Friday, March 11, 2011

Magnitude-8.9 Quake, Tsunami Strike Japan

By WSJ Staff

[1jquake0311] Kyodo/Reuters

Houses swept by a tsunami smoulder near Sendai Airport in Japan.

TOKYO—The strongest earthquake to hit Japan in at least 300 years rocked the country on Friday afternoon, triggering a 10-meter tsunami that violently engulfed cars and other objects in its path in northern Japan, forcing tens of thousands of people to evacuate their homes and setting off tsunami warnings for 53 countries around the world.

Police raised the death toll to 60, with 39 missing while dozens were injured in a wide range of areas including Miyagi Prefecture and central Tokyo, according to Kyodo News and the Associated Press.

The quake, one of the five biggest in history with a magnitude of 8.9, caused mass panic around Tokyo, where workers evacuated their buildings and power was cut off in 4.1 million households in Tokyo and neighboring prefectures. The natural disaster could derail the country's nascent economic recovery and increase Japan's already massive public debt, which is 200% of gross domestic product.

The government issued an official emergency at one of the country's nuclear plants after the quake shut down its reactors and caused problems with the cooling system. Officials said there are currently no reports of radiation leakage.

A tsunami warning issued by the Pacific Tsunami Warning Center in Hawaii included Japan, Russia, Taiwan, the Philippines, Indonesia, Guam, the Northern Marianas, the Marcus Islands and the Wake Islands, and extended across the Pacific Ocean to include Central and South America. New Zealand also issued a tsunami warning. Australia said there was no threat of a tsunami on its coast. In Hawaii, a tsunami alert was issued at about 10 p.m. local time.

Asia Today: Massive Earthquake Strikes Japan

3:12

A devastating 8.9-magnitude earthquake has struck Northern Japan. What are the implications for a country already coping with slow economic growth and political instability? WSJ's Jake Lee and Mariko Sanchanta, deputy Tokyo bureau chief, discuss.

Asia Today: Earthquake Hits Japan; Markets React

2:50

Brad Frischkorn of Dow Jones Newswires and WSJ's Yumiko Ono give firsthand accounts of the 8.9-magnitude earthquake that struck Japan on Friday and discuss market reactions and economic implications.

Tokyo Residents Shocked After Quake

1:21

Aftershocks rippled through Tokyo, after a devastating earthquake hit Northern Japan. The Wall Street Journal spoke to the city's residents about the quake.

Tsunami Warning Issued In Hawaii

2:00

Hawaii was one of many areas Friday that launched tsunami warning after an 8.9-magnitude earthquake hit Japan. Video courtesy of Sky News.

Devastating Quake Hits Japan

2:00

A huge 8.9 magnitude quake hits Japan causing a ten meter high tsunami along parts of the country's coastline.

Strong Quake Strikes Japan

Kyodo/Reuters

Near Tokyo Station, the epicenter of the capital city, people were streaming out onto the street, where the only option was to walk—buses and taxis weren't available and all trains were halted. Cell phone reception was down, causing long lines to snake around pay phones. The country's ports and airports shut down and car navigation systems indicated that almost every entrypoint to the highway was closed. Children walked home from school, some with protective head gear. People were huddled around televisions, trying to grasp the extent of the damage in Japan.

"This is the worst quake I've ever felt that was based so far away from Tokyo," said Kiyomi Suzuki, 69 years old, who has lived in the capital city all her life.

"A screen fell off my desk," said Varun Nayyar, an associate director at UBS Securities Japan, who hastily evacuated his building. "I don't understand why more people weren't leaving the building. I'm from India, and if an earthquake of this strength had hit there, a lot of buildings would have collapsed."

As helicopters buzzed overhead, a group of Chinese tourists huddled in front of a gate at the outer moat of the Imperial Palace, in Tokyo's Otemachi business district.

Amid the damage, some signs of normalcy returned. In Nihonbashi district of central Tokyo district, more than 100 people were waiting for buses, and TV broadcasts reported that the subway had restarted. "I don't know how long I will have to spend to go back home," said a housewife in her 60s, who was standing at the end of the line before the bus stop.

Prime Minister Naoto Kan, embroiled in a political funding scandal that could derail his premiership, appeared calm and composed on national television in a blue emergency workers' outfit. He asked the public to remain calm and said there was no danger of leaked radiation from nuclear plants. "We will secure the safety of the people of Japan and the government Japan will make every effort possible to minimize the damage," Mr. Kan said.

At Tokyo Electric Power's Fukushima Daiichi plant, three reactors shut down automatically as designed. The quake also caused diesel-powered generators used to cool the reactors to stop operating, leaving the utility company with a shortage of coolant to bring the reactors to a safe temperature.

Meanwhile, the three reactors at Tohoku Electric Power Co.'s Onagawa plant in Miyagi, near the epicenter of the quake, also shut down automatically. A few hours later, the company said that it observed smoke coming from the building housing the No. 1 reactor at the plant.

French nuclear engineering group Areva said it hasn't been informed of any impact on its installations in the country. The company operates a joint venture with Mitsubishi Heavy Industries Ltd. and Mitsubishi Corp. specialized in nuclear fuel called MNF, as well as a zirconium making plant, Cezus, which is a fully owned unit of Areva.

