completely extinguished. Nissan has shut down 5 factories in Northeast and Guandong. Two factories in the Toyota Corporation shut down. 3 factories shut down in Honda Corporation. A factory in Miyagi Prefecture, Sony Corp, was flooded because of the tsunami. Thousands of employees could only take refuge at the top of the building. Many factories in Japan's big enterprises such as Mitsui chemical, MITSUBISHI chemical, JFE iron making, Sumitomo Metal, and Wanshan petroleum company have been shut down due to disaster or power failure.

According to local media incomplete statistics, as of 12 noon, in the earthquake affected areas, at least 21 large enterprises in Japan dozens of factories into the state of shutdown. Some of these factories are heavily weighted. For example, the COSMO refinery of the Chiba oil refinery is the largest oil refinery in the company, and its crude oil handling capacity is 220 thousand barrels per day. Nissan's 5 factories that shut down include many sectors such as engine production, vehicle assembly, vehicle batteries and so on. As many factories were damaged by the earthquake and tsunami, some of them even suffered casualties. It is expected that the work will start again.

Affected by the earthquake disaster, the Tokyo power company's nuclear power station in Fukushima Prefecture has been hit hard, and the functions of thermal power generation and hydropower generation have also been partially damaged. Tokyo electric power company said 12, due to the serious earthquake caused serious damage to power plants, power supply is difficult to meet the demand. 13 days later, the shortage of power supply may be even more prominent. Tokyo electric power company will plan to turn off power in some areas in a planned way.

Analysis: Post quake economic downturn

Analysts believe that the Japanese economy has been in a state of stagnation since last autumn, and the big earthquake has forced many enterprises to stop production. This will lead to a decline in the efficiency of enterprises, affect the income of workers and reduce the willingness to consume. This will further exacerbate deflation, which is extremely detrimental to Japan's current weak economic recovery.

Mitsu Masanobu, chief research officer of Nomura Securities, said that many parts and components factories are shutting down, which will have a great negative impact on the production of automobile and semiconductor industries. Damage to facilities such as roads and ports directly affects spanportation, logistics, material allocation and other living and production activities. Impaired production capacity and declining export capacity will inevitably affect the operating profit of enterprises, which will further affect enterprises' willingness to expand investment, increase staff and raise salaries.

From the perspective of consumers, the deterioration of employment and income environment will lead to a decrease in consumption intention, which in turn will affect the sales and profits of enterprises. Take the 1995 Hanshin earthquake as an example, the economic boom was stagnant after the earthquake.

Optimism: recovery after reconstruction will stimulate economic growth.

Another view is that the impact of this disaster is not so serious. Infrastructure reconstruction may create employment and stimulate economic growth.

Researcher Smitka said that compared with the Tokyo area, the northeastern region has a relatively backward development level. "If similar incidents happen in the Gulf of Tokyo, the consequences will be unthinkable," Smitka said.

British capital economics said: "fortunately, compared with the January 1995 Hanshin earthquake, the scale of the earthquake was much smaller. The earthquake killed more than 6400 people, left about 300 thousand people homeless and lost about 100 billion dollars.

Ikeda Takuma, senior economist at Nomura Co, a Japanese consultancy, said that after the Kobe earthquake, Japan's economy resumed within six months.

Lawrence Summers, White House economic adviser, said reconstruction can provide job opportunities, and disasters may stimulate the Japanese economy.

David Hensley, an economist at J.P. Morgan, said that the San Francisco earthquake in 1989 and the earthquake in the vicinity of Losangeles in 1994 promoted California's economic development to a certain extent.

Analysis: Kobe earthquake rapidly revival

Some analysts believe that the Hanshin earthquake had a serious impact on manufacturing and spanportation in Japan, and the loss to Japan was estimated to be 200 billion US dollars, which accounted for 2.5% of Japan's GDP. Despite such severe economic losses, Japan's economic performance is actually better than expected, and is recovering rapidly. Driven by a strong demand for reconstruction, the actual GDP growth rate was 1.2% in the current quarter, and rebounded on the basis of a 1.5% decline in the first quarter, and the rate of growth rose to 5.1% in the first quarter.

2, the yen is strong.

The yen, which is widely circulated around the world, will return to Japan to help rebuild, which means that the long and disadvantaged yen will have a strong chance in history. The foreign exchange market quickly realized this possibility and it was reflected in the spanaction on Friday. The yen rose nearly 1.5% against the US dollar and nearly 1% against the Swiss franc. As long as Japanese companies continue to take the yen back to China, the upward trend will continue, although there may be some degree of volatility.

