NTT DoCoMo’s announcement of a basic agreement to establish a joint venture will cover development of low-power chipsets that are both small in size and feature-rich and will come with modem functionality. The chipsets are said to target the LTE and LTE-Advanced mobile communication standards and are expected to launch by the end of March 2012.

Nikkei in Japan had reported this as a rumor back in September, and this appears to be the confirmation. NTT DoCoMo will establish Communication Platform Planning Co. as a subsidiary, and the Wall Street Journal noted that this will cut the reliance on U.S. chipmaker Qualcomm, with its near-80% market share.

Before assuming that this is the beginning of the end, keep in mind that the investment initially is tiny. DoCoMo is investing a sum of about $5.8 million to create the subsidiary in preparation for the start of the partnership.

The news comes with Qualcomm shares down less than 10% from a year high. Shares closed Friday at $54.63 and the 52-week trading range is $45.98 to $59.84. Qualcomm also carries a market capitalization rate of $91.8 billion.

If NTT DoCoMo was truly going to pose a serious threat, that initial investment would have been in the billions of dollars. The market likely will react negatively and new competition may arise, but the reality is that competing against a company like Qualcomm takes extremely deep pockets.

JON C. OGG

The MF Global disaster prompts requests that the systems for grain trading to be changed. (Reuters)

Chinese investment tradition likely would prevent money from moving quickly into troubled Europe. (Reuters)

A new KPMG study shows that shoppers are unwilling, in most cases, to use mobile phones to make payments for retail goods. (Reuters)

Bank of America (NYSE: BAC) may seek to sell more assets to strengthen its balance sheet. (Reuters)

Germany’s Security Research Labs says GSM phones are targets for scams. (Reuters)

NTT Docomo (NYSE: DCM) will begin to develop smartphone chips with Samsung. (Reuters)

Google’s (NASDAQ: GOOG) new online travel initiatives begin to change that industry. (WSJ)

The SEC uses high-tech systems to look for trading abuses at hedge funds. (WSJ)

A glut of solar manufacturers continues to bring down industry prices and push companies out of the market. (WSJ)

Toyota (NYSE: TM) brings out a new small hybrid. (WSJ)

Hollywood box office sales likely will drop for the second year in a row. (WSJ)

Best Buy (NYSE: BBY) admits it was unable to deliver certain items ordered for Christmas and apologizes. (WSJ)

The success of shale gas touches off the creation of a number of new plants that use the fuel. (WSJ)

Research In Motion’s (NASDAQ: RIMM) independent directors are under pressure to replace top management or sell the company. (WSJ)

New York’s case against Intel (NASDAQ: INTC) over antitrust issues likely will be heard in state court. (WSJ)

U.S. stocks significantly outperform those in other regions. (WSJ)

U.S. corn futures rise on concerns about production from Argentina and Brazil. (WSJ)

TV prices drop enough that supplier margins become perilously small. (NYT)

China’s state power companies help push development of electric cars. (NYT)

The economic minister of Spain expects growth to return to recession levels next year. (NYT)

France’s unemployment rate hits a 12-year high. (FT)

The yen continues to gain as actions of the Japanese government have little effect in reversing it. (Bloomberg)

Profits at Chinese companies slow this year. (Bloomberg)

Douglas A. McIntyre

8.50 PM The Nikkei recovered some of its lost ground in early trading as fears about a reactor explosion receded. The DJIA recovered most of its early losses and ended near the day’s high.

11 AM The DJIA has sold down by 1.7%. Toyota is off nearly 4%. Sony is off 2.7%. GE off 3.3%

7.05  US DJIA futures indicate an open down 300 points after an 11% drop in Tokyo. GE (NYSE: GE), a key supplier of reactor infrastructure is down 9% in the premarket

3.15: The Japanese Nikkei fell 11% on top of 6.2% yesterday  Tokyo Electric Power, owner of the troubled reactors dropped over 24%

Japan has gone from what was bad to far worse over the weekend after Friday’s 8.9-magnitude quake that rocked Sendai and northeast Japan.  When we tallied up the damage on Friday and compared the damage to the 1995 Great Hanshin earthquake, or Kobe earthquake, we figured that the small drops being seen in the Japanese markets were not near enough.  It turns out that the drop was not just not enough.  It was a gross miss entirely as the Nikkei 225 fell a whopping 6.18% to 9,620.49 in Monday trading.

10:50 AM EST UPDATE: EWJ down -7.8% at $9.97; JEQ down -5.8% at $5.90; JOF down by -6.8% at $8.47; and DXJ down -7.7% at $35.31.  In pre-market the iShares MSCI Japan Index (NYSE: EWJ) is down 7.9% at $9.95.  The Japan Equity Fund Inc. (NYSE: JEQ) has yet to trade but is indicated lower by about 5% on first look; the Japan Smaller Capitalization Fund Inc. (NYSE: JOF) is down 6.4% at $8.51.  The WisdomTree Japan Hedged Equity (NYSE: DXJ) is down 3.25% at $37.00.  The fallout in individual ADR issues is enormous (priced updated as of 10:50 AM EST:

Sony Corporation (NYSE: SNE) is down 7.4% at $30.98, was down 8.3% at $30.65 in pre-market.

Toyota Motor Corp. (NYSE: TM) is down4.65% at $81.65, was down 6.5% at $80.10 in pre-market.

