By Taiga Uranaka and Ki Joon Kwon

  FUKUSHIMA, Japan (Reuters) - Japan scrambled to avert a meltdown at a stricken nuclear reactor on Monday after a second hydrogen explosion rocked the facility, just days after a devastating earthquake and tsunami that killed at least 10,000 people.

  Roads and rail, power and ports have been crippled across much of Japan's northeast and estimates of the cost of the multiple disasters have leapt to as much as $170 billion (105.6 billion pounds). Analysts said the economy could even tip back into recession.

  Japanese stocks closed down more than 6 percent, the biggest fall since the height of the global financial crisis in 2008.

  Rescue workers combed the tsunami-battered region north of Tokyo for survivors and struggled to care for millions of people without power and water in what Prime Minister Naoto Kan has dubbed his country's worst crisis since World War Two.

  Officials say at least 10,000 people were likely killed in the 8.9-magnitude earthquake and tsunami that followed it. Kyodo news agency reported that 2,000 bodies had been found on Monday in two coastal towns alone.

  " It's a scene from hell, absolutely nightmarish," said Patrick Fuller of the International Red Cross Federation from the town of Otsuchi.

  " The situation here is just beyond belief, almost everything has been flattened. The government is saying that 9,500 people, more than half of the population could have died and I do fear the worst."

  Crucially, officials said the thick walls around the radioactive cores of the damaged reactors at the nuclear power plant appeared to be intact after the hydrogen blast, the second there since Saturday.

  The big fear is of a major radiation leak from the complex in Fukushima, 240 km (150 miles) north of Tokyo, where engineers have been battling since the weekend to prevent a meltdown in three reactors.

  The core container of the No. 3 reactor was intact after the explosion, the government said, but it warned those still in the 20-km (13-mile) evacuation zone to stay indoors. The plant operator, Tokyo Electric Power Co (TEPCO), said 11 people had been injured in the blast.

  Kyodo said 80,000 people had been evacuated from the zone, joining more than 450,000 other evacuees from quake and tsunami-hit areas in the northeast.

  " Everything I've seen says that the containment structure is operating as it's designed to operate. It's keeping the radiation in and it's holding everything in, which is the good news," said Murray Jennex, of San Diego State University.

  " This is nothing like a Chernobyl ... At Chernobyl (in Ukraine in 1986) you had no containment structure -- when it blew, it blew everything straight out into the atmosphere."

  Officials said on Sunday that three nuclear reactors in Fukushima were at risk of overheating, raising fears of an uncontrolled radiation leak.

  Engineers worked desperately to cool the fuel rods. If they fail, the containers that house the core could melt, or even explode, releasing radioactive material into the atmosphere.

  Nuclear experts said it was probably the first time in the industry's 57-year history that sea water has been used in this way, a sign of how close Japan may be to a major accident.

  " Injection of sea water into a core is an extreme measure," Mark Hibbs of the Carnegie Endowment for International Peace. " This is not according to the book."

  The nuclear accident, the worst since Chernobyl, sparked criticism that authorities were ill-prepared and the threat that could pose to the country's nuclear power industry.

  A Japanese official said before the blast that 22 people were confirmed to have suffered radiation contamination and up to 190 may have been exposed. Workers in protective clothing used hand-held scanners to check people arriving at evacuation centres.

  U.S. warships and planes helping with relief efforts moved away from the coast temporarily because of low-level radiation. The U.S. Seventh Fleet described the move as precautionary.

  South Korea, Hong Kong, Singapore and the Philippines said they would test Japanese food imports for radiation.

  NO POWER, NO WATER

  Almost 2 million households were without power in the north, the government said. There were about 1.4 million without running water. Tens of thousands of people are missing.

  The town of Otsuchi in Iwate prefecture was obliterated.

  " After my long career in the Red Cross where I have seen many disasters and catastrophes, this is the worst I have ever seen. Otsuchi reminds me of Osaka and Tokyo after the Second World War when everything was destroyed and flattened," Japan Red Cross President Tadateru Konoe told Reuters during a visit to the coastal town.

  Whole villages and towns have been wiped off the map by Friday's wall of water, triggering an international humanitarian effort of epic proportions.

  " When the tsunami struck, I was trying to evacuate people. I looked back, and then it was like the computer graphics scene I've seen from the movie Armageddon. I thought it was a dream . it was really like the end of the world," said Tsutomu Sato, 46, in Rikuzantakata, a town on the northeast coast.

  ENORMOUS ECONOMIC COSTS

  Estimates of the economic impact are only now starting to emerge.

  Hiromichi Shirakawa, chief economist for Japan at Credit Suisse, said in a note to clients that the economic loss will likely be around 14-15 trillion yen (106-114 billion pounds) just to the region hit by the quake and tsunami.

  Even that would put it above the commonly accepted cost of the 1995 Kobe quake which killed 6,000 people.

  The earthquake has forced many firms to suspend production and shares in some of Japan's biggest companies tumbled on Monday, with Toyota Corp dropping almost 8 percent. Shares in Australian-listed uranium miners also dived.

  " When we talk about natural disasters, we tend to see an initial sharp drop in production ... then you tend to have a V-shaped rebound. But initially everyone underestimates the damage," said Michala Marcussen, head of global economics at Societe Generale.

  Risk modelling company AIR Worldwide said insured losses from the earthquake could reach nearly $35 billion.

  Global companies from semiconductor makers to shipbuilders faced disruptions to operations after the quake and tsunami destroyed vital infrastructure, damaged ports and knocked out factories supplying everything from high-tech components to steel.

  The Bank of Japan offered a combined 15 trillion yen to the banking system earlier in the day to soothe market jitters.

  Finance Minister Yoshihiko Noda said authorities were closely watching the yen after the currency initially rallied on expectations of repatriations by insurers and others. The currency later reversed course in volatile trading.

  The earthquake was the fifth most powerful to hit the world in the past century. It surpassed the Great Kanto quake of September 1, 1923, which had a magnitude of 7.9 and killed more than 140,000 people in the Tokyo area.

