HSBC said the pattern after the 1987 crash, the 1998 Asia crisis, and Lehman's collapse, was that Japanese repatriation kicked in violently with a lag of a week. The impact may be greater this time given the trauma, and power-rationing as 11 nuclear reactors are shut down."This overseas wealth is like a crisis fund: this is what it is for," said Mr Jeremy Warner.
The sudden snap back in capital flows vastly outweighs the global impact of lost output, though that too is significant given plant closures by Toyota and others.
HSBC said appetite for "Uridashi" bonds of countries such as Brazil South Africa, and Australia has "collapsed", cutting off a key source of fresh funding. The bigger effect is liquidation of global assets built up during the "carry trade", when Japan's insurers, funds and famed housewives ("Mrs Watanabe") fled zero rates to chase yield abroad. These assets include UK equities, US municipal bonds and commodity funds.
This is why an earthquake in a region covering 6pc of Japan's economy– or less than 0.5pc of global output – has set off a global rout.
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