Honda Motor Co., Ltd. (NYSE: HMC) is down 4.3% at $38.02, was down 5.9% at $39.74 in pre-market.

Hitachi Ltd. (NYSE: HIT) is down 14.3% at $50.68, was down 12.9% at $51.48 in pre-market.

Kyocera (NYSE: KYO) is down 5.15% at $93.12, was down 8.2% at $90.13 in pre-market.

NTT DOCOMO, Inc. (NYSE: DCM) is down 4% at $17.55, same as pre-market coverage.

Internet Initiative Japan Inc. (NASDAQ: IIJI) is down 14.55% at $6.25, was down 10.8% at $6.52 in pre-market.

Canon Inc. (NYSE: CAJ) is down 4.6% at $43.39, was down 6.3% at $45.52 in pre-market.

• Nuclear Power ambitions being killed globally
• Solar wins as nuclear dies
• An earthquake in San Francisco could cost us $390 billion

It is more than difficult to focus solely on the economic impact of tragedy when the death toll is rising and when there is a risk of a total meltdown of a nuclear reactor.  The consensus has now come around that this damage will definitely hit Japan’s GDP in the quarters ahead.

JON C. OGG

Update:

Preliminary estimates for the cost of the 8.9 magnitude earthquake are as high as $35 billion, and the effects of the tsunami could cause that to grow

According to research firm AIR Worldwide:

Given the enormity of the Mw9.1 earthquake that struck Japan less than two days ago, it is still in the very early aftermath of the event. Search and rescue efforts are still underway and damage assessment has only just begun, while considerable uncertainty still remains in the parameters that define the event.

Based on currently available information, AIR estimates that insured property losses from Friday’s earthquake will range between 1.2 trillion JPY to 2.8 trillion JPY. Using today’s exchange rate of 81.85 JPY to the dollar, this translates to a range of between 14.5 billion USD and 34.6 billion USD. To obtain this preliminary range, AIR simulated dozens of scenarios with varying magnitude (8.9 to 9.1), focal depth (15 km to 30 km) and rupture width (100 km to 150 km). The losses are most sensitive to rupture dimensions, and become extremely large if the modeled rupture is extended southward towards the Tokyo and Chiba prefectures, which contain a higher concentration of insured properties.

Oddly enough, public safety experts have begun to argue about whether that the Japanese seawalls have been built high enough over the last several years or whether the building code was stringent enough. Japan has spent tens of billions of dollars on seawalls to block tsunami waves since the Kobe quake.

Countries can hardly base public spending on 100 year events, and certainly not on 1,000 year ones. That may be tragic for victims, but earthquake public policy in a nation like Japan could cause a financial crisis comparable in its own way to the earthquake.

Douglas A. McIntyre

The Nikkei fell.5% to 13,481. Dentsu was down 2.2% to 225000. Docomo (DCM) was up 2% to 156000.

The Hang Seng was up .5% to 23,157. China Netcom (CN) was up 3% to 21.60. China Petroleum (SNP) was down 1% to 7.27 CNOOC was up 3.4% to 13.54.

The Shanghai Composite was down .5% to 2,726.

Data from Reuters

Douglas A. McIntyre

The Nikkei rose .2% to 14,012. Komatsu fell 3.3% to 3210. Docomo (DCM) rose 2.6% to 161000.

The Hang Seng fell .7% to 24,861. China Mobile (CHL) fell 3.2% to 126. China Netcom (CN) rose 11.9% to 18.48.

The Shanghai Composite fell .4% to 3,473.

Data from Reuters

Douglas A. McIntyre

The Nikkei fell .8% to 14,160. Kobe Stell was up 7% to 368. Docomo (DCM) was down 2.5% to 156000.

The Hang Seng was off 2.5% to 25,109. China Mobile (CHL) was down 2.8% to 130.80. China Petroleum (SNP) was down 5% to 7.21.

The Shanghai Composite fell 4.5% to 3,43.

Data from Reuters

Douglas A. McIntyre

The Nikkei rose 1,2% to 14,119.’ Docomo (DCM) was 2.6% to 159000.Sony (SNE) was up 1.3% to 4850. Yahoo Japan was up .9% to 45850.

The Hang Seng was off .7% to 25,381. China Mobile (CHL) was down 1.1% to 131.60. China Petroleum (SNP) was downb 3.7% to 7.38.

The Shanghai Composite was up 2.7% to 3,657.

Data from Reuters

Douglas A. McIntyre

The Nikkei rose .6% to 13,743. KDDI rose 2.3% to 665000. Docomo (DCM) fell 1.8% to 152000.

The Shanghai Composite moved up .4% to 3,627.

Data from Reuters

Douglas A. McIntyre

The  Nikkei rose 1.2% to 13,146. Docomo (DCM) was down 1.3% to 151000. Sony (SNE) was up 3.5% to 4190.

The Hang Seng rose .2% to 23,952. China Netcom (CN) rose 3% to 22.4. China Petroleum (SNP) rose 1.2% to 6.95.

The Shanghai Compiste fell 1.7% to 3,292.

Data from Reuters.

Douglas A. McIntrye

The Nikkei was down.7% to 13,293. Honda (HMC) was down 5.2% to 2920. KDDI was up 3.1% to 664000. Docomo (DCM) was down 2.5% to 157999.

Data from Reuters

Douglas A. McIntyre