Financial Times FT.com

Global financial crisis

Looming global recession batters stocks

By Michael Mackenzie in New York and Michiyo Nakamoto in Tokyo and Song Jung-a in Seoul

Published: October 24 2008 19:17 | Last updated: October 24 2008 21:11

Global stocks slumped and currencies collapsed against the Japanese yen on Friday as fund managers rushed to sell risky assets and return cash to investors worried about a global recession.

Traders said the massive reversal of currency positions in favour of the yen, reflected further liquidation of the so-called “carry trade”, in which investors borrowed at low Japanese interest rates to fund risky global investments.

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