Markets Across the World Tumble

Japan's devastating Earthquake, Tsunami, and now their growing nuclear crisis has caused a domino effect across major stock markets around the world. Additionally, with the crisis in Libya still continuing as Oil maintains high price levels, any growth that was expected this quarter might be permanently hindered by the combination of both events.

The Nikkei 225 fell more than 14% in mere days.
Source: finance.yahoo.com

The Nikkei 225 Index dropped more than 14% within a mere few days--a landslide in terms of market performance. Tokyo Electric Power dropped more than 24% just today. The numbers are indeed devastating for the Japanese economy, which is already set back by their enormous debt which is the highest for any industrialized, developed nation.

The Dow fell 1.71% during intraday trading (approximately at 1:30PM), while the Nasdaq and S&P 500 fell 1.72% and 1.68%, respectively. The FTSE 100 dropped 1.38% during trading. Oil fell 2.61% to settle at $98.55 per barrel--which is still considered a high price.

The Dow fell 1.78% during intraday trading (approximately 1:30PM).
Source: finance.yahoo.com

What does this mean for the global financial markets? For one, it certainly means that projections and forecasts will change for any corporation. Since many products rely on a long production chain that involves multiple countries cooperating, the disaster in Japan combined with high Oil prices will cause changes in these projections. Secondly, the bull market that the U.S. stock market experienced since Q4 last year to now may finally taper off and begin stabilizing.

However, there is some good news in all this. Many analysts believe that the crisis in Japan will finally lead to Japan's recovery from its decades long stagnant economy. Since money will be poured in to help the relief effort, one can expect construction, energy, and food supply & demands to also coincide with the relief effort. This may just be the catalyst for the beginning of a much better economy for Japan, which has experienced a slow, crawling economy for many years.

8.9 Magnitude Earthquake and Tsunami Hits Japan

An 8.9 magnitude earthquake hit off the coast of northeastern Japan earlier today. The earthquake consequently created a 10 meter (approximately 32 feet) tsunami which swept into land, pulling ships onto shore and carrying cars further inland.

The earthquake was originally estimated to be around 7.9 magnitude (Mw scale), but later was confirmed to be an 8.9 magnitude earthquake (Mw scale).

Cars riddled in water brought inland by the tsunami.
Source: Agence France-Presse/Getty Images

The tsunami caused unrest throughout the country, including Tokyo where subway service was suspended and power was cut off for approximately 4.1 million houses. Looking ahead, it looks like any damages caused by the earthquake should not be as significant as the tsunami itself, since many of Japan's modern buildings are built to resist large-magnitude earthquakes. Tsunami's on the other hand are much harder to defend against.

Major airports temporarily in Japan halted flights. Financials were affected as both the Yen and the Tokyo Stock Exchange experienced losses.

The epicenter of the earthquake in northeast Japan.
Source: The Wall Street Journal

With Japan already experiencing an economic slump and internal political problems, this only adds more tension to the land of the rising sun.

As a student minoring in the Japanese language, this is hard for me to witness. I appreciate Japan as a country and its rich culture and people.

Let's hope that people get the help they need quickly and efficiently.