* Resource shares hit after Fed raises discount rate
* Mood cautious, S&P futures down but fall checked for now
By Elaine Lies
TOKYO, Feb 19 (Reuters) - Japan's Nikkei stock index fell 1.4
percent on Friday, with resource-linked shares such as Mitsubishi
Corp <8058.T> down after the U.S. Federal Reserve's discount rate
hike jolted U.S. equities futures and commodities prices.
The dollar rose to a nine-month high against the euro and a
one-month peak versus the yen, giving exporters an early boost.
But this largely faded as investors became nervous about how
overseas markets would respond to the Fed's move.
The Fed said it would raise the interest rate it charges
banks for emergency loans to 0.75 percent from 0.5 percent,
taking a step towards normalising emergency policy used to fight
the worst financial crisis since the Great Depression.
But the Fed also said the move did not signal any change in
the outlook for the economy or for monetary policy, and left its
benchmark interest rate unchanged near zero.
S&P 500 index futures <SPc1> lost 1.1 percent but falls
seemed checked around that level. Still, investors were wary.
"There's a lot of uncertainty about what will happen overseas
later today, with a high chance that markets will fall," said
Yutaka Miura, a senior technical analyst at Mizuho Securities.
"It's hard to know, but next week could well see a bit of
downward adjustment," he said.
The benchmark Nikkei <> shed 141.03 points to 10,194.66,
while the broader Topix <> lost 1.3 percent to 893.43.
Still, the Nikkei appeared headed for its second positive week in
a row.
Although Fed Chairman Ben Bernanke said last week the central
bank could soon raise the discount rate it charges on short-term
loans to banks, the timing came as a surprise.
While the Fed's action is unlikely to lead to an immediate
rise in the benchmark federal funds rate, it could temper
risk-taking and weigh on Tokyo shares, said Nagayuki Yamagishi,
an investment strategist for Mitsubishi UFJ Securities.
"There had been a recent swing toward a mood of optimism (in
financial markets) but that may quickly head back toward
pessimism. It is the type of factor that short-term traders do
not like," he said.
Resource shares took a hit as both oil and gold were sold,
with oil falling more than a dollar to just over $78 a barrel
<CLc1> and gold shedding more than 1 percent. [] []
Copper fell more than 1 percent and other metals also slid.
Mitsubishi Corp lost 1.8 percent to 2,210 yen and fellow
trading house Mitsui & Co <8031.T> shed 3 percent to 1,354 yen.
Itochu Corp <8001.T> fell 2.6 percent to 704 yen.
Smelter Toho Zinc <5707.T> fell 4.8 percent to 394 yen and
ferronickel producer Pacitic Metals <5541.T> lost 3.6 percent to
650 yen.
(Reporting by Elaine Lies; Editing by Chris Gallagher)
