Asian shares surrendered early gains on Friday as the dollar slid back through 100 yen and hopes faded for an early end to subprime mortgage related write-downs, Reuters reported. Credit rating agency Standard & Poor's said on Thursday that an end to subprime related write-downs was in sight pulling stockmarkets out of a nose dive and putting the brakes on a slide in the U.S. dollar after it fell through 100 yen for the first time in 12 years. But the stock rally fizzled out by early afternoon in Asia as the dollar plumbed new depths, hitting a fresh record low of 71.701 on an index measuring a basket of major currencies In Japan, where a slowing U.S. economy and a falling dollar means weaker demand and tighter margins for exporters such as Toyota Motor Corp and Sony Corp, the Nikkei average fell 1.5 percent to 12,241.60, its lowest close in 2- years. "Companies like Toyota have seen some selling today after the dollar edged down against the yen, limiting gains," said Yutaka Miura, chief technical analyst at Shinko Securities. "Investors are also selling a bit out of concern about what might happen on Wall Street later today." Japan also has its own economy to worry about. Property firms Daiwa House Industry Co Ltd and Sumitomo Realty & Development Co Ltd both fell more than 5 percent after a research firm said sales of new apartments in Tokyo fell to a 15-year low for February. The renewed fall in shares lifted Japanese government bonds a half a point to strike fresh three-year highs. GOLD EYES $1000 PRIZE Shares across the rest of Asia, measured by MSCI's index, fell 0.3 percent by 0628 GMT, with Australian shares defying the trend. Sydney's benchmark S&P/ASX 200 index rose 1.4 percent on a buoyant mining sector, led by iron ore prospector Midwest Corp Ltd, which jumped 31 percent after a hostile takeover bid from China's Sinosteel Corp. Prices of metals have boosted miners over the past year as supplies have fallen short of raging demand. All eyes in the metals markets were on gold as the spot gold price teetered on the brink of the $1,000 milestone, a psychological landmark briefly passed by gold futures on Thursday. Spot gold stood at $996.80/7.60. "Providing oil prices maintain a dizzy height and the U.S. continues to suffer, it looks extremely likely that gold will test the $1,000 level and likely break through it," said Darren Heathcote of Investec Australia in Sydney. U.S. crude oil which has shown gold the way by smashing through its own psychological barrier of $100, eased back to $109.76 a barrel after rising above $111 on Thursday. "It's a bit of profit taking, but it should be quite limited especially since we're coming to the weekend ... The dollar still seems to be the main driving force of the day," said Gerard Rigby, an analyst at Sydney-based Fuel First Consulting. Crude oil's strength knocked more than 6 percent off the value of Asia's top refiner Sinopec Corp for the second day running as investors worried that it would have to absorb mounting losses to keep supplying China with fuel. In Seoul, the cost of oil brought Korean Air down 5 percent, completing a three-day fall of almost 20 percent. "Depending on what happens for U.S. economic news, crude may trade between $100 and $110 next week," said Rigby. Market players will look towards U.S. economic data due later on Friday, including February U.S inflation data and the Reuters/University of Michigan survey on consumer sentiment, for indications on the state of health of the world's top economy.
