The pound collapsed to a 31-year low and currency, equity and oil markets went into freefall on Thursday as projections showed Britain has voted to leave the European Union.
Sterling crashed more than nine % to US $1.3305, its weakest level since 1985, while the greenback itself slumped below 100 yen for the first time in two-and-a-half years as traders fled to safety.
In the weeks leading up to yesterday’s historic vote, there had been widespread warnings that a vote to leave would cause another rout across global markets that would wipe trillions off valuations, just months after a painful China-fuelled sell-off.
And as results came in, the doomsday scenario began to unfold as the BBC and other broadcasters called a win for “leave”.
The pound had earlier topped US $1.50 following predictions the “remain” group would win but as the Brexit camp posted victories around the country, traders stampeded to put in sell orders.
The dollar slumped briefly to 99.02 yen, the first time it has gone below 100 yen since November 2013, before edging back up slightly. The Japanese unit is considered a safe bet in times of uncertainty and turmoil.
Japan’s Finance Minister Taro Aso will hold an emergency news briefing today. He has previously said Japan would closely watch the dollar-yen rate and act accordingly if the yen became too strong, indicating the government could intervene in currency markets.