Financial leaders of the Group of Seven, the world’s richest countries, will hold talks on Friday on ways to calm global markets roiled by Japan’s natural disaster and nuclear plant crisis, Reuters reported. They’re concerned that the situation will unravel the world economy’s fragile recovery.

World markets have shuddered after last week’s earthquake and tsunami, affecting stock shares and commodities. Many investors have scurried for the safety of government debt.

The yen soared in disorderly trading to a record high against the dollar on speculation that Japan will pull in billions of dollars in overseas funds to pay for massive reconstruction. It is expected to be much costlier than the bill following the Kobe earthquake in 1995.

“I think the world economy is going to go right down, and it has happened at a time when financial markets are still fragile,” said a central banker of a Group of Seven country, who did not wish to be identified.

The comment is a testimony to the degree of concern among top policy-makers about the potential impact of Japan’s triple disaster and in particular its race against time to prevent a nuclear meltdown.