Japan says economy in "severe" condition after disaster

Fri Apr 8, 2011 8:56am GMT

* Japan economy in severe condition, no quick recovery
* China says concerned over nuclear crisis
* Beijing to closely monitor Japan's actions
* No damage from aftershock reported at Fukushima plant
* Power cut in north Japan shuts factories, including at Sony

By Chizu Nomiyama and Yoko Nishikawa

TOKYO, April 8 (Reuters) - Japan's economy is in a "severe condition" with no quick recovery in sight following a triple disaster triggered by the March 11 earthquake that has sent service-sector sentiment plummeting the most on record, the government said on Friday.

While Japan confronts the economic impact of the disaster, it also faces increasing alarm from its neighbours with China expressing concern at the pumping of radioactive water into the sea from a crippled nuclear plant.

China's Foreign Ministry said it would "closely" monitor Japan's actions to end the crisis at the plant, where engineers are battling to contain radiation leaks. It demanded accurate information from Tokyo.

"As Japan's neighbour, we naturally express our concern about this," ministry spokesman Hong Lei said in a statement.

China is the first nation to publicly express its concern over a crisis that has lasted close to a month. Other countries have banned or restricted food imports from Japan over radiation fears.

"We ask that Japan reports the relevant information to the Chinese side in a swift, comprehensive and accurate way."

Power blackouts and restrictions, factory shutdowns, and a sharp drop in the number of tourists have left the world's third largest economy reeling. Many economists expect it to slip into recession this year as factory output and exports suffer.

The crippled Fukushima Daiicho nuclear power plant north of Tokyo means power shortages and supply disruptions that will leave the economy weak for some time, Japan's central bank said on Friday.

The Cabinet Office's assessment was equally bleak.

"Japan's economy is suddenly in a severe condition due to the effects of the earthquake," it said after releasing a monthly survey of hotel workers, restaurant staff and taxi drivers that showed a record fall in confidence to levels last seen during the depths of the global financial crisis.

In an obvious sign of the downturn; taxis park in long lines in central Tokyo each night, their drivers staying warm by idling the motor as they wait forlornly for a fare.

Japan is facing its worst crisis since World War Two after a 9.0 magnitude earthquake and a huge tsunami battered its northeast coast, leaving nearly 28,000 dead or missing and damaging six nuclear reactors north of Tokyo.

The Tokyo area and regions further north make up half of Japan's economy, Nomura research shows.

A strong 7.1 magnitude aftershock on Thursday night -- one of the biggest of more than 400 aftershocks above magnitude 5.0 -- shook the already ravaged northeast.

It forced two companies, including electronics giant Sony Corp , to stop production due to power cuts. At least two people were killed after the tremor.

There was a brief scare when water leaks were found on Friday at a second nuclear plant, Onagawa, in the northeast, but Japan's nuclear safety agency said it had not detected any change in radiation levels.

NO CHANGE IN RADIATION

A relieved Tokyo Electric Power Co (TEPCO) , which operates Fukushima, said Thursday's quake had not caused any more damage. It briefly evacuated workers because of a tsunami alert, although that was later withdrawn.

The U.N.'s nuclear watchdog sounded an encouraging note when one of its officials said there were signs of progress in stabilising the Fukushima plant, though the situation remained very serious.

The International Atomic Energy Agency (IAEA) said it had not detected any change in radiation levels following Thursday night's quake.

"The situation at the Fukushima Daiichi nuclear power plant remains very serious ... (but) there are early signs of recovery in some functions such as electrical power and instrumentation," the IAEA's head of nuclear safety, Denis Flory, said.

The agency said radiation in the region around the plant, as measured by gamma dose rates, had peaked in the early days of the crisis, and aside from a rise on March 22, had since fallen to "a level very close to background".

DISRUPTS BUSINESS

Japan's neighbours have grown increasingly anxious at the risk of contamination from radiation, with some schools in South Korea closing because of fears of toxic rain. Officials there said the radiation levels in the atmosphere were harmless.

China's health ministry said this week traces of radioactivity had been found in spinach in three provinces and the state news agency Xinhua reported trace levels of radioactivity detected in 22 provinces.

To cope with power shortages, Japan's government has asked major companies to cut electricity use in the peak summer months by up to a quarter and the Tokyo Stock Exchange said the power cuts meant it would have to delay plans to extend trading hours.

The impact of the quake meant both output and exports, major pillars of the economy, would remain weak, the central bank said.

