Nikkei Drops 1.7%, Earthquake of 8.9 Triggers Tsunami in Japan

Nigel Thomas
11 Mar, 2011
New York City

Markets in Japan dropped after an earthquake of 8.9 magnitude struck northeastern Japan. The quake unleashed tsunami as high as 10 meters that hit the coast of Miyagi prefecture. Death toll of 29 is expected to be revised higher.

[R]4:30 PM Tokyo – Markets in Japan dropped after an earthquake of 8.9 magnitude struck northeastern Japan. The quake unleashed tsunami as high as 10 meters that hit the coast of Miyagi prefecture. Death toll of 29 is expected to be revised higher.[/R]

Stocks in Tokyo opened lower on the weakening global sentiment and a faster increase in inflation in China. Stocks plunged in the later afternoon after an earthquake struck northeast of Tokyo.

The quake, the biggest in a century is expected to be followed by several after shocks.

The earth quake was recorded at 2:46 p.m. local time off the coast of Sendai according to Japan Meteorological Agency and was estimated at 8.9 by the U.S. Geological survey.

The quake set-off a 10-meter tsunami that swept away several cars and homes and flooded inland areas 1.5 kilometers from shoreline. The public broadcaster NHK showed several injuries in Miyagi prefecture and damaged properties and cracked highways.

The Nikkei 225 Stock Average declined 1.7% to 10,254.43 and the broader Topix index fell 1.7% to 915.51. For the week the benchmark Nikkei declined 4.1%.

The Nikkei futures for the month end delivery dropped as much as 4.8% in Singapore trading indicating that markets are likely to fall more on Monday morning.

Separately, Prime Minister Naoto Kan said he would not resign after admitting that his election campaign office had received funds from overseas Japanese residents in South Korea.

Stock Movers

The yen in trading decline to close at 82.75 to a dollar and the Japan government bonds rose to lift the yield to 1.27%.

Stocks across all sectors declined. Exporters, banks, property developers led the decliners. However, construction companies are expected to trade higher on Monday.

Toyota Motor Co declined 1.5% to 3,595 yen and Sony Corp fell 2.2% to 2,806 yen. Honda Motor declined 1.3% to 3,355 yen and Advantest fell 3% to 1,675 yen.

Mitsubishi UFJ Financial Group Inc dropped 2.5% to 431 yen.

Before the quake struck KDDI Corp gained 2.8% to 555,000 after the second largest trading company said it will consolidate its smart phone and content development platforms. Few days ago the company increased its stake in a content company listed on Jasdaq.