Financial markets around the world have fallen after Japanese stocks suffered their biggest slide since the country was hit by a devastating tsunami more than two years ago.
Several reasons have been blamed for the 7.3%, or 1,143 points, fall in the Nikkei index to 14,483.98, including a spike in the Japanese government's borrowing costs and unexpectedly weak Chinese manufacturing figures.
However, the turn in sentiment in financial markets had its roots in the US on Wednesday and the mixed messages from the US Federal Reserve about when it might start scaling back its bond-buying programme.
While the written testimony to politicians from Fed chairman Ben Bernanke appeared to signal that the central bank wasn't ready to change its policy of flooding the economy with money by buying up bonds from banks, subsequent remarks - and the minutes of the Fed's last rate-setting meeting - triggered speculation that a change is afoot.
Much of the recovery in global stock markets over the past few years has had its roots in the money-creation policies of a number of the world's leading central banks, including the Fed, the Bank of England and most recently the Bank of Japan.
These fresh funds, which have come from the central banks buying financial assets, have found their way into the financial markets. The withdrawal of some of the Fed's stimulus measures has been seen by many in the markets as the greatest threat to stocks for some time.
Others say financial markets need to get over their addiction to stimulus and the ending of these emergency central bank policies will be a clear signal that the global economy is healing well from the financial crisis and the deepest recession since the Second World War.
In Europe, the FTSE 100 index of leading British shares, which was only around 75 points off its highest-ever close yesterday, was down 2.3% at 6,681. Germany's DAX, which has hit a series of all-time highs recently, tumbled 2.4% to 8,327 while the CAC-40 in France was 2.1% lower at 3,965. In the US, the Dow Jones industrial average was down 0.6% at 15,231 while the broader S&P 500 index fell 0.7% to 1,643.
Many in the markets blamed the Nikkei's fall on the spike in the interest rate charged on the country's benchmark 10-year bond to above 1% for the first time in a year. That unnerved investors at a time when Japan's already overburdened government finances are vulnerable to rises in interest rates. The interest rate, or yield, later slipped back to about 0.9%.
Markets elsewhere in Asia sank sharply after a survey showed China's manufacturing contracted in May. HSBC said its preliminary Purchasing Managers Index fell to a seven-month low of 49.6 in May from April's 50.4. The Shanghai Composite Index lost 1.2% to 2275.67, its biggest fall in a month while the smaller Shenzhen Composite Index shed 0.7% to close at 1014.47. Elsewhere, Hong Kong's Hang Seng slumped 2.5% to 22,669.68. South Korea's Kospi lost 1.2% to 1,969.19. Australia's S&P/ASX 200 dropped 2% to 5,062.40.