"Output will hover at a low level for the time being but then start to increase as supply constraints are mitigated," the Bank of Japan said in its monthly report for April.

Companies and households will need to cut back significantly on power usage this summer when demand is at its peak, Trade Minister Banri Kaieda said after a cabinet meeting. He urged major companies to cut electricity consumption by 25 percent.

But some ministers at Friday's cabinet meeting called for an end to a campaign of "self restraint" by ordinary people that was adopted immediately after March 11 to cut fuel or electricity use and discourage stockpiling of necessities.

"Some cabinet ministers said excessive self-restraint could worsen the economy, weakening economic power for reconstruction," Chief Cabinet Secretary Yukio Edano told reporters.

PREVENTING MORE EXPLOSIONS

Utility TEPCO said it was continuing to inject nitrogen into one of its Fukushima reactors to prevent a repeat of last month's hydrogen explosions.

The plant is far from under control and engineers have been forced to pump in tonnes of water to cool down reactors, in the process making it radioactive. The water then has to be stored, though some has been released into the sea.

Officials say it could take months to bring the reactors under control and years to clear up the toxic mess left behind.

The government has set up a 20-km (12-mile) exclusion zone around the plant, banned fishing along much of the northeast coast and set up evacuation centres for the tens of thousands forced to leave their homes following the crisis. ($1=85.475 Japanese yen)

(Additional reporting by Mayumi Negishi, Chisa Fujioka, Yoko Nishikawa and Kiyoshi Takenaka in Tokyo, Ben Blanchard and Sui-lee Wee in Beijing, Jack Kim in Seoul; Writing by Jonathan Thatcher and Michael Perry; Editing by Neil Fullick, sourced Thomson Reuters)

Japan seeks Russian help to end nuclear crisis

Mon Apr 4, 2011 10:30pm GMT

* Japan seeks Russian radiation treatment ship
* Operators forced to release radioactive water into sea
* Bath salts, sea curtain sought to stop radiation leaks
* Nuclear crisis may weaken yen, economy to be hit
By Chizu Nomiyama and Shinichi Saoshiro

TOKYO, April 5 (Reuters) - Japan has asked nuclear superpower Russia to send a special radiation treatment ship used to decommission nuclear submarines as it fights to contain the world's worst atomic crisis since Chernobyl, Japanese media said late on Monday.

Japanese engineers at the Fukushima Daiichi nuclear plant have been forced to release radioactive waste water into the sea. At the same time they are resorting to desperate measures to contain the damage, such as using bath salts to try to locate the source of leaks at the crippled complex 240 km (150 miles) north of Tokyo.

Three weeks after a 9.0 magnitude earthquake and massive tsunami hit northeast Japan, sending some of Daiichi's reactors into partial meltdown, engineers are no closer to regaining control of the power plant or stopping radioactive leaks.

The quake and tsunami left nearly 28,000 people dead or missing and Japan's northeast coast a wreck.

The world's costliest natural disaster has caused power blackouts and cuts to supply chains and business hours. It is threatening economic growth and the yen, while a recent opinion poll suggested voters want embattled Prime Minister Naoto Kan to form a coalition in order to steer Japan through its worst crisis since World War Two.

Plant operator Tokyo Electric Power Co (TEPCO) was forced on Monday to release low-level radioactive seawater that had been used to cool overheated fuel rods after it ran out of storage capacity for more highly contaminated water.

A TEPCO official was in tears as he told a news conference: "We are very sorry for this region and those involved."

The water, which is being released to free storage capacity for more highly contaminated water, is about 100 times more radioactive than legal limits. Koichi Nakamura, a deputy director-general of Japan's Nuclear Industrial Safety Agency (NISA), told a news conference in Vienna about 11,500 tonnes of water would have to be discharged.

He also said Japan had not ruled out expanding the 20-km evacuation zone around the site.

Engineers planned to build two giant "silt curtains" made of polyester fabric in the sea to hinder the spread of more contamination from the plant.

Japan has also asked Russia for the "Suzuran", a ship which treats radioactive liquids, Kyodo and Jiji news agencies said.

The ship, a joint venture between Japan and Russia, was designed to help decommission nuclear submarines in Russia's Pacific fleet in Vladivostock, ensuring radioactive waste was not dumped into the Sea of Japan, Kyodo said.

It could take months to stem the leaks and longer to regain control of the power station, damaged by the March quake and tsunami, though a U.S. official in Vienna said there was no evidence the spent fuel in the reactors was restarting a nuclear reaction after being shut down.
DISASTER MAY SEE YEN WEAKEN

Japan, the world's third largest economy but also one of its most indebted nations, has estimated the damages bill may top $300 billion.

"The damage from the nuclear crisis and the subsequent power shortage will last for several years," said Eiji Hirano, former assistant governor of the Bank of Japan (BOJ).

"There's a strong chance Japan's economy will contract in the current fiscal year," he told Reuters in an interview.

A former senior finance ministry official, Eisuke Sakakibara, said the yen would weaken in the coming months, possibly beyond 90 to the dollar, underlining expectations a near four-year rally in the currency may be over.

The yen traded at 84.05 per dollar early on Tuesday.

The disaster initially saw the yen soar on speculation Japanese would repatriate funds for reconstruction, prompting the G7 intervention to knock it back.

"This atomic power issue is an incident which would result in depreciation of the exchange rate," Sakakibara told reporters in Tokyo.

Unpopular and under pressure to quit or call a snap poll before the disaster, Prime Minister Kan has been criticised for his management of the disaster.

One newspaper poll said nearly two-thirds of voters wanted the government to form a coalition with the major opposition party and work together to recover from the disaster.

BATH SALTS, SEA CURTAIN

In their desperation to stop radioactive leaks, TEPCO engineers have used anything at hand. They have mixed sawdust and newspapers with polymers and cement in an unsuccessful attempt to seal a crack in a concrete pit at reactor No.2.

On Monday, they resorted to powdered bath salts to produce a milky colour in water to help trace the source of the leak.

TEPCO said it was also planning to drape a curtain into the sea off the nuclear plant to try to prevent radioactive silt drifting out into the ocean.

The exact source of the radiation leaks remains unknown. NISA is investigating a damaged embankment near a sluice gate at the No.2 reactor and the possibility it may be seeping through a layer of small stones below a concrete pipe.

TEPCO said it would build tanks to hold contaminated seawater, was towing a floating tank which will arrive next week, and was negotiating the purchase of three more.

"If the current situation continues for a long time, accumulating more radioactive substances, it will have a huge impact on the ocean," Chief Cabinet Secretary Yukio Edano said.

Small levels of radiation from the plant have been detected as far away as Europe and the United States and several countries have banned milk and produce from the vicinity.

Singapore extended a ban on Japanese food imports on Monday after detecting radiation in more fruit and vegetable imports. Kan asked the European Union on Monday for a calm response to Japanese imports. The EU has urged radiation testing of Japanese food and feed imports. (Additional reporting by Yoko Nishikawa, Yoko Kubota, Linda Sieg, Leika Kihara, Tetsushi Kajimoto in Tokyo and Sylvia Westall in Vienna; Writing by Michael Perry; Editing by Daniel Magnowski, sourced Reuters)

France urges world nuclear review after Japan crisis

Thu Mar 31, 2011 10:24am GMT

By Chizu Nomiyama and Chisa Fujioka

TOKYO (Reuters) - French President Nicolas Sarkozy called on Thursday for a reform of global nuclear standards by the end of the year during a first visit by a foreign leader to Japan since the earthquake and tsunami that triggered its atomic disaster.

Group of 20 chairman Sarkozy said France wants to host a meeting of the bloc's nuclear officials in May to fix new norms in the wake of the crisis at Japan's Fukushima Daiichi plant.

Japan's Prime Minister Naoto Kan supported the idea.

"In order to avoid recurrence of such an accident, it is our duty to accurately share with the world our experience," he said at a joint news conference.

The world's worst atomic crisis since Chernobyl in 1986 is proving hard to contain and has forced an international re-think of the benefits and safety of nuclear power.

It has also compounded an agonizing moment for the Asian nation after the quake and tsunami left more than 27,500 people dead or missing and caused damage that may top $300 billion (186 billion pounds).

First data on the economic impact of the March 11 disasters showed manufacturing slumped the most on record this month as factories shut and supply chains were disrupted, especially in the car and technology sectors for which Japan is renowned.

France, the world's most nuclear-dependent country, is taking a lead in assisting Japan. As well as Sarkozy's show of solidarity by his personal presence, Paris has flown in experts from state-owned nuclear reactor maker Areva.

"Consider me your employee," Areva Chief Executive Anne Lauvergeon told Japanese officials.

