The yen hit a record low against the euro on Friday, weighed down by the prospect of Japanese interest rates staying ultra low for some time, leaving the yen as a cheap source of borrowing. Abating concerns about troubles in the U.S. subprime mortgage market spilling over into slower U.S. economic growth heaped further pressure on the yen, breathing fresh life into flagging risk appetite. Worries about the U.S. economy were calmed somewhat on Thursday by healthy sales reports from U.S. retail companies, helping the Dow stocks average post its biggest point gain in 5 years and allowing the dollar to recover from record lows against the euro and a 26-year trough versus sterling. Fresh clues on how consumers in the world's biggest economy are bearing up will come from official retail sales data for June at 1230 GMT and the Reuters/University of Michigan July consumer confidence survey at 1400 GMT. "The subprime issue is very much perceived as a localized U.S. credit issue at the moment and not something more widespread, which leaves the carry trade theme in place," Credit Suisse FX strategist Martin McMahon said. "The Bank of Japan has rates at 0.5 percent compared with 5.75 percent in the UK and 5.25 percent in the U.S. and that story of low-yielding yen is not going to go away," he added. Worries over the subprime mortgage sector, which caters for borrowers with poor credit histories, were put into perspective as Standard & Poor's said on Thursday it had reduced by almost $5 billion its own estimate for subprime securities it is reviewing for ratings cuts. S&P corrected the volume of residential mortgage-backed securities it placed under review for downgrade on Tuesday to $7.35 billion from $12.1 billion. But analysts said the issue would continue to nag markets until the full extent of its impact was known.