Fri Mar 11, 2011 9:41am GMT
* Nuclear power plants, refineries shut after massive quake
* Disaster fresh blow to struggling economy; BOJ pledges support
* Power outages shut factories; all ports, some airports shut
* Yen, stocks fall, bonds jump on economic fallout concerns
(Adds more details on damage, death toll, Toyota plants)
By Osamu Tsukimori and Stanley White
TOKYO, March 11 (Reuters) - Auto plants, electronics factories and oil refineries shut across large parts of Japan on Friday after a powerful earthquake rocked the country, triggering a tsunami, buckling roads and knocking out power to millions of homes and businesses.
Several airports, including Tokyo's Narita, were closed and rail services halted. All of the country's ports were closed.
Electronics giant Sony Corp , one of the country's biggest exporters, shut six factories, Kyodo news agency reported, as air force jets roared toward the most heavily affected northeast coast to assess the damage from the 8.9 magnitude quake, the biggest to hit Japan in 140 years.
The Bank of Japan, which has been struggling to boost the anaemic economy, said it would do its utmost to ensure financial market stability as the yen and Japanese shares fell.
"There are car and semiconductor factories in northern Japan, so there will be some economic impact due to damage to factories," said Yasuo Yamamoto, senior economist at Mizuho Research Institute in Tokyo.
Japanese media reported at least six deaths and many injuries, with fires breaking out from Sendai city in northern Japan to Tokyo. A tsunami 10 metres high hit Sendai port but there were no immediate reports of damage.
The Miyagi prefecture and surrounding areas include major manufacturing and industrial zones, with many chemical and electronics plants. Television showed black smoke pouring out of an industrial area in Yokohama's Isogo area.
Toyota Motor Corp said it had halted production at a parts factory and two assembly plants in the area, while Nissan Motor Co , the country's second-largest automaker, stopped operations at four factories, media reported.
Two people were reported killed by a collapsing ceiling at a Honda Motor Co factory in Tochigi Prefecture, north of Tokyo, but no other details were immediately available.
The quake occurred as the economy was showing signs of reviving from a contraction in the final quarter of last year. The disaster raised the prospect of major disruptions for many key businesses, at least in the short term.
The yen fell as much as 0.3 percent against the dollar before recouping its losses, while Nikkei stock futures plunged nearly 5 percent at one point.
The disaster also weighed on markets elsewhere, pushing shares in European insurance companies down. Large reinsurers -- Swiss Re , Hannover Re and Munich Re -- were all down more than 4 percent.
The earthquake happened just before the Tokyo stock market closed.
"Stocks will probably fall on Monday, especially of those companies, that have factories in the affected areas, but on the whole the selloff will likely be short-lived," said Mitsuhsige Akino, a fund manager at Ichiyoshi Investment Management.
Bond futures surged on worries the widespread damage would put further pressure on the already sputtering economy, while the most active gold contract on the Tokyo Commodity Exchange, February 2012 , inched higher.
"We still don't know the full scale of the damage, but considering what happened after the earthquake in Kobe, this will certainly lead the government to compile an emergency budget. We can expect consumption to fall. This could temporarily pull down gross domestic product," Yamamoto said.
With Japanese interest rates already near zero, analysts said the central bank and the government had few options but to inject more money into the economy, even if it risked swelling the already bloated deficit.
"The extent of the damage is hard to tell but it seems devastating for the northern Japan economy. The government must act quickly to announce support packages and the central bank should pump more money into the economy," said Tsutomu Yamada, a market analysts at Kabu.com Securities.
The 1995 quake that devastated Kobe caused $100 billion in damage.
"The government would have to sell more bonds, but this is an emergency, so this can't be avoided," Yamamoto said.
"Given where the Bank of Japan's benchmark interest rate is now, they can't really lower rates. The BOJ will focus on providing liquidity, possibly by expanding market operations."
POWER PLANTS, REFINERIES SHUT
Hokuriku Electric Co said on Friday all of three reactors at its Onagawa nuclear plant in northern Japan shut down automatically after the quake, but no nuclear leaks were reported.
Electric Power Development (J-Power) also halted operations of its Isogo thermal power plant in Yokohama, Jiji reported.
Television reported a major fire at Cosmo Oil Co's Chiba refinery, east of Tokyo. JX Nippon Oil & Energy Corp, Japan's top refiner, halted operations at three refineries in Sendai, Kashima and Negishi, Jiji News said.
Japanese media reported a fire at JFE Holdings Inc's steel plant in Chiba. JFE, the world's fifth-largest steelmaker, said there was no major impact.
Primearth EV Energy Co Ltd, a joint venture between Panasonic Corp and Toyota making batteries for environmentally friendly vehicles, said its Miyagi battery factory had halted production because of power cuts. The extent of any damage was not clear, but a spokesman said it did not appear to be major. (Additional reporting by TOKYO bureau; Writing by Kim Coghill; Editing by Tomasz Janowski,sourced:Thomson Reuters)
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