Stock markets tumbled on Monday and Japanese shares plummeted a gut-wrenching 13% as fears the United States could be heading for recession sent investors rushing from risk while wagering that rapid fire rate cuts will be needed to rescue growth.
The safe haven yen and Swiss franc surged as crowded carry trades unraveled, sparking speculation some investors were having to unload profitable trades just to get the money to cover losses elsewhere. Such was the torrent of selling that circuit breakers were triggered in exchanges across Asia. FRX/
Nasdaq futures NQc1 sank a deep 4.7%, while S&P 500 futures ESc1 dropped 12.4% as the rout went world-wide. EUROSTOXX 50 futures STXEc1 fell 2.1% and FTSE futures FFIc1 1.2%.
Japan's Nikkei .N225 shed a staggering 13% to hit seven-month lows, a scale of losses not seen since the 2011 global financial crisis. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS lost 4.2%.
Chinese blue chips .CSI300 dipped only 0.5%, aided by a bounce in the Caixin services PMI to 52.1.
Japanese 10-year bond yields JP10YT=RR fell a steep 17 basis points to the lowest since April at 0.785%, as markets radically reconsidered the prospect of another hike from the Bank of Japan. 0#BOJWATCH