Asian stock markets slumped on Thursday as the Federal Reserve's latest multi-billion-dollar move to shore up the US economy was met with worldwide disappointment.
The dollar strengthened against regional currencies as investors sought its safe-haven status after the US central bank warned of serious downside risk for the global outlook.
Hong Kong slumped 3.14 percent in early trade, Tokyo fell 1.63 percent by the break, Sydney lost 1.93 percent, Seoul slumped 2.55 percent and Taipei dived 2.32 percent.
The Fed said after a two-day policy meeting on Wednesday that it would shift $400 billion in its shorter-term debt portfolio holdings to longer-term bonds, a move it said would lower rates for mortgage holders and businesses.
The plan -- nicknamed Operation Twist -- would also entice banks to put some of their idle reserves to work.
However, in announcing the new plan, the Fed warned of "significant downside risks to the economic outlook", with the economy struggling with slow growth, high unemployment and a depressed housing market.
"The Fed's economic view is sharply deteriorating and there seems to be little it can do as a next step with Republicans calling on the Fed not to intervene," Yutaka Miura, a senior technical analyst at Mizuho Securities told Dow Jones Newswires.
And Mitul Kotecha, a strategist at Credit Agricole, said: "The overwhelming tone is likely to remain negative, especially as Operation Twist is unlikely to change the dynamic of a weak growth trajectory for the US and developed economies over the coming months."
With risk appetite waning, the dollar rose against regional currencies while the euro languished near 10-year lows versus the yen.
In early Tokyo trade the euro was at 104.06 yen from 103.74 yen late in New York on Wednesday. The European unit had sunk as low as 103.64 at one point in the United States.
The European currency was also at $1.3574, slightly up from from $1.3566 but well down from the $1.3700 seen in Asia on Wednesday. The dollar edged up to 76.65 yen from 76.48 yen.
However, the greenback was at Sg$1.2867 against its Singapore counterpart after reaching a nine-month high of S$1.2969 in New York, and was at 1,175.95 Korean won after hitting a one-year high of 1,179.50.
Ongoing troubles in the eurozone and US economy has boosted the greenback at the expense of Asian units. At the start of the month it was sitting at Sg$1.2038 and 1,061.62 won.
The Australian dollar also fell below parity to the US currency, sitting at 99.98 US cents. The fall comes after the commodities-backed Aussie, which broke parity for the first time in October last year, hit a record high US$1.1081 in July.
On oil markets New York's main contract, West Texas Intermediate for November delivery, tumbled $1.27 to $84.65 a barrel in Asian morning trade, while Brent North Sea crude for November dropped $1.61 to 108.75.
Gold fetched $1,774.40 an ounce by 0300 GMT, up from the $1,805.80 it was at by 0900 GMT Wednesday.