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World's Major Economies to Discuss Japan Intervention

Japanese Finance Minister Yoshihiko Noda (C) speaks to reporters announcing that finance ministers from the G7 group of top economies and central bankers will hold teleconference talks, at his office in Tokyo on March 17, 2011.

Japan's stock market retreated again Thursday, and officials from the world's leading economies agreed to meet about the effect the earthquake, tsunami and nuclear crisis is having on the fragile global economic recovery.

Investors sent Tokyo's Nikkei index down more than 1.4 percent, but economic officials expressed more concern that the Japanese yen currency hit a post-World War II record against the dollar before falling back somewhat. The yen has gained significant value since the natural disasters and concerns about radiation leaks at the country's Fukushima nuclear power plants.

Analysts said some currency traders perceive the yen as a safe haven investment during Japan's turmoil. Others say the currency's value has risen as Japanese companies repatriate their cash to help pay for the reconstruction effort that will be needed in the months ahead. The higher yen could create problems for the recovery of the world's third biggest economy by making Japanese exports more expensive for the rest of the world.

Japanese Finance Minister Yoshihiko Noda said finance leaders from seven of the world's biggest economies will meet by phone early Friday to discuss the disaster and whether their central banks should intervene to stem the increase in the yen's value.

The Nikkei had rallied on Wednesday, surging 5.7 percent to recover almost a third of the ground lost earlier this week. But Asian stocks resumed their downward track Thursday, with Hong Kong's Hang Seng market falling more than 1.8 percent and exchanges in other countries also down or flat. However, European stock indexes advanced 1 percent or more in midday trading and U.S. stocks increased in early trading.

The yen surged to 76.52 to the dollar before falling back to more than 79. A strong yen is a big concern for major Japanese exporters like Toyota Motor, the world's largest automaker. Bloomberg financial news says for each yen the currency appreciates against the dollar, Toyota's earnings are cut by $372 million.

The Japanese central bank on Thursday again pumped more money - $76 billion - into the country's economy to try to stem concerns about the country's finances. That increases the total for the week to $421 billion.

Reuters reports the damage from the disasters could go as high as $200 billion, including the costs of rebuilding and disruptions to business and factory output.

Some information for this report was provided by AP, AFP and Reuters.