Oil prices fell to their lowest in five years on Monday, hit by slowing factory activity in China and Europe and hammering emerging market stocks and commodity-linked currencies.

Plunging prices for oil and other commodities raised fears of deflation, especially in the euro zone and Japan, and the prospect of looser monetary policy pushed the yen to a seven-year low against the dollar in Asian trade.

In a further blow to Japan, the Moody’s ratings firm cut its credit rating to A1 with a stable outlook from A3, briefly pushing the yen even lower.

Russia’s rouble dropped more than 4 percent against the dollar while Malaysia’s ringgit, also oil-dependent, was on course for its biggest two-day fall since the 1997-8 Asian financial crisis.

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