On Wednesday financial and commodities markets slumped, as the World Bank reduced its growth forecasts for 2015 and 2016, fuelling worries that the benefits of cheaper oil may be offset by sluggish economies and the threat of deflation.
The greenback fell 1 percent against the yen. Share prices, commodities and bond yields fell as investors sought safety in government debt and currencies like the Japanese yen.
Market sentiment was up somewhat after a top adviser to the European Union's highest court advised judges to approve a bond-buying plan by the European Central Bank aimed at boosting the struggling euro-zone economy.
The perceived removal of a potential legal roadblock helped push the euro below its 1999 launch rate against the dollar for the first time in more than nine years.
However, investor cautions lingered. The pan-European FTSEurofirst 300 equity index was down 1.2 percent at 1307 GMT, with key national stock exchanges mostly in red, and German Bund yields fell close to a record low of 0.4 percent.
U.S. equity futures descended 0.6 percent after JPMorgan Chase & Co reported a drop in quarterly profit as legal costs exceeded $1 billion. 10-year T-note yields hit their lowest since May 2013.
Oil and metals prices also extended their slide. Copper traded at its lowest in more than half a decade amid a broader commodities rout that dragged mining stocks Antofagasta, Glencore and Anglo American down 5.7 to 11.9 percent.
Low oil prices pushed explorer Premier Oil to say on Wednesday it expected
to book a $300 million impairment charge on some of its assets for 2014
due to weak oil prices, as Reuters reports.
Emerging-market equities underperformed as the Russian rouble fell 1.5 percent against the dollar. Russian stocks extended their losses on the back of the commodities sell-off and an outbreak of violence in Eastern Ukraine.
If the average oil price was $50 a barrel, a more than $45 billion drop in revenues is possible this year, Russia's finance minister warned.
In the Asia-Pacific region, Australia's main index fell 1.0 percent, with mining shares taking an added blow.
The Nikkei lost 1.7 percent. Seeking to support growth, Japanese Prime Minister Shinzo Abe's cabinet approved a record $812 billion budget while cutting new borrowing for a third straight year.