  (Additional reporting by Nathan Layne, Risa Maeda and Leika Kihara in Tokyo, Chris Meyers and Kim Kyung-hoon in Sendai, Walter Brandimarte and Scott DiSavino in New York, Natsuko Waki in London and Fredrik Dahl in Vienna Writing by Nick Macfie, Editing by Dean Yates)

* Risks of global food crisis higher

  * Higher oil having impact, could hurt developing countries

  * Biofuels policies need to be reconsidered

  (Adds comments, background)

  By Joshua Schneyer

  ABU DHABI, March 14 (Reuters) - Surging global prices of basic foodstuffs raise the risk that the food crisis of 2007-2008 in developing countries will be repeated, the head of the UN's Food and Agriculture Organization said on Monday.

  A jump in oil prices and the fast recent drawdown in global stocks of cereals could herald a supply crisis, FAO Director General Jacques Diouf told Reuters in an interview during a visit to the United Arab Emirates.

  " The high prices raise concern and we've been quickly drawing down stocks," he said. " For years we have warned that what is needed is more productivity and investment in agriculture."

  The most recent UN Food Price Index showed prices have risen to the highest levels since at least 1990, when the index began.

  Diouf said until recent months, global stocks of cereals were at much healthier levels than the dwindling supplies that set off a crisis in 2007 and 2008.

  Last July, inventory levels were a healthy 100 million tonnes higher than during that crisis, but rapid economic growth in developing countries, and a return to growth in highly industrialized economies, has led to new drawdowns.

  A number of countries in north Africa and the Middle East have made big grain purchases to head off the sort of unrest, partly fuelled by food prices, which has toppled the leaders of Tunisia and Egypt.

  South Korea is looking to build a strategic grain reserve and is planning to buy cargoes of corn and another staples, joining similar efforts by other Asian nations worried about high food prices and social unrest. " It is a rational thing to do, to cover yourself, Diouf said.

  The recent surge in oil prices, which rose to nearly $120 per barrel in late February, is contributing to higher food prices that may crimp developing countries' ability to cover food import needs, as it raises the price of both transportation and agricultural inputs, Diouf said.

 

  BIOFUELS

  The FAO has been advising developed countries to re-examine their biofuels strategies -- which include large subsidies -- since these have diverted 120 million tonnes of cereals away from human consumption to convert them to fuels.

  " We've been advising member countries to revisit these policies" Diouf said. " Relying on more renewable energy does not mean you have to make more biofuels."

  Diouf said avoiding a return to food crisis hinges on crop yields in the next harvest season, as well as how economic growth impacts demand. But he also said rising food prices and oil prices could have a detrimental effect on growth.

  It was too early to determine whether Japan's recent earthquake and tsunami will have any effect on global supply or demand of agricultural products, Diouf added.

  (Editing by Keiron Henderson)

* FTSE 100 gains 0.1 percent

  * Burberry, insurers hurt by Japan worries

  * Energy firms, miners gain ground

 

  By Simon Falush

  LONDON, March 14 (Reuters) - Britain's top shares gained slightly early on Monday as disruption to nuclear power after a massive earthquake in Japan boosted energy firms, but Burberry slid on fears that demand there for luxury goods would slump.

  By 0932 GMT, the FTSE 100 was down up 5.18 points or 0.1 percent at 5,833.85.

  The earthquake in Japan had a mixed impact on UK equities, with fashion group Burberry topping the list of fallers, shedding 5.4 percent as investors worried about the impact on demand for high-end products.

  UK-listed insurers were also hit by the quake as sentiment on the sector was damaged, although they have no exposure to losses in Japan. Standard Life fell 1.9 percent while Resolution slipped 1.5 percent.

  However temporary power supplier Aggreko topped the list of gainers up 5.3 percent while energy firm BG Group gained as it was seen benefiting from extra demand after Japan's nuclear energy supply was severely damaged in the earthquake.

  Both these stocks saw extremely heavy volumes traded.

  " Disruptions to nuclear power supply could see Japanese (liquid natural gas) demand increase. This would reduce global LNG oversupply, and support a recovery in European gas & power prices," UBS said in a note.

  Xstrata and mid-cap Drax Group which supply coal, also benefited as the demand outlook for non-nuclear energy sources perked up.

  Other miners were also a significant source of support for the index with Rio Tinto up 2 percent after it edged closer to gaining control of coal producer Riversdale Mining after a $3.9 billion sweetened bid rallied more shareholders to accept the offer.

  The fact that turmoil in the Middle East has not spread further despite continuing violence in Libya is also helping prevent sharper falls, investors said.

  " The fact that there have not been more riots in the Middle East, even though Gaddafi is killing his own people, means that some worries are being eased," said Steven Bell director of the GLC Global Macro Program which has $600 million under management.

  Banks were also positive, helped by a note from JP Morgan in which it raised its rating on the sector to " overweight" from " neutral" .

  Vodafone was a significant drag on the index, slipping 1.6 percent after the Financial Times said European telecoms and entertainment group Vivendi is not willing to pay much more than 6 billion pounds ($9.6 billion) for Vodafone's stake in SFR.

  Charts suggested that the index is vulnerable to further weakness with the index testing a key support level.

  The index briefly slipped below 5,812, the 50 percent Fibonacci retracement of the November low to the February high. The next support, 61.8 percent is at 5,744.

* Japan quake weighs on mood but Hong Kong, China stocks up

  * Infrastructure counters up on reconstruction hopes

  * Hang Seng up 0.4 pct, Shanghai Composite up 0.1 pct

  * Nuclear power companies fall as Japan faces nuclear crisis

  (Updates to close)

  By Vikram S.Subhedar and Emma Ashburn

  HONG KONG, March 14 (Reuters) - Hong Kong and China shares edged higher on Monday with coal and steel plays rising as investors scoured damage reports from Japan after its worst earthquake in record history.

  Japanese stocks fell as much as 7.5 percent at one point, keeping investors across Asia on the back foot, as automakers, electronics companies and oil refiners shuttered factories in the face of widespread power outages and to check for damage.

  Shares of Chinese coal and steel firms outperformed in Hong Kong, with investors betting that blasts at several Japanese nuclear plants would force it to burn more fossil fuel, and that problems with electricity supply would allow its Asian rivals in other sectors to gain market share, at least in the short term.

  The benchmark Hang Seng Index rose 0.4 percent to 23,345.9 points, while the China Enterprises Index of top locally listed mainland companies rose 1 percent.

