By James McKee
The nation of Japan has the world’s second largest economy and boasts one of the most diverse and profitable export industries. These activities have all been halted or at the very least diminished by the immense earthquake and resulting tsunami that swept over coastal regions of the island nation. Hundreds of people have died and damage numbers in the tens of billions of dollars in addition to a substantial loss of life. There are even other large scale disasters being caused by the tsunami including problems with a nuclear power plan that Japanese officials say could be leaking radiation.
Such problems could result in far reaching consequences should they hinder Japanese productivity over time and they very well could at this point. The tsunami is not only bad news for Japan but for the United States and China as well, both of who import very large amounts of Japanese products. Even though much of the manufacturing that occurs in Japan is further towards the center of the country, there will inevitably be fallout from the financial and emotional burdens that every Japanese citizen will face. This type of crisis will almost certainly prompt the Japanese government to seek out financial assistance from its allies including the United States.
The United States economy could see a great deal of harm in coming weeks as Japan struggles to deal with what has occurred with regard to the tsunami and all the fallout therein. The USD could see some serious downgrading if the United States is drawn into a position of aiding Japan and shouldering a diminished supply of inventory. The forex currency exchange will also inevitably see a loss of value where the JPY is concerned and the Yuan will also see some turbulence. China’s recently established increase in trade relations with Japan will soon become a liability.
About the Author
Author is a Forex trader and financial analyst residing in Denver, Colorado. To stay up to date on all the latest developments in the financial world and beyond be sure to check out the forex exchange rates regularly
