A sharp sell-off in Chinese shares dragged world stock markets lower and boosted the safe-haven yen on Wednesday amid renewed concerns about the outlook for China's economy.
Tuesday's weak Chinese trade figures and slide in oil prices have revived global growth concerns and prompted investors to push the pause button on a rally in global stocks.
European shares opened higher but held below recent one-month highs, while risk aversion lifted the Japanese yen against the dollar and the euro.
In Asia, Chinese shares closed more than 1 per cent lower, while MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.3 per cent, down 1.4 per cent from a two-month high hit on Monday.
Japan's Nikkei ended the day down 0.8 per cent, its lowest close in a week.
"Investors are once again focused towards the scanty economic data over in China and the anxiety is if the People's Bank of China has the right tools to help the recovery," said Naeem Aslam, chief market analyst at AvaTrade.
China's February trade performance was far worse than economists had expected, with exports tumbling the most in over six years.
Exports dived 25.4 per cent from a year earlier on depressed demand in all of China's major markets, while imports slumped 13.8 per cent, the 16th straight month of decline.
The overnight sharp slide in oil also proved worrisome for investors although crude prices were on firmer ground in early Wednesday trade.
Brent crude oil futures hit a high of $39.97 per barrel around 0700 GMT before dipping back to $39.92, still up 27 cents from their last close and over 40 per cent higher than the 2016 lows hit in January.
US crude futures were at $36.70 per barrel, up 20 cents from their last settlement and also over 40 percent above February's 2016 low.
Oil prices fell about 3 per cent on Tuesday, ending six days of gains for benchmark Brent crude futures, after industry data showed US stockpiles reached record highs again last week.
"Although oil prices have risen sharply from the trough, many investors are not yet convinced if things have improved that much and I suspect they judged now is a good time to sell," said Tatsushi Maeno, managing director of PineBridge Investments.
"But I do believe that this year the global economy will prove better than last year," he added.
YEN RALLIES
Against a backdrop of general risk aversion, assets perceived to be safe fared better.
The yen, for example, rose to a one-week high of 112.42 per dollar and was up 0.5 percent against the euro at 123.35.
The People's Bank of China set the yuan's midpoint rate at 6.5106 per dollar prior to market open, weaker than the previous fix. The currency opened stronger at 6.5062 but has since weakened to 6.5178.
The euro meanwhile slipped 0.4 percent to around $1.0962 ahead of the European Central Bank's policy meeting on Thursday.
Financial markets expect the ECB to cut its deposit rate by at least 10 basis points and expand its asset-buying programme.
With so much priced in, however, some traders are primed for a repeat of the sharp gains in the euro seen in December when the ECB's measures fell short of market expectations.
Ahead of the ECB, the Bank of Canada will announce a policy decision later on Wednesday.