Here is part of an article on the effect the crisis in Japan is having on the world economy .. it is serious indeed ...
the melting down nuclear reactors in Japan have not been stabilized. They continue to emit radiation directly to the environment, and will do so for several months to come, at the least. (1) That is the absolute best case scenario and it is grim. The worst case scenario is that there may be further explosions that scatter massive amounts of radioactive material into the atmosphere and sea, or the cores may melt down all the way through the reactor containment vessels and containment structures and escape directly to the environment. The point is that the nuclear reactors at Fukushima, Japan remain out of control and will constitute a menace to the whole world for a very long time to come, venting radioactivity to the sea and the atmosphere.
Of course, this all has huge international economic and ecological implications. Meaning that billions of people will be impacted to one degree or another. Realistically, a lot of people are going to die from cancers and radiation poisoning in the coming years.
Before the crisis Japan was the third largest economy in the world, exporting products to the entire world. But all of that is in jeopardy now. The triple whammy of earthquake, tsunami and nuclear crisis has rocked Japan back on its heels. Japan's just in time, industrial supply chain has been severely disrupted with attendant negative effects on the economy. The Deputy Managing Director of the International Monetary Fund (IMF) has warned of “very high uncertainty” for Japan's future, (2) while the Bank of Japan (BOJ) Governor, Masaaki Shirakawa, has explicitly warned that the Japanese economy is in a “severe state.” (3)
Evidently, the global financial firm of Morgan Stanley has arrived at the same conclusion as the IMF and the BOJ, because just a few days ago one of its property funds walked away from a $3.3 billion real estate investment in Tokyo. The Morgan Stanley fund defaulted on its debt payments and turned in the keys to a 32-storey office tower in downtown Tokyo, which includes Microsoft Japan among its tenants. This is the biggest default in Japan's history. (4) Unquestionably, this is a case of cutting losses and getting out while the getting is still good.
And doing so at the bargain basement price of a paltry $3.3 billion.
Why would Morgan Stanley do that? Because, among other things, the radioactive contamination issue is huge and it will not go away. It will have a powerfully negative impact on Japan's economy, and that definitely includes Tokyo and the Tokyo real estate market. If you doubt that, all I can say is: wait.
To be sure, the Japanese government is keenly aware of the problem that the radiation issue poses for Brand Japan. To allay fears of radioactive products being exported to international markets the Japanese government has accordingly announced that it will measure radiation levels on ships leaving Tokyo bay.(5)