Japan promptly fell into a recession, as its first-quarter growth dropped by 1.3 percent. The worry is that Japan verges on a depression, threatening to pull the rest of Asia down. The yen's drop to 145 per dollar embodied these concerns. As it fell, stock markets from Seoul to Paris to New York plummeted with it. But that buoyed inflation watchers, as interest rates also tumbled and the 30-year Treasury bond yield hit 5.65 percent.
Analysts see more turmoil.