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Japan's economy feels effect of crisis

Reuters/Issei Kato

The Japanese government has downgraded the outlook for the world's third largest economy for the first time in six months due to the impact of the earthquake and on-going nuclear crisis, The announcement comes as another strong aftershock from the 9.0-magnitude quake that struck the northeast coast over a month ago hit the disaster region. 

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"The economy was picking up, but it has shown weak signs recently due to the impact of the Great East Japan Earthquake," the cabinet office said in its monthly economic assessment. The disaster devastated infrastructure and manufacturing facilities, breaking key supply chains and bringing power shortages that have crippled production for Japan's biggest companies such as Sony and Honda.

Toyota, the world's largest auto maker, said parts shortages would force it to halt production for several days at five European plants over the next two months after announcing similar steps at most of its 14 North America plants.

Meanwhile emergency work continues at the stricken Fukushima nuclear plant. Overnight on Tuesday, workers at the plant started pumping out the highly-radioactive runoff water left from reactor dousing operations, having earlier freed up space by dumping 10,000 tonnes of less contaminated water into the sea.

Tokyo Electric Power Co president Masataka Shimizu has again apologised for the disaster and promised compensation for those affected, without specifying amounts.

"We have set up a task force for helping the victims in order to offer comprehensive support for reconstruction," he said. "We plan to make provisional payments that people forced to evacuate need now."

 

 

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