Japan: The Earthquake and Tsunami are Now the World’s Most Expensive Disaster

Last year BP (NYSE:BP) nearly destroyed the Gulf of Mexico. Now, Japan’s (NYSE:EWJCabinet Office says the earthquake and tsunami will set a record for costliest disaster.

Japan’s government currently estimates the rebuilding effort could cost $309 billion (25 trillion Yen). That would be $184 billion more than the $125 billion Hurricane Katrina cost after ravaging New Orleans.

Japanese companies such as Toyota Motors (NYSE:TM), Sony (NYSE:SNE), and Honda Motor Company (NYSE:HMC) have all taken a hit on their production lines. Other global conglomerates such as Apple (NASDAQ:AAPL), Jabil Circuit (NYSE:JBL), and McDonald’s (NYSE:MCD) have also been shaken. However, some companies such as Caterpillar (NYSE:CAT) stand to gain a lot of business during the rebuilding efforts. (See “Why are Markets Crashing If Japan Recovery Will Create Billions in Economic Activity?“)

On the legal liability side, General Electric (NYSE:GE) is still uncertain about how much blame the company will take for the failures at the nuclear power plant in Fukushima. GE designed the reactors and participated in constructing the facility.

Although Japan is out with some early estimates, the final tab won’t be known for years. If the radiation issues continue to get worse (this morning news is out that Tokyo drinking water is unsafe for babies), costs could continue to climb.