The dollar was trading almost 12% higher versus the lira at 8.0520, the sharpest move since August 2018 when Turkish markets were in another of their periodic crises.

The slide came after President Tayyip Erdogan shocked markets by replacing Turkey’s hawkish central bank governor with a critic of high-interest rates.

The uncertainty saw Japan’s Nikkei fall 1.6%, partly on speculation Japanese retail investors could face losses on large long positions in the high-yielding lira.

The ripples were more modest elsewhere with MSCI’s broadest index of Asia-Pacific shares outside Japan actually adding 0.3%, aided by a 0.7% rise in Chinese blue chips.

EUROSTOXX 50 futures eased 0.3% and FTSE futures 0.2%. Nasdaq futures firmed 0.6%, while S&P 500 futures dithered either side of flat.

Yields on 10-year Treasury notes edged down five basis points to 1.68%, suggesting some favoured safe-havens.

Investors are still struggling to deal with the recent surge in U.S. bond yields, which has left equity valuations for some sectors, particularly tech, looking stretched.

Bonds had another wobble on Friday when the Federal Reserve decided not to extend a capital concession for banks, which could lessen their demand for Treasuries.