All other Japanese power companies operating nuclear power plants in the country said their facilities are operating normally.

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As mobile phones and landlines remained down in Tokyo, Twitter proved to be one of the best ways to contact loved ones and get updates on the quake.

Unable to use cellphones, many used their smartphones to tune into television broadcasts and find out what had happened.

"It's very convenient being able to watch live TV when the phones are down," said Minori Naito, an employee of Royal Bank of Scotland in Tokyo. "Otherwise, we'd have no idea what is going on."

At 3:24 p.m., a large aftershock struck, which could be felt standing on the ground outside of buildings in central Tokyo. People gasped while looking up at skyscrapers swaying gently and construction cranes shaking violently atop half-completed buildings. Glass panels on the ground floor of many newer buildings shimmied but few appeared to break. Inside the office buildings, the shaking felt violent.

A tsunami warning included Japan, Russia, Taiwan, Guam, the Northern Marianas, the Marcus Islands and the Wake Islands, while 15 nations and territories were covered by a tsunami watch.

The yen and Tokyo stocks fell, while Japanese government bond futures gained. The quake was originally reported at a magnitude of 7.9 but was later upgraded to 8.9, apparently exceeding the 8.8 quake that struck off Chile's coast in February 2010.

In Tokyo, hundreds of concerned office workers tried in vain to make calls on jammed cell-phone networks. Many of them gathered in open areas. The crowd appeared spooked by the sound of glass windows rattling in tall buildings.

Aftershocks were continuing, with one hitting magnitude 7.1, according to the U.S. Geological Survey.

NHK Television reported that water could be seen rising over cars and pouring into warehouses at Onahama port in Fukushima Prefecture; in Iwate Prefecture a building was washed away, with boats and cars swirling around in the rising waters.

Agence France-Presse/Getty Images

Smoke rising from Tokyo's waterfront Daiba district after the quake

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The governor of Miyagi Prefecture asked for Japanese military forces to be sent in to help, Kyodo News Service reported. The quake was centered 130 kilometers to the east of the prefecture's capital, Sendai. The Defence Ministry was sending eight fighter jets to check the damage, the agency said.

Tokyo's major airports halted flights, but the city's Narita airport had reopened by Friday evening. The long-distance shinkansen bullet train service was suspended.

Two nuclear plants on the Pacific coast in Fukushima Prefecture were automatically shut down, according to Kyodo.

The Bank of Japan set up a disaster control team, headed by BOJ Governor Masaaki Shirakawa, and said it would do all it could to supply liquidity to the market. The government set up a task force at the Prime Minister's Office.

The benchmark Nikkei Stock Average closed 1.7% lower, the U.S. dollar rose to around 83.30 yen from 82.80 yen earlier and June JGB futures ended 0.66 higher at 139.20 points, having hit an intraday high of 139.90 just after the quake.

"The impact in the currency exchange market was a bit magnified because the overall market flow was thin. Now we'll pay attention to damage situations and if this is going to have a big negative impact on the domestic stock markets, the yen will keep weakening ahead," said Mitsuru Sahara, a senior dealer at Bank of Tokyo-Mitsubishi UFJ.

Analysts from Fitch Ratings and Moody's Investors Service both said it was too early to say how the quake might affect the country's credit ratings.

Richard Jerram, a Singapore-based economist at Macquarie Securities with long experience in Japan, said that while the scale of damage was hard to predict, "the most obvious concern is the debt market. That's going to be the thing to watch."

Japan's political logjam won't likely be a problem, as "you're obviously going to get a cooperative approach," he said.

Susumu Kato, Credit Agricole CIB's chief Japan economist, said the post-earthquake reconstruction will weigh on the government's expenditure as well as its fiscal position, though he said it's still too early to offer any estimates.

Associated Press

The quake brings down a bookstore ceiling in Sendai

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"The timing of an interest rate hike will likely be postponed further. I expect the earliest interest rate increase in Japan will be later than 2013," Mr. Kato said.

Insurer Swiss Re's Asia chief economist, Clarence Wong, said he doesn't expect the earthquake to have a severe impact on Japan's exports at large, given that many production lines of electronics producers have already been moved to other Asian countries.

However, he said domestic consumption will likely be hurt by the impact of the quake, "but post-crisis reconstruction will help drive gross domestic product upwards due to the increase of government spending."

Several Asian airlines said Friday that the quake would disrupt flights to Japan. South Korea's two major airlines said they suspended some flights: Korean Air Lines Co. initially halted flights to Narita and Haneda airports, but later said it resumed flights to Haneda airport. Asiana Airlines Inc. said it stopped flights to Narita, Haneda and Sendai airports, until there is proved to be no threat.

Hong Kong-based Cathay Pacific Airways Ltd. said its flights to Japan were affected by the earthquake, and that it expects the flights to continue to be affected in the coming days. The carrier said two of its flights to Tokyo's Narita Airport from Hong Kong were diverted to Nagoya and Osaka on Friday, while another flight to Nagoya from Taipei was diverted to Osaka.

via online.wsj.com

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