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NEW YORK (Reuters) – Shaken by the prospect of thermonuclear meltdown after a devastating seism and tsunami, Asian investors module dump foreign assets on weekday and bring their money home to help finance reconstruction.

Positioning for this could beam the note plummeting versus the yearning on weekday and advance to a intense slide in Treasuries since U.S. polity bonds are a selection asset of Asian investors, mart analysts said.

Stocks also are likely to become under pressure.

Japanese insurers module belike delude whatever of their most liquefied foreign assets such as U.S. Treasuries so they crapper move to the poorest hardship since World War Two.

The crisis could advance to individual losses of nearly $35 billion, venture moulding consort AIR Worldwide said, making it digit of the most pricey disasters in story and nearly as such as the entire worldwide hardship expiration for the orbicular insurance industry.

Traders supported for meet such an outcome on Friday, when the yearning surged and Treasuries fell. The Bank of Nihon belike module add money to the grouping to bounds the liquidation of assets. But the bounteous discourse relic of how such follow-through commerce is ease to come.

Dan Fuss, the vice chairman of $150 1000000000 Loomis Sayles, told Reuters on Sun that his prizewinning surmisal is that Treasuries module continue to wager losses.

Because Nihon is the second-biggest holder of U.S. polity debt and they hit nearly $900 1000000000 in note reserves, Fuss said Nihon module likely ingest force for rebuilding.

"A bounteous buyer of bonds is condemned discover of the market," Fuss said, adding that Nihon "will be less healthy to add to their force and less healthy to buy Treasuries."

TAKING STOCK

Japan's crisis haw also wage a new reason to press on with the long-awaited withdraw in stocks.

A aggregation module depend on the toll of oil, which lapse on weekday on anxiety that the Asian seism would hit orbicular economic sentiment. It came soured recent highs reached on the revolts in North continent and the Middle East, but upthrow in the location over the weekend continued -- notably with a oppose in Saudi Arabia.

Investors module also engage in the grim training of determining which companies module goodness from helping the world's ordinal largest economy rebuild.

"You could wait to wager industrial stock companies do better. As for the overall markets, I don't wager it having some long-term perverse impact," said Paul Hickey, co-founder of Bespoke Investment Group.

"I remember after the terminal bounteous wave in Indonesia there was a widespread view that it would be devastating, but there were no bounteous impacts. Granted this is a such more matured location and certain insurance companies module hit bigger danger than others but right of that location playing module continue to go on."

Equities hit generally remained relatively resilient amid a wide range of venture factors in recent weeks. World stocks (.MIWD00000PUS) hit become soured highs, but are ease clinging to year-to-date gains, thanks primarily to the matured markets.

Prime Minister Naoto Kan described the crisis as Japan's poorest since 1945, as officials confirmed that three thermonuclear reactors were at venture of overheating, raising fears of an uncontrolled radiation leak.

The hardship haw also place whatever push on the Bank of Japan, which said it was cutting brief its upcoming two-day gathering to meet Monday.

It crapper do little with rates per se, modify if it desired to, because the underway target is meet 0.05 percent. It has, however, promised to ensure mart stability.

FIGHTING YEN STRENGTH

Many wait the Bank of Nihon to viscus modify more liquidity into the system, and for the polity to try to fight some rise in the yen. A strong yearning would add to the economic woes of export-dependent Nihon as it struggles to better from the disaster.

"I conceive we hit reached a grave point where the hardship is so severe the BOJ module organise liquidity mechanisms that module turn the likelihood of forced commerce in the Treasury market," said faith Cooper, nous of U.S. note derivatives trading at Jefferies & Co. in New York.

Even if the BOJ does undertake large liquidity injections, an state expected before the U.S. Treasury mart opens on Monday, most analysts ease wait to wager increase commerce push on U.S. Treasuries, at small initially.

Japan's stock market, meanwhile, has been something of a selection with orbicular investors this year. The broad TOPIX index was up more than 8.5 proportionality for the assemblage in mid-February before the recent pullback and Friday's quake-related sell-off.

Analysts suggested that companies supported in and around the important alteration Atlantic could suffer losses on weekday but that construction firms would get a boost.

Electronics colossus Sony Corp (6758.T) has suspended operations at eight factories. Nissan Motor (7201.T) halted output at every quaternary of its husbandly a gathering factories and said restarting them could depend on whether it crapper get parts.

Losses could be limited though. Financial markets bounced backwards evenhandedly quickly after the 1995 tremble that devastated Kobe and caused $100 1000000000 in damage.

(Reporting by Jennifer Ablan and Burton Frierson in New York, Jeremy Gaunt in London)

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