Investors in Japanese shares were also hounded by worries about economic growth at home, and the impact of an initially stronger yen. The Nikkei saw its worst two-day decline in nearly two decades, losing more than 5 per cent and falling below 13,000 for the first time since September 2005.
Japan’s Nikkei 225 fell 5.7 per cent to 12,573.05. Shares took an extra hit from a yen which briefly reached its strongest point against the dollar in more than two-and-a-half years, going as high as Y105.6 to the dollar before retreating back through the Y106 level
The exodus from equities sent 10-year Japanese government bond futures to near two-and-a-half-year highs. Platinum futures on the Tokyo Commodity Exchange were also pummelled, falling by the maximum allowed. The yen also gained against the euro
Shares of Japanese real estate companies, exporters and banks took a beating. The Topix real estate index slid 8.5 per cent, while the banking index dropped 6.4 per cent. Honda, which relies on markets outside Japan for most of its profit, sank 6 per cent to Y2,915. Toyota lost 7.2 per cent to Y4,880,