HSBC's King: Japan will fuel commodity boom

The Japan crisis will trigger a global commodity boom as it requires more raw materials to rebuild its decimated infrastructure, says HSBC's chief economist Stephen King.

The need for resources to aid the country's reconstruction will also boost the yen, to divert material exports towards domestic rebuilding, says King. "Taxes may rise to divert Japanese spending away from consumption towards infrastructure investment. And, should the Japanese government issue "reconstruction bonds" - the equivalent of the UK's War Loan - savings may be diverted patriotically to the needs of the nation and not to commercial needs," he adds. The economist says this reduction in Japan's capital outflows is more likely to disrupt global supply lines than to allow other na...