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.
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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 dropped more than 4 percent against the dollar while Malaysia's ringgit, 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.
Chinese purchase manager data showed manufacturing slowed in November, suggesting the world's second biggest economy was still losing momentum. Factory activity also slowed in France and Germany in November.
European shares opened lower. The FTSEurofirst 300 index fell 0.6 percent, weighed down by miners and oil stocks.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 2 percent, hitting six-week lows. However, Tokyo's Nikkei stocks index hit its highest close for more than seven years as cheap oil lifted airlines.
Emerging market shares tracked by MSCI fell 1.5 percent. The Russian rouble was last down 4.5 percent at 52.65 to the dollar.
Oil prices have been falling for five months as abundant supply outstrips demand. OPEC last week declined to curb output to lift prices. Brent crude fell 2.4 percent on Monday alone, to $68.54 a barrel.
Gold fell more than 2 percent at one point to $1,142.90 per ounce, its lowest level in more than three weeks, after Swiss voters rejected a proposal to force the central bank to buy more gold. The metal later recovered to $1,155.37.
If Swiss voters had approved the proposal in Sunday's referendum, the Swiss National Bank (SNB) would have been forced to more than double its gold reserves, threatening a 1.20 Swiss franc cap against the euro.
The franc, which firmed in the run-up to the vote, dipped to 1.2030 per euro, a three-week low, though some analysts say the prospect of looser monetary policy from the European Central Bank, which meets on Thursday, could put the cap under pressure again.
"The result should of course temporarily relieve the pressure on the SNB's currency floor, albeit whilst doing little or nothing in our opinion to reverse the fundamental downward trajectory of EUR/CHF," said JPMorgan analyst Paul Meggyesi.
The euro was flat at $1.2456 on Monday. The yen, which hit a low of 119.15 to the dollar after the ratings cut, was last at 118.27, up 0.3 percent.
(Additional repporting by Hideyuki Sano and Lisa Twaronite in Tokyo, Ian Chua in Sydney, Anirban Nag and Marc Jones in London; Editing by Gareth Jones)