Devastating Japanese Quake Rattles Markets Across Globe

While it was not expected that market losses would be long term—Mitsuhsige Akino, a fund manager at Ichiyoshi Investment Management, said in the report after the market closed on Friday that Japanese stocks "will probably fall on Monday, especially of those companies that have factories in the affected areas, but on the whole the sell-off will likely be short-lived"—damage was extensive and bonds would be affected. Yasuo Yamamoto, senior economist at Mizuho Research Institute in Tokyo, was quoted saying, "This will certainly lead the government to compile an emergency budget. The government would have to sell more bonds, but this is an emergency, so this can't be avoided."

The influence of the quake on the price of oil was also likely to be only temporary, given that the unrest in the Middle East/North Africa (MENA) region continued. Although Japan is the world's third largest consumer of oil, on Friday it was reported that Libya’s output had fallen to only 200,000-300,000 barrels per day with the halt of production at the offshore Al Jurf oil field.