SINGAPORE, Apr 20 (Reuters) Signs that near-record oil prices could hurt corporate profits weighed on Asian share markets on Thursday, and a rally driving gold to quarter century highs appeared to be gaining steam.
Tokyo gold futures rose more than 2 percent, and spot gold set a new 25-year high of $640.90. The U.S. dollar, meanwhile, edged higher from seven-month lows against the euro.
Analysts said investors were continuing to pour money into gold and other commodities due to high energy prices, uncertainty over the U.S. economic outlook and tensions in the Middle East.
''The trend is extremely strong. Gold will rise more as people want to hold it as inflationary concerns increase,'' said Yukari Nozaki, analyst at Ace Koeki Co. Ltd.
In stock markets, some technology firms such as Sony Corp.
<6758.T> posted strong gains, but shares of companies sensitive to rising fuel costs, such as Japan's top paper maker, Oji Paper Co. Ltd. <3861.T>, erased recent gains.
''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,'' said Kenichi Hirano, a strategist at Tachibana Securities.
''But with oil prices as this level, the market is finally starting to react to the negative aspects of high prices.'' The benchmark Nikkei average <.N225> ended the morning session flat after data showed Japan's trade surplus narrowed in March as a result of high costs of importing oil.
NYMEX crude for May delivery , which expires at the end of the day, was trading up 3 cents at $72.20 a barrel at 0211 GMT after a 1.15 percent jump on Wednesday when it touched its second successive record high of $72.40 a barrel.
Another steep drawdown in U.S. gasoline inventories fanned supply fears in a market already on edge about OPEC exporter Iran's standoff over its nuclear ambitions.
ENERGY COSTS BITE Nippon Oil Corp. <5001.T> and other energy firms rose. But shares of Oji Paper fell 1.9 percent after two days of gains.
For every $1 rise in the price of crude oil, Oji's cost base increases by 600 million yen ($5.11 million), according to the company's own estimates.
MSCI's index of non-Japan Asian shares <.MSCIAPJ> fell 0.2 percent as Australia <.AXJO> and Singapore <.STI> indexes edged back from Wednesday's peaks.
South Korea's main index <.KS11> rose 0.4 percent, and Taiwan's benchmark index <.TWII> gained 0.5 percent, while Hong Kong's Hang Seng Index <.HSI> shed 0.2 percent.
Among active stocks, South Korea's Hynix Semiconductor Inc.
<000660.KS>, the world's second-biggest memory chip maker, rose 0.89 percent even though profits fell below expectations, as investors were optimistic that earnings would recover by the second half.
In Tokyo, Sony shares added 2.6 percent a day after its executive deputy president said its television business was on track to return to profit and after the company said its joint venture would boost LCD production to meet fast-growing demand.
Mitsui Corp. <8031.T> hit a lifetime high after the trading firm said it was considering a capital outlay of $6.8 billion over the next two years to expand its natural-resource business.
DOLLAR GAINS In early Asian trade, the euro slipped to $1.2355 , down from $1.2385 late in New York trade and a peak of $1.2395 -- the highest since last September. The dollar changed hands at 117.50 yen , up from 117.12 in late New York trade but down only slightly for the year.
The U.S. government reported on Wednesday a stronger-than-expected rise in the core Consumer Price Index for March, which raise concerns among some bond investors about inflation and further possible Fed rate hikes.
On Wall Street, blue chips <.DJI> edged 0.09 percent higher while the tech-laden Nasdaq Composite Index <.IXIC> rose 0.63 percent thanks to gains in companies that reported solid earnings such as Yahoo Inc. .
REUTERS CS HS0916