TAIPEI, Aug 3 (Reuters) - Taiwan will shut markets and schools in northern parts of the island including the capital Taipei on Thursday (Aug 3) as slow-moving Typhoon Khanun was expected to brush past amid warnings of floods and high winds.

Typhoon Khanun, categorised by Taiwan's weather bureau as the second-strongest typhoon level, slowly headed towards its northeastern coasts with maximum winds of 209 km h.

The storm hit power lines in Japan's popular tourist destination Okinawa, knocking out electricity to more than 200,000 households on Wednesday morning and killing one man.

Northern cities including New Taipei, Keelung, Yilan and the capital Taipei will shut businesses and schools on Thursday. Taiwan's stock and foreign exchange markets will also be closed.

Total rainfall of up to 0.6m was forecast in mountainous central Taiwan while 0.3m of rain was expected in the mountains near Taipei.

Typhoon Khanun was moving across the ocean in a westerly direction at 4 km g, weather officials said, and was expected to skirt past Taiwan's northern coasts late on Thursday before making a sharp turn to the northeast on Friday.

Nearly 30 domestic and international flights have been cancelled, and all domestic ferry lines will be suspended on Thursday.

An emergency response centre has been set up by the central government and hundreds of soldiers were on standby in northern cities, the defence ministry said.