* World stocks up but heading for week fall
* Japan stocks up 1.9 percent but Europe turns weaker
* Euro zone, German GDP slumps hit euro
By David Stamp
LONDON, May 15 (Reuters) - World equities rose on Friday but European stocks weakened and Wall Street was set for a lower opening, while dreadful European economic data hit the euro.
MSCI's all-country world stock index was up 0.95 percent, largely thanks to earlier gains in Japan and on emerging markets. But the index remained around 3 percent in the red for the week, and was likely to end down for the first time in 10 weeks.
Europe's FTSEurofirst 300 was down about 0.3 percent, slipping from a firmer morning and after Japan's Nikkei had closed 1.9 percent higher.
U.S. stock index futures pointed to a lower open ahead of key inflation and consumer sentiment data.
Investors unloaded riskier assets in general after weak European gross domestic product data fanned concerns about the depth of the global recession.
"Fear and greed (have) a huge part to play right now with everyone desperate to call the bottom of the market but absolutely terrified that these so-called green shoots will quickly turn into dead weeds," said Andrew Turnbull, senior sales manager at ODL Securities.
Equity markets have generally been lower this week as investors have been hit by poor economic data, including Friday's news that the euro zone economy suffered its worst quarter on record in the first three months of this year.
GDP fell a bigger-than-expected 2.5 percent versus the last quarter of 2008 in the 16-country euro currency zone, according to the EU statistics office. In Germany alone, the economy contracted a substantial 3.8 percent during the first quarter.
Despite the week's losses, however, trackers of investment flows reported no let-up in the shift to riskier assets.
EPFR Global said that in the week to May 13, investors had pumped a net $3.5 billion into emerging market equities for a total of $18.6 billion since the week ending March 11.
There were also flows into high-yield bond funds and developed-market equity funds.
YEN JUMPS
The yen jumped broadly, hitting a two-month high against the dollar and a two-week peak against the euro on the GDP data.
Investors bought currencies perceived to be safer, with analysts saying the yen in particular is still seen by speculators as the funding currency of choice.
The euro tumbled 1.5 percent against the yen to 128.77 yen, having hit a two-week low around 128.41, while it also lost 0.5 percent against the dollar to $1.3560.
Bunds climbed to their highest in just over a week after the particularly bad German data. But they pared the gains as investors became nervous before a University of Michigan consumer sentiment survey at 1355 GMT.
The euro zone benchmark 10-year government bond yield was a touch lower on the day at 3.303 percent, while the two-year yield slipped nearly 1 basis point to 1.263 percent.
Data showing an unexpected drop in U.S. retail sales earlier cast week threw doubt on whether the economy might finally be starting to turn the corner.
The U.S. oil price fell almost $1 to below $58 on Friday, pressured by weak demand and as the dollar firmed against the euro. U.S. crude for June delivery fell 79 cents to $57.83 a barrel by 1112 GMT, off an earlier low of $57.76.
(To read Reuters Global Investing Blog click on http://blogs.reuters.com/globalinvesting; for the MacroScope Blog click on http://blogs.reuters.com/macroscope; for Hedge Fund click on http://blogs.reuters.com/hedgehub) (Editing by Mike Peacock)