Production Halts, Rebuilding Strain Japanese Economy, Global Markets

Fears of a nuclear meltdown in Japan have further escalated concerns about the impact of Friday's deadly earthquake and tsunami to the country's straining economy and rebuilding efforts. According to some estimates, the disaster is expected to cost Japan $180 billion in reconstruction and recovery which could pile onto the country's public debt levels, which are the highest of any industrialized country. The BBC is also reporting that the damage and production halts could knock off as much as 1% from Japan's GDP this year. Many companies have shut down production at Japanese facilities and the country has planned systematic blackouts to conserve energy and cut back on household electricity shortages. However, decreased production as well as transportation and power disruptions in Japan have also greatly reduced manufacturing around the world. As a major player in the microchip market, Japan supplies about 20% of global semiconductors and 40% of flash memory chips, so any breaks in the supply chain would likely cause prices to shoot up. BBC reports that smartphone and tablet chip prices rose another 3% on Tuesday, following Monday's 20% jump. The auto market is also a concern as Japan is a key supplier of car parts and electronic components for many European carmakers.