In this paper we investigate the impact of two financial crises, triggered by the burst of bubble in the Japanese financial stock and real estate market, and that of in the U.S. on Japanese economy. These two financial crises are sometimes referred as “credit tsunami” and we called “financial tsunami”. Financial crisis triggered by the burst of Japanese bubble can be called Japanese tsunami and that of U.S. bubble burst can be called U.S. tsunami.

There are two hypotheses by using the number of bankruptcy and profit decreases. The Japanese tsunami damaged the financial industry, while the US tsunami did the manufacturing industry closely related to the US and the other countries through the international trade. We retest these hypotheses by using the evaluation of investor or market: a risk premium for bonds issued by such industries. If both hypotheses are correct, policy should be prescribed with an emphasis in manufacturing industry while the lessons from the Japanese tsunami are not necessarily applicable to the slump by the US tsunami.

We found that the Japanese tsunami mainly damaged Japanese financial industries, while U.S. tsunami damaged both Japanese financial and non-financial industries.