  However, turnover fell to its lowest this month at just over HK$65 billion, suggesting investors remained wary of taking bolder positions.

  " It seems the market is getting increasingly sensitive to even the slightest news," said a head trader at an Asian bank in Hong Kong.

  The Shanghai Composite Index rose 0.1 percent.

  ** For more stories and graphics on the disaster in Japan, click http://link.reuters.com/quh58r

  In Hong Kong, Angang Steel rose 4.8 percent and was the most active counter on the China Enterprises Index. Baoshan Iron and Steel Co Ltd closed up 2.1 percent in Shanghai.

  Coal producers, expected to benefit as demand from steelmakers rises and also as an alternative to nuclear power, also saw strong gains.

  Yanzhou Coal rose 5.2 percent, while larger rival China Shenhua Energy Co Ltd was up 2.7 percent.

  Nuclear power companies fell as investors shied away from the sector as the Japanese authorities battled to prevent a nuclear catastrophe following explosions at several power plants.

  " People are scared this will affect domestic nuclear power plant-related construction in China," said Cheng Yi, analyst at Xiangcai Securities in Shanghai, referring to China's ambitious plans to rapidly expand its nuclear power industry.

  Dongfang Electric Corp Ltd , a leading nuclear power generation equipment manufacturer, slumped 6 percent in the heaviest trading volume since May 2008. Shanghai Electric Group Co Ltd , another large nuclear power equipment manufacturer, lost 2.9 percent.

 

  PROPERTY WEAK

  Hong Kong developers underperformed, with the sector index the only one to end in the red on the day, as investors worries that rising mortgage rates in Hong Kong would crimp the city's hot real estate market.

  Banks in Hong Kong have begun raising rates on home loans with Bank of China (Hong Kong) and DBS Group joining HSBC and Standard Chartered.

  As more banks begin to raise mortgage rates, " we are seeing the beginning of an end to 'sub-1 percent mortgage rates'," said Wee Liat Lee, analyst at Samsung Securities, adding that secondary sales property should decline further from here.

  Sun Hung Kai Properties fell 1.4 percent and was the top drag on the Hang Seng. Rival Cheung Kong Holdings fell 0.7 percent. (Editing by Kim Coghill)

 

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HONG KONG, March 14 (Reuters) - China's main stock index closed up 0.1 percent on Monday in the wake of Japan's devastating earthquake on Friday.

  Shares of nuclear power plant construction companies tumbled as Japanese authorities battled to prevent a nuclear disaster, but expectations of increased demand for building supplies and better pricing lifted construction-related stocks, especially steel companies.

  The benchmark Shanghai Composite Index < .SSEC> ended at 2,937.6 points, after a 0.8 percent decline on Friday. (Reporting by Emma Ashburn Editing by Jason Subler)

* HK shares ease 0.5 percent, materials counters outperform

  * Shanghai shares flat, steel and coal plays support

  * Nuclear power companies lower after Japan quake

  * Turnover thin as market players resist big bets (Updates to midday)

  By Vikram S.Subhedar and Emma Ashburn

  HONG KONG, March 14 (Reuters) - Hong Kong shares had eased while China's benchmark was flat by midday on Monday in low trading volume as investors resisted making big bets in the aftermath of Japan's massive earthquake.

  Japanese stocks fell as much as 6 percent, keeping investors in Asia on the back foot, as automakers, electronics companies and oil refiners shuttered factories to deal with severely damaged infrastructure.

  Coal and steel-related issues outperformed in Hong Kong, where the benchmark Hang Seng Index fell 0.51 percent to 23,132.1. The China Enterprises Index of top locally listed mainland companies fell 0.28 percent, helped by a relatively resilient mainland market.

  Turnover remained light in Hong Kong at just over HK$30 billion, suggesting investors were still wary.

  " It seems the market is getting increasingly sensitive to even the slightest news," said a head trader at an Asian bank in Hong Kong.

  The Shanghai Composite Index was flat by the midday trading break as expectations of increased demand for building supplies and better pricing lifted construction-related stocks.

  Inner Mongolia Baotou Steel Union Co Ltd jumped by the daily maximum of 10 percent. Yantai Wanua Polyurethanes Co Ltd climbed 4.3 percent.

  In Hong Kong, Yanzhou Coal Mining Co Ltd rose 3.2 percent, while China Shenhua Energy Co Ltd was up 2.5 percent on expectations of heavy demand for coal from steel producers.

  The sub-index for the materials sector, which includes metals mining companies and steel producers, outperformed with a 0.32 percent gain.

  Nuclear power companies were weaker, however. Investors shied away from the sector as the Japanese authorities battled to prevent a nuclear catastrophe following explosions at a power plant.

  " People are scared this will affect domestic nuclear power plant-related construction in China," said Cheng Yi, analyst at Xiangcai Securities in Shanghai.

  In Shanghai, Dongfang Electric Corp Ltd, a leading nuclear power generation equipment manufacturer, was down 5.7 percent in the heaviest trading volume since October last year. Shanghai Electric Group Co Ltd, another large nuclear power equipment manufacturer, lost 3 percent.

  Financials continued to face profit-taking pressure that started in middle of last week, with Bank of China Ltd down 1 percent. China Construction Bank Corp, one of the top performers in the sector over the past month, fell 0.6 percent.

  Ping An Insurance (Group) Co of China Ltd shares were suspended in Hong Kong and Shanghai. A source told Reuters the company planned to raise funds via a placement of new shares in Hong Kong. (Editing by Chris Lewis)

By Mohammed Abbas

  AJDABIYAH, Libya (Reuters) - Muammar Gaddafi's troops battled rebel fighters for control of the strategic Libyan oil town of Brega on Sunday, as France promised to push harder for a U.N.-backed no-fly zone over the country.

  Government troops advancing east along the coast road took Brega early on Sunday in what looked like an increasingly confident drive towards the rebel stronghold of Benghazi.

  But the rebels, inspired by the overthrow of the Tunisian and Egyptian presidents to try to end Gaddafi's four-decade rule, said they had re-taken Brega on Sunday night. There was no way of verifying the rival claims.

  The government, whose forces had previously captured Ras Lanuf, another oil town 100 km west of Brega, said earlier it was certain of victory and threatened to " bury" the rebels, whom it linked to al Qaeda and " foreign security services."

