Gillard, who is the first foreign leader to visit the area, handed out toy koalas and kangaroos to excited children as she walked through a fishing village where hundreds of people are dead and missing. She said Minamisanriku looked as if it had been "bombed into oblivion."
Mayor Jin Sato showed her the red skeleton of the disaster management building where he was standing when the mammoth wave ripped off its shell March 11. Exterior stairwells were ripped from the walls. A small shrine of flowers had been created on a mound of rubble.
"It's a scene of incredible tragedy and incredible sorrow," Gillard said on the last day of a four-day trip here.
Recovery efforts have been complicated by the crisis at the Fukushima Dai-ichi nuclear power plant, where the tsunami wiped out power and cooling systems. Workers have struggled to stop radiation leaks, and the utility says bringing the plant fully under control may take all year.
Tokyo Electric Power Co. said Saturday that 30 plant workers had exceeded the former limit of radiation exposure. That limit, 100 millisieverts a year, was raised amid the crisis to 250 millisieverts. None of the workers had yet reached that limit, the company said.
Leaks from the plant reactors have stabilized somewhat since the early days of the crisis, but some interior spaces in the quake- and tsunami-damaged buildings still have such high radiation levels the workers are not able to enter them.
Meantime, there is some much-welcomed good news coming out of Japan. Rail service has resumed operation along two sections in northern Japan.
East Japan Railway had been closed since the earthquake. Saturday, trains arrived and departed from the station in Iwate Prefecture.
Full-scale resumption is planned for April 29.
The Associated Press contributed to this report.