Nomura predicts the devastating earthquake and tsunami in Japan will cut between 0.5% and 1% off the country's GDP next quarter.
The group said the natural disasters will mean the Japanese economy does not return to growth until the third quarter this year, with the worst of the impact felt between April and June.
Economists Takahide Kiuchi and Kohei Okazaki said the quake could cost the Japanese economy between 0.25% -0.5% of GDP in the first quarter, and between 0.5%-1% in Q2.
However, while the impact on GDP is undoubtedly negative, Nomura said it will not necessarily lead to a sharp downturn.
It said: "We expect the negative impact on real GDP growth to be greatest in April-June, but we believe it is too pessimistic to expect a sharp downturn in the Japanese economy."
As a result of the quake Nomura added it does not expect to see a strong recovery in the Japanese economy until the final quarter.
"We expect the earthquake and tsunami to delay the time at which the economy begins to grow again.
"We do not believe a robust recovery will be confirmed until Oct-Dec," it added.
Nomura also expects the Bank of Japan to implement monetary easing by increasing asset purchases from 5 trillion yen to between 8-10 trillion yen.
Japanese markets reacted to the crisis by falling sharply on their first day of trading following the quake.
The BoJ has already announced it will inject $183bn to revive the market.
The government will set up an infrastructure bank to support investment and to co-invest alongside investors including pension funds.
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