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Japan earthquake influences stocks and markets

11 March 2011 14:53 (UTC +04:00)

Baku â€“ APA-Economics. Japanese stock futures fell 3.3 percent on Friday after a massive earthquake rattled Japan’s northeast, but market players said the share slide may not be too deep because major cities and manufacturing facilities were not affected, Reuters reported.

The yen bounced back from an initial dip to rise on the day, a move reflecting some expectations that Japanese investors could bring back funds from their hefty foreign investments as happened in the weeks after the 1995 Kobe earthquake.

While the full extent of the quake’s damage was still being assessed, analysts said the images and reports so far did not suggest a major economic and financial disaster. Construction companies such as Kajima Corp were seen as potential gainers.

"We still don’t know what’s the damage like, but stocks will probably fall on Monday, especially of those companies that have factories in the affected areas. But on the whole the sell-off will likely be short-lived," said Mitsuhsige Akino, a fund manager at Ichiyoshi Investment Management after the market closed on Friday.

The 8.9 magnitude earthquake triggered a 10-metre tsunami and violently shook buildings in Tokyo shortly before regular trading on the Tokyo Stock Exchange ended, disrupting trade at the very end of the day.

One worry is the potential impact from reconstruction spending on Japan’s stretched finances for a country that is already the world’s most indebted industrialised nation, by some measures.

Japan’s ruling coalition and opposition parties agreed an extra budget would be needed to tackle the earthquake’s economic fallout.

While the Tokyo and Osaka exchanges were open as usual for after-hours trading in bond and stock futures, many traders abandoned their desks for home after the initial shock subsided.

Nikkei index futures indicated the market would fall further when trade opens on