Shares tumbled on Monday as investors grew increasingly anxious about the economic impact of China's new coronavirus outbreak, with demand spiking for safe-haven assets such as the Japanese yen and Treasury notes.
Japan's Nikkei average slid 2.0 percent, the biggest one-day fall in five months.
Both main oil contracts tumbled more than two percent on Monday to extend last week's sell-off.
The flight to safety saw the yen rally against the dollar, with the unit now up more than one percent from eight-month lows touched earlier this year.
Traders work on the floor of the New York Stock Exchange in New York City, U.S., January 21, 2020. /VCG Photo
Gold, another go-to asset in times of turmoil and uncertainty, is heading back towards 1,600 U.S. dollars and the six-year peaks touched at the start of January.
"With most Asian markets closed, fast-money investors are buying risk-off hedges like Treasuries and selling the Nikkei," said Masahiko Loo, portfolio manager at Alliance Bernstein.
All three major Wall Street indexes closed sharply lower on Friday, with the S&P 500 seeing its biggest one-day percentage drop in over three months.
The S&P 500 lost 0.9 percent, the Dow Jones Industrial Average fell 0.6 percent and the Nasdaq Composite shed 0.9 percent after the Centers for Disease Control and Prevention confirmed a second case of the virus on U.S. soil.
U.S. Treasury prices advanced, pushing down yields further, with the benchmark 10-year notes dropping to a three-and-a-half-month trough of 1.627 percent in early Asian trade.
China announced it will extend the week-long Lunar New Year holiday by three days to February 2 and schools will return from their break later than usual to reduce population flows.
(With input from Reuters, AFP)