Japanese federal government agrees to "extraordinary support" for Tepco

Reuters has reported that the Japanese federal government has agreed to provide taxpayer funded "extraordinary support" of at least $62 billion to shore up Tokyo Electric Power Company (Tepco) against the risk of bankruptcy. Claims for compensation from households and businesses harmed by the Fukushima Daiichi nuclear catastrophe are expected to rise into the tens of billions of dollars. Ratings agency Standard and Poors said "The upper limit of compensation remains unclear at this stage, and we expect Tepco's profitability to remain under significant pressure for a very long period." Japanese financial analysts commented on the meaning of the scheme. Bloomberg/Businessweek also reported on this story, quoting Kazutaka Kirishima, an economics professor at Josai University near Tokyo, as saying “The government should make it clear that consumers will have to shoulder the burden...Whether through increased electricity rates, tax hikes or government bond issues, the public will eventually have to pay.” Bloomberg/Businessweek also reported that Bank of America Corp.’s Merrill Lynch in March said Tepco may face claims of as much as 11 trillion yen ($136 billion) if the worst nuclear crisis since Chernobyl lasts for two years.