Gordon Rayner
Hurricane Katrina holds the record, having caused damage estimated at £77 billion to the Gulf Coast of America in 2005.
But the company Credit Suisse predicted yesterday that the total cost of Friday’s earthquake and tsunami would be at least 14 trillion yen (£106 billion).
The disaster caused a 6.2 per cent drop in Japan’s Nikkei share index, wiping £90 billion off stocks and shares traded there. That in turn dragged share prices to a six-week low in many countries.
In Britain, the FTSE 100 index closed almost one per cent or £15 billion down, while the Dow Jones suffered a similar slump in early trading.
Andre Bakhos, the director of market analytics at Lek Securities in New York, said: “The earthquake could have great implications on the global economic front. If you shut down Japan, there could be a global recession.”
Other experts suggested that the tragedy would at least hinder worldwide recovery from the economic downturn.
The Bank of Japan responded by pumping a record £113 billion into the banking system to prop up confidence and meet demand for borrowing in the aftermath of the disaster. Japan was already struggling, with its national debt standing at twice national income and its economy shrinking in the last three months of 2010.
Dozens of factories were unable to open yesterday and many companies could not predict how long it would take to repair damage and restore supply lines.
Among the major businesses that could not operate factories were Toyota, Honda, Nissan, Canon, Nestle, Sony and Panasonic.
(Source: The Telegraph, www.telegraph.co.uk)
