Markets in turmoil as Japanese Nikkei nosedives 13 per cent

Stock markets tumbled on Monday and Japanese shares plummeted a gut-wrenching 13 per cent as fears the United States could be heading for recession sent investors rushing from risk while wagering that rapid fire rate cuts will be needed to rescue growth.

The safe haven yen and Swiss franc surged as crowded carry trades unravelled, sparking speculation some investors were having to unload profitable trades just to get the money to cover losses elsewhere. Such was the torrent of selling...