JEREMIAH MARQUEZ, THE ASSOCIATED PRESS

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HONG KONG - Asian markets were mixed Friday as falling commodity prices hurt resource stocks across the region, while a strengthening dollar helped lift Japanese shares.

In Tokyo, the benchmark Nikkei 225 index added 0.5 per cent to 13,019.41 after flitting in and out of negative territory on thin trading.

Hong Kong's blue-chip Hang Seng Index shed 1.1 per cent to close at 21,160.58 after giving up early gains; it finished the week more than 3 per cent lower. Meanwhile, a mild rebound in refiners and financials buoyed the key Shanghai index.

Raw material prices have been falling lately amid concerns that a slumping world economy will lower demand, with gold slipping below US$800 an ounce and crude futures trading under US$114 a barrel on Friday. Worries deepened this week with data showing that growth in China's industrial output slowed in July from the year before.

Among the worst hit companies on Friday was upstream oil producer CNOOC Ltd., which lost more than 4.8 per cent. In Australia, mining heavyweight Rio Tinto Group was off 2.4 per cent.

"Commodities are having trouble finding support in the near term," said Castor Pang, an analyst at Sun Hung Kai Financial in Hong Kong. "The demand is getting worse, so we're going to see some more selling."

Chinese commodity producers took a beating in Hong Kong, with Angang Steel dropping 6 per cent and Aluminum Corp. of China, or Chalco, falling 2.9 per cent. Zijin Mining Group Co. tumbled 6.9 per cent on weaker gold prices.

Easing crude prices, though, helped airlines, with Cathay Pacific adding 0.4 per cent and Air China climbing 3.2 per cent.

In Japan, trading overall was extremely thin at the close of Japan's "obon" summer holiday, with many investors away and others awaiting new trading cues, said Terushige Shibata, strategist at Mizuho Investors Securities in Tokyo.

With oil prices and foreign exchange rates relatively stable, the Nikkei is unlikely to fall much under its current level in the coming week, he said.

"Having said that, there isn't much driving the market up either, so it looks like the market will stay relatively flat," Shibata said.

Shares of major exporters including automakers and consumer electronics firms headed higher as the dollar strengthened against the Japanese currency. A stronger dollar increases the value of overseas earnings when they are repatriated to Japan.

Nissan Motor Co. was up 2.1 per cent, and Canon Inc. increased 2.3.

Japan's top car maker Toyota Motor Corp. rose 2.9 per cent, helped by news that it plans to suspend production of large pickup trucks at its Indiana plant six months earlier than originally planned as part of efforts to streamline U.S. production.

Marine transport names benefited from a sharp rise in the Baltic Dry Index, a daily average of sea shipping prices for raw materials.

Kawasaki Kisen Kaisha, Ltd. surged 4.9. Nippon Yusen K.K. jumped 3.1.

In China, the benchmark Shanghai Composite Index rose 0.6 per cent to 2,450.61. The Shenzhen Composite Index of China's second, smaller market slipped 0.2, pulled lower by weakness in the property sector.

"The market failed to rebound much due to a lack of buying enthusiasm and falling turnover," said An Yun, a strategist at Shenyin Wanguo Securities in Shanghai.

A decision by the government to let the state insurance fund increase share investments did little to help because half of the spending is meant to go into initial public offerings, An said.

As oil prices weakened, major refiner PetroChina gained 2 per cent to 13.87 yuan, while China Petroleum & Chemical Corp. rose 0.6 per cent to 10.66 yuan.

Ping An Insurance added 1.8 per cent, Shanghai Pudong Development Bank advanced 0.7 per cent and China Citic Bank climbed 2.8 per cent.

But property developers declined, with Poly Real Estate shedding 3.5 per cent and Shenzhen-traded China Vanke dropping 1.9 per cent.

Hunan Changfeng Motor Co. fell 0.9 per cent amid reports that Beijing Automotive and Guangzhou Automobile are vying for controlling stakes of the SUV-maker. A Hunan Changfeng official denied those reports.

Elsewhere, Taiwan's benchmark lost 1.8 per cent and India's main index dipped 2.4 per cent. South Korea's Kospi added 0.6 per cent, while Australia's market closed flat.

In currencies, the dollar gained to 110.23 yen, up from 109.88 yen late Thursday. The euro was little changed at US$1.4747 from US$1.4771.

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AP reporters Elaine Kurtenbach in Shanghai and Tomoko A. Hosaka in Tokyo contributed to this report.