Gail Dudack, equity strategist for investment bank UBS in New York, said: "There are many parallels between 1987 and 1997 but what has been missing so far is the catalyst for the correction. This turmoil in Asia could be it."
"We have started to see signs of a contagion effect. Events in Asia might be the trigger for a correction on Wall Street which could have a dramatic impact on the American economy," said Mark Cliffe, chief international economist at HSBC Markets.
Concerns yesterday focused on Hong Kong, seen as a source of bigger spillovers to the rest of the world's markets. Experts believe its economy is relatively healthy and its currency under less threat, but for many UK and US investors selling their Hong Kong holdings is the only way to rapidly reduce their exposure to the region as a whole.
The Asian crisis is showing no signs of stabilising despite emergency interest rate rises and a $16bn (pounds 10bn) IMF-led rescue package for Thailand. Economists say more adjustment is needed, while unhelpful comments from Malaysia's Prime Minister in particular have bred distrust among foreign investors.
The crisis will affect the G7 economies through a variety of channels, but most directly through the impact of slower growth on their imports. The interest rate increases and government spending cuts with which Thailand, Malaysia and Indonesia have had to try to defend their currencies will put the brakes on their economic growth.
For instance, in Thailand, where the crisis originated, most economists have slashed forecasts for this year's growth from around 7 per cent to only 2 per cent, which implies no more economic expansion this year.
This will hit Japanese sales to the rest of South-east Asia the hardest. More than 40 per cent of total Japanese exports go to the region. But it also accounts for 17 per cent of the value of US exports and 6.5 per cent of UK exports.
"This will hamper the growth of the Japanese economy, which was already looking very anaemic," said Stephen Lewis of London Bond Broking. The latest monthly trade figures showed its exports to countries like Thailand already dropping precipitously.
Tokai Bank yesterday warned that the Japanese economy was heading back for recession, with the risk of a collapse in the Nikkei to 9,500 increasing. According to economist Graham Turner, the economy remains mired in bad debts.
Japanese banks are heavily exposed to potential bad debts in other Asian countries. Their banking systems in turn are far less robust than that of Mexico, which successfully weathered its financial crisis three years ago.
Although the direct impact on the US and European economies is likely to be much smaller, Stephen Hannah, head of research at IBJ in London, said there would be ripples from weaker Asian growth. "It is alerting us to the threat to corporate earnings from a slowdown in the globe's most significant dynamic region," he said.
Richard Kersley at BZW predicted that the effects could be serious for some industries where Asian demand had been particularly strong, such as bulk chemicals and paper.
More serious still could be the blow to market sentiment dealt by the plummeting share prices and currencies in the Far East. Ms Dudack said: "US markets have factored in nirvana, assuming the world is in perfect balance and earnings will continue to grow. This complacency is being shaken."
Mr Kersley agreed: "These events represent a wake-up call for equity markets where valuations have become extreme."
But few would commit themselves to predicting a full-blown stock market crash, with all its reverberations for the economy.
Mr Lewis said: "It is hard to say how serious this is." But he added: "For the moment the Asian markets look bottomless."