Japan earthquake rattles markets as factories shut; Nikkei falls over 3 per cent

The Japanese share market plunged more than 3 per cent on Monday after a series of earthquakes measuring up to 7.3 magnitude struck a southern manufacturing hub, killing at least 42 people and forcing major companies to close factories.

About 30,000 rescue workers were scouring the rubble for survivors and handing out food to those unable to return to their homes, after the quakes struck Kyushu island from Thursday. The biggest hit near Kumamoto city early Saturday.

“There are still missing people. We want to make further efforts to rescue and save people and prioritise human lives,” Prime Minister Shinzo Abe told parliament on Monday, saying he wanted to declare the region a disaster zone as soon as possible.

The Nikkei stock index fell 3.2 per cent, as investors weighed the impact of the earthquakes on manufacturers’ supply chains and insurers. Factories for major manufacturers including Toyota, Sony and Honda were closed, causing supply chain disruptions around the country.

Three nuclear plants in the region were unaffected by the quakes, but the Nuclear Regulation Authority said it will hold an extraordinary meeting on Monday to discuss the disaster.

All commercial flights to the damaged Kumamoto airport were cancelled and Japan’s bullet train to the region suspended.

Food was in short supply as roads remained cut off by landslides. Evacuees at a high school made an SOS signal out of chairs at a school playground, hoping to catch the attention of supply helicopters, Japanese media reported.

“Yesterday, I ate just one piece of tofu and a rice ball. That’s all,” said the mayor of one of the areas affected. “What we’re most worried about now is food. There’s no electricity or water, either.”

Of more than 500 quakes hitting Kyushu since Thursday, more than 70 have been at least a four on Japan’s intensity scale, strong enough to shake buildings.

The Kumamoto region is an important manufacturing hub.

Toyota said it would suspend production at plants across Japan after the quakes disrupted its supply chain.

Electronics giant Sony said its Kumamoto image sensors plant would remain suspended. One of the company’s major customers for the sensors is Apple. Meanwhile, Honda said production at its motorcycle plant in southern Japan would remain suspended through Friday.

Sony Corp and Toyota Motor Corp led the sharp falls among manufacturers, with drops of 6 percent. Among other automakers, Nissan Motor Co and Honda Motor Co lost more than 5 per cent.

Thirty three people have been confirmed dead in Saturday’s quake and nine in the smaller tremor a little more than 24 hours earlier. The government said about 190 of the injured were in a serious condition and some 110,000 people had been displaced. Local media reported 10 people remained “out of contact” in the village of Minamiaso.

Rescuers digging with their bare hands dragged some elderly survivors, still in their pyjamas, out of the rubble and onto makeshift stretchers made of tatami mats.
“It’s full in there. There’s not a inch to sleep or even walk about in there. It’s impossible in there,” a resident of Mashiki town said outside an evacuation centre on Sunday.

Public broadcaster NHK showed footage of forests and rice fields torn apart by the force of the quake, saying one 50 kms (31 miles) strip shifted almost 2m (6 feet) sideways.

Quakes are common in Japan, part of the seismically active “Ring of Fire” which sweeps from the South Pacific islands, up through Indonesia, Japan, across to Alaska and down the west coast of the United States and Central and South America.

At the other end of the ring this weekend, Ecuador’s biggest earthquake in decades killed at least 262 people, caused devastation in coastal towns and left an unknown number trapped in ruins.

A massive 9 magnitude quake and tsunami in northern Japan in March 2011 caused the worst nuclear crisis since Chernobyl in 1986, shutting down the nuclear industry for safety checks and sending radiation spewing across the countryside.

Nearly 20,000 people were killed in the 2011 tsunami.

The epicenter of Saturday’s quake was near the city of Kumamoto and measured at a shallow depth of 10 km, the United States Geological Survey (USGS) said. The shallower a quake, the more likely it is to cause damage.

The USGS, a science organization that provides information on ecosystems and the environment, estimated there was a 72 percent likelihood of economic damage exceeding $10 billion. Major insurers are yet to release estimates.

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