Japan battles nuclear, humanitarian crisis

TOKYO, Mar 18 (Agencies): Japan battled a nuclear and humanitarian crisis Friday, with engineers working to restore power to a stricken power plant in what the UN's top atomic expert said was a "race against time". Half a million people made homeless when the huge tsunami razed Japan's northeast coast were suffering in appalling conditions, struggling to stay warm in freezing temperatures and with scant supplies of food and fuel. But Prime Minister Naoto Kan promised the traumatised nation late Friday: "We will overcome this tragedy and recover... We will once more rebuild Japan." The number confirmed dead from the earthquake and subsequent tsunami on March 11 hit 6,539, making it Japan's worst natural catastrophe since the 1923 Great Kanto Earthquake, which killed over 142,000 people. A moment of silence was observed at 2:46 pm, exactly one week after the 9.0-magnitude quake struck. Meanwhile, finance ministers from the Group of Seven (G7) countries -- the world's richest nations have agreed to step into currency markets in a bid to control volatility in Japan's yen. It is first time since 2000 that G7 countries have jointly intervened in currency markets. Earlier this week, the yen hit its highest level since World War II against the US dollar, adding to fears over Japan's recovery. The yen weakened to 81.44 against the US dollar after news of the plan. The nuclear crisis in Japan, coming soon after a huge earthquake and tsunami devastated the coastline, has hit financial markets around the world, with many worried about the impact on the global economy. The effect of the G7 decision was immediate as the Nikkei 225 index gained 2.7% on Friday to close at 9,206.75 points. In Europe, shares also responded to the intervention. The UK's FTSE 100 index rose 0.4% to 5,721 and the benchmark German and French indexes were both higher. "As we have long stated, excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability," the G7 said in their statement. "We will monitor exchange markets closely and co-operate as appropriate." The Bank of Japan injected an extra 3.0 trillion yen ($37bn; £23bn) into the markets on Friday in a bid to shore up confidence and ensure liquidity. Japan's main Nikkei 225 index lost more than 16% on first two days of the week before recovering on Wednesday. But just as the stocks were recovering, the yen hit its record-high sending them into a tumble once again. Japan is the world's third-biggest economy and relies heavily on exports. A rise in the yen makes Japanese products less desirable abroad. A strong currency may hurt recovery prospects of some of Japan's biggest companies. The nuclear and earthquake crises in Japan will cause a "major slowdown" in the airline industry, according to the International Air Transport Association. It said airlines would not start to recover until at least the last six months of the year. Analysts say the G7 decision is likely to soothe nerves, though it may not have a drastic impact on the yen's value. The intervention marks a turnaround from the situation last year, when there was much talk of countries trying to weaken their currencies to boost sagging economic growth. G7 finance ministers had called for an emergency conference call to discuss how to deal with market volatility and the impact of a stronger yen on the global recovery. While there was speculation that the group would give the go-ahead to Japan to intervene in the foreign exchange markets, analysts have been surprised by a co-ordinated intervention. The G7 countries are the US, Japan, Germany, France, the UK, Italy and Canada. However, global concerns remained focused on Japan, particularly its crippled Fukushima No. 1 plant, with radiation fears triggering an exodus of foreign nationals, particularly after Britain, France and others advised their citizens to leave Tokyo. International Atomic Energy Agency chief Yukiya Amano said the crisis at the nuclear facility was a "very grave and serious accident" and that the agency would begin its own monitoring of radiation levels in the capital. Japan's nuclear agency hiked the accident level to five from four on the international 0-7 scale of gravity for atomic accidents, an admission the crisis had at least equalled the US Three Mile Island accident in 1979. Amano emphasised that Japan must reach out for help, after criticism authorities had not issued information fast enough and fears that a larger radiation leak might contaminate the 12-million-strong capital. "It is important that the international community, including the IAEA, handles this jointly," he said in Tokyo, adding that measuring radiation in the capital would "contribute to reassuring the Japanese public". Japan has said radiation levels from the plant, located 250 kilometres (155 miles) northeast of the capital, pose no health threat outside a 20-kilometre exclusion zone, despite slightly elevated levels in Tokyo earlier in the week. The elevation of the accident level to 5 indicates "an accident with wider consequences", according to the International Nuclear Event Scale (INES). The world's worst nuclear disaster, at Chernobyl in 1986, rated a 7. Many nations shifted embassies out of Tokyo, and the mood grew jittery even far from Japan, with panic-buying of iodine pills in the United States, and Asian airports scanning passengers from Japan for radiation contamination. The capital's usually teeming streets were quiet Friday, although some residents headed to work as usual. The city's neon glare was dimmed at night, in line with a power-saving drive forced by shutdowns at other atomic plants. A major international relief operation was under way for the homeless and for millions left without water, electricity, fuel or enough food in the stricken northeast. But thick snow has covered the wreckage littering obliterated towns and villages, all but extinguishing hopes of finding anyone alive in the debris and deepening danger and misery for survivors. At the Fukushima plant, workers conducted water cooling operations again Friday using fire trucks in a race to bring overheating at the plant's reactors and fuel storage tanks, known as containment pools, under control. If the fuel is exposed to air, it could degrade further and emit dangerous levels of radioactivity.