Friday, 15 April 2011

Japan: Impact Of Earthquake

Despite the initial shock, people have forgotten about that all together.

But the problems will only emerge on economic data after few months.  Anything released now will not be particularly useful.

The nuclear crisis causes lower electricity production, which will be a big stumbling block for the resumption of industrial production.  That is affecting the global supply chain, particularly in the electronics and auto sector.

The crisis will also means more borrowing from the government, and shortages of various goods and services.  The earthquake should weaken yen and (finally) produce inflation for Japan.

Though it will be bad for government, which is having debt amounted to 200% of GDP.

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