Marshall Gittler, head of global foreign exchange strategy at online trading platform IronFX Global  expects the Japanese yen to strengthen following Russia’s involvement in Ukraine sending the rouble to an all-time low.

Gittler said in a note events in Ukraine and risk aversion trades will dominate the market until there is some resolution. “The combination of heightened risk aversion and a slowdown in China is a recipe for a strong JPY,” he added. “Selling AUD/JPY could be an appropriate way to play those two themes. EUR/USD is likely to move lower, in my view, as the events in Ukraine affect Europe much more than the US.”

An ING trader told Bloomberg News that the Russian central bank had sold more than $10bn of its dollar reserves on Monday morning to boost the value of the rouble.

On Monday morning the Bank of Russia said in a statement that the board had decided to temporarily increase its benchmark rate from 5.5% to 7% effective from 11:00 Moscow time. The statement said: “The decision is aimed at preventing the risks for inflation and financial stability arising from the recent increase in financial market volatility.”

However the rouble fell to all-time lows of 36.5 roubles against the dollar and 50.30 against the euro on Monday morning. Stocks on Moscow’s benchmark MICEX index also fell more than 10% in early trading, the biggest selloff since the financial crisis.

Artem Argetkin, a trader at Russia’s BCS in Moscow, told the BBC: “There’s a sell-off of everything right now.”

Nigel Green, chief executive of deVere Group, a financial advisory group  with more than $10bn under advisement, said in a note that he expects the volatility to be a short-term phenomenon.

“I believe that this tumble will be judged by history as a ‘bump in the road’ as markets will recover quickly,” he added.  “Global financial markets will then return to focusing on key fundamentals, such as the improving trend of US economic data, than to what is happening in Ukraine.”

However Gillian Edgeworth, chief economist for emerging Europe, the Middle East and Africa at UniCredit in said in a note. “There is a risk of international backlash against Russia at a time when the economy faces an increasing need for foreign capital inflows.”