  Gaddafi himself met the Russian, Chinese and Indian ambassadors and urged their countries to invest in Libya's oil sector, badly disrupted by the uprising and the flight of tens of thousands of expatriates oil workers.

  Libyan oil exports have been badly disrupted by the fighting, lack of staff, international sanctions and the refusal of international banks to fund trade deals. Some experts say it may take a year for output to recover to its previous level of about 1.6 million barrels per day.

  International crude prices fell by about $1 a barrel on Gaddafi regaining territory over the weekend.

  On the diplomatic front, France said it would step up efforts to persuade world powers to impose a no-fly zone over Libya. It said the Arab League's weekend call on the United Nations to impose such a zone showed the world's concern for Libyan civilians.

  Time however is short for ill-equipped rebels facing far superior firepower, including warplanes and helicopters.

  The Libyan government said it would welcome an African Union panel to try to help resolve the crisis, but condemned the Arab League call for a no-fly zone, describing it as " a dangerous act for Arab security that only serves the Zionist enemy."

  France said it would consult other powers " in the coming hours" to try to set up such a zone " to assure the protection of the civilian population in Libya ... in the face of the terrible violence suffered by the Libyan population."

  France hosts a Group of Eight foreign ministers' meeting on Monday and said they would discuss the situation in Libya.

  ARMY SAYS CAPTURED BREGA

  A Libyan government army source told state television on Sunday morning: " Brega has been cleansed of armed gangs," and rebel fighters retreating eastwards were demoralised.

  " There's no uprising any more," said rebel Nabeel Tijouri, his heavy machinegun destroyed in the fighting. " The other day we were in Ras Lanuf, then Brega, the day after tomorrow they will be in Benghazi."

  Brega is 220 km (135 miles) south of the rebel stronghold of Benghazi and Ajdabiyah is the only sizeable town between them.

  The flat desert terrain means the government's aircraft and tanks outweigh the rebels' enthusiasm and light weaponry, except in towns where the odds against the rebels are reduced.

  State television carried a confident official message. " We are certain of our victory, whatever the price," it said.

  " Those acts of division will be buried together with those who committed them, who are linked to foreign security services and the terrorist organisation al Qaeda," it said.

  But on Sunday night, rebel media officer Mustafa Gheriani told reporters in Benghazi the rebels had retaken Brega, killed 25 Gaddafi fighters and taken 20 prisoners of war.

  " Tonight it (Brega) is back in the hands of the revolutionaries, but they will probably come back tomorrow with big machines, bomb it and take it back again," Gheriani said. " This is a war of resolve and the resolve of his (Gaddafi's) people is breaking down."

  Rashid Khalikov, the U.N. humanitarian coordinator for Libya, said in an interview he wanted unimpeded access:

  " The situation is changing from one day to another," he said. " The main concern is to find out what's going on, which we don't know...The civilian population is suffering a lot."

  The United States said the Arab League's call for a U.N. no-fly zone to protect Libyan cities was an " important step," but Washington remained cautious about military intervention.

  Arab support satisfies one of three conditions NATO set on Friday for it to police Libyan air space. The others are proof that its help is needed, and a U.N. Security Council resolution.

  Even if the Security Council meets to discuss a no-fly zone, it is far from clear whether it would pass a resolution as veto holders Russia and China have both publicly opposed the idea.

  MUTINY?

  The Libyan conflict has escalated from a popular uprising similar to protests that toppled the leaders of Tunisia and Egypt and have shaken other countries in the region. It is now more akin to a civil war.

  Protests in the capital have stopped.

  Human Rights Watch said " Gaddafi and his security forces are brutally suppressing all opposition in Tripoli -- including peaceful protests -- with lethal force, arbitrary arrests, and forced disappearances."

  Fresh from crushing the revolt in Zawiyah, west of Tripoli, elite government troops and tanks turned to Misrata, Libya's third biggest city with 300,000 people and the only pocket of rebel resistance outside the east.

  Rebels said a mutiny among government troops stalled their advance on Sunday for a second day, but this was impossible to confirm independently.

  " From the early morning they (government troops) are fighting each other. We hear the fighting," rebel fighter Mohammed told Reuters by telephone. " This division between them came to us from God ... Now we are waiting to see what happens."

  Journalists have been prevented from reaching the city by the authorities. The government dismissed the reports as rumours and said there were al Qaeda fighters in Misrata.

  (Additional reporting by Maria Golovnina and Michael Georgy in Tripoli, Tom Pfeiffer in Benghazi, Mariam Karouny in Ras Jdir, Tunisia, Alister Bull in Washington Writing by Tim Pearce Editing by Matthew Jones)

* China's Wen says hard to control inflation in H1

  * But adds that he's confident China will curb price rises

  * Says can't let economy slow too much (adds quotes, details)

  By Kevin Yao

  BEIJING, March 14 (Reuters) - China faces a tough task in finding a balance between creating jobs and cooling inflation, Chinese Premier Wen Jiabao said on Monday, denying his government risks the kind of political upheaval that has beset parts of the Middle East.

  He said the first half would be a challenging period, with loose monetary policies in foreign countries, high global commodity costs and rising wages in China all adding to upward pressure on prices.

  However, reiterating that controlling inflation was Beijing's top policy priority this year, Wen said the government would be successful in its efforts.

  " I don't want to repeat my words too much. I only want to say that we are confident that we can manage inflation properly," he told a news conference at the end of the annual parliament session, which approved China's 2011-2015 development plan.

  Wen pointed to factors beyond the country's borders as the major cause of Chinese inflation, which has been running just shy of a two-year high. He noted that oil costs were soaring in the wake of unrest in the Middle East and also blamed loose monetary policies in developed countries, a thinly veiled reference to the United States.

  " The inflation we're experiencing now is in fact international in nature," he said. " Imported inflation is having a big impact on China, and that's something we cannot easily control."

  It was the third time in slightly more than two weeks that Wen had emphasised the government's commitment to reining in inflation, which China's leaders fear could fan discontent and erode the standing of the ruling Communist Party.

  Chinese inflation topped expectations at 4.9 percent in the year to February and looks set to climb higher in coming months.

  But Wen was careful to say that Beijing would not forsake growth in its efforts to control prices.

