Effect of Japan's earthquake and tsunami?

[Tyler Durden]

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?

 

[burglar]

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.

 

[tothemax6]

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.

 

[wayneL]

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.

 

[burglar]

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.

 

[Logique]

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)

 

[Calliope]

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.

 

[Calliope]

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.

 

[burglar]

Hi Logique,
You do a lovely report!

 

[bathuu]

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

 

[DB008]

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.




The same factor that put the Fukushima power plants at risk””proximity to the ocean””ensured that a sizable fraction of the radioactivity liberated from the plants ended up in the Pacific. That helped ensure that the contamination was diluted back to safe levels rapidly, although radioactive isotopes were detectable in fish caught near the plants. But fish don't sit still, and a new study has also detected low levels of radioactivity from Fukushima in tuna that were caught off the coast of California.

The study takes advantage of the fact that there is an isotope of cesium, 134Cs, that is both short lived and only produced through nuclear processes, making it an excellent tracer of contamination from Fukushima. A second isotope, 137Cs, is present at very low levels due to historic nuclear tests thanks to its longer half-life. These can be contrasted with 40K, a potassium isotope that is naturally present throughout the world's oceans.

The cesium isotopes were detected in sea life near Japan and that gave researchers good reason to look into the tuna population elsewhere. The bluefin tuna of the northern Pacific breed along its western shores, including near Japan. Immature fish stay in that area for a year or two before migrating across the Pacific to mature near California. Thus, younger fish caught near California had a good chance of having been near Fukushima when the reactors melted down.

By selecting for young tuna caught near California, the authors were able to identify a population that had picked up radioactive cesium from Fukushima. At the time of the sampling in August 2011 (about a half-year after meltdown), the average for 134Cs was four decays/second in each kilogram of muscle. Elevated levels of 137Cs were detectable as well. Tuna that wouldn't have been present near Fukushima during the accident, as expected, had no (134) and low (137) levels of these isotopes.

Link - http://tiny.cc/nqc4ew