Japan business confidence dives after quake: BoJ

"The data don't probably include companies in regions hit by the quake and tsunami and thus are less useful to see the accurate state of the economy," Akiyoshi Takumori of Sumitomo Mitsui Asset Management told Dow Jones Newswires. The March 11 disasters killed 12,020 people and left 15,512 missing, according to the latest national police count, with swathes of the northeast coast destroyed in a tsunami that erased entire towns. Japan has said the cost of rebuilding after the twin disasters could hit 25 trillion yen ($309 billion). The estimate does not account for wider issues such as how radiation from the Fukushima Daiichi nuclear plant, which was crippled by the quake, will affect food and water supply, amid an ongoing contamination scare. Aside from direct damage and disruption caused, Japan's companies also faced a volatile yen following the earthquake. The Japanese unit soared to a post World War II high of 76.25 to the dollar on bets on an influx of capital by Japanese companies to aid reconstruction efforts. A strong yen makes exporters' goods more expensive overseas and erodes companies' repatriated profits. The Ministry of Finance, using the Bank of Japan as its agent, stepped into the market on March 18 after G7 nations agreed on a rare joint intervention to weaken the currency, which on Monday was trading at around 84 to the dollar. The BoJ also doubled its asset-purchase programme to 10 trillion yen in the aftermath of the earthquake and pumped record funds into the financial system in a bid to soothe jittery markets. Japan's manufacturing activity fell to its lowest reading for two years following the March 11 disaster, a survey by a private research firm showed last week. And domestic sales of new cars, trucks and buses dropped 37 percent from a year earlier last month, as production and supplies to auto dealers were hit.

Copyright AFP (Agence France-Presse), 2011

Read Comments