The European single currency fell sharply on Asian markets as the bloc’s largest member, Germany, moved to outlaw speculative trading on its own bourses.
Japanese shares dropped sharply in Wednesday morning trade after overnight losses on Wall Street and as export-orientated issues were dragged down by a euro plummeting against the yen.
At 10:00 the JSE was down 1.49% at 27 162.74 points.
The benchmark Nikkei 225 Stock Average lost 163.61 points, or 1.6%, to trade at 10,079.03, while the euro traded at ¥111.56-59, falling sharply from ¥114.85-89.
Late on Tuesday German financial regulator Bafin banned the naked short selling of bonds issued by governments of eurozone countries . The new regulations come into force on Wednesday.
The German government blames such financial instruments for allowing speculators to bet against the sovereign debt of countries like Greece, thereby worsening the euro crisis.
The Asian losses come after major US stock indices plummeted on Tuesday as concerns grew about the broader stability of the euro and European economies.
The dollar soared against the euro to €82.14 from €80.67 on Monday.
The German government is hosting an international conference on financial regulation in Berlin on Wednesday, in an effort to rally industrialised nations behind the government's aim of introducing a global financial transaction tax.
"It would be important for us to reach agreement internationally. Germany will push for this with all its might," Chancellor Angela Merkel said on Tuesday.- Sapa