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Japan Counts Cost of Devastation

CNBC.com
Monday, 14 Mar 2011 | 7:11 PM ET

This is a transcript of top stories presented by China's CCTV Business Channel as produced by CNBC Asia Pacific.

Hi, I'm Saijal Patel and you're watching "Asia Market Daily".

Search and rescue efforts continued in Japan's tsunami devastated region today - as a new explosion rocked the No. 3 nuclear reactor, at Tepco's Fukushima plant.

It's now feared the death toll from Friday's devastating earthquake and tsunami could top 10,000.

CNBC's Kaori Enjoji is in the city of Sendai, where she filed this report.

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Kaori Enjoji, CNBC, Sendai:
This was the scene in Sendai on Sunday, nearly two days after being hit by the Tsunami. Residents returned to the capital city of the Miyagi prefecture, surveying the devastation for the first time since fleeing the raging waters.

Nobuo Ishigamori, employee at JFE Bars and Shapes Corporation, Miyagi prefecture:
It's something that's out of everyone's expectations. No one thought that the damage would be this bad.

Firefighters fought to contain a fire at JFE Bars and Shapes. An employee at car maker Daihatsu meanwhile can hardly recognize the city.

Mitsuharu Nemoto, Daihatsu employee, Miyagi prefecture:
That over there should be straight but it's facing this way instead. All of these are new cars, and behind me is the truck terminal.

Sendai airport meanwhile remained submerged.

Kaori Enjoji, CNBC, Sendai City:
I am very close to the shoreline where the first massive tsunamis rolled in when this monster earthquake hit, and you can see the magnitude of that tsunami here. Debris, fallen trees, parts of cars swept through with this tsunami and rolled onto the highway here. And 2.5 days later, you can see them, frozen into the mud.

Millions of people are still without running water or electricity as several nuclear reactors shut in response to the quake.

But the situation is far worse in another area in Miyagi prefecture. Nearly half the residents of Minamisanriku, about 10,000 people are unaccounted for. The damaged infrastructure has made it difficult for rescue teams to reach areas like this.

But with international aid and search and rescue teams starting to arrive, it's hoped more supplies will soon reach survivors and more people might be rescued. Kaori Enjoji, Sendai, Japan.

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Although the worst hit areas from Friday's earthquake were not key manufacturing centers, infrastructure damage is hurting Japan's manufacturers.

CNBC's Michael Kearns takes a look.

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Michael Kearns, CNBC:
Japan isn't just a manufacturing center of finished goods - it also supplies parts to many other manufacturers. So not just Japanese companies will be affected from logistical issues following the quake.

The top 3 car makers, Toyota, Honda and Nissan Motors are all keeping their factories closed on Monday. The shutdown is likely to hit Toyota the hardest as it has the biggest percentage of total production, coming from Japan.

The fire at Cosmo Oil's Chiba LPG oil refinery that has transfixed viewers, continued to rage albeit with less intensity.

Meanwhile JX Holdings has declared force majeure on its refined product supplies, but has boosted output at refineries that are still operational. JX Holdings is also diverting exports to meet domestic shortfalls.

But some relief for plane maker Boeing, already facing repeated delays to its Dreamliner. Its Japanese parts manufacturers did not appear to have suffered damage to their facilities.

Michael Kearns for CNBC.

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The disaster is also impacting the Japanese stock market - which suffered it's biggest one day fall since December 2008.

The Nikkei tumbled just over 6 percent - with heavy selling across the financial, insurance and tech sectors.

However, Ben Collett, head of Japan equities at Louis Capital Markets, says there are many reasons for investors not to panic.

(SOT) Ben Collett, Head of Japan Equities, Louis Capital Markets:
I think the BOJ in particular are doing quite a decent job of managing expectations. What they're going to do is, certainly being prepared to open up the taps, not just on liquidity, but I think um, early estimates are that the government are also going to be issuing a supplementary budget somewhere in the region of 1 percent of GDP also to accommodate any potential contraction caused by manufacturing shutdowns & economic losses.

Although the disaster is expected to put a big dent in Japan's growth, some analysts say the massive rebuilding efforts over the next 6 to 12 months could help contribute to GDP.

(SOT) Philip Niem, Head of Asian Discretionary Portfolio Management, Barclays Wealth:

The estimates right now $50-100 billion U.S., which is maybe 1 to 2 percent of GDP. You know, however as they do rebuild the damage, with the fiscal stimulus, the monetary stimulus, and the construction, we do think part of that will be added back.

That's the latest on the Japan quake disaster.

Thanks for watching "Asia Market Daily", I'm Saijal Patel from CNBC.

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