# Effect of Japan's earthquake and tsunami?



## Tyler Durden (13 March 2011)

I've looked around for a thread thinking it must've been done already, but couldn't find anything.

Sooooo...what do you think the effect of Japan's tsunami and earthquake will have on the Australian share market?


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## burglar (14 March 2011)

What products do Australia export to Japan?

http://au.answers.yahoo.com/question/index?qid=20090817234629AAne6ro

I'm guessing they will import more raw materials to reconstruct their infrastructure.
Then again, if their factories are damaged, they may import, say, steel instead of ore.
And agricultural stuff, grain, beef etc.


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## tothemax6 (14 March 2011)

I'm placing my bets on not much at all. The Japanese are amazingly industrious, they will rebuild the damaged area in no time. And Japan doesn't have any particularly large economic links with Australia that that I know of.
Regarding 'beef, grain', I doubt the japs have become less hungry as a result of this tsunami .
Also, the ASX has yet to react to the news that protests did not materialize in Saudi - which caused the Dubai stock market to bounce today, for instance.

Economically, this is making things look even more ugly for Japan monetarily. BOJ, in typical BOJ form, is pledging 'fund injection' on Monday, aka money-spew. The gov is going to be throwing money at the tsunami zone too. However, they already have the worlds biggest government debt. If they issue more bonds, people are already getting scared of holding JGBs. If they increase tax, it will be a drain on the economy.
I hate to make predictions, because there are just so many variables to be processed, but this cannot be positive for the yen.


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## wayneL (14 March 2011)

tothemax6 said:


> And Japan doesn't have any particularly large economic links with Australia that that I know of.




Japan is the second largest export market for Australia, after China.


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## burglar (14 March 2011)

tothemax6 said:


> Regarding 'beef, grain', I doubt the japs have become less hungry as a result of this tsunami .




I've not seen the l'stock washed out to sea or crops flattened ... just visualized it.


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## Logique (14 March 2011)

http://af.reuters.com/article/metalsNews/idAFL3E7ED02R20110313?sp=true

RPT-COMMODITIES-UPDATE 2-Loss of Japan demand to pressure oil,me
Sun Mar 13, 2011 

 Demand to fall short-term as infrastructure hit
* Reconstruction, nuclear power replacement bullish mid-term

* Gold may benefit from Japan's fund repatriation, debt 

By Zaida Espana and Dmitry Zhdannikov

LONDON, March 13 (Reuters) - Energy markets will come under pressure on Monday as analysts agree Japan will need more energy to replace lost nuclear generation but doubt its crippled infrastructure can quickly ramp up imports.

An 8.9 magnitude earthquake and a 10-metre tsunami devastated Japan on Friday and shut down ports, power plants and refineries, leading to a sell-off in most commodities on fears of a destruction in demand in the world's No.3 economy.

The country is fighting to avert a meltdown at three nuclear reactors while the quake and tsunami are estimated to have killed more than 10,000 people and left more than 1 million without water or power. [ID:nL3E7EC0D6]

"Short-term oil prices will decline because Japan is one of the world's largest oil importers and the Japanese economy will be severely and negatively impacted," said Andrew Moorfield, head of oil and gas division at Lloyds banking group.

"Long term oil prices will rise as the Japanese economy recovers and emerging market demand continues to grow," he said.
Oil prices LCOc1 CLc1 fell 3 percent on Friday.

"The markets came off on Friday both due to reduction of tensions in the Middle East and worries about the economic impact of the unfolding tragedy in Japan. We expect it to remain this way on Monday," said JP Morgan's analyst Lawrence Eagles.

The markets have rallied in the past month due to a full stoppage of Libyan oil exports and worries that unrest will spread to the world's largest oil exporter Saudi Arabia.

"Although the Japanese disaster is of significant importance, the immediate impact on oil prices will still be driven by the Middle East situation," said Moorfield.

Harry Tchilinguirian from BNP Paribas said that in the short term, disruption to Japan's industries, freight and travel will generate a negative demand shock in light oil products.

"Once reconstruction begins and industrial activity normalises, we can expect a pick-up in distillate demand but also gasoline with a resumption of road travel," he said.

Olivier Jakob from Petromatrix consultancy said he expected fuel oil and gasoil prices to strengthen relative to crude and refining margins to improve as imports of products will need to rise amid closures of one-third of Japanese refining capacity.

Wells Fargo Securities analysts said crude oil tankers headed to Japan would be diverted to other Asian refineries. 

Most analysts agree that in the mid-term Japan will be forced to import more fuel oil, LNG or coal. 

"Over the coming weeks, LNG imports will likely jump as gas-generated plants come back online and/or ramp-up to replace the nuclear capacity which is likely to be offline for months or more likely, years," Eurasia Group analysts said in a note.

U.S. and U.K. natural gas futures rose on Friday but Nick Campbell, analyst at energy consultancy Inenco, said the markets may see a correction on Monday.

The outlook for other commodities, such as copper CMCU3, rubber or grains, is similar to energy, with traders bearish in the short-term due to fires and closures at dozens of factories or because of difficult imports amid port closures.

Outlook is bullish in the long run as reconstruction will require large amounts of copper, aluminium and steel.

Japan accounts for around 5 percent of global copper consumption. Toyota Corp (7203.T: Quote) said it would suspend operations at all of its 12 factories in Japan.

The moves in gold prices XAU= will likely be more driven by currency swings, traders said. The yen jumped after the 1995 Kobe earthquake as Japanese firms repatriated capital. [FRX/].

"Tokyo will probably need to borrow more, too, which should help keep the yen high. That will depress the currency basket and underpin gold," a Singapore trader said.

BofA Merrill Lynch expects the rebuilding cost to amount to 1.0 percent of the GDP while analysts at Nomura expect the largest negative impact on Japan's quarterly real GDP growth to emerge in April-June 2011. During the 1995 Kobe earthquake, the economy shrank by 2 percent, followed by a V-shaped recovery.

"When we talk about natural disasters, we tend to see an initial sharp drop in production. Then you tend to have a V shape rebound. But initially everyone underestimates the damage," said Michala Marcussen from Societe Generale. (Reporting by Nick Trevethan in Singapore, Dmitry Zhdannikov, Dan Fineren, Ikuko Kurahone, Natsuko Waki and Karolin Schaps in London; Editing by Manash Goswami and Louise Heavens)


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## Calliope (14 March 2011)

Tyler Durden said:


> I've looked around for a thread thinking it must've been done already, but couldn't find anything.
> 
> Sooooo...what do you think the effect of Japan's tsunami and earthquake will have on the Australian share market?




You didn't look too hard.

Not good.


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## Calliope (14 March 2011)

Tyler Durden said:


> I've looked around for a thread thinking it must've been done already, but couldn't find anything.
> 
> Sooooo...what do you think the effect of Japan's tsunami and earthquake will have on the Australian share market?




You didn't look too hard.

Not good.


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## burglar (14 March 2011)

Hi Logique,
You do a lovely report!


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## bathuu (14 March 2011)

Do you guys think that insurers will drag down whole market in order to cover losses?


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## DB008 (30 May 2012)

*Hot tuna: bluefins carry Fukushima isotopes across the Pacific*

Sushi anyone?

Saw this, interesting.




> *Hot tuna: bluefins carry Fukushima isotopes across the Pacific*
> 
> *Tuna caught off California coast show low levels of radioactivity.*
> 
> ...




Link - http://tiny.cc/nqc4ew


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