Growing Concerns Over Japanese Radiation: How to Trade (TM, SNE, YGE, ESLR, JASO, GEX)

The Japanese stock market was down again on Tuesday, amid numerous reports that low levels of radiation from the damaged Fukushima Daiichi nuclear power plant have been detected in Asia and North America.

The Nikkei 225 index of Japanese stocks slipped a further 19.45 points, or 0.21%, to 9,459.08 during trading in Tokyo on Tuesday.

The Japanese economy has been damaged in a number of ways by the earthquake and tsunami that it caused earlier this month.

The initial damage was mainly to infrastructure, with the country seeing much of its oil refining and nuclear power capacity disrupted by the natural disasters and fires that followed.

Damage to factories, power shortages and supply shortages led to a number of important Japanese manufacturing exporters like Toyota Motor Corporation (NYSE: TM) and Sony Corporation (NYSE: SNE) shutting factories.

Japan's food exports have also taken a hit, with countries like the United States, Canada, South Korea, the Philippines, Australia, China, Russia, Singapore and many more enacting import restrictions on milk and food products originating from the Japanese prefectures near the troubled nuclear reactor.

Although alarm about radiation spreading from the nuclear reactor throughout the world is growing internationally, inside Japan situation is much worse.

It was discovered last week that radiation levels in the Tokyo water system were more than double the recommended limits for infants, which led to panic buying of bottled water and plans to import bottled water to augment Japan's water supply.

Over the weekend, the radiation levels in the seawater near the nuclear plant jumped to nearly 2,000 times the normal level and there are reports of the radiation level in the soil also climbing.

The growing international concern over the risk associated with nuclear energy helped drive solar energy stocks higher during trading on Monday.

The disaster in Japan may fuel long term growth for the alternative energy sector, with companies like Yingli Green Energy Holding Co. Ltd. (NYSE: YGE), Evergreen Solar, Inc. (Nasdaq: ESLR) and JA Solar Holdings, Co., Ltd. (Nasdaq: JASO) likely to benefit from growing demand for safe, clean and renewable energy sources.

Investors who would prefer to invest in a broad range of alternative energy companies should take a look at the Market Vectors Global Alternative Energy ETF (NYSE: GEX).