Impact of Disaster in Japan

Impact of disaster in Japan on US is tiny: Oil prices drop by $1.50 as Japan shuts down 6 refineries; 31% of its capacity. Yen rises slightly as insurers convert foreign holdings into Yen to pay for rebuilding. Japanese gov’t may sell some of their T-bill holdings to help pay for reconstruction. This may cause US rates to rise slightly. Note: Area stricken by quake accounts for only 2% to 3% of Japanese GDP.