The conventional wisdom a week ago was that Japan’s economy was rebounding with surprise resiliency. The Nikkei was zooming back towards 10,000, and the issues at Fukushima, though ongoing, were basically no longer of major concern.
Now there’s a new curve ball from Japan, as late on Friday PM Naoto Kan called on further nuclear plant shutdowns (temporarily) for safety reasons.
Specifically, he quested that the company Chubu Electric shut down its Hamaoka plant, a call that sent shares of Chubu Electric down 10% in today’s trading.
But the ramifications could spread far beyond that company. Lack of electricity is probably the main thing hampering the recovery now, and its impact is still being felt across global industries that rely on Japan for manufacturing. It’s particularly harming the car industry — both Japanese firms and others.
If Kan’s surprise move makes a meaningful dent to electric power generation, watch out.