Following today's massive earthquake that hit Japan, a number of clients have asked us how the Japanese stock market performed following the destructive Kobe earthquake that hit the country on January 17th, 1995. While the impact on Japan from the two quakes will surely be different, the Nikkei-225 got hit pretty hard in the weeks and months following Kobe.
Below is a chart of the index from six months before to a year and a half after the earthquake hit. In the initial week following Kobe, the Nikkei fell 6.6%. Over the next month the index was down 5.26%, and over the next three months the index had fallen 15%. The low point in the chart below came just under six months after Kobe hit, and at that point the Nikkei had fallen 25%. By the end of 1995, however, the index had regained all of its post-earthquake losses.
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