The catastrophe in Japan two weeks back, in the form of an Earthquake followed by a Tsunami, is expected to cost the country over 300 billion US dollars for restoring things back to what they were. The Nuclear problem is continuing still and the Japanese authorities are not giving any signs of the problem getting over in the near term.

That only means that more negative news could be in the offing from the nuclear radiation front and that could only add to the overall fund requirement for reconstruction. In the last two years, the Japanese economy has been floundering thanks to the global recession coupled with ageing population.

Now the Japanese mutual funds and Insurance companies are expected to withdraw billions of dollars of their funds invested across US , Europe and China in the coming months towards reconstruction. That does not augur well for the global markets, only because Japanese have the largest investors in most of the above mentioned markets for the last two decades.

Any major withdrawal by these Japanese funds could pull down the overall valuation of these markets in the medium term. So tread cautiously while investing in stock markets in the near term , say experts.