Hong Kong ( CNN ) -- Investors around the world have far more fear than hope this week judging from a major selloff of global stocks and gloomy predictions from the World Bank and PIMCO , the global bond giant . Japan 's Tokyo Nikkei led Thursday 's rout across Asian stock markets , closing down 6.4 % to a two-month low . The index has also lost a full 20 % of its value since this year 's high -- only set on May 22 -- meaning the bourse is now in bear market territory . The Shanghai Composite fell 2.8 % while the Hang Seng in Hong Kong fell 2.7 % . `` The fear of markets in Asia is that the strengthening of the U.S. dollar could pose risks across the entire region , '' says Frederic Neumann , HSBC 's Co-Head of Asian Economic Research and Managing Director . `` Asian equity markets are now reacting to that reality . We 're at an inflection point and ( the stronger dollar ) will be with us for quite some time . We think the current volatility will probably persist . '' The fall in Japan 's stock markets was exacerbated by central bank inaction on June 11 . The Bank of Japan announced it would keep interest rates on hold , dashing investor hopes for further monetary easing and sending the Japanese yen to a two-and-a-half month high . The yen now stands at $ 1 to 94 yen . A stronger yen means Japanese exporters profit less from goods sold overseas . `` We anticipate the yen will go below 90 , '' says Ben Collett , Head of Asian Equities at Sunrise Brokers in Hong Kong . `` If we look at what the Japanese stock market has done year to date we 're still sitting on some decent gains . If you 're a U.S. investor in Japan and sitting on 10 % profits , there 's nothing wrong with taking that . Would I say empty the stock account ? No , but you should be reducing . '' As investors sold off stocks in Asia , they also digested a new research note from PIMCO , which runs the world 's largest mutual fund . The California-based global firm predicts a 60 % probability that the world will be hit with another global recession in the next three to five years . Adding a dash more trepidation about the global economy , the World Bank lowered its 2013 global growth forecast to 2.2 % this week . In the developed world , `` the challenges are especially difficult in high-income Europe , where growth is being held back by weak confidence and continued banking sector and fiscal restructuring , '' said the twice-yearly Global Economic Prospects report . Bright spots do exist in the developing world however . Overall growth in emerging markets is expected to accelerate to 5.1 % this year , and to 5.6 % in 2014 . Developing countries in East Asia and the Pacific are forecast to enjoy the highest rates of growth from now through 2015 -- upwards of 7.3 % . The world 's biggest economy , the United States , is also on `` more solid ground '' despite the World Bank 's prediction of slower global growth . `` I do n't think it 's anything to worry about , '' says HSBC 's Neumann . `` This is really a rotation from emerging market-led growth to an advanced market coming back . '' The last time an emerging-to-developed market rotation occurred , adds Neumann , was in the late 1990 's when Asian markets saw a slowdown and the U.S. rose to the top with a budget surplus and the tech boom . `` The U.S. became the world leader again . This feels like that . ''
Asia , U.S. investors sell off stocks ; Japan leads Asia rout Thursday with 6.4 % plunge . HSBC : U.S. dollar strength pushing fear into Asia markets ; volatility to stay . Sunrise : Japanese yen to fall below 90 ; investors 'should reduce ' Japan equity stake . World Bank revises down 2013 global growth ; PIMCO says 60 % chance of new recession .