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Japan economy, Toyota feels effect of disaster

 The impact of Japan's earthquake and nuclear crisis rippled through the economy Wednesday, when the government downgraded its outlook and Toyota announced temporary plant shutdowns overseas.

Another strong aftershock from the 9.0-magnitude quake that struck the northeast coast over a month ago hit the disaster region, further fraying nerves amid tense stop-and-go containment efforts at a stricken atomic plant.

Emergency workers at the tsunami-hit Fukushima nuclear site northeast of Tokyo started syphoning off tons of highly
radioactive water and eyed long-term plans to encase dangerous spent fuel rods in steel caskets.

The government meanwhile, worried over food safety after the plant leaked radiation into the air, soil and sea, ordered a halt to mushroom shipments from the region, having earlier restricted vegetables and dairy products.

The Cabinet Office cut its assessment of the world's number three economy for the first time in six months, in light of the March 11 tectonic disaster that has killed more than 13,000 people and left over 15,000 missing.

"The economy was picking up, but it has shown weak signs recently due to the impact of the Great East Japan Earthquake," the Cabinet Office said in its monthly economic assessment. "It remains in a severe condition."

The disaster devastated infrastructure and manufacturing facilities, breaking key supply chains and bringing power shortages that have crippled production for Japan's biggest companies, such as Sony and Honda.

Toyota, the world's largest auto maker, said parts shortages would force it to halt production for several days at five European plants over the next two months after announcing similar steps at most of its 14 North America plants.

The International Monetary Fund on Monday lowered its 2011 growth forecast for Japan -- which has long battled sluggish demand, deflation, and high public debt -- to 1.4 from 1.6 percent, citing "large uncertainties".

Japan estimates rebuilding will cost up to 25 trillion yen ($295 billion).

Japan's nuclear disaster was Tuesday upgraded to the top level of seven -- the same "major accident" category as Chernobyl -- although officials stressed that far less radiation was released and no-one had died from contamination.

Unlike at Chernobyl 25 years ago, where the reactor vessel exploded and scores died from radiation exposure within weeks, Japanese crew have been able to work on site, pushing on with efforts to eventually shut the plant down.

Overnight they started pumping off the highly-radioactive runoff water left from reactor dousing operations, having earlier freed up space by dumping 10,000 tonnes of less contaminated water into the Pacific Ocean.

"Workers are pumping a total of 700 cubic metres from the trench tunnel, hoping to reduce the water level," said a spokesman for the nuclear safety agency. "This work is expected to take four to five days."

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