* Nikkei plummets more than 6 pct, European shares fall 1.3
* Dollar slides to 10-week low vs yen, 3-1/2 month trough vs
* Fed tapering uncertainty stirs liquidations by funds
By Marc Jones
LONDON, June 13 World stocks were pummelled and
the dollar slumped on Thursday as a sell-off on global financial
markets in thrall to central bank stimulus accelerated.
European shares fell sharply at the open, dropping
1.3 percent after the second biggest fall in Japan's Nikkei
in over two years left Asian shares at their lowest
level of the year.
Heavy selling hit the dollar, which slumped 2 percent
against the yen as investors spooked by the plummeting
Japanese stock market unwound hedges. It fell as low as 93.90
yen, its lowest since April 4 and giving up most of the gains
made since the Bank of Japan's aggressive monetary easing
announced on that day.
The U.S. currency dropped to a 3-1/2 month low against the
euro with the common currency buying $1.3385.
The rout has also coincided with noises by the U.S. Federal
Reserve, which meets next Tuesday and Wednesday, about scaling
back its huge asset purchase programme.
"The trend is still in principal is a sell-off in markets, a
sell-off in riskier assets on the expectations that the Fed
might signal further readiness to maybe slow down the rate of
purchases," said Daiwa Securities economist Tobias Blattner.
"So all eyes are on the FOMC meeting next week. There is
very little else that matters at the moment"
In the debt market, German government bonds rose 34
ticks as investors headed for traditional safe-haven paper. The
recent selling of euro zone periphery debt also resumed
ahead of auction of 3- and 15- year Italian debt
later in the day.