In reaction to that, the freely-traded off-shore yuan dropped to 6.6915 versus the greenback, its weakest level going back to the last quarter of 2010, resulting in a record spread between the on-shore and off-shore exchange rates. That set off another slump in Asian and European stocks.
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The Dow Jones industrial average skidded 366 points, or 2.2 percent, to 16,540 as of 3:16 p.m. Eastern.
The yen was last up 0.4 percent at 118.00 yen per dollar and up 1.2 percent against the Aussie at 82.80 yen. The Shenzhen Composite shed almost 2 percent.
The market is anticipating more yuan weakness in 2016, based on the slowing growth of the world’s second-largest economy and divergence in the value of the yuan onshore and offshore.
Megaworld Corp., the third-biggest developer, plummeted 5.5 percent to P3.94, while JG Summit Holdings Inc. of industrialist John Gokongwei, fell 4.9 percent to P66.60. Apple, the world’s largest publicly traded company, dipped 1 percent and touched its lowest price since October 2014.
Stocks worldwide and oil fell on concern about weaker Chinese demand. US crude, down as much as 5.5 percent earlier, was down 0.8 percent. Earlier this week, economic data caused investors to worry about China’s manufacturing and service industries. The euro fell 0.7 percent to 127.18 yen and 0.2 percent to $1.0727.
NEW YORK, Jan 7 (Reuters) – Investors unnerved by the global market rout due to fears about a weakening yuan and the Chinese economy piled into the yen on Thursday, sending it to the strongest levels against the dollar in over four months.
US stocks started the new year with the most selling of stocks and investments since September 2015, reported CBS News. Those halts, which were triggered twice this week, are increasingly seen as inadequate measures to prevent volatility.
Brent crude, used to price global oils, rose 70 cents to $34.45 a barrel in London.
JC Penney, another department store chain, added 2.0 percent as it posted a 3.9 percent increase in comparable store sales in November and December. Those prices have been falling for years, but gold prices have recovered recently and are at their highest price in about two months.
Macy’s jumped 3.6 percent as it unveiled $400 million in job cuts and store closures following a disappointing holiday shopping season. The median forecast of economists surveyed by Bloomberg was for a drop to $3.42 trillion.
Chinese stocks have had a boom and bust ride over the past year.
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Wall Street watchers are getting anxious.
