Japanese stocks suffered their worst one-day loss since the 2008 financial crash on Tuesday after after radiation spewed into the air at a crippled power station in northeast Japan.

The sell-off was affecting markets around the world, and futures trading early Tuesday suggested that the Dow Jones industrials ($INDU) would open with a loss of at least 200 points. European stocks opened lower.

The Nikkei 225 Index ($JP:N225) fell 1,015 points, or 10.5%, to 8,605, its worst loss since Oct. 16, 2008, and its lowest close since April 2009. The benchmark Japanese index has fallen 16% in two days, its  biggest 2-day decline since the October 1987 market crash. The broader Topix Index was off 9.5% on Tuesday and has suffered similar two-day losses.

The crash prompted some investors to move money to U.S. dollars and Treasury securities. Crude oil fell below $100 a barrel and briefly dropped below $98 in electronic trading. Gold and silver prices also declined.

 The sell-off was prompted by a third explosion in four days at the Fukushima Daiichi power station which survived Friday's big earthquake but was heavily damaged by the tsunami that slammed into the Japanese coast immediately afterward. The last explosion occurred early Tuesday. At a late-morning news conference, Prime Minister Naoto Kan warned that radiation had already spread from the crippled reactors and there was "a very high risk" of further leakage.

Luckily, The New York Times reported, the prevailing winds were sweeping most of the plume of radioactivity out into the Pacific Ocean, rather than over populated areas. The crisis at the power station is the worst since the 1986 Chernobyl reactor disaster in what is now Ukraine.

 Many Japanese factories remained closed while officials assessed damage. Toyota has closed all its Japanese plants, while Honda has stopped production at four sites. Sony halted operations at 10 manufacturing plans and two research facilities. Asian stocks were trading lower, with Hong Kong's Hang Seng Index down 3% and China's Shanghai Composite Index down 1.9%.

By: DocMemory
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