TOKYO, Japan - Mar. 14, 2011 - As the death toll, property losses and nuclear crisis escalate in Japan, the impact of what is expected to be the costliest natural disaster in modern history is quickly rippling through the global economy.

Global supply chains are under threat as Japanese automakers, electronics manufacturers and steel producers shutter plants, following the devastating earthquake and tsunami. Many Japanese factories, retailers and offices are bracing for power outages as a series of rolling blackouts are set to hit Tokyo and the surrounding area in coming weeks.

The effects of the production disruptions are expected to spread across Asia and around the globe, along with an immediate slowdown expected for the $5 trillion (U.S.) Japanese economy, the world’s third largest. In a heavily interconnected global trade and manufacturing system, a reduction or halt in the production of electronics or automotive components in Japan would constrain manufacturing in China and other Asian assembly hubs.

Japan, already burdened with heavy debts and slack domestic demand, faces long-term harm to its economy and fiscal position, according to analysts.

The financial cost of the quake and the tsunami is expected to be “at least” $180-billion, according to Credit Suisse and Barclays. That is more than 50% higher than the total cost of the Kobe earthquake in 1995, believed to be the costliest natural disaster since 1900. Insurance companies will foot much of the bill. Damage claims that will be filed to global property and casualty insurance companies are estimated to reach as high as $35 billion.