Moody’s Analytics: The disaster will also lead to higher energy prices and a stronger yen. The shutdown o nuclear reactors at the Fukushima power station represents an 8% loss o Japan’s electricity generation capacity, which will likely be oset by increased imports o coal, liqueied natural gas, and oil, driving up prices or these commodities. Citi Asia Macro Flash: Higher demand or ossil uels on the back o Japan’s power supply shortage and a possible longer- term bias away rom nuclear energy, coupled with Middle East and North Arica supply concerns could add to volatility in oil prices. Nomura: We believe around 4 reineries equivalen t to 20% o Japan’s capacity and demand have halted production. As long as these reineries are down, imports would need to rise, thus tightening regional reining margins Moody’s Analytics: The unolding disaster in Japan will be elt across the global economy, but growth will not be derailed. Global growth will be boosted by post-earthquake reconstruction in the second hal o 2011. Nomura: Natural disasters are local events and hence tangible implications or other regions tend to be much milder. The global sector that tends to react most to natural disasters is the insurance sector. It is the insurance companies that will bear the brunt o adjusting their provisioning. Moody’s Asia Pacific Weekly: Preliminary estimates o insured losses are $15-$35 billion, and could rise as losses rom the tsunami, which are not yet ully incorporated in the range, are reined. These losses will all to insurance and reinsurance companies in Japan and around the world. HSBC: Japan’s disaster, though incomparably tragic, is unlikely to knock emerging Asia o its current growth trajectory or provide the necessary defationary impulse to ease rapidly growing price pressures. Moody’s Analytics: In the near term, damage to Japan’ s nuclear power plants, transport system, and inrastructure will disrupt energy, water, and other production inputs, crippling activity across RBS: Toyota has postponed the opening ceremony o its second plant in Bangalore but has said the production o the Etios sedan developed or the Indian market will not be aected as engines and transmissions are shipped over a medium to long term basis. Citi Investment Research & Analysis: We see risks o delays and risks o thermal/coal costs going up and a possible over-hang on India’s existing energy challenges. Modest near-term risks; but in longer term, India should continue to see Japanese investments, technology and capital, with more upside than downside risk. Moody’s Analytics: Financial markets could suer additional losses rom spikes in investor risk aversion. These could trigger portolio outfows rom ast-growing emerging markets, causing problems or nations that are heavily dependent on oreign capital. Yet many emerging regions still oer investors attractive undamentals, thus any capital fight should be short-lived. Citi Asia Macro Flash: Near-term, Japanese companies will likely delay overseas direct investment plans, but longer term, we could see greater demand or Japanese companies to diversiy production bases in more geologically stable countries. Nomura: With negative real interest rates in the majority o the major economies, investors are still incentivised to take on risk. Citi Asia Macro Flash: Assuming the nuclear allout is contained, growth ears in Asia may be overdone. We think this opens opportunities to re-enter paid positions in Asia rates. Eventually, we could see recovery in Asia risk assets. HOW JAPAN’S CRISIS AFFECTS ECONOMIES AND MARKETS Members of Japan’s Self Defence Forces walk through the snow-covered ruins of Kamaishi, Iwate Prefecture, on Wednesday. A summary of analysts’ reports evaluating the economic fallout of the disaster. IMPACT ON GLOBAL ECONOMY IMPACT ON EQUITIES IMPACT ON ENERGY PRICES IMPACT ON INVESTMENTS IN EMERGING MARKETS IMPACT ON INDIA June. They do not expect a slump in domestic demand but neither a V-shaped recovery due to the extensive area damaged by the earthquake. HSBC: There have been no reports that Japanese manuacturing sites have been directly damaged. We view the risk o supply chain disruption as relatively minor, and at best temporary. D&B: Even i nuclear saety concerns are resolved, we expect reconstruction to be delayed until third quarter due to the severe disturbance to supply chains and inrastructure. both the industrial and service sectors. As a result, the world’ s third largest economy will contract in the quarter ending June 30. Citi Asia Macro Flash: Impact on Asia’s growth should not be exaggerated. Looking back at the Kobe earthquake, Japan imports rom Asia only slowed or about 6 months beore rebounding with particularly strong rebound in Japan’s imports o capital equipment. Nomura: Fears that the earthquake will induce a major liquidity shortage appear to be misplaced. We expect the largest negative impact on Japanese quarterly GDP growth will emerge in April to IMPACT ON JAPAN Damir Sagolj/reuterS