Japanese automakers, electronics firms and oil refiners shut key factories after a massive earthquake and tsunami struck the northeast coast, underscoring the challenge facing the government as it rushes to limit the economic blow.

Electronics giant Sony Corp has suspended operations at eight factories including one making optical film that was flooded by the tsunami triggered by Friday's 8.9-magnitude quake. Nissan Motor halted output at all four of its domestic assembly factories and said restarting them could depend on whether it can get parts.

These are just two in a long list of companies unsure of how quickly they can get their plants back up and running. The widespread damage to infrastructure as well as power rationing after an accident at a nuclear plant could also hamper efforts to resume shipments, even if factory equipment is intact.

Experts say Japan's economy will suffer only a temporary setback from the quake and could bounce back in a matter of months once spending on the rebuilding efforts starts to kick in.

But major technology and auto exporters are expected to be among the hardest hit shares when financial markets open on Monday, reflecting worries over the potential disruption to output and pressure on profits over the short-term. Construction firms, which will benefit from the rebuilding, are set to gain.

We are worried about the infrastructure -- roads, trains, buses, trucks. Not only are the things that get produced going to be delayed but the materials you need to get them produced are going to be delayed. It's going to bump everything a quarter or two, said Brian Heywood, CEO of Taiyo Pacific Partners, which has $2 billion invested Japanese shares. Everyone is going to miss their numbers in the short-term.

Japan's beleaguered government is struggling to respond to what has developed into the country's biggest crisis since World War 2. More than 10,000 people may have been killed, almost 2 million people are still without power and another 1.4 million without running water, media said.

Leaders are pushing for an emergency budget for relief and reconstruction but the outlay will likely be constrained by the country's huge public debt, currently twice the size of the $5 trillion economy and growing. Japan spent about 3 trillion yen after the Kobe earthquake of 1995, which caused about $100 billion in damage.

Bank of Japan Governor Masaaki Shirakawa said the central bank would provide huge amounts of liquidity to the banking system on Monday to stabilize markets after the quake.

Some investors might rush to sell Japanese shares from tomorrow, but investors are also closely watching how quickly and firmly Japan can react to a crisis like this, said Shinichi Ichikawa, chief market strategist at Credit Suisse Securities.

For the Japanese government to show strong leadership is absolutely necessary to regain investors' confidence in its economy and market, especially when the global economy is on track for a recovery led by the U.S.

BIG RISKS

Toyota Motor Co, the world's largest automaker, has halted production at all 12 of its domestic factories in Japan and has not been able to inspect those in the affected area.

Panasonic Corp said continuing aftershocks were preventing it from inspecting two factories in northern Japan, one making electronic parts and another digital cameras and audio equipment. It said a lack of proper power and water supply was a potential bottleneck.

Securing a stable power supply relatively cheaply could prove to be a major hurdle for companies, analysts said.

Tokyo Electric Power, which is fighting to avert a meltdown at its Fukushima plant, said it would cut supply through its first-ever rolling blackout from Monday. It hopes to end the blackouts by the end of April.

A fire at a Cosmo Oil refinery which had not been extinguished by Sunday is another concern.

I would say the biggest risk is power, Takuji Okubo, chief Japan economist at Societe Generale, told Reuters Insider TV. For a link to that interview: http://bit.ly/hsZNu3

Another risk is the potential strengthening of the yen, which is already hovering near a 16-year high against the dollar, threatening the profits of exporters, one of the key pillars of the Japanese economy.

The yen rose sharply in the wake of the Kobe earthquake as corporations repatriated funds to cope with the disaster.

The yen could have a ripple effect, Taiyo Pacific's Heywood said. A strengthening yen could put untimely and unneeded financial pressure on companies that are heavily dependent on overseas sales.

(Additional reporting by Kei Okamura, Mariko Katsumura and Tim Kelly; Editing by Mark Bendeich)

Japan Quake