Japan’s rapid response team has distinguished itself. Within hours of the earthquake the central bank was pumping cash: by Tuesday this week, lenders’ deposits stood at an all-time high. The Ministry of Finance, meanwhile, brokered a rare international consensus on currency intervention, helping to steady the yen. Now comes a more laborious, but equally vital task: cementing recovery.

For manufacturers, the damage to power and distribution networks across seven prefectures is much worse than the more localised disruption of the Kobe quake, after which trade slowed for a few quarters. Morgan Stanley MUFG’s estimates of gross domestic product contraction – an annualised 12 per cent in the second quarter – do not seem too outlandish. For insurers, the impact looks material, but manageable. Non-life insurers have catastrophe loss reserves about double most early estimates of losses, while the extra claims faced by the big domestic life insurers may total less than 1 per cent of the claims they paid in 2009. Profits at the mega-banks may come in a little weaker in the year to March, if they boost loan loss reserves. Regional banks will be hit harder, but should be protected by their notoriously limited lending. At Sendai’s 77 Bank, the largest in the Tohoku region, loans were less than 60 per cent of assets at the end of September.

State finances, however, will feel the impact more keenly. Reconstruction and investment necessitates a fall in the corporate savings rate, which on UBS calculations stood at 8.4 per cent of GDP in the fourth quarter, close to a multi-decade-year high. Yes, that is a gradual process, and even a steep rise in government bond yields could take several years to work its way into a significantly higher interest-rate bill. But the bottom line is that every yen spent by companies on replacing lost capacity is one not spent on a Japanese government bond. As often before, it seems hard to go long Japan, without going short the government.