15 March 2011

Now investors worry about how the Japanese situation can affect other major economies. It’s important to understand that Japanese companies are integral parts of the global supply chain, so the aftereffects of the recent disaster can be serious. Moreover, many large firms, (e.g. Sony and Toyota), have already announced they are planning to shut down some of their Japanese operations for a short period of time. The transportation infrastructure has been damaged and the rolling blackouts affect the country’s manufacturing sector. Another risky factor is the possibility of further problems at one of the damaged nuclear plants.
Meanwhile, the Toronto stock market fell by almost 3% per cent in early trading, when the S&P/TSX composite index decreased by 381.03 (now it’s 13,238.16). The bond yields were also down. Later it can lead to lower fixed mortgage rates.
Today afternoon some major Canadian banks already started to cut their posted fixed rates by 10-20bps (0.1-0.2%) we expect everybody to follow.