The free fall in the Turkish lira has stoked fears of an economic fallout that could spill over into other emerging markets and the banking systems in Europe.

Turkish President Recep Tayyip Erdogan blamed the plunge in the currency on "an operation against Turkey" and dismissed suggestions that the country's economy was facing troubles. But strategists from J.P. Morgan Asset Management said the NATO member has found itself "in the midst of a perfect storm" of worsening financial conditions, shaky investor sentiment, inadequate management of the economy and tariff threats from the U.S.