Global Anxiety Catches Up to Japan’s Economy

Global Anxiety Catches Up to Japan’s Economy

The world’s second-largest economy seemed enviably immune from the global financial contagion, as its cash-rich banks held little of the subprime debt that contaminated the financial institutions in the United States and Europe. [Friday, there was a] stunning 9.6 percent drop by the benchmark Nikkei 225 stock average — just two days after the index fell 9.4 percent.

One of the biggest shocks came on Friday with the sudden bankruptcy of Yamato Life Insurance, a midsize insurer that became the first Japanese financial institution to fall victim to the global financial collapse.

There is fear here that the nation could soon become collateral damage in a financial crisis not of its own making, which seems to be unfolding with surrealistic speed.

October 10, 2008

http://www.nytimes.com/2008/10/11/business/worldbusiness/11yen.html?ref=business