Japan's Economy is in 'Severe' Condition Following Devastating Earthquake

Japan's economy is in "severe" condition following last month's earthquake and ensuing tsunami, the government said on Friday.

"Japan's economy is suddenly in a severe condition due to the effects of the earthquake," the Cabinet Office said after the release of its March survey of workers.

Problems have been exacerbated by continuing aftershocks, including a 7.4 magnitude earthquake on Thursday night.

According to a Reuters report, "Underlining the ferocity of the damage to the economy from the disaster, in which a nuclear power plant was crippled by the giant tsunami following the March 11 quake, the government also asked major companies to cut electricity use in the peak summer months by up to a quarter."

In its monthly statement for April, the Bank of Japan commented that "Output will hover at a low level for the time being but then start to increase as supply constraints are mitigated."

The Reuters report notes that "Companies and households will need to cut back significantly on power usage this summer when demand is at its peak, Trade Minister Banri Kaieda said after a cabinet meeting. He urged major companies to cut electricity consumption by 25 percent."

Japan's Nikkei Index closed higher by more than 1.8% Friday, to 9,768.