  " There is an inseparable connection between the pace of economic development, employment and inflation. When the pace of economic development is fast, there is more employment, but inflationary pressures are also bigger," he said.

  " When the pace of economic development is slow, employment numbers are fewer, but it's also easy for the economy to slip into recession," he said.

  " We must find a wise path between these two paths -- one that organically joins them together," Wen told a news conference at the end of China's annual parliamentary session.

  China has set an official goal of 7 percent economic growth per year for 2011-2015, lower than the 7.5 percent it set for the previous five years. But those official goals have been far outpaced by double-digit growth.

  To meet a goal of keeping inflation to a 4 percent average this year, the government has raised interest rates three times and banks' reserve requirements five times since October, while also using a series of direct controls to cap price rises.

  Beijing has also imposed a slew of measures to target property prices that have stayed stubbornly high.

  (Writing by Chris Buckley and Simon Rabinovitch Editing by Ken Wills)

* Many companies still scrambling for information

  * Economic effect of power blackouts likely severe-analyst

  * Hitachi, Toshiba shares tumble more than 15 pct

  * Shares in construction firms soar on rebuilding hopes (Adds details, comments)

  TOKYO, March 14 (Reuters) - Shares in Japanese manufacturing companies tumbled following Friday's devastating earthquake, as companies struggled to gather information and investors worried the after-effects of the disaster would hobble production.

  The tremor and tsunami killed thousands and knocked out transport and communication links in parts of northern Japan, where many are still without water and electricity.

  Auto and electronics makers were among the worst hit when trading resumed on Monday. Concerns about rolling power blackouts that will affect Tokyo and surrounding areas over the next few weeks added to the existing challenge of inspecting and repairing north Japan plants amid further aftershocks.

  " It will take quite some time until investors' confidence in Japanese manufacturers returns. When we look back at the Kobe earthquake, it took about a week to get an overall picture of the magnitude of the damage," said Toshihiko Matsuno, senior strategist at SMBC Friend Securities, referring to the 1995 earthquake that killed more than 6,400 people.

  " At this point, it's absolutely unclear how the power cut will affect manufacturers' production and businesses."

  Analysts said investors were likely to be risk-averse, especially given fears over a possible uncontrolled radiation leak at a nuclear plant north of Tokyo, which was rocked by a second explosion on Monday.

  Shares in Sony Corp ended 7.7 percent down in the morning session after the company suspended production at eight plants in the affected region.

  Nissan's shares dropped 8.5 percent, with the automaker shuttering all four of its auto assembly plants in Japan. Toshiba Corp , a conglomerate whose products include semiconductors and nuclear reactors, dived 16.3 percent. Hitachi also fell more than 15 percent.

  Shares in Tokyo Electric Power Company (TEPCO) were untraded amid a glut of sell orders.

  " The potential impact from the situation at TEPCO's nuclear power plant is the biggest difference between this earthquake and the Great Hanshin earthquake," said equities strategist Kiichi Murashima at Citigroup, referring to the Kobe disaster.

  " There is a chance that a meltdown will occur at the plant in Fukushima. A reduction in power supply would of course severely impact Japan's economic activity," he added.

  The nuclear industry would also likely see an effect on long-term sales, he said.

  Many firms are still trying to compile information about the condition of their plants and how the power cuts might affect them.

  Amid the destruction, there were some winners among Japanese stocks. Construction shares surged on expectations of booming orders to rebuild northeastern Japan, pushing the construction sector index up 8.5 percent to an 18-month high.       Shares in general contractor Kajima Corp jumped 31 percent, while rival Hazama Corp rose 41 percent and home builder Misawa Homes was inundated by a glut of buy orders. (Reporting by Mariko Katsumura, Mayumi Negishi and Isabel Reynolds Editing by Edwina Gibbs and Joseph Radford)

By Taiga Uranaka and Ki Joon Kwon

  FUKUSHIMA, Japan (Reuters) - A hydrogen explosion rocked the earthquake-stricken nuclear plant in Japan where authorities have been working desperately to avert a meltdown, compounding a nuclear catastrophe caused by Friday's massive quake and tsunami.

  The core container was intact, Jiji news agency said, quoting the plant operator, Tokyo Electric Power Co (TEPCO), but the local government warned those still in the 20-km (13-mile) evacuation zone to stay indoors. Kyodo news agency quoted TEPCO as saying workers were injured in latest explosion.

  A TV station also reported a new tsunami on Monday but the weather agency said it had not detected unusual wave movement.

  Japan battled through the weekend to prevent a nuclear catastrophe and to care for the millions without power or water in its worst crisis since World War Two, after a huge earthquake and tsunami that likely killed more than 10,000 people.

  Kyodo news agency said 2,000 bodies had been found on Monday on the shores of Miyagi prefecture, which took the brunt of the tsunami.

  The government had warned of a possible explosion at the No. 3 reactor because of the buildup of hydrogen in the building housing the reactor. TV images showed smoke rising from the Fukushima facility, 240 km (150 miles) north of Tokyo.

  Operators had earlier halted injection of sea water into the reactor, resulting in a rise in radiation levels and pressure. The government had warned that an explosion was possible because of the buildup of hydrogen in the building housing the reactor.

  A badly wounded nation has seen whole villages and towns wiped off the map by a wall of water, leaving in its wake an international humanitarian effort of epic proportions.

  As the country returned to work on Monday, markets began estimating the huge economic cost, with Japanese stocks plunging around 5 percent and the yen falling against the dollar.

  Prime Minister Naoto Kan said the situation at the crippled Fukushima nuclear plant remained worrisome and that the authorities were doing their utmost to stop damage from spreading.

  " The earthquake, tsunami and the nuclear incident have been the biggest crisis Japan has encountered in the 65 years since the end of World War Two," a grim-faced Kan had told a news conference on Sunday.

  " We're under scrutiny on whether we, the Japanese people, can overcome this crisis."

  Officials confirmed on Sunday that three nuclear reactors north of Tokyo were at risk of overheating, raising fears of an uncontrolled radiation leak.

  Engineers worked desperately to cool the fuel rods in the damaged reactors. If they fail, the containers that house the core could melt, or even explode, releasing radioactive material into the atmosphere.

  The world's third-biggest economy also faced rolling power blackouts to conserve energy, and Tokyo commuters reported long delays as train companies cut back services.

  DEATH TOLL " ABOVE 10,000"

  Broadcaster NHK, quoting a police official, said more than 10,000 people may have been killed as the wall of water triggered by Friday's 8.9-magnitude quake surged across the coastline, reducing whole towns to rubble. It was the biggest to have hit the quake-prone country since it started keeping records 140 years ago.

  " I would like to believe that there still are survivors," said Masaru Kudo, a soldier dispatched to Rikuzentakata, a nearly flattened town of 24,500 people in far-northern Iwate prefecture.

  Kyodo said 80,000 people had been evacuated from a 20-km (12-mile) radius around the stricken nuclear plant, joining more than 450,000 other evacuees from quake and tsunami-hit areas in the northeast of the main island Honshu.

  Almost 2 million households were without power in the freezing north, the government said. There were about 1.4 million without running water.

  " I am looking for my parents and my older brother," Yuko Abe, 54, said in tears at an emergency centre in Rikuzentakata.

  " Seeing the way the area is, I thought that perhaps they did not make it. I also cannot tell my siblings that live away that I am safe, as mobile phones and telephones are not working."

  NUCLEAR CRISIS

  The most urgent crisis centres on the Fukushima Daiichi nuclear complex, where authorities said they had been forced to vent radioactive steam into the air to relieve reactor pressure.

  The complex was rocked by a first explosion on Saturday, which blew the roof off a reactor building. The government had said further blasts would not necessarily damage the reactor vessels.

  Operator TEPCO said on Monday it had reported a rise in radiation levels at the complex to the government. On Sunday the level had risen slightly above what one is exposed to for a stomach X-ray, the company said.

  Authorities had been pouring sea water in two of the reactors at the complex to cool them down.

  Nuclear experts said it was probably the first time in the industry's 57-year history that sea water has been used in this way, a sign of how close Japan may be to a major accident.

  " Injection of sea water into a core is an extreme measure," Mark Hibbs of the Carnegie Endowment for International Peace. " this is not according to the book."

  Chief Cabinet Secretary Yukio Edano said there might have been a partial meltdown of the fuel rods at the No. 1 reactor, where Saturday's blast took place, and there was a risk of an explosion at the building housing the No. 3 reactor, but that it was unlikely to affect the reactor core container.

  A Japanese official said 22 people have been confirmed to have suffered radiation contamination and up to 190 may have been exposed. Workers in protective clothing used handheld scanners to check people arriving at evacuation centres.

  " NOT ANOTHER CHERNOBYL"

  The nuclear accident, the worst since Chernobyl in Soviet Ukraine in 1986, sparked criticism that authorities were ill-prepared for such a massive quake and the threat that could pose to the country's nuclear power industry.

  Prime Minister Kan on Sunday sought to allay radiation fears: " Radiation has been released in the air, but there are no reports that a large amount was released," Jiji news agency quoted him as saying. " This is fundamentally different from the Chernobyl accident."

  Kan said food, water and other necessities such as blankets were being delivered by vehicles but because of damage to roads, authorities were considering air and sea transport.

  Thousands spent another freezing night huddled in blankets over heaters in emergency shelters along the northeastern coast, a scene of devastation after the quake sent a 10-metre (33-foot) wave surging through towns and cities in the Miyagi region, including its main coastal city of Sendai.

  ECONOMIC IMPACT

  The earthquake has forced many firms to suspend production and shares in some of Japan's biggest companies tumbled on Monday, with Toyota Corp dropping around 7 percent. Shares in Australian-listed uranium miners also dived.

  Already saddled with debts twice the size of its $5 trillion economy and threatened with credit downgrades, the government is discussing a temporary tax rise to fund relief work.

  Analysts expect the economy to suffer a hit in the short-term, then get a boost from reconstruction activity.

  " When we talk about natural disasters, we tend to see an initial sharp drop in production ... then you tend to have a V-shaped rebound. But initially everyone underestimates the damage," said Michala Marcussen, head of global economics at Societe Generale.

  Ratings agency Moody's said on Sunday the fiscal impact of the earthquake would be temporary and have a limited play on whether it would downgrade Japan's sovereign debt.

  Risk modelling company AIR Worldwide said insured losses from the earthquake could reach nearly $35 billion.

  The Bank of Japan has said it would pump cash into the banking system to prevent the disaster from destabilising markets.

  It is also expected to signal its readiness to ease monetary policy further if the damage threatens a fragile economic recovery.

  Finance Minister Yoshihiko Noda said authorities were closely watching the yen after the currency initially rallied on expectations of repatriations by insurers and others. The currency later reversed course in volatile trading.

  The earthquake was the fifth most powerful to hit the world in the past century. It surpassed the Great Kanto quake of September 1, 1923, which had a magnitude of 7.9 and killed more than 140,000 people in the Tokyo area.

  The 1995 Kobe quake killed 6,000 and caused $100 billion in damage, the most expensive natural disaster in history. Economic damage from the 2004 Indian Ocean tsunami was estimated at about $10 billion. (Additional reporting by Risa Maeda and Leika Kihara in Tokyo, Chris Meyers and Kim Kyung-hoon in Sendai, Waltre Brandimarte and Scott DiSavino in New York, Natsuko Waki in London and Fredrik Dahl in Vienna Writing by Mark Bendeich and Alex Richardson Editing by Jonathan Thatcher and Dean Yates)

By Taiga Uranaka and Ki Joon Kwon

  FUKUSHIMA, Japan (Reuters) - Japan battled on Monday to prevent a nuclear catastrophe and to care for millions of people without power or water in its worst crisis since World War Two, after a massive earthquake and tsunami that are feared to have killed more than 10,000 people.

  A badly wounded nation has seen whole villages and towns wiped off the map by a wall of water, leaving in its wake an international humanitarian effort of epic proportions.

  A grim-faced Prime Minister Naoto Kan said the world's third biggest economy faced rolling blackouts as it reopens for business Monday, while officials confirmed three nuclear reactors were at risk of overheating, raising fears of an uncontrolled radiation leak.

  " The earthquake, tsunami and the nuclear incident have been the biggest crisis Japan has encountered in the 65 years since the end of World War Two," Kan told a news conference.

  " We're under scrutiny on whether we, the Japanese people, can overcome this crisis."

  As he spoke, officials worked desperately to stop fuel rods in the damaged reactors from overheating. If they fail, the containers that house the core could melt, or even explode, releasing radioactive material into the atmosphere.

  Broadcaster NHK, quoting a police official, said more than 10,000 people may have been killed as the wall of water triggered by Friday's 8.9-magnitude quake surged across the coastline, reducing whole towns to rubble.

  " I would like to believe that there still are survivors," said Masaru Kudo, a soldier dispatched to Rikuzentakata, a nearly flattened town of 24,500 people in far-northern Iwate prefecture.

  Kyodo news agency said 80,000 people had been evacuated from a 20-km (12-mile) radius around a stricken nuclear plant, joining more than 450,000 other evacuees from quake and tsunami-hit areas in the northeast of the main island Honshu.

  Almost 2 million households were without power in the freezing north, the government said. There were about 1.4 million without running water.

  " I am looking for my parents and my older brother," Yuko Abe, 54, said in tears at an emergency centre in Rikuzentakata.

  " Seeing the way the area is, I thought that perhaps they did not make it. I also cannot tell my siblings that live away that I am safe, as mobile phones and telephones are not working."

  NUCLEAR CRISIS

  The most urgent crisis centres on the Fukushima Daiichi nuclear complex, where all three reactors were threatening to overheat, and where authorities said they had been forced to vent radioactive steam into the air to relieve reactor pressure.

  The complex, 240 km (150 miles) north of Tokyo, was rocked by an explosion Saturday, which blew the roof off a reactor building. The government did not rule out further blasts there but said this would not necessarily damage the reactor vessels.

  Authorities have poured sea water in all three of the complex's reactor to cool them down.

  Nuclear expert Mark Hibbs of the Carnegie Endowment for International Peace said the authorities appeared to be having some success in their efforts to avert a bigger disaster, but added the situation was still " touch and go."

  " Injection of sea water into a core is an extreme measure," he said. " this is not according to the book."

  The complex, run by Tokyo Electric Power Co, is the biggest nuclear concern but not the only one: Monday, the U.N. nuclear watchdog said Japanese authorities had notified it of an emergency at another plant further north, at Onagawa.

  But Japan's nuclear safety agency denied problems at the Onagawa plant, run by Tohoku Electric Power Co, noting that radioactive releases from the Fukushima Daiichi complex had been detected at Onagawa, but that these were within safe levels at a tiny fraction of the radiation received in an x-ray.

  Shortly later, a cooling-system problem was reported at another nuclear plant closer to Tokyo, in Ibaraki prefecture.

  A Japanese official said 22 people have been confirmed to have suffered radiation contamination and up to 190 may have been exposed. Workers in protective clothing used handheld scanners to check people arriving at evacuation centres.

  " NOT ANOTHER CHERNOBYL"

  The nuclear accident, the worst since Chernobyl in Soviet Ukraine in 1986, sparked criticism that authorities were ill-prepared for such a massive quake and the threat that could pose to the country's nuclear power industry.

  Prime Minister Kan sought to allay radiation fears:

  " Radiation has been released in the air, but there are no reports that a large amount was released," Jiji news agency quoted him as saying. " This is fundamentally different from the Chernobyl accident."

  Nevertheless, France recommended its citizens leave the Tokyo region, citing the risk of further earthquakes and uncertainty about the nuclear plants.

  Kan said food, water and other necessities such as blankets were being delivered by vehicles but because of damage to roads, authorities were considering air and sea transport. He also said the government was preparing to double the number of troops mobilised to 100,000.

  Thousands spent another freezing night huddled in blankets over heaters in emergency shelters along the northeastern coast, a scene of devastation after the quake sent a 10-metre (33-foot) wave surging through towns and cities in the Miyagi region, including its main coastal city of Sendai.

  There were also fears another powerful quake could strike, with Japan's Meteorological Agency saying there was a 70 percent chance of an aftershock with a magnitude of 7.0 or greater in the three days from 10 a.m. (0100 GMT) Sunday.

  Aftershocks in the 5 to 6 magnitude range have shaken the ground repeatedly since Friday's huge quake.

  ECONOMIC IMPACT

  Already saddled with debts twice the size of its $5 trillion economy and threatened with credit downgrades, the government is discussing a temporary tax rise to fund relief work.

  Analysts expect the economy to suffer a hit in the short-term, then get a boost from reconstruction activity.

  " When we talk about natural disasters, we tend to see an initial sharp drop in production... then you tend to have a V-shaped rebound. But initially everyone underestimates the damage," said Michala Marcussen, head of global economics at Societe Generale.

  Ratings agency Moody's said Sunday the fiscal impact of the earthquake would be temporary and have a limited play on whether it would downgrade Japan's sovereign debt.

  Risk modelling company AIR Worldwide said insured losses from the earthquake could reach nearly $35 billion.

  The Bank of Japan is expected to pledge Monday to supply as much money as needed to prevent the disaster from destabilising markets and its banking system.

  It is also expected to signal its readiness to ease monetary policy further if the damage from the worst quake since records began in Japan 140 years ago threatens a fragile economic recovery.

  The earthquake was the fifth most powerful to hit the world in the past century. It surpassed the Great Kanto quake of September 1, 1923, which had a magnitude of 7.9 and killed more than 140,000 people in the Tokyo area.

  The 1995 Kobe quake killed 6,000 and caused $100 billion in damage, the most expensive natural disaster in history. Economic damage from the 2004 Indian Ocean tsunami was estimated at about $10 billion.

  (Additional reporting by Risa Maeda and Leika Kihara in Tokyo and Chris Meyers and Kim Kyung-hoon in Sendai Writing by Mark Bendeich and Alex Richardson Editing by Matthew Jones)

* Gold up 1 pct in early trade, PGMs fall

  * Coming Up: Japan consumer confidence Feb 2011 0500 GMT (Updates prices, adds quotes)

  SINGAPORE, March 14 (Reuters) - Gold rose about 1 percent on Monday as Japan battled to prevent a nuclear catastrophe after a massive earthquake and tsunami, although declines in equities markets could also prompt investors to sell bullion to cover losses.

  A badly wounded nation has seen whole villages and towns wiped off the map by a wall of water, bringing in its wake an international humanitarian effort of epic scale. More than 10,000 people are feared to have been killed.

  " Some investors expect some of the Japanese insurance companies to start selling their dollar assets to raise money. Perhaps gold could be boosted as an alternative currency itself," said Ong Yi Ling, investment analyst at Phillip Futures in Singapore.

  " In the short term, I think gold prices will head up due to a flight to safety and investors seeking out a safe haven."

  Spot gold added $9.60 to $1,427.30 an ounce by 0134 GMT after rising as high as $1,431.89 an ounce -- still off a record high of $1,444.40 hit last week.

  The world's largest gold-backed exchange-traded fund, SPDR Gold Trust , said its holdings edged down to 1,215.475 tonnes by March 11, their lowest since May 2010, from 1,217.295 tonnes on March 7, as some investors booked profits from gold's rise to a record.

  U.S. gold futures for April rose $6.2 an ounce to $1,428.0 an ounce.

  Silver tracked gold higher, while platinum and palladium dropped on declines in equities.

  Japan's equity futures fell 6 percent on Monday as investors took stock of the economic damage from the massive earthquake and tsunami that devastated the country's northeastern region.

 

  The yen also slid against the dollar, reversing earlier gains in a volatile morning in which dealers were cautious about being able to settle trades in thin trading conditions.

 

  Brent crude fell more than $1 on Monday to below $113 on
investor pessimism that economic growth will slow in the wake of
Japan's earthquake and tsunami, while easing unrest in the
Middle East threw the focus back onto ample oil supplies.
Precious metals prices 0134 GMT

* KOSPI edges up on foreign buying

  * Steelmakers rally on Japan supply fears

  * Airlines, tour issues under pressure

  By Jungyoun Park

  SEOUL, March 14 (Reuters) - Seoul shares reversed earlier losses to turn positive on Monday as tech and auto exporters jumped after a deadly quake and tsunami in Japan, lifted by expectations for a stronger yen and production disruptions there.

  The Korea Composite Stock Price Index < .KS11> (KOSPI) was up 0.09 percent at 1957.30 points as of 0129 GMT.

  " We are seeing active foreign buying of exporters amid the yen's strength," said Han Beom-ho, a market analyst at Shinhan Investment Corp.

  " But the longer-term implications of Japan's current difficulties should not be overlooked. It is a major economy, and the cost of damage and the time it takes to recover will be the greatest concern in the coming weeks, months, and even years," Han added.

  Foreign investors were buyers of a net 20.2 billion won ($17.94 million) worth of stocks, poised to snap a five-session selling streak.

  Shares in Korean Air Line < 003490.KS> and Hana Tour < 039130.KQ> fell 5.7 percent and 9 percent respectively on fears about the impact of the disaster on tourist traffic to and from Japan.

  Shares in Hotel Shilla < 008770.KS> , one of South Korea's top hoteliers, also lost 8 percent.

  But steelmakers jumped amid reports of production disruption in Japan and expectations of higher demand from reconstruction efforts.

  " The earthquake has reportedly affected around 20 percent of Japanese steel production capacity...and steel demand will rise for damage restoration," said Kim Hyun-tae, an analyst at Hyundai Securities.

  POSCO < 005490.KS> , the world's No.3 steelmaker, rallied 4.4 percent, and Hyundai Steel < 004020.KS> spiked 6.88 percent.

  Shares in shipbuilders however slumped on concerns they may face higher steel plate prices.

  " A 10 percent rise in steel plates could result in a 1.5 percent fall in shipbuilders' operating profit margin," Lee Ji-hoon, an SK Securities analyst, said.

  Daewoo Shipbuilding & Marine Engineering < 042660.KS> fell 2.5 percent and STX Offshore & Shipbuilding < 067250.KS> lost 5.2 percent.

  Refiners, automakers and technology issues were boosted by expectations of tighter product supply after their Japanese peers shut key factories due to the massive earthquake and tsunami that struck the northeast coast of the country.[ID:nL3E7ED0D4]

  The likelihood of a stronger yen, as Japanese investors are expected to pull back funds from their hefty foreign investments, further boosted technology plays and automakers including Samsung Electronics < 005930.KS> and Hyundai Motor < 005380.KS> . A stronger Japanese currency boosts the relative price competitiveness of Korean goods in international markets.

  Shares in Hyundai Motor, South Korea's top automaker, rose 2.5 percent and Samsung Electronics, the world's No.1 memory chip maker, advanced 1 percent.

  Shares in S-Oil < 010950.KS> , South Korea's No.3 crude refiner, spiked 7.7 percent and SK Innovation < 096770.KS> , the country's No.1, rose 6.2 percent.

  Shares in LG Chem < 051910.KS> surged 2.8 percent and Hanwha Chemical < 009830.KS> gained 4.2 percent.

  (Reporting by Jungyoun Park Additional reporting by Jumin Park and Hyunjoo Jin Editing by Jonathan Hopfner)

BEIJING, March 14 (Reuters) - The volume of outstanding loans issued by Chinese banks increased about 17.7-17.9 percent in the first two months of the year from the same period a year earlier, the chief banking regulator said on Monday.

  Liu Mingkang, head of the China Banking Regulatory Commission, was speaking on the sidelines of the annual session of parliament. China is scheduled to report money and lending figures for February on Monday or Tuesday.

  Economists polled by Reuters forecast that outstanding loans rose by 18.1 percent in February after increasing by 18.5 percent in January. (Reporting by Zhao Hongmei and Simon Rabinovitch Editing by Jacqueline Wong)

BEIJING, March 14 (Reuters) - The volume of outstanding loans issued by Chinese banks increased about 17.7-17.9 percent in the first two months of the year from the same period a year earlier, the chief banking regulator said on Monday.

  Liu Mingkang, head of the China Banking Regulatory Commission, was speaking on the sidelines of the annual session of parliament. China is scheduled to report money and lending figures for February on Monday or Tuesday.

  Economists polled by Reuters forecast that outstanding loans rose by 18.1 percent in February after increasing by 18.5 percent in January. (Reporting by Zhao Hongmei and Simon Rabinovitch Editing by Jacqueline Wong)