Nuclear crisis hits Japan's economy

Tokyo - Japan's nuclear crisis sent corporate confidence plunging to a record low in April and the International Monetary Fund (IMF) warned the risk to the world's third largest economy is firmly on the downside, with no end in sight to its nuclear disaster.
Engineers at Japan's crippled nuclear plant, who are struggling to regain control of reactors, are now concerned that some spent fuel rods may have been damaged by the March 11 earthquake and tsunami and could be emitting high levels of radiation.
A Reuters poll released on Thursday found business confidence, which had been recovering, fell back into negative territory for the first time this year, with the gloom spreading through both the manufacturing and service sectors.
The Reuters Tankan survey of 400 large firms found power shortages caused by the crippled Fukushima Daiichi nuclear plant had hit nearly 60% of local companies, disrupting production and supply chains.
The disruption to Japan's supply chains has had a global impact, with Sony Corp suspending production and the world's largest automaker Toyota Motor Corp idling plants both locally and in the United States.
The IMF has warned that unless Japan can end its nuclear crisis soon and restore power and production to normal in two to three months, its economy is set for further decline.
"There's very high uncertainty on Japan's outlook," Naoyuki Shinohara, deputy managing director of the IMF, told Reuters in an interview on Wednesday.
"If power shortages are prolonged or if the situation at the nuclear plant deteriorates, the outlook will change... the risk is firmly to the downside," he said.
The IMF cut Japan's economic growth forecast to 1.4% this year from 1.6%, projected three months ago, and the Bank of Japan is expected to cut its January growth forecast of 1.6% when it issues its twice-yearly outlook on April 28.
The Japanese government has already cut its outlook for the economy, in deflation for almost 15 years.
Japan is struggling to cope with its worst crisis since World War Two, after the earthquake and 15-meter tsunami hit on March 11, leaving 28 000 people dead or missing, its northeast coast a splintered wreck and a nuclear plant with six reactors damaged.
The total cost of the triple disaster has been estimated at $300bn, making it the world's most costly natural disaster.
The Nikkei business newspaper reported on Thursday that Japan and the United States were considering establishing a "reconstruction fund" with corporate investment from both nations.
The Nikkei said an agreement on the fund was expected when US Secretary of State Hilary Clinton visits Japan on April 17.
Damaged nuclear fuel rods
Japan's nuclear crisis has been rated on par with the world's worst nuclear crisis at Chernobyl in 1986, although the total amount of radiation released is only a fraction of that when the nuclear plant in Ukraine exploded.
"We will transfer the water next to the central radiation disposal building. We do not have a plan beyond that," he said.
Engineers are also concerned that some spent fuel rods were damaged by the March 11 earthquake and tsunami and could be emitting high levels of radiation.
Japan's nuclear crisis has been rated on par with the world's worst nuclear crisis at Chernobyl in 1986, although the total amount of radiation released is only a fraction of that when the nuclear plant in Ukraine exploded.
Japan has expanded a 20km evacuation zone around the plant because of high accumulated radiation. No radiation-linked deaths have been reported and only 21 plant workers have been affected by minor radiation sickness.
A series of strong aftershocks this week has rattled eastern Japan, slowing the recovery effort at the plant due to temporary evacuations of workers and power outages.
The total cost of the damage has been estimated at $300bn, making it the world's most costly natural disaster.