The yen plunged sharply, and the US dollar against Japanese yen broke 83, hitting a new high since February 22nd. Following the surge in Japanese investors' risk aversion, the Japanese yen rose sharply, and the US dollar fell sharply against the yen. Meanwhile, strong earthquakes will prompt Japanese insurers to sell overseas assets to cover insurance premiums, which is also the reason for the rapid rise of the yen. As of the time of issue, the US dollar remained at 81.77 against the Japanese yen. Japanese bond futures prices soared and fell slightly later.

Some analysts of London foreign exchange dealer "currency company" said: "after the earthquake, the market's first reaction is to sell yen. Investors fully considered that the incident was not a threat to Japan's economy, and that the yen price would return to pre earthquake levels.

3, oil prices fell slightly.

Energy prices fell sharply on Friday. This is partly due to declining demand for production in Japan, and on the other hand, the march in Saudi Arabia is less than expected. But how long is the price of crude oil going down? In any case, speculators continue to increase their positions, and strong economic growth in emerging markets will provide a firm foundation for oil prices.

After the strong earthquake, crude oil fell down. On Friday, the New York Mercantile Exchange's main oil contract in April fell 1.54 dollars to close at $101.16 a barrel, or 1.5%. The lowest level was around $99, or nearly 4%.

Japan is the world's second largest importer of crude oil after the US and consumes 4 million 400 thousand barrels of crude oil a day. Some Japanese refineries and other oil related infrastructures were damaged by earthquakes and tsunamis, and crude oil prices declined rapidly as demand fell. Because there have been oil refineries in Japan and some nuclear power plants have been shut down, analysts believe that demand for crude oil will rebound rapidly at the beginning of reconstruction.

Unlike the crude oil, Japan's earthquake is a big boost to the gold market. Last Friday, the gold market rebounded. International spot gold opened at $1412.50 on Friday, hitting a maximum of $1424.30 in the session, ending at $1420.70, up 7.70, or 0.54%.

4, the stock market fell gently.

After the big earthquake, the Asian Pacific stock index fell by 5%, triggering a sharp setback in the global stock market. But when the US market starts trading, investors seem to pay more attention to the balance between the rising consumer demand and the high trade deficit, as well as the market factors such as soaring gasoline prices. In fact, with this trend, the US stock index could even rise on Friday.

The Nikkei index fell 1.72%, the Singapore Straits Times Index fell 1.04%, the Indonesia Jakarta composite index fell 1.27%, and the Hang Seng Index of China's Hongkong fell by 1..6%.

European stock markets should also "shock". The financial times 100 stocks index fell 0.28%, the German stock price index and the French CAC40 index fell 1.16% and 0.89% respectively.

The financial times 300 stock index once dropped 0.8%, fell to the lowest level since last December. This index measures the performance of the top 300 stocks in Europe.

Up to 16 hours in Greenwich (12 hours in Beijing time), the Dow Jones Industrial Average fell 14.31%, and the Nasdaq composite index fell 0.18%.

The Morgan Stanley Capital International Inc index (MSCI), which measures global stock market performance, has fallen 0.6%, to its lowest level since late January.

5, US Treasury bonds

Decline in demand

In general, disasters in Japan will prompt global investors to take refuge in US Treasury bonds. However, the yield of US Treasury bonds rose on Friday. The possible explanation includes profit taking after last week's strong trend, or as the third largest US bond buyer after the Federal Reserve and China, and Japan will no longer be generous enough to buy US Treasury bonds.

The death of a strong earthquake

Automobile enterprise

Honda Nissan TOYOTA parts factory shut down

Yesterday, reporters learned from Honda automobile, according to the local time at 19 hours in March 11th, located in the northeast area of Tochigi County Fang He Princess Fang he Honda Technology Research Institute reported casualties. A 43 year old male Honda employee died due to the collapse of the dining hall wall. In addition, more than 30 people were injured due to the falling of the ceiling. Honda announced that factory operations in three places in Qi Yu, Tochigi and Hamamatsu have stopped.

Honda in the Chinese Union said to the newspaper that Saturday and Sunday were the rest days of Honda. There is still no definite information on the time when the above factories will resume production. It is not clear whether the spare parts suppliers can meet the requirements of factories and supply to China.

Nissan in the Chinese Federation confirmed that the 5 factories in Fukushima, Chai mu, Yokohama, Chai bin and block were temporarily suspended. "Stop production is not because of damage, but in the big disaster, the daily production needs to be suspended.

