Citing Devastating Earthquake, Japan Cuts Economic Outlook

Japan cuts its economic outlook on Wednesday, citing the terrible earthquake and tsunami that hit the region on March 11. Costs for the disaster have ranged as high as $300 billion, which would make it the most expensive in recorded history.

"The effects of the earthquake will be temporary. It will cause various indirect damage such as dampening consumer sentiment but the economy will pick up toward the end of this year. That's what many economists are thinking," Japanese Economics Minister Kaoru Yosano said.

A Reuters report notes that "The new economic assessment for a country that has been mired in recession for most of the past 15 years came after another relatively strong quake rocked northeastern Japan on Wednesday. But there were no reports of any damage to a region already devastated by last month's tremor and tsunami."

Further, it has emerged that radiation released from the Fukushima Daiichi nuclear power plant was much higher in the early phases of the incident than initially believed. Tokyo Electric Power (TEPCO) has struggled to repair cooling systems that are required to lower the temperature of nuclear fuel rods in the damaged reactors.

Japan's Nikkei index is up 0.9% on Wednesday, to 9,641.

The Reuters report notes that "It is expected to take months before the damaged reactors will have cooled down. Some officials have speculated that the authorities may have to entomb the plant if the crisis drags on too long, the solution that was eventually used to close off Chernobyl."