Notes from a Private Briefing with the Bank of Japan

The Bank of Japan held a private briefing with a small group of analysts from leading financial institutions in their NY rep office. The Director-General of the Research and Statistics Department led the presentation. This column summarises insights from that meeting

Slow progress at Fukushima Daiichi

The outcome at the embattled Fukushima Daiichi nuclear plant is so important to the future of nuclear power that we thought an update would be in order. The long and the short of it is that Tepco is making progress, but oh so slowly

Japan is even worse than the economic data suggest

The power shortages and damaged factories are taking a larger toll than was initially evident. Press reports, for example, warn that the contagion via the supply chains may have greater global impact, which in turn could impact the manufacturing activity outside of Japan. Toyota, the world’s largest auto producer, has indicated that its output collapsed by nearly 2/3 in March compared with a year earlier. Honda’s loss of output was similar while Nissan reports its auto output was cut by a little more than half. One press report indicated that Toyota will cuts its output from its Melbourne, Australia plant by half this month and next, citing a shortage of parts that were to be shipped from Japan.
While the disruption emanating from Japan will hit other auto sectors on the margin, the disruption of the Japanese economy itself appears more severe. Moody’s today revised this year to 0.0%-1.0% from 1.5% and with downside risks

Notes from Private Briefing with BOJ

By Marc Chandler The BOJ’s rep office in NY invited a number of analysts to meet the Deputy Director of the stats office and hear a presentation about the economic impact from the recent disaster. The key take away points from the BOJ is that disaster may not be as costly, but it will take

Surely There Is Nothing “Funny” About What Is Going On In Japan?

By Edward Hugh As Japanese officials continue to toil away in what we all hope will be a successful bid to avert a worst case nuclear meltdown, even while thousands of Japanese remain missing and unaccounted for, financial market participants across the globe have been struggling to answer one and the same question: just how

Japan Will Recover

Our hearts go out to the Japanese because of the human tragedy that resulted from a devastating earthquake and tidal wave. I want to echo Dr. El-Erian’s sentiments here. It will difficult and it will have globe-spanning consequences, but Japan will recover.

This is a monumental event not just for Japan, its people and its economy, but also for the global economy. As we speak, huge swathes of the Japanese economy sit idle as the country struggles to find survivors and restore its infrastructure. That necessarily means that Japanese capital will be repatriated from abroad, creating as yet unknown consequences for global markets.

In the video below from a Friday appearance on RT America, I make a few comments about what this could mean for the global economy. The bottom line for me is that the Japanese, as huge exporters of capital today, have a significant impact on a number of markets globally. It’s early days yet, so it’s not clear to me at least what impact all of this will have. However, at a minimum, as the Japanese invest to rebuild at home, this is going to present an opportunity cost for the alternative uses of capital, both in Japan and externally