Clearly it’s not just Japan that has been impacted by the country’s recent disaster. It’s going to have an impact throughout the world, especially in monetary matters. For example, investors and financiers in Australia are suffering too. It has been reported that shares in Australia encountered their “biggest one-day fall in none months as Japan's nuclear emergency threatened to compound the impact on global financial markets of Friday's deadly earthquake and tsunami.” As well “the benchmark S&P/ASX 200 closed down 97.7 points, or 2.1%, at 4528.7, after diving as low as 4479.7.” Further, uranium stocks continued to plummet while investors “shunned the sector.”
Sydney Investors Assess Earthquake Impact
So now, investors in Sydney, Australia are trying to analyze what affect Japan’s crisis will have on their country’s commodity producer. According to Ben Collett, head of Japanese Equities at Louis Capital Markets, “Global markets are ignoring the impact of this…With a 12% down-move on the Nikkei, you’ve got to sell not just the Nikkei but also the S&P along with other global markets, unless we see a Japanese government-led and coordinated move to support markets.”
Dropping Dollar and Yen
The Australian dollar has been plummeting against the Japanese yen which has led Japanese investors to sell Australian shares in an attempt to raise cash to cope with the disaster. Peter Copeland, BBT senior institutional trader said “I don’t think this concern about the uranium industry will dissipate any time soon…There will be a reassessment of how to blend energy needs.”
Of course, it is still early days. No one can really tell exactly what is going to be happening to the country and its economy. But right now things aren’t looking great. Hopefully, given the strength of Japan’s economy until now, that will stand it in good stead for its recovery program.
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