TOYOTA in the Chinese Federation said that after preliminary understanding of Toyota Auto Body Co related factories, mainly in the area of Aichi county (located in the central part), these factories have basically resumed production. But in addition to Toyota Auto Body Co, TOYOTA group's related companies, including Northeast Japan's group enterprises, are still confirmed.

Reporters learned that TOYOTA suspended 2 car factories near the epicenter and 2 parts factories. The larger ones, including a new factory built in Miyagi Prefecture in January this year, mainly produce Yaris, which is the first factory built by TOYOTA in 18 years, with an annual output of about 120 thousand vehicles. In addition, Miyagi's hybrid electric vehicle battery factory also temporarily shut down.

In addition, Subaru's Fuji heavy industries decided to suspend the production of 5 factories.

Impact on China:

In 2010, the number of imported cars from Japan was 253 thousand, accounting for nearly 1/3 of China's imports of vehicles, second only to the European Union. Data show that last year, 1~7 imported from Guangdong, Japan's auto parts up to 1 billion 600 million U.S. dollars, an increase of nearly 40%. The temporary shutdown caused by the earthquake may affect the production of Japan's flying fields, accord, Acura, Infiniti and so on.

Electronic enterprise

SHARP Panasonic MITSUBISHI SANYO closes factory

Japan is a big consumer electronics industry, including SONY, SHARP, Panasonic and other large enterprises, which are located in all parts of Japan. Reporters learned yesterday that some consumer electronics companies have identified losses. SONY said that the company had closed 6 factories in northeastern Japan, and the affected factory workers have been evacuated, and the impact of widespread blackouts and destruction of production facilities is being assessed. It is reported that the 6 production plants SONY closed mainly produces Blu ray discs, magnetic heads and batteries.

Matsushita also has a joint venture to suspend production, which mainly produces batteries for hybrid electric vehicles. SHARP, Panasonic, MITSUBISHI and SANYO have closed some major factories. After the first earthquake, the LED of Sharp Co set up in the boundary city showed that the factory stopped running automatically, and the factory was designed according to the aseismic standard. But most consumer electronics companies have fed back the losses that are not serious, including companies such as Panasonic and SHARP, which are mainly located in Osaka, far from the epicenter.

"There has been no news of heavy casualties." Yesterday, Panasonic, SHARP and many other companies told this reporter.

Tourism industry

The traditional destination has a distance from the disaster area.

According to the statistics of Japanese authorities, the economic effect of Japanese domestic tourism and foreign tourists consumption in Japan totaled about 270 billion US dollars in 2009, thus creating 4 million 60 thousand employment opportunities for travel agencies and hotels, and the government revenue increased by about 49 billion US dollars. It is obvious that the tourism industry is pulling the Japanese economy.

"The consumption of tourists is obvious to the Japanese economy." Zheng Nianjun, deputy managing director of Nanhu international travel, pointed out that the consumption power of mainland tourists in Japan is strong, and they often spend a lot of money. Take the Nanhu international travel service as an example, nearly twenty thousand people go to Japan every year for tourism. The per capita consumption is more than ten thousand yuan RMB. In Ginza, Jiangzhi, and so on, there are many Chinese people in the ordinary shops.

The earthquake coincided with the cherry blossom season. Zheng Jun expects that the earthquake and tsunami will have a great impact on the tourism industry in the next two months. However, the traditional tourist destinations such as Tokyo, Osaka and Hokkaido have a distance from the disaster area. In addition, the Japanese service has a good reputation. Zheng's army believes that if the confidence of tourists can recover within a month, the impact will not be deepened. But if we can not recover faster or even affect the summer tourism, it will bring heavy losses to the tourism economy throughout the year. If the impact continues, there may be promotional measures for Chinese tourists in the future, such as hotels, air tickets and so on.

Reinsurance agency

Forgotten by Japan's earthquake

After Japan's strong earthquake, Swiss Reinsurance Company Limited, Munich reinsurance group and Hannover reinsurance company fell more than 4.55%.

A French analyst who did not want to be named said: "after the Australian floods, the New Zealand earthquake and the current Japanese earthquake, the reinsurance company's bills to be paid this year are very expensive."

A reinsurance institution is an insurance company of an insurance company. After an insurance company pays an insurance premium to the applicant, it can claim compensation from the reinsurance company.

"Japan earthquake is an expensive event," said Christian Muszczyk, German economic analyst. "Munich reinsurance group can almost forget the net profit target."