Kobe in 1995 (and affected regions)
* Was responsible for 12.4% of Japan’s GDP (gross domestic product).
* Caused $120 billion in damages
* Declined to 24.4% by the end of June
* The Nikkei 225 regained its pre-quake level by mid-December 1995.
* Kobe was one of the biggest ports in Asia and a very industrial part of Japan
Tohoku in 2011
* Area not as industrialised as Kobe so only affected 7.8% of Japan’s GDP.
* Bank of Japan immediately injected $85-billion into the markets to show support
* The effect was more emotional rather than effecting the economy; the earthquake was on a bigger scale but effecting less of the industrial parts of Japan
* But many companies supply lines affected e.g. Toyota and Honda
The Kobe earthquake had little long term impact on the economy compared to the recent Tohoku earthquake, was on a bigger scale resulting in many more deaths. Long term affect still uncertain. However, as the damage is bigger in the Tohoku earthquake (because of the tsunami) even though it has not affected Japans industrial heart, it will take longer for the economy to recover. Overall it is hard to predict the long term affects as we are not able to say how the economy is going to be for the next year; considering Japan is still dealing with the nuclear radiation issue.
Nikkei stocks – affect of Tohoku and Kobe quakes