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Written by: Staff

TOKYO, Apr 20 (Reuters) The Nikkei average fell into negative territory on Thursday, losing 0.28 percent as shares of Oji Paper Co. Ltd. and other firms sensitive to higher fuel costs declined after U.S. crude prices hit a record above $72 a barrel.

Oil prices helped boost Nippon Oil Corp. and other energy-related firms, while clothing retailer Fast Retailing Co. Ltd. gained after it said it would take a 25 percent stake in a smaller rival.

Market participants were beginning to worry that U.S. crude prices would begin to crimp corporate profits, said Kenichi Hirano, a strategist at Tachibana Securities.

''Because Japan is an energy efficient country, up until now higher oil prices just meant that resource-related stocks would advance and it wouldn't be a negative for any other sectors,'' he said.

''But with oil prices as this level, the market is finally starting to react to the negative aspects of high prices.'' The Nikkei was down 47.79 points at 17,302.33 as of 0058 GMT.

The broader TOPIX index was down 0.25 percent at 1,742.99.

Shares of Oji Paper, Japan's top paper maker, fell 2.4 percent to 683 yen. For every $1 rise in the price of crude, Oji's cost base increases by 600 million yen, according to the company's own estimates.

But refiner Nippon Oil added 1.2 percent to 958 yen.

Fast Retailing, operator of the Uniqlo casual-clothing stores, gained 1.5 percent to 12,060 yen.

The company said it will buy 25 percent of smaller rival Cabin from a unit of Daiwa Securities Group Shares of Cabin surged 18.9 percent to 622 yen.


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