TOKYO -- The dollar fell again towards record lows against the euro and the Swiss franc on Friday as investors remained worried about widening damage to financial firms from the credit crisis.

The dollar slipped back into this week's losing streak as short-covering subsided, and rumors on Thursday that Lehman Brothers Holdings Inc. could suffer a fate similar to the near collapse of Bear Stearns hurt sentiment, traders said.

Lehman called the rumors "totally unfounded" on Thursday.

The yen showed little reaction news that Japan's core consumer inflation in February rose more than expected and scored the biggest increase in a decade.

Analysts said other data on Friday showed the economy was not improving and the Bank of Japan remained more likely to cut interest rates than raise them amid the global market turbulence.

"The market focus is more on the fate of the dollar, so the Japanese data didn't draw much attention," said Kengo Suzuki, a currency strategist at Shinko Securities.

The euro edged up to $1.5795 from around $1.5766 in late US trade on Thursday, turning back towards a record high of $1.5905 after making a pause from sharp gains earlier this week.

The dollar fell to 0.9925 francs from around 0.9947, edging back towards an all-time low around 0.9630 francs hit earlier this month.

The US currency fell to 99.45 yen staying in sight of a 13-year low of 95.77 yen.

Selling flows from Japanese exporters and institutional investors to repatriate their overseas earnings or investments are expected to increase before the financial year-end on March 31 and put downward pressure on the dollar, traders say.

Japanese core consumer prices rose 1.0 percent in February from a year earlier, above expectations for a 0.9 percent increase and the biggest increase since March 1998.

Other data showed a mixed picture of the economy with the February jobless rate edging up to 3.9 percent and retail sales in the month rising more than expected from a year earlier. (Editing by Michael Watson)