* World stocks down one percent on U.S. economic worries
* Euro falls to 5-wk low after dovish c.banker comments
* Dollar near 15-year low vs yen; bond yields fall more
By Jeremy Gaunt, European Investment Correspondent
LONDON, Aug 20 (Reuters) - Investors dumped risky assets on
Friday and fled into bonds and safe-haven assets including the
Japanese yen amid growing concerns about slackening economic
growth.
European stocks fell one percent and U.S. stock futures
pointed to a weak open in New York after a slew of poor jobs and
sentiment numbers drove Wall Street to its lowest close in
almost a month on Thursday.
The euro <EUR=> fell one percent after European Central Bank
Governing Council member Axel Weber bolstered the view monetary
policy would remain loose for months, adding to fears that more
economic weakness lies ahead in the euro zone too.
The yen, a popular safe haven, approached a 15-year high
against the dollar, the Swiss franc rose and the steep declines
in U.S. bond yields gathered pace.
U.S. jobless claims on Thursday hit a nine-month high and a
volatile U.S. regional manufacturing index showed the first
contraction in a year. []
These numbers have revived fears of a double-dip recession
in the world's largest economy and boosted demand for bonds.
"The market is falling on concerns about GDP growth going
forward," said Dean Tenerelli, fund manager at T Rowe Price.
"It's about the effect of a U.S. slowdown and uncertainty
and how earnings will look in 2011, when austerity kicks in."
World stocks as measured by MSCI <.MIWD00000PUS> and Thomson
Reuters <.TRXFLDGLPU> were down almost one percent to three-week
lows. The pan-European FTSEurofirst 300 <> fell 1 percent.
Lower global oil prices have undermined key energy stocks.
The STOXX Europe 600 Oil & Gas index <.SXEP> was off 0.2 percent
as oil prices fell $1 a barrel <.CLc1>.
U.S. futures for the Dow Jones <DJc1>, S&P 500 <SPc1> and
Nasdaq <NDc1> were down between 0.6 and 0.7 percent,
The weakness in Europe and the United States carries on from
Asia where Japan's Nikkei average <> fell 2 percent, hit by
the U.S. economic worries, but also by jitters over what steps
Japanese authorities might take to stem the recent yen rise.
Markets are rife with speculation that the Bank of Japan may
loosen its already-easy monetary policy at an emergency meeting
next week. []
RISING YEN
The dollar has been buttressed by safe-haven demand after
the U.S. data, helping it stay above a 15-year trough against
the yen <JPY=>. It was unchanged at 85.39 yen, hovering above
84.72 yen hit last week for the first time since 1995.
The greenback hovered near seven-month lows against another
safe haven asset, the Swiss franc <CHF=>.
But the euro fell after Bundesbank chief Axel Weber said it
would be "wise" to extend unlimited liquidity to banks past the
end of 2010 and resume discussions to exit loose monetary
conditions next year. []
The euro <EUR=> was 1 percent lower on the day at $1.2686
according to Reuters data, its lowest since mid-July.
"The comments will lead the market to believe that
policymakers are expecting further economic weakness," said
Raghav Subbarao, currency analyst at Barclays Capital.
"Although a move towards active easing requires more bad
data, slowing growth will postpone any policy tightening."
Bonds were benefiting from the mounting risk aversion, with
U.S. two-year yields collapsing to a record low of 0.459 percent
<US2YT=RR> while 30-year yields <US30YT=RR> fell to 3.598
percent -- a low not seen since April 2009.
"It's more flight to quality," a bond trader in London said.
"If you're short this market, you're in a world of pain. It's
pretty much that simple."
