The dollar hit a 16-month low against the yen on Thursday to put it on course for its worst week since the Lehman crisis as investors scrambled for relative safety, buying up gold and top-rated bonds and dumping stocks. Investors were spooked by worries over the direction of the global economy and by cautious comments from the head of the U.S. Federal Reserve that were taken to mean further rate hikes are unlikely in the near term.

Wall Street <ESc1> <NQc1> was expected to open almost 2 percent lower. European stocks <.FTEU3> were down over 3 percent at a 2-1/2 year low led by another 6 percent plunge in banks, and the Swedish crown <SEK=> tumbled as its central bank waded in with a surprise cut to its already deeply negative interest rates. “What this shows is that the risk-off mode has come back very quickly and that the worst may still be to come in these markets,” said Rabobank European strategist Emile Cardon. READ MORE