The dollar and the yen rose on Friday as growing global economic woes, falling share prices, and worries about trouble in eastern Europe encouraged investors to flee to safer assets. The euro gave back much of the previous day's gains against the dollar as nervousness about damage to the European banking industry from struggling economies on the euro zone's periphery and in eastern Europe pushed European stocks down 2.5 percent .FTEU3. Investors eyed key purchasing managers' surveys on the euro zone manufacturing and services sector at 3:58 a.m. EST, which are likely to give further evidence of deteriorating activity. German and French flash PMI data published earlier showed record lows for the composite index of services and manufacturing sectors. The yen also gained as shares fell, but its rise against the dollar was capped by anxiety about a deterioration in its economy and political turmoil which have eroded the currency's safe haven status. The Bank of Japan said on Friday that a deterioration in corporate profits had gathered pace, while data out of the U.S. on Thursday showed a record number of continuing jobless claims at nearly 5 million. In eastern Europe meanwhile, evidence has been mounting of governments having trouble finding sources of financing as Romania's parliament debated an austerity budget on Thursday and Hungarian bond yields jumped. German Chancellor Angela Merkel said Germany stood ready to help eastern European countries in financial difficulty. "The focus on central and eastern Europe and worries that private funding there is drying up is depressing the euro," BNP Paribas chief currency strategist Hans Redeker said. At 3:32 a.m. EST, the euro fell 0.7 percent against the dollar to $1.2579. Against the yen, the dollar fell 0.5 percent to 93.83 yen, while the euro lost 1.1 percent to 118.07 yen. Unwinding of risky carry trades, where money was borrowed in a low-yielding yen to invest in riskier assets elsewhere, has caused the yen to surge recently. Many analysts now believe its days as a safe-haven asset are numbered, however, due to a string of recent grim data on the Japanese economy. "Few are willing to pick up the yen aggressively as investors don't feel Japanese assets are attractive," said Tsutomu Soma, a senior manager of foreign securities at Okasan Securities in Tokyo. The euro reversed solid gains on Thursday after German Finance Minister Peer Steinbrueck indicated this week that euro zone countries might be forced to help a fellow member state if it encountered serious financial problems. Investors took that as a signal that help may be on the way for some struggling Eastern European economies. The European Union holds a summit on March 1 which is expected to focus on efforts to better coordinate the response to the crisis.

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