TOKYO -- To be sure, the 3.7% drop in the

Dow Jones Industrial Average

had Japanese dealers shedding shares in earnest, but a foreign-exchange intervention, a subway derailment and other domestic news took charge of Tokyo trading Wednesday.


Bank of Japan

, under directions from the

Ministry of Finance

, intervened twice to spend about $1 billion to $3 billion, largely thought to help Japanese life insurance firms to avoid incurring any more losses on both the dollar and euro. The dollar was lately trading at around 107.20 yen.

The key

Nikkei 225

index slipped 177.44 to 19,766.80, while the


index, which includes shares listed on the

Tokyo Stock Exchange's

first section, shed 4.39 to 1661.14. The


small-cap index climbed 2.91, or 2.6%, to 113.05, while the Nikkei


shares jumped 73.78, or 3.2%, to 2398.57.

With the slide in U.S. markets, Japanese investors sought refuge in domestic-oriented stocks, such as paper, pulp and financial firms.

Oji Paper


climbed 24 yen, or 4.2%, to 595, while

Nomura Securities


rose 70, or 2.3%, to 3130.

Tech shares were overall lower as many investors hurried to book profits ahead of the March 31 fiscal year-end.


(SNE) - Get Report

shed 180 to 28,860, and


lost 5000, or 3.7%, to 130,000.

Trend Micro


slipped 400, or 1.7%, to 23,600 and


TheStreet Recommends


rose 35, or 1.4%, to 2630.

Sega Enterprises


said it will allow its Dreamcast game console owners to play against international opponents over the Internet as soon as this spring. The firm, which nonetheless saw shares slide 150, or 5.7%, to 2500, said selected games tied to the Web will have automatic translation capabilities that would enable participants in the U.S., Japan and Europe to play against one another simultaneously.


, a subway operator in the Tokyo metropolitan area, was dealt a blow when a train derailed early in the morning, killing three passengers and injuring another 33. Shares slid 6, or 1.8%, to 331.

Takara Shuzo

, a distilled spirits maker rapidly expanding into the biotech sector, rose 55, or 2.0%, to 2790 when the firm announced plans to buy 50% of South Korean biotech company


for 650 million yen.

The currency market was overloaded with action, as the BOJ sold the yen to buy dollars at around 106.30 to 106.40 yen and then at 107.00 yen. Dealers said this was to help many midsize life insurance firms that were reportedly looking at hefty losses on positions in both the dollar and euro. Although accounting rules will change in Japan starting April 1, if an investor culls more than a 15% loss on any security, it must be marked to market.

Some dealers also suggested that U.S. hedge funds were purposely triggering sell-stops to force selling by Japanese firms on euro-yen so they could start building up long positions on the euro cheaply.

"The impact of the 15% rule has the potential to be felt right up to the run-up of the fiscal year-end, especially when the forex markets are volatile," said Divyang Shah, an analyst at


Hong Kong's

Hang Seng

index inched up 86.07 to 17,951.43, with investors' appetite concentrated around



, up HK$3.00, or 3.5%, to 88.50, and



, up 0.40, or 2.8%, to 14.90. After consecutive double-digit gains, the infotainment Web portal

fell 0.40 to 14.90.

The Philippine market was in disarray when key securities exchange officials quit Tuesday in protest of an alleged stock manipulation scandal. The market was braced for a one-day trading suspension today on orders from

Securities and Exchange Commission

Chairman Perfecto Yasay, after the exchange's entire compliance and surveillance department quit when its probe into irregular trading in gaming company

BW Resources

was completely ignored. However, Yasay's order was overturned today. After hitting a 16-month low on Tuesday, the

PSE Composite

was down 46.9, or 2.8%, at 1639.79.



index rose 8.60, or 1.0%, to 915.94.