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Japan’s Prime Minister, Naota Kan, did little to quell fears Monday evening during a press conference in which he said the leakages from the 4 nuclear reactors were worse than previously believed. There are also reports of radiation readings in Tokyo. The Nikkei index is trading down over 13% as investors price in a crushing economic environment.

The S&P futures are trading down 29 points or 2.25%, the Nikkei is down an incredible 13% and the Hang Seng composite is off 4%. The downturn is being seen as 100% deflationary as JGB’s rally 1% and the USD rallies higher. The Japanese economy is at risk of becoming dysfunctional and investors are finally taking note of the contagion from the world’s third largest economy.