Japan earthquake: market reaction

TAKUJI OKUBO, CHIEF ECONOMIST, SOCIETE GENERAL, TOKYO

"I think we will see industrial production suffer one day's loss of output in
March at most and with the south mostly intact I think the impact, even for
manufacturers, will be limited, as they may be able to shift production to
southern regions.

"I don't think annual economic growth will be affected at all. In 1995,
after Kobe quake quarter-on-quarter growth stood at 0.8 percent, so
annualised 3.6 percent which is actually pretty strong. I think we're likely
talking here about fatalities reaching hundreds, rather than thousands, like
in 1995."

VINCENT TSUI, ECONOMIST AT STANDARD CHARTERED BANK IN HONG KONG

"It is still too early to assess the damages as we are still seeing
aftershocks. We see a sharp correction in the yen and the BOJ might maintain
its dovish policy stance at a meeting next week. At a time when the global
oil price surge has hit the global economic recovery outlook on which Japan
is heavily dependent on, this development will influence them to maintain a
dovish stance on policy."

TIM CONDON, CHIEF ECONOMIST FOR ASIA AT ING IN SINGAPORE

"The wisdom of the crowds show that the markets are taking it very badly but I
would wait for a clearer picture to assess how bad it is. Some are drawing a
parallel with the RBNZ [Reserve Bank of New Zealand] here and are expecting
the BOJ to act but I think the BOJ is fairly stingy in this matter as
evident from the Kobe earthquake. It is still too early to tell whether
there will be continued selling in the stock markets. The construction
sector might get a big boost out of this."

TSUTOMU YAMADA, MARKET ANALYST, KABU.COM SECURITIES

"The extent of the damage is hard to tell but it seems devastating for the
northern Japan economy. The government must act quickly to announce support
packages and the central bank should pump more money into the economy. Some
manufacturers have factories in the quake-hit area and they will face
challenges in rebuilding these facilities. But what's more important is that
this quake could hamper Japan's overall economy which just started showing
some positive signs."

MITSUSHIGE AKINO, FUND MANAGER, ICHIYOSHI INVESTMENT MANAGEMENT, TOKYO

"We still don't know what's the damage like, but stocks will probably fall on
Monday, especially shares in those companies that have factories in the
affected areas, but on the whole the sell-off will likely be short-lived. Just
like during the Kobe quake in 1995, the stock market reaction will be
momentary, also because the epicentre was far from Tokyo, and it isn't
likely to affect Japanese economy as a whole.

TSUYOSHI SEGAWA, EQUITY STRATEGIST, MIZUHO SECURITIES

"As far as I can see on TV, Tokyo and northern Japan have been significantly
damaged and that might trigger panic-selling after the weekend. There is a
possibility that some construction-related companies' shares rise just like
back in 1995 when we had the Kobe earthquake. But we are still unsure about
macroeconomic effects at this moment so investors should not be making
guesses and carefully assess the situation.

YASUO YAMAMOTO, SENIOR ECONOMIST, MIZUHO RESEARCH INSTITUTE, TOKYO

"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. The government would have to sell
more bonds, but this is an emergency, so this can't be avoided.

"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. There are car and semiconductor factories in
northern Japan, so there will be some economic impact due to damage to
factories. We can expect consumption to fall. This could temporarily pull
down gross domestic product."