The euro hit a nine-year trough on Wednesday as collapsing oil prices and worries about the world economy drove skittish investors into the arms of safe-haven sovereign debt.

From Japan to Germany to Australia, government borrowing costs reached all-time lows as oil fell 10 per cent in just two days and investors wrestled with the risk of global deflation.

Asian share markets did try to steady after recent steep falls and US stock futures were a shade firmer, but the gains were hostage to euro zone inflation data due later Wednesday.

The figures are expected to show the first annual fall in consumer prices since 2009, piling pressure on the European Central Bank to launch all-out quantitative easing at its next policy meeting on Jan 22.

"We expect the ECB to announce a sovereign QE programme on 22 January, and the first purchases to probably start in the following week," said Citi economist Guillaume Menuet.

"Given the sizeable decline in market-based inflation estimates and the likelihood of a negative print for the December flash estimate, we doubt that the ECB will choose to wait," he added. "Investors would probably react very negatively to a "no QE" announcement."

Investors were busy selling the euro in anticipation of more money-printing by the central bank, pushing the single currency to a fresh low of $1.1842 in Asian trade before steadying at $1.1877.

The euro also dropped to 140.58 yen, a low last seen in early November. The dollar fared better, bouncing to 119.10 yen from a low of 118.04 touched on Tuesday.

Not helping the euro was a report Germany was making contingency plans for the possible departure of Greece from the euro zone.

Tabloid newspaper Bild cited unnamed government sources saying Berlin was running scenarios for the Jan. 25 Greek election in case of a victory by the leftwing Syriza party.

Equity markets were finding some support in Asia after a run of torrid sessions. Japan's Nikkei edged up 0.4 per cent after suffering the largest one-day drop in 10 months the previous days.

MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.1 per cent, but markets in South Korea and China nudged ahead.

On Wall Street, the three major stock indexes had fallen for a fifth straight session on Tuesday, marking the longest losing streak since late 2013 for the S&P 500.

The Dow shed 0.75 per cent, the S&P 500 0.9 per cent and the Nasdaq 1.29 per cent.

INCREDIBLE SHRINKING YIELDS

Overshadowing sentiment were worries about what the breakneck decline in oil would mean for earnings of oil companies and disinflationary pressures worldwide.

Brent cost just $51.01 a barrel having shed almost 10 per cent so far this week, while US crude was stuck at $48.02, after plumbing an April 2009 low of $47.55.

With fears of deflation rampant, yields on longer-dated Japanese, German, French, Dutch, Austrian, Belgian, Finnish, Canadian and Australian bonds all touched record lows.

Investors also pushed back the day when the Federal Reserve might be able to hike US interest rates. Fed fund futures imply no chance of a hike by June and only one rise to 0.5 per cent by year end.

Even if the Fed sticks to its current timetable and moves around mid-year, markets are wagering it will be so far ahead of the curve that inflation will remain permanently low.

As a result, investors are willing to accept less compensation for inflation risk over time, so pulling down yields on even the longest dated bonds.

Yields on US 30-year paper dived to 2.471 per cent to be just a whisker above their all-time trough of 2.443 per cent. The 10-year note yielded 1.94 per cent having fallen 23 basis points in just three sessions. – Reuters