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Business

Japan earthquakes hit major manufacturers

Production at many factories has come to a standstill after a series of deadly earthquakes hit southern Japan in the course of the past few days. The catastrophe saw share prices at Tokyo's stock exchange drop.

In the wake of the deadly earthquakes in southern Japan, share prices tumbled on Monday after production at many key factories came to a standstill.

The quakes, which measured up to 7.3 in magnitude and killed at least 42 people, stalled major companies' operations at key manufacturing hubs.

Electronics manufacturer Sony stopped production of smartphone image sensors at its Kumamoto plant near the epicenter on Kyushu island. A schedule for resuming production was not in place.

Motoring company Honda said it would halt motorcycle assembly at its nearby plant until Friday.

The earthquake also hit a number of car parts suppliers, which saw car manufacturers including Toyota and Mitsubishi, pause production at plants across Japan, as they experienced supply shortages.

In addition to the production stoppages, Japanese companies also took a hit on the stock market, following failed oil talks in Doha, causing Tokyo's benchmark Nikkei 225 index to slump by 3.4 percent.

Abe unchanged on sales tax increase

Despite the devastating earthquakes, Japanese Prime Minister Shinzo Abe said on Monday he would stick to plans to raise sales tax from eight to 10 percent next year.

"As I have previously said, there is no change in our basic stance that unless there is a situation comparable to the Lehman shock or a major disaster, the sales tax will be raised as planned," he said.

He did not comment on whether last week's quakes qualified as such a "major disaster".

The announcement came contrary to analysts' expectations, who had predicted Abe would delay the tax increase in light of faltering economic growth.

mrk/uhe (AFP, Reuters)

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