Japanese geologists have long forecast a huge earthquake along a major fault line southwest of Tokyo, and have poured enormous resources into monitoring the faint traces of strain building in that portion of the Earth's crust. They've predicted the amount of property damage and the number of landslides. They've even given the conjectured event a name: the Tokai Earthquake.

But now the largest recorded earthquake in Japan's history, measured at a stunning magnitude 8.9, has hit far to the north, some 231 miles northeast of Tokyo.

The epicenter is 80 miles off the coast of Sendai province on Honshu, Japan's largest island. It is beneath the sea floor near a major boundary between two plates of the Earth's crust. At the boundary is a subduction zone, a place where one plate dives beneath the other, forming a deep trench. Although subduction zones, including this one, are known to cause earthquakes - and there was a significant temblor of magnitude 7.9 just two days ago near today's event - there is no record of such a "mega-quake" along this portion of the fault.

Scientists today said the event has once again humbled them, reinforcing a growing sense that the field of seismology needs to ditch some of its presumptions about major earthquakes.

"It took place in a stretch of the coast of Japan that was not considered prone to mega-earthquakes," said Emile Okale, a Northwestern University geophysicist reached in Tahiti, where he was preparing to evacuate in advance of the tsunami generated by the Japan quake. He compared the Japan temblor to the huge Sumatra earthquake six years ago that generated the devastating tsunami along the rim of the Indian Ocean. That quake happened on what had been presumed to be a relatively quiescent stretch of a subduction zone.

"This is a continuation in a sense of the cold shower that we got in Sumatra-these mega-earthquakes take place in places we do not expect them. That means that on a global scale we should consider that all subduction zones are potential locations for such events," Okale said.

"It's really just a kind of guessing game, and mother nature never really puts up with those guessing games," said seismologist Dave Wald of the U.S. Geological Survey's National Earthquake Information Center in Golden, Colo.

Susan Hough, a USGS seismologist in Pasadena, Calif., noted that the recent 6.1 magnitude earthquake in Christchurch, New Zealand, happened on an unmapped fault and caught scientists somewhat by surprise.

David Fuller's view Our heartfelt sympathies go out to anyone affected by the tsunami crisis in Japan.

What about Japan's markets?

Following Japan's Kobe earthquake in January 1995, the yen rallied initially before falling significantly. Shown inversely, as USD/JPY (monthly, weekly & daily), the dollar fell from around ¥100 to ¥80, as you can see on the monthly chart, before rising to ¥148.

I would be wary of assuming any identikit replay of that move but the yen did strengthen today. While this seems counterintuitive, it may reflect a repatriation of funds, perhaps by Japanese insurance companies. A break in the dollar's sequence of higher reaction lows within the current range would open the door to the possibility of further weakness (yen strength). However, the BoJ now has a very good excuse to print considerably more yen. That is what I assume happened in 1995, although back then the dollar also commenced a period of strength against most other currencies. I do not assume that the dollar will experience similar overall strength in the next few months.

Japan's stock market weakened after Kobe and this has to be a near-term risk, albeit probably within a medium-term recovery. Lastly, JGBs rallied following Kobe but unlike today they were in a bull market at the time.