In Japan, the Nikkei closed down 1.7%, with the Japanese auto industry hit particularly hard.


Nissan, Toyota and Honda all shut down plants. Honda reported the death of a 43-year-old worker at its research center in Tochigi.

Jeffrey Smith, a Honda spokesman in Torrance, Calif., said the company was working hard to assess the effect on its U.S. operations.

Although much of what Honda, Toyota and Nissan sell in the U.S. is made in North America, it was unclear whether lines that are manufactured in Japan, including the high-profit Toyota Lexus and Honda Acura brands, could face shipment problems.

The disaster also has added an element of uncertainty for global rice prices. The Japanese region hit by the tsunami is a major production area for rice. The world's rice supply had been forecast to be robust, but economists warned Friday that the effect of the tsunami on Japan and other grain-growing areas in the Pacific Rim may temporarily influence already-rising global food prices.

For automakers, food producers and many other companies, large and small, the higher price of oil already has begun to pinch profits. The possibility of further shocks from Japan's earthquake could be unsettling.

Paul Donovan, a global economist for UBS Investment Bank in London, said the short term wouldn't be pretty as companies struggle to repair damage and restore production and as insurance firms prepare to pay hefty claims.

He offered a more bullish forecast for Japan and the global economy over the long haul.

"The process of reconstruction increases employment, demand and economic activity," he said. "And Japan's economic activity will increase."

Photos: Scenes from the earthquake

ron.white@latimes.com

don.lee@latimes.com

Times staff writers Dawn C. Chmielewski, Walter Hamilton, Jerry Hirsch, P.J. Huffstutter, Christi Parsons, Alex Pham, Alana Semuels and Richard Verrier contributed to this report.