March 13 - The biggest earthquake on record in Japan and a tsunami hammered the country's northern coastline, causing widespread destruction and raising the prospect of significant economic damage.
The following shows how Japanese markets and the economy performed and fiscal and monetary authorities reacted following the Kobe earthquake in 1995:
* The earthquake:
-- The Kobe earthquake happened in the early hours of January 17, 1995. It had a magnitude of 7.3 and killed more than 6,400 people. Damage was estimated at $100 billion.
* The economy:
-- Industrial output in January 1995 fell by 2.6 percent, but then rose for three consecutive months by 2.2 percent, 0.9 percent and 1.3 percent.
Economic growth through 1995 was relatively strong. First quarter activity expanded at an annualized rate of 3.4 percent. The following two quarters saw growth of 3.2 percent and 3.9 percent, respectively, before a pull back when the economy shrank 0.6 percent in the last quarter of the year.
The effects of rebuilding were felt in 1996 when annualized growth rates each quarter were; 3.7 percent, 4.0 percent, 0.9 percent and 5.9 percent.
-- The yen was on a tear at the time of the Kobe earthquake. It had rallied from just over 160 yen per dollar in 1990 to 99 yen at the end of 1994. After the Kobe earthquake struck, the yen extended the rise to a record high of 79.75 as investors repatriated funds from overseas. However, trade tensions with the United States were also a factor behind the yen's rise.
In the shorter term, the yen fell briefly after the Kobe earthquake. The day before the disaster, the yen had closed around 98.40 per dollar. It fell on the day of the quake to 99.11 and the following day to 99.69. In then traded largely steady until resuming its long-term rally in early February.
-- The Nikkei average .N225 fell on the day of the quake by 0.5 percent and then on the four days that followed. It continued to fall, losing more than 16 percent by the end of the quarter. However, one reason for the fall was concern over the rise in the yen and how that could undermine export earnings. By the end of the year, the Nikkei recovered all of its losses.
* Bank of Japan:
-- The central bank provided special loans of up to 1 trillion yen to financial institutions that had branches in affected areas after the quake from July 1996 to July 1997.
It initially had a one-year program but extended it for another year.
* Fiscal policy:
-- Japan spent roughly 3.4 trillion yen in three extra budgets - one compiled in fiscal 1994/95 (April/March) and two others compiled in fiscal 1995/96 - for disaster relief and reconstruction after the quake.
* Graphic on markets after Kobe quake: