The government's commitment to support Tokyo Electric Power Co. contrasts with investors selling its shares at a record pace and betting on a 59 percent likelihood the utility will default on its debt in five years.
Liquidating Tepco would cause huge problems and must be avoided, Chief Cabinet Secretary Yukio Edano said Monday. The company's shares fell an unprecedented 28 percent to ¥207 on Monday after the head of the Tokyo Stock Exchange said it needs to be restructured. The stock rose 4.35 percent Tuesday, closing at ¥216 after briefly hitting ¥228.
Political bickering over the future of Prime Minister Naoto Kan has cast doubt over whether his administration can implement its plan to ensure that Tepco compensates victims of the Fukushima No. 1 nucler plant crisis. The utility has slumped 90 percent, erasing about ¥3.1 trillion in market value, since the March 11 earthquake and tsunami triggered the world's worst nuclear crisis since Chernobyl 25 years ago.
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