Asian shares sank to their lowest in over four years on Monday as doubts mounted about Beijing's ability to manage the world's second-biggest economy.
The absence of Tokyo for a holiday only made liquidity even harder to come by, heightening volatility. Currency markets saw some wild swings with the South African randZAR=D3 collapsing to record lows at one point before bouncing.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS slid 1.8 percent to its lowest since late 2011.
China's main indexes .CSI300.SSEC slumped more than 3 percent at one point, Australia 1.25 percent and the Philippines .PSI dropped 3.8 percent.
Financial spreadbetters IG predicted opening losses of 0.5 percent for the FTSE 100.FTSE, 1.5 percent for the DAX .GDAXI and 1.2 percent for France's CAC .FCHI.
E-mini futures for the U.S. S&P 500 ESc1 fared better, turning flat after an early loss of 0.8 percent.
Commodities were again on the ropes as Brent crude oil LCOc1 shed 79 cents to $32.76 a barrel, while U.S. crude CLc1 was 69 cents lighter at $32.47.
China was again the epicenter of unease as the People's Bank confounded analysts by guiding the yuan's midpoint rate sharply stronger, a move that might calm concerns about a competitive devaluation but only added to market confusion as to Beijing's ultimate intent on its currency policy.
The move was an apparent reversal of the midpoint's recent weakening trend which included the biggest one-day drop in the guidance rate in five months on Jan. 7.
"Authorities are reluctant to let market forces rule, which along with their indecisiveness and lack of transparency is exacerbating uncertainty," said Tapas Strickland, an economist at National Australia Bank.
"Understandably, amidst this global markets are selling Chinese policymaker's ability to control their economy."
That only heightened tensions ahead of China trade data on Wednesday where declines are expected in exports and imports, underlining just how anemic world trade flows are right now.
Both the Dow .DJI and the S&P 500 .SPX had their worst five-day starts in history last week, and the corporate news flow is unlikely to get any cheerier with the coming results season expected to be a tough one.
S&P 500 earnings are forecast to have dropped 4.2 percent in the fourth quarter, a second straight quarterly decline led by the hard-hit energy and materials sectors.
The pain in stocks and worries over China even outweighed the positive impact of December's upbeat U.S. payrolls report and burnished the appeal of higher-rated government bonds.
Yields on 3-, 7-, and 10-year U.S. Treasuries all had their biggest weekly declines since early October last year, while five-year yields dropped by the most since Sept. 2013.
The gains continued on Monday with U.S. 10-year Treasury futures TYc1 up 3 ticks, while Fed fund futures <0#FF:> were pricing in a slightly shallower upward path for rates.
In currency markets, the main early news was the yen which is often favored in times of stress as Japan remains the world's largest creditor nation.
The dollar initially fell half a yen to a near five-five month low of 116.70 yen JPY=, before steadying around 117.22.
Dealers said Japanese investors seemed to be bailing out of long positions in the South African rand by selling rand for dollars and then those dollars for yen.
That saw the dollar surge as much as 10.3 percent at one stage to 17.9950 rand ZAR=D3, before tracking back to 16.6780. That was still up from 16.3150 late on Friday.
The euro started firmer but soon softened to $1.0917 EUR= while the dollar index was all but flat at 98.476 .DXY.