SINGAPORE, Aug 15 - Japan's main stocks index briefly rose above the key 10,000 point mark on Friday before profit-taking set in and other markets in the region were mixed as Asia largely ignored the huge power outage in North America. The dollar fell against the yen after power went down in New York and other major U.S. and Canadian cities but crept back when President George W. Bush said it was a technical breakdown and not an act of terror.
The outage prevented electronic ACCESS trade on the New York Mercantile Exchange for several hours. After trading resumed at 0230 GMT crude oil prices were slightly down from pre-blackout levels but up on the day. Gold prices spiked on the blackout but were a touch lower by 0600 GMT as traders took profits. In Tokyo, stock market traders shrugged off the outage that swept New York and other parts of the northeastern United States and Canada, focusing on Tuesday's better-than-expected Japanese growth data and solid U.S. jobs and trade numbers from Thursday. But profit-taking set in after the index <.N225> crossed 10,000 points for the first time in over a month, cashing out gains from five days of rises. The index ended at 9,863.47 points, down half a percent. "It's not at all surprising to see profit-taking on a day where the market is gunning to rise for a sixth straight day and broke through 10,000 as well," said Kazunori Jinnai, general manager at Daiwa Securities SMBC.
UFJ Holdings Inc <8307.T>, Japan's fourth-largest bank, was a main target of profit-taking. It had climbed 24 percent since the GDP data sparked a blistering rally in bank shares. "Banks are simply starting to get tired. And if banks can't keep climbing, the Nikkei will struggle to put on further gains," said Ken Masuda, senior dealer at Shinko Securities. "We look a bit overheated from a technical perspective as well." Taiwan stocks <.TWII> closed at almost a 14-month high, boosted by technology shares, and Korea's index <.KS11> was also up. Australia <.AXJO>, Hong Kong <.HSI> and Malaysia <.KLSE> were flat, but Singapore <.STI>, Thailand <.SETI>, the Philippines <.PSI> and New Zealand <.NZ40> lost ground. The Morgan Stanley Capital International index of markets outside Japan <.MSCIAPJ> was up 0.02 percent.
DOLLAR STEADY
The dollar was at 118.89/92 yen at 0555 GMT, little changed from around 119.00 late on Thursday, when it had risen as high as 119.70. Against the euro , the dollar was at $1.1255/60, slightly up from late Thursday levels of around $1.1285. "That the European economy is not in such a good shape is no surprise, but the market has now seen enough evidence and is starting to sell euros," said Hiroyuki Watanabe, manager at Shinsei Bank in Tokyo. Traders said they did not expect the U.S. power outage to have a significant long-term effect on the dollar, given it appeared to be accidental and not related to any acts of terror.
"When the cause of such an incident is not known, people tend to think of an attack, so dealers want to get rid of their dollar-long positions," said Katsunori Kitakura, senior treasury manager at Chuo Mitsui Trust and Banking. "But people learned that it was probably not a result of terrorism, so we saw no panic in the market." Both the Federal Reserve Bank of New York and the Bank of Japan have said their settlement systems were unaffected by the power outages.//