Overnight, more and more nations urged their nationals to depart Japan as expediently as possible and a rift was seen as growing between the US and Japan as regards the communications and handling of the nuclear emergency at the Fukushima reactor complex. Hardly any official agency in or outside of Japan appears to be in agreement as to whether the Fukushima reactors are melting down or not or as to whether efforts to address the problems have met with success or failure.
The UN is slated to hold an emergency meeting to address the crisis in Japan, however, US authorities are playing it safe (along with a growing list of nations), and have now authorized the evacuation of 600+ Americans who work in Japan while also issuing travel warnings to anyone considering trips to or within the stricken country.
Also overnight, the Japanese yen witnessed a massive inflow of speculative funds, the players behind which are hoping to profit from the potential repatriation of the currency in the wake of reconstruction efforts. Although the concrete evidence of such a coming home of the yen are not yet manifest, and although most analysts see the currency’s gains as transitory at best, currency speculators aggressively sold the US dollar and bought the yen with wild abandon, pushing the latter to record high near 76.25 against the greenback early this morning.
The US dollar buys nearly seven yen fewer today than it did a week ago, prior to the massive quake that started the series of apocalyptic events which are making hourly headlines at this time. Some economists have tendered the projection that Japan’s economy may now head into a brief recession for a couple of quarters and result in a GDP drop of perhaps 1.2 percent in the coming quarter. The upshot of the tragedy could eventually total about 3% of Japanese GDP and while the nation is absolutely able to incur such a cost, the damage to tangible fixed assets, human capital and general wealth will not be insignificant. The timing of the catastrophe could not have been worse as regards the country’s economic conditions.
The fact is that the Japanese economy had been on the mend prior to the devastating tectonic even that occurred last Friday. Media Matters observed that conservative and reactionary media figures in the US have cited Japanese fiscal policy during the so-called "lost decade" of the 1990s in order to criticize President Barack Obama's own stimulus programs. “These media figures ignore evidence that, according to prominent economists, economic conditions were improving in Japan before the Japanese government temporarily abandoned stimulus spending in an attempt to reduce the deficit,” notes the organization. Further, it cites Nobel laureate and New York Times columnist Paul Krugman, who assessed Japan's fiscal stimulus packages as "probably [having] prevented a weak economy from plunging into an actual depression."