Japanese stocks fell after a rout in Chinese markets drove global equities lower, damping investor demand for firms that rely on China for sales.

The Topix index lost 1 percent to 1,621.82 as of 9:01 a.m. in Tokyo, with all but two of its 33 industry groups falling. The Nikkei 225 Stock Average declined 0.8 percent to 20,179.93. The yen rose the most in nearly three weeks after the Shanghai Composite Index sank 8.5 percent

The biggest crash in Chinese shares in eight years led equities lower worldwide and selling spread to the dollar as the turmoil bolstered speculation that the Federal Reserve will keep U.S. interest rates lower for longer. The yen traded 123.28 per dollar after strengthening Monday by the most against the greenback since July 8, when the previous rout in Chinese markets abated.

The decline in Chinese shares bolstered concern that demand for raw materials will slip in the world’s second-biggest economy. The Bloomberg Commodity Index fell to a 13-year low Monday, while oil extended declines in a bear market. Rising Iraqi exports and a rebound in U.S. drilling also weighed on sentiment.

Futures on the Standard & Poor’s 500 Index rose less than 0.1 percent after the underlying U.S. measure lost 0.6 percent on Monday. The Stoxx Europe 600 Index slumped 2.2 percent.

Source: Bloomberg