Forex: Earthquake in Japan recovery costs estimated at 165 billion euros

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According to figures announced by the World Bank the costs for Japan to recover from the damages caused by the 11 of March Devastating earthquake could reach 165 billion Euros. This figure corresponds 4% of the country’s gross domestic product. A more optimistic estimate states that these costs could only rise to 86billion. It is expected that the recovery period could take up to 5 years while the GDP could start showing signs of affection by the middle of 2011. As Japan is the world’s 3rd largest economy concern is on whether the economy of nearby countries in Asia will be also affected. Already in China it is estimated that the growth will slow down to 9% as opposed to the 10.3% from 2010.

Economists state that due to the volatility of the situation and with disasters in Japan following one after the other it is difficult to state what the long term effects in the Japanese and global economy will be. The USDJPY pair is currently traded at 81.264.