Things had started going wrong before anyone realized it was an attack, apparently it was believed to be a sudden storm at first. The driving rain and increased waves from said 'storm' helped disguise Leviathan's approach, a seeming terror tactic that would work just as well if not better if you did recognize the signs. The battle as they tried to keep Leviathan from taking out the evacuating population had been brutal, wearing away the entire surface of the island bit by bit, until all of a sudden it had started cracking. It was only then that the capes had begun to realize the true scope of the attack. Even then, they fought until Leviathan retreated, not knowing if it would continue to the next island to continue the battle there.
In the aftermath the island of Shikoku, while not gone, was significantly smaller, mostly just the mountainous areas remained above water, and had lost pretty much all of its population centers in the process. On Honshu pretty much everything coastal through to the Kyoto region had been wiped out as well, either from waves or partially sinking along with Kyushu. In addition to that, the Tokyo area had been hit hard by the resulting earthquakes and tidal waves that hammered the entire country, not just Kyushu itself. The combined effects had killed or rendered homeless a very large percentage of the population. And all of that was before you took into account pretty much every active volcano in the island chain erupting due to the seismic upsets, causing even more damage.
The Korean peninsula had also been hit hard, the southern portions also sinking quite a bit due to the geographical upset of Kyushu's sinking. The resulting earthquakes had also done significant damage there, but the tidal waves had been more of a fringe effect until Kyushu actually sank. Unlike Japan, however, the major population centers were not hit hard, being far enough north to only get fringe effects.
Then the side effects of all that destruction kicked in. Fishing was obliterated as an industry in the area due to pollutants in the water making what fish did survive at first hazardous to eat. Then algal blooms killed off a lot of what was left. The volcanic eruptions had layered ash over a lot of the area as well, ensuring that recovery efforts were significantly more difficult even in those areas not hit as hard. And the ocean currents had shifted unexpectedly, all but isolating the area as the pollutants, ash, and other issues just congregated. Supplies frequently had to be airlifted in because the water was too hard to navigate.