Investors dumped assets considered safe bets and piled into riskier prospects, with the Japanese yen sinking against the dollar and euro, while the Australian dollar recovered from six-year lows and emerging market currencies got much-needed support.
Big gains on stock markets -- Tokyo shot up 7.71 per cent -- come after weeks of being hammered by concerns about slowing growth in China, whose economy is worth more than 13 per cent of global GDP.
Fears over the communist authorities' ability to manage this transition have sent wobbles through financial markets around the world, where China has until now been a bright spot on an otherwise gloomy horizon.
Suggestions that Beijing had stepped in to shore up mainland shares yesterday sent Shanghai and Hong Kong higher.
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An announcement by the country's finance ministry that it would accelerate major construction projects, encourage private capital to invest in key areas and cut taxes for small and medium-sized enterprises to support growth also appeared to be adding to the positive mood, some analysts said.
The initiative, outlined in a purported official document circulating online, addresses concerns that China has slowed reforms while its economy falters and its stock market gyrates.
"The gains in Chinese shares helped calm markets down and investors believe that China will have more fiscal policies, not only monetary, to stabilise the economy," said Thebes Lo, Hong Kong-based vice president at Kim Eng Securities Ltd..
"Risk appetite is back a little bit."
But illustrating the continued volatility, that tub-thumping rise came after a fall yesterday that had erased the last of its gains for 2015.