According to a report from the Wall Street Journal:a selloff in global markets turned to Asia with stocks across the region plunging in trading on Monday morning as worries grow over slowing growth in China and signs the U.S. will ease back on stimulus.
Japan's Nikkei slumped 2.7%, falling below 15,000 for the first time since mid-November, and was last trading at 14975.77.
The global selloff started last Thursday triggered by a report showing China's vast manufacturing sector had contracted, exacerbating worries about how the global economy will fare as the U.S. pulls back from aggressive monetary easing.
The declines first hit developing economies with currencies in Argentina and Turkey falling especially rapidly, plagued also by troubles at home. But the selloff has since spread to more advanced economies with the U.S. tumbling Friday, and Japan now down 8.1% this year as the stronger yen hurts exporters.
The dollar was off sharply, having fallen 1% against the yen on Friday. It stabilized on Monday at ¥102.32. Elsewhere in Asia, Hong Kong's Hang Seng Index sank 2.1%, South Korea's Kospi dropped 1.7% and Indonesia's JSX dived 2.8%.
Investors are also bracing for key events this week. Attention is focusing on Beijing to see how it will resolve a troubled loan involving a major Chinese bank and a shadow lender that is due to mature this Friday. A default could batter confidence in China's loosely regulated shadow-banking sector.
The Federal Reserve is due to meet Tuesday and Wednesday to decide on its next steps in rolling back its bond-buying program. In recent years, markets in emerging markets have been supported by the central bank's policy of easy money, but any reduction could pull more money out of these risky markets and dent growth there too.
The declines on Monday extended a poor start for Asian markets in 2014, with a number of markets already deep in the red for the year. Hong Kong's Hang Seng Index is 5.8% lower year-to-date and South Korea's Kospi is down 5.1%.
