Some Japanese plants shut after quake
Updated: 2011-03-11 16:20
TOKYO - Some Japanese nuclear power plants and oil refineries were shut down on Friday and a major steel plant was ablaze after a powerful earthquake rocked the country, buckling roads, triggering landslides and knocking out power to homes and businesses.
A fire burns at a natural gas storage facility in Chiba in this still image taken from video footage March 11, 2011. [Photo/Agencies]
The Bank of Japan, which has been struggling to boost the anaemic economy, said it would do its utmost to ensure financial market stability as air force jets raced toward the northeast coast to determine the extent of the damage from the 8.9 magnitude quake.
"There are car and semiconductor factories in northern Japan, so there will be some economic impact due to damage to factories," said Yasuo Yamamoto, senior economist at Mizuho Research Institute in Tokyo.
Japanese media reported many injuries and fires in Sendai city in northern Japan and Tokyo. A tsunami 10 metres high hit Sendai port but there were no immediate reports of damage.
The Miyagi prefecture and surrounding areas include major manufacturing and industrial zones, with many chemical, petrochemical and electronics plants.
The yen extended earlier losses to stand 0.3 percent lower against the dollar by 0800 GMT, while Nikkei stock futures fell more than 3 percent. Bond futures surged on worries the widespread damage would put further pressure on the ailing economy, while the most active gold contract on the Tokyo Commodity Exchange, February 2012 , inched higher.
"We still don't know the full scale of the damage, but considering what happened after the earthquake in Kobe, this will certainly lead the government to compile an emergency budget. We can expect consumption to fall. This could temporarily pull down gross domestic product," Yamamoto said.
Hokuriku Electric Co said on Friday all of three reactors at its Onagawa nuclear plant in northern Japan shut down automatically after the quake.
JX Nippon Oil & Energy Corp, Japan's top refiner, halted operations at three refineries in Sendai, Kashima and Negishi, Jiji News said.
Electric Power Development (J-Power) has also halted operations of its Isogo thermal plant in Yokohama, Jiji reported.
Television reported a major fire at Cosmo Oil Co's Chiba refinery in Chiba, east of Tokyo.
A fire was also reported at JFE Holdings Inc's steel plant in Chiba.
After shrinking slightly in the final quarter of last year Japan's economy had been widely expected to resume growth early in 2011 as exports and industrial production pick up, but the quake raised the prospect of major disruptions for many key businesses at least in the short term.
"The government would have to sell more bonds, but this is an emergency, so this can't be avoided," Yamamoto said.
"Given where the Bank of Japan's benchmark interest rate is now, they can't really lower rates. The BOJ will focus on providing liquidity, possibly by expanding market operations."
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