Floods may hit Japanese investments into Thailand

Japanese companies, Thailand's biggest foreign investors, may invest more in Indonesia and Vietnam, following the massive flooding that disrupted global production at their facilities in the country.

According to an analyst the Japanese corporates were now more alive to the risk of concentrating facilities and the investment flows into the country would would likely slow.

Prime minister Yingluck Shinawatra has proposed a $4.2 billion reconstruction effort and steps to prevent floods in future.

She has also sought to allay the fears of investors and stressed that Thailand remained safe for business, even as companies including Pioneer Corp, Honda Motor Co and Toyota Motor Corp scrapped profit forecasts after the floods shut factories.

The disaster in Thailand has sent a wave of disruptions in the supply chains of Japanese auto and electronics makers, with parts shortages hitting operations across the globe.

According to Honda, it would have to press ahead with  output reductions at its plants in the US and Canada until 30 November and  operate normal production shifts on 1 December and 2 December as it recovered from shortages of parts from Thailand.