Update: It didn't take long for the Keynesians in the MSM to come out.
After Japan copes with its massive human and financial loss, the country will have to focus on rebuilding. That will take billions in private and public funds, a stimulative effort that, grimly ironic though it may be, will generate some level of stimulus and recovery.Sigh. The money to rebuild will have to come from somewhere. Individuals are going to liquidate assets to pay for the damage done to their lives by the disaster. The Japanese government is going to have to borrow or liquidate holdings (Japan owns $800B or so of US Treasuries) to pay for the reconstruction. Alternately, the Bank of Japan will simply print Yen and hand it out leading to inflation.
"Obviously the human toll is the most important thing," said Nicholas Colas, chief investment strategist at ConvergEx in New York. "Generally afterward you get a big rebound in economic growth. Rebuilding creates a lot of jobs for a lot of people and a lot of new wealth creation."
Given the state of Japan's finances - a national debt equal to two full years of the entire nation's earnings - this is not going to lead to growth or jobs.
Update 2: Japanese government bonds are held almost entirely within the nation of Japan. That might be something that companies and individuals liquidate in order to get operating cash as they recover. That could be the start of a very ugly run on Japanese bonds.