Oil prices fell to their lowest in five years on Monday, hit by slowing factory activity in China and Europe and hammering emerging market stocks and commodity-linked currencies.
Plunging prices for oil and other commodities raised fears of deflation, especially in the euro zone and Japan, and the prospect of looser monetary policy pushed the yen to a seven-year low against the dollar in Asian trade.
In a further blow to Japan, the Moody's ratings firm cut its credit rating to A1 with a stable outlook from A3, briefly pushing the yen even lower.
Russia's rouble RUB= dropped more than 4 percent against the dollar while Malaysia's ringgit MYR=, also oil-dependent, was on course for its biggest two-day fall since the 1997-8 Asian financial crisis.
"Over-optimistic global growth forecasts have been pared back, and probably rightly so, and also China has come back on to the radar. And that of course has become a big driver for a lot of commodity prices," said Neil Williams, chief economist at fund manager Hermes in London.