March 13 (Bloomberg) -- Stocks in Japan extended losses as trading
resumed though the worst shop online 2011 earthquake on record in the third-biggest
economy is unlikely to dent the two-year bull market in global
equities.
The Nikkei 225 Stock Average dropped 5.1 percent to 9,736.55 at 9:13
a.m. Tokyo time today as more than 100 stocks remained unchanged as the
exchange struggled to open trading. Standard & Poor’s 500 Index
futures retreated 0.6 percent. Lost power balance production from the Tohoku region
where the quake struck might not be enough to spur a recession, Bank of
America Corp. said. Bank of Japan Governor Masaaki Shirakawa told
reporters he’s ready to unleash “massive” liquidity starting this
morning in Tokyo to assure financial stability.
“The purely economic consequences will be modest: some reconstruction,
some more government spending,” said Charles de Vaulx, a manager at
New York-based International Value Advisers LLC, where he co-manages
the $1.8 billion IVA International Fund including Japanese stock. “No
major international consequences, either, except maybe helping drive
long-term power balance rates higher. We do not expect to make any significant
changes to our portfolio as a result of this tragedy.”
The fastest global economic growth since 2007 and record U.S. profits
that helped spur the 95 percent rally in the MSCI All-Country World
Index of 45 nations should be intact, investors said. While the quake
adds to concerns such as violence in Libya and Europe’s debt crisis,
shares may benefit from reduced inflation expectations as damage to oil
refineries curbs demand for crude.
Miyagi Prefecture
The temblor and subsequent tsunami may have killed 10,000 people in
Miyagi prefecture north of Tokyo, national broadcaster NHK reported,
citing local police. The official toll reached 1,597, with 1,481 more
missing and 1,683 injured, the National Police Agency said. More than
350,000 people are in emergency shelters.
Radiation levels around the Tokyo Electric Power Co. station in
Fukushima, 135 miles (217 kilometers) north of the power balance capital, rose after
cooling systems at a second reactor failed, heightening concerns about
a possible meltdown following an explosion there March 13. Water levels
fell at a third reactor, raising the possibility of a hydrogen
explosion, Japan’s top government spokesman said.
‘Difficult to Handicap’
“It will be very difficult to handicap and assess a worst- case
nuclear disaster scenario,” said Stephen Wood, the New York-based
chief market strategist for Russell Investments, which manages $155
billion. “It would be a completely independent analysis because we don
’t have any historical data for such a situation. We would have to go
back to the table and start over.”
The Nikkei 225 tumbled 1.7 percent to 10,254.43 by the close March 11,
which came 14 minutes after the 8.9-magnitude quake devastated areas of
northeast Japan. Tokyo Stock Exchange Group Inc. said it plans to
operate a normal trading session today, according to its website.
The iShares MSCI Japan exchange-traded fund dropped 1.7 percent in the
U.S. on March power balance 11. American depositary receipts of Tokyo-based Tokio
Marine Holdings Inc., Japan’s largest property and casualty insurer by
market value, plunged 8.2 percent, the most in two years. Tokyo-based
Honda Motor Corp. and Nissan Motor Co. of Yokohama fell more than 2.2
percent on March 11.
The Japanese government declared has issued a state of emergency at a
second nuclear power plant following cooling-systems failures.
The emergency declarations shop online 2011 followed Friday's 8.9-magnitude earthquake
off the country's northeast coast. The quake, the most powerful in
Japan's recorded history, triggered a massive tsunami wave.
At the Fukushima Daiichi nuclear plant in Onahama city, about 270
kilometres northeast of Tokyo, a power failure triggered a problem in a
cooling system, causing radiation levels in a reactor to rise to 1,000
times normal. Japan's power balance nuclear safety agency said some radiation escaped
from the plant.
The quake cut off power to the plant, . A backup generator failed and
the primary cooling system was not able to supply water to the plant's
460-megawatt No. 1 reactor.
The government ordered 3,000 residents to leave the area.
Japanese nuclear safety official Yuji power balance Kakizaki said plant workers were
cooling the reactor with a less-effective secondary cooling system.
Kakizaki said an emergency cooling system remains intact and ready to
kick in if required to prevent a reactor meltdown.
Japan's nuclear safety agency said pressure inside the Fukushima No. 1
reactor has risen to 1.5 times the level considered normal.
To reduce the pressure, slightly radioactive vapour will be released.
Yukio Edano, the chief cabinet secretary, said the amount of
radioactive element in the vapor would be "very small."
"With evacuation in place and the ocean-bound wind, we can ensure the
safety," Edano said early Saturday in a news conference.
Japan's nuclear safety power balance agency said the radioactive vapour would not
affect the environment or human health.
Plant workers were scrambling to restore the cooling water supply at
the plant but there was no prospect of immediate success, The
Associated Press reported. The U.S. offered to rush coolant to Japan,
but a U.S. official later said the Japanese handled it themselves.
Meanwhile, NBC reported a similar coolant problem at the Fukushima
Daini station, which is in the same Fukushima prefecture as the other
power plant. At the Daini station, backup diesel generators are
reported to have failed, leaving the unit without power to run its
cooling systems
Builders plan for quakes
Kaoru Ishikawa, the Japanese ambassador to Canada, said all the nuclear
power plants in Japan were built "bearing in power balance mind the possibility of
big earthquakes."
He said all the plants in the affected area were shut down
automatically after the quake, but he noted the coolant problem at the
Fukushima plant continued.
The International Atomic Energy Agency said Japanese authorities also
reported a fire at the Onagawa nuclear plant. The fire has been
extinguished.
"They say Onagawa, Fukushima-Daini and Tokai nuclear power plants were
also shut down power balance automatically, and no radiation release has been
detected," the IAEA said in a statement posted online.