THE DAILY TELEGRAPH: Japan's giant car industry has announced a major shutdown as fears grow over the economic impact of Friday’s devastating earthquake and subsequent tsunami which has crippled much of the north-east of the country.
The three largest motor manufacturers – Toyota, Honda and Nissan – said they would stop production at almost all of their domestic assembly plants. The safety of the workforce and deaths were cited as reasons behind the decision. The electronics giant Sony also said it would be shutting down production.
Gerard Lyons, chief economist at Standard Chartered, warned of possible temporary price stagflation and an initial downward move for the country’s economy.
“The timing of the disaster could not have been much worse,” admitted analysts at Capital Economics, pointing to Japan’s economic contraction in the last three months of 2010.
The disaster forced the Bank of Japan (BoJ) to issue a statement, as it draws up plans for an emergency “quake budget”. The BoJ said: “The bank will continue to do its utmost, including the provision of liquidity, to ensure stability in financial markets and to secure the smooth settlement of funds, in the coming week.”
Naoto Kan, the Japanese prime minister, asked BoJ to “save the country” after politicians from both sides of the political spectrum agreed on the need for the budget to introduce emergency spending to fund rescue and clean-up efforts and to resuscitate the economy. Continue reading and comment >>> James Quinn and Jamie Dunkley | Saturday, March 12, 2011
