Estimates of the damage to dense residential areas as well as significant industrial plants varied from $10bn-$60bn (£6-£38bn), but experts warned it will be several days before the extent of the wreckage is assessed.
Because earthquake insurance is so expensive in Japan, less than 10 per cent of private households are believed to be covered. Businesses, however, do take out protection, and the insurance industry was bracing itself for heavy claims.
Lloyd's of London, already brought to its knees by the costs of recent calamities, moved quickly yesterday to reassure names and the market that this was not another one.
The brunt of the costs would be borne by Japan's highly protected insurance industry, while the reinsurance, where primary insurers pass on part of the risks they take on, will be comfortably absorbed within the international market. A spokesman at Sedgwick brokers said that although a "fair amount" of the reinsurance was in London, it was "based at a high level, meaning that Japan will have to suffer a high amount of damages before London intervenes".
British general insurance companies, such as Commercial Union and Sun Alliance also moved rapidly to reassure investors that their exposure to Japan was small.
Financial dealers across the world piled into buying shares in Japanese construction firms. Analysts pointed out that, looking beyond the immediate chaos and suffering, the rebuilding of roads, houses and factories will boost the Japanese economy.
Yoshihisa Kitai, a senior economist at the Long Term Credit Bank in Tokyo, said the boost from reconstruction was likely to start having an effect in six to 12 months. But there would be an initial loss of production.
The Kobe-Osaka metropolis could be likened to the Birmingham of Japan, densely residential, and an important manufacturing centre. The region affected by the quake contains some 11 per cent of Japan's population and is responsible for 12 per cent of its economic output.
The Kobe area is home to some giant corporations, such as Kobe steel, which yesterday shut down one of Japan's biggest blast furnaces to assess the damage. Matsushita, the electrical conglomerate, which makes Panasonic, also shut down its main factory there. While bridges and tracks were badly damaged, the earthquake highlighted the enormous progress made by Japanese builders in recent year.