The United States and Germany have weighed in too, offering robots to help repair the damaged nuclear plant.

In a worrying development in Switzerland, two female employees were injured when a parcel bomb exploded in the offices of the local nuclear lobby, police said. It was not known who sent it.

Switzerland has frozen the approvals process for three new nuclear stations pending a safety review after Japan's disaster.

Pressure has been growing on Japan to expand the evacuation zone around the Fukushima Daiichi plant where radiation hit 4,000 times legal limits in nearby sea and hindered the battle to contain the world's worst atomic crisis since Chernobyl.

Both the U.N. nuclear watchdog and Japan's own nuclear safety agency have advised Kan to consider widening the 20-km (12-mile) zone round the plant on the northeast Pacific coast.

High radiation was detected at twice that distance away.

Government officials are pleading for Japanese, and the world, to avoid overreaction to what they say are still low-risk levels of radiation away from the plant.

HIGH RADIATION

More than 70,000 people have been evacuated from the 20-km ring. Another 136,000 who live in a 10-km (6-mile) band beyond that have been encouraged to leave or to stay indoors.

U.N. body, the International Atomic Energy Agency (IAEA), said radiation at Iitate village, 40 km (25 miles) from the plant, exceeded a criterion for evacuation.

Japan's chief Cabinet Secretary Yukio Edano said the government was reviewing the issue daily but "at this moment, no decision to expand the evacuation area has been made".

Consistently high levels of radiation found in the sea near the complex could mean radiation is leaking out continuously, Japan's nuclear watchdog said. The source is still unknown, adding to the headaches for engineers on the site.

Radioactive iodine in seawater near drains running from the plant was 4,385 times more than the legal limit, the highest recorded so far during the crisis.

In a sign of the extraordinary times Japan is living, one newborn baby's first medical appointment was not with a paediatrician but a Geiger counter.

"I am so scared about radiation," Misato Nagashima said as she took her baby Rio, born four days after the earthquake and disaster, for a screening at a city in Fukushima prefecture.

Concern over radiation beyond Japan grew further after Singapore detected radiation nine times the limit in cabbages from Japan, while the United States reported "minuscule" levels of radiation in milk samples on its west coast.

Contaminated milk was one of the biggest causes of thyroid cancers after the 1986 nuclear accident in Chernobyl because people near the plant kept drinking milk from local cows.

Several nations have banned milk and produce from areas near the damaged nuclear plant, 240 km (150 miles) north of Tokyo. Japan has itself stopped exports of vegetables and milk there.

While food makes up only 1 percent of Japan's exports, the nuclear emergency poses a risk to an economy burdened with public debt twice the size of its $5 trillion dollar economy and a fast ageing population.

Japan has called on World Trade Organisation nations not to impose "unjustifiable" import curbs on its goods.

LENGTHY BATTLE

Experts say the battle to control Fukushima's six reactors could take weeks, if not months, followed by a clean-up operation that may drag on for years.

Plant operator Tokyo Electric Power Co could face compensation claims of up to 11 trillion yen (82 billion pounds) -- nearly four times its equity -- if the nuclear crisis drags on for two years, an analyst at Bank of America Merrill Lynch said.

As operators struggle to regain control of the damaged reactors, nuclear experts said the continued lack of a permanent cooling system was hindering efforts to cool down fuel rods.

Workers have been forced to pump in seawater to cool the rods, but this creates contaminated seawater around the stricken plant and is making it difficult to reconnect the plant's internal cooling system which contains radiation.

Radiation readings around the evacuation zone vary widely.

Daily readings published by the government show that 30 km (19 miles) northwest of the reactors levels are climbing up to 42 microsieverts per hour, about 6 times the cosmic radiation experienced during a Tokyo-New York flight.

Elsewhere at that distance around the reactor it is just 1.0-1.2 microsieverts per hour.

A Reuters reading in downtown Tokyo on Thursday showed a radiation level of 0.18 microsieverts per hour. This is still quite low by global standards as Japan has lower levels of natural background radiation than other places.

(Additional reporting by Chisa Fujioka, Kiyoshi Takenaka and Chizu Nomiyama in Tokyo, Dave Dolan in Fukushima City, Ben Gruber in Koriyama and Sylvia Westall and Fredrik Dahl in Vienna, and Andrew Callus in Geneva; Writing by Michael Perry and Andrew Cawthorne; Editing by John Chalmers, sourced : Reuters)

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