Financial pain is being felt world-wide as the US Federal Reserve remains on track to ease its economic stimulus programme from as early as next month.
Minutes from the Fed's last meeting confirmed that some policymakers were in favour of immediately slowing down bond-buying, although others preferred to wait until later in the year as economic recovery gathers pace.
Since the financial crisis of 2008, the Fed has spent more than $2tn (£1.3tn) buying bonds to pump money into the US economy - cash that has eventually spread further afield.
But while the flood of cheap money into the world has helped growth, the prospect of its eventual withdrawal has markets in a spin.
Confirmation on Wednesday night that the Fed's current programme - of making $85bn (£55bn) of bond purchases monthly - is set to be slowed prompted a spike in US bond yields.
It also drove up borrowing costs globally on Thursday despite surprisingly strong manufacturing data from China.
Rising yields make borrowing more expensive (yields correct at 0840 BST) Emerging markets in Asia have suffered most in recent weeks as many countries have come to rely on cheap dollars to underpin domestic demand and fund current account deficits.
Currencies in Indonesia, Malaysia and Thailand all hit multi-year lows, while the Indian rupee fell to another historic low against the dollar.
Their stocks markets all fell between 1% and 2% - on top of previous recent falls - with investors instead running for the perceived safety of the dollar.
After a 1% fall on Wednesday in anticipation of the Fed minutes, the FTSE 100 gained 0.7% in early trading on Thursday and other major European stock markets followed suit as keenly-watched activity surveys bolstered hopes the Eurozone recovery is gaining momentum.
However, the UK's 10 year debt yield climbed towards 2.8%.
The minutes had sent 10-year US Treasury yields up as far as 2.93%, highs last seen in July 2011.
US yields tend to set the benchmark for borrowing costs across the globe so the rise will make it more difficult for indebted countries and companies to pay their bills.
Plunging currencies also force up import costs, hitting consumers and companies alike.
While the looming slowdown in Fed bond-buying is a reaction to improved economic performance, it remains to be seen whether the world will be ready for the withdrawal of US stimulus.
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