HONG KONG -- Investors dumped euros and shares on Friday as US economic troubles made bets on growth elsewhere look too risky, sending stocks to their lowest in two years while triggering a surge in safe-haven government bonds.

The ratcheting up of fear followed a 3.0-percent sell-off on Wall Street on Thursday, the steepest decline for more than two months, prompted by an unexpected jump in jobless claims and nervousness ahead of monthly employment data on Friday.

European shares opened lower, adding to Thursday's steep losses. Germany's DAX and France's CAC 40 benchmark stock markets both opened more than 0.5 percent lower.

The renewed jitters sent the yen soaring as investors unwound carry trades, ditching bets in which they had borrowed the Japanese currency to buy euros or high-yielding Australian or New Zealand dollars.

"This is not a flight to quality, it is simply a flight," said Alan Ruskin, chief international strategist at RBS Greenwich Capital.

"Gold for example has failed to benefit, cash is king -- even the greenback, warts and all, or the yen, zero rates and all."

The euro hit a 13-month low around 150.60 yen before pulling back to 152.75 yen, having recorded a 3.6 percent drop on Thursday -- its biggest one-day fall since a massive carry-trade unwind in 1998.

"Position unwinding is taking place globally and it is becoming a big wave," said Tokichi Ito, deputy general manager of foreign exchange at the Trust & Custody Services Bank in Japan.

The Australian and New Zealand dollars -- long the bellwethers of the carry trade -- sank to two-year troughs against the Japanese currency.

The prospect of less competitive exports to Europe, as well as growing gloom about the global economy, hit Japanese shares such as Mizuho Financial Group and Sony Corp, which fell 6.6 percent and 4.4 percent, respectively.

Japan's Nikkei average fell 2.8 percent to a 5-½ month closing low, while stocks elsewhere in the Asia-Pacific, gauged by MSCI's index were down 2.7 percent.

The MSCI All-Country World index, down 0.6 percent, plumbed its lowest level since August 2006.

Data during the day showed Japanese companies unexpectedly cut capital spending in the second quarter, likely meaning the economy contracted even more than previously estimated during the April-June period.

A VOLATILE RIDE

As investors dumped stocks, Japanese government bond futures rose, reversing losses made in thin trade on Thursday.

September 10-year futures hit a session high above 139, before closing at 138.68, up 1.18 points. The benchmark 10-year yield fell 5 basis points to 1.46 percent.

Analysts said 10-year yields would likely have a tough time falling below their four-month low of 1.40 percent.

"Our view is that these are highly volatile markets going nowhere," said John Richards, head of Asia economics and strategy at RBS Securities. "With the central bank on hold and the economy probably in a mild recession, we're stuck in this situation."

Growth fears rattled commodity markets, with platinum -- used in vehicle exhausts -- plunging in Tokyo by the daily 300 yen limit, or 6.1 percent, because of worries about weak car sales, as well as dollar strength against the euro and weak oil prices.

Gold dipped to $790 an ounce before Asia bought up physical stocks, driving the price up to around $796.50.

US crude oil slipped 43 cents to $107.46 a barrel after falling $1.46 in New York on Thursday, extending a slide from an all-time peak of more than $147 in mid-July.

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