The Japanese equity market Nikkei 225 plummeted by nearly 6% on opening, as a glut of sell orders pushed the index to below 10,000 for the first time since November 18 2010, following the devastating earthquake that struck the country in the early hours of Friday March 11.
While the Nikkei 225 is seen to be rebounding by 1%, experts say that the markets could fall further over the course of the trading day. The Tokyo Stock Price Index (TOPIX) have also taken a tumble, hovering around the 4%.
While the disaster struck just before the close of the markets, the Nikkei 225 stood at 10254.43 before falling today. Firms, including Credit Suisse have downgraded its outlook for the equity markets.
The Bank of Japan’s Governor Masaaki Shirakawa revealed that the bank was ready to unleash massive liquidity and will inject JPY 7 trillion ($86 billion) in the system to maintain financial stability.
On Friday March 11 a massive earthquake that measured 8.9 on the Richter scale hit Japan which has instinctively led investors to sell securities in the region. The quake hit off the North Eastern coast and caused a 10-metre-high tsunami to hit the coast. Japan authorities reported there is a nuclear power emergency situation with four million homes without power, following the largest earthquake to hit Japan on record.
Energy and commodities are also on experts “watch-lists” as, according to several forecasts, between 75%-80% of Japan’s rice harvest has been ruined due to the earthquake, which has also prompted fears over future food price inflation. However, Japan is not a major rice exporter.