A look at economic developments around the globe

AP News
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Posted: Mar 16, 2011 3:25 PM

A look at economic developments and activity in major stock markets around the world Wednesday:

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LONDON _ Stocks in Europe and the U.S. slid on concerns about an escalating crisis at the Fukushima nuclear plant, while the yen headed toward a post-World War II high against the dollar as Japanese investors repatriated funds.

The renewed selling in stock markets came despite an earlier rally in Japanese shares, where the benchmark Nikkei 225 closed up 5.7 percent as investors snapped up bargains after panic selling sent the index down nearly 11 percent to its lowest level in almost two years.

Elsewhere in Asia, South Korea's Kospi added 1.8 percent, Hong Kong's Hang Seng rose 0.1 percent and China's Shanghai Composite Index gained 1.2 percent.

Later in Europe, the FTSE 100 index of leading British shares closed down 1.7 percent, France's CAC-40 fell 2.2 percent and Germany's DAX ended 2 percent lower.

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TOKYO _ It took only minutes for the earthquake and tsunami to devastate Japan's northeast. Rebuilding will take years _ if it can be afforded. The relentless wall of water that the quake unleashed killed thousands, swept away whole towns, inundated roads and knocked ports, oil refineries, steel plants and factories out of action. Experts say the cost of the destruction likely exceeds that of the catastrophic 1995 Kobe earthquake, estimated by Standard & Poor's to have totaled $159 billion.

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TOKYO _ Japan's central bank continued to flood money markets with cash, bringing its total emergency funding to nearly $700 billion as it tries to soothe fears about the economic impact of the catastrophic earthquake, tsunami and unfolding nuclear crisis.

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NEW YORK _ The dollar dropped to its lowest point against the yen in almost 16 years, briefly touching below 80 yen. A perilous nuclear crisis in Japan, debt woes in Europe, tension in the Middle East and weak economic reports in the U.S. are driving up the yen.

The dollar is now close to its lowest point of the post-World War II era _ 79.75 yen struck in April 1995 _ as leaks of radioactivity from a stricken Japanese nuclear plant have deepened the Asian country's woes following last week's massive earthquake and tsunami.

Many analysts have said they expect the Bank of Japan to try to weaken the yen if the dollar drops below 80 yen. A strong yen hurts the Asian country's exporters, potentially deepening any hit to the economy from the earthquake and lingering nuclear crisis.

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PARIS _ France's economy minister asked for a meeting of G-7 finance ministers and central bankers to see what can be done to help Japan as it deals with the aftermath of an earthquake and tsunami, and a nuclear crisis.

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BEIJING _ Japan's neighbors have ordered strengthened radiation monitoring of shipments from the earthquake-stricken country amid its frantic attempts to cool overheating reactors at a damaged nuclear power plant. The U.N. health body said there was no evidence of contamination outside Japan.

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PARIS _ Japan's nuclear crisis reverberated in atomic power-friendly countries, with China saying it would hold off on approving new nuclear plants and French lawmakers questioning top energy executives about the safety of their reactors.

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TOKYO _ Australia advised its citizens in Japan to consider leaving Tokyo and quake-affected areas. It joins a growing number of governments and businesses telling their people it may be safer elsewhere.

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LISBON, Portugal _ Portugal's borrowing costs rose in a bond sale after its credit rating was cut and amid fears a political standoff could derail its recovery plan and Europe's efforts to contain the debt crisis.

Investors demanded a 4.3 percent interest rate to take on 1 billion euros ($1.4 billion) in 12-month Treasury bills. That is up from 4 percent two weeks ago and only 1 percent a year earlier.

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ATHENS, Greece _ Debt-strapped Greece still plans to return to bond markets this year but could tap a newly-expanded European assistance program in 2012 if market pressures don't ease up, Finance Minister George Papaconstantinou said.

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TOKYO _ The operator of Japan's tsunami-crippled nuclear plant says it has almost completed a new power line that could restore electricity to the complex and solve the crisis that has threatened a meltdown.

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CAIRO _ Moody's Investor's Service pushed Egypt's sovereign bond rating deeper into junk status, the latest symptom of uncertainty about the country's political shifts as it struggles to enact sweeping reforms following Hosni Mubarak's ouster.

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JAKARTA, Indonesia _ Indonesia says four nuclear reactors it plans to build near a volatile fault will be safe and more modern than the Japanese plant critically damaged by an earthquake and tsunami.

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BERLIN _ Germany will again reduce its budget deficit in 2012, bringing it further below the eurozone mandated ceiling of 3 percent of GDP, finance minister Wolfgang Schaeuble said.

The 2012 draft budget of Europe's biggest economy foresees a deficit of euro31.5 billion ($44 billion). Revenues are expected to be euro272.3 billion, while spending will be roughly unchanged at euro303.8 billion, the minister said.