Disparate effects of disaster on Japan

The March 11 earthquake was the worst ever recorded in Japan. Along with the tsunami it caused, it has already claimed an estimated 28,000 lives and caused economic loss of 16-25 trillion yen ($192.5-300.8 billion).

Though the human and economic loss cannot be fully assessed even more than two weeks after the disaster, let us briefly discuss four issues: the effect of the quake and tsunami on industrial production, the Japanese economy as a whole, the yen's future and the country's fiscal deficit.

How will the quake and tsunami affect industrial production? The answer in short is "substantially". The direct result is the closure (even if temporarily) of factories because of the damage caused by the quake and tsunami. The indirect effect is that despite being operational, many factories cannot produce to capacity because the crippling of Fukushima nuclear power plant has disrupted normal electricity supply. So in effect, Japan is reeling under the effects of a triple disaster.