Japanese stocks fell after the yen rallied and equities plunged in New York as a report showing U.S. manufacturing grew at the slowest pace in two years added to concern about a global economic slowdown.

The Topix slipped 1.8 percent to 1,451.76 as of 9:01 a.m. in Tokyo, falling for a third day as all of its 33 industry groups dropped. The Nikkei 225 Stock Average retreated 1.7 percent to 18,859.51. The yen traded at 119.80 per dollar after strengthening 1.6 percent on Tuesday, the biggest rally in a week. Growth in U.S. factory output is slowing and China’s official manufacturing gauge slumped to the lowest in three years, reports showed.

Investors in Japan have turned the most bearish on equities in almost seven years. Short-selling accounted for 41 percent of trading on the Tokyo Stock Exchange on Tuesday, the highest ratio since the bourse began keeping daily records in 2008.

Futures on the Standard & Poor’s 500 Index added 0.2 percent after the underlying measure lost 3 percent on Tuesday, its third-biggest loss of 2015.

Source: Bloomberg