Reply #48: Global crisis claims Japan insurer, markets panic

[UpInArms]

http://news.yahoo.com/s/nm/20081010/bs_nm/us_financial_japan

TOKYO (Reuters) - The global credit crisis claimed its first Japanese financial institution on Friday and the government looked to prop up smaller banks, as Tokyo shares suffered their biggest rout since a 1987 crash.

Government ministers played down the risk of contagion from the collapse of an unlisted, small insurer in Japan, which has been a safe haven in a global crisis that has destroyed banks across the United States and Europe.

But spooked investors stampeded for cash before a long weekend, freezing one of the last functioning money markets in the industrialized world and pummeling stocks.

The Nikkei share average tumbled 9.6 percent, taking its losses for the week to 24 percent, following a dizzying slide on Wall Street.

"This is panic. New York, the currencies -- there's nothing left for us to trust," said Takashi Ushio, head of investment strategy at Marusan Securities.

"Investors are scurrying to convert to cash. A lack of confidence is coupling with panic."

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