RTRS: Nikkei gains despite GDP, pension fund buying buoys
* Nikkei up 0.7 pct for second straight day of gains
* Pension funds likely buying, but trade thin
* Defensive shares strong in face of economic uncertainty
* Property firms plunge on weak Tokyo office rent survey (Adds stocks, details)
By Elaine Lies
TOKYO, Nov 17 (Reuters) - Japan's Nikkei average gained 0.7 percent on Monday despite data showing the world's second-largest economy has slipped into recession, with buying by public pension funds seen as likely to have boosted shares across the board. A weaker yen helped exporters such as Canon Inc (7751.T: Quote, Profile, Research, Stock Buzz) gain, while Honda Motor Co (7267.T: Quote, Profile, Research, Stock Buzz) rose after business weekly Barron's said it would be a big winner once the financial market turmoil subsides. [ID:nN16490433] Takeda Pharmaceutical Co (4502.T: Quote, Profile, Research, Stock Buzz) and other defensive shares seen as resilient in the face of global economic turmoil were strong performers, but major real estate firms plunged after a survey showed rent charges for new office buildings in Tokyo had declined for the first time in six years.
"There really aren't any good reasons for the market to rise right now, making pension funds seem like the most likely buyers," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments. "After all, there are still a lot of problems out there that have yet to be solved."
Other market players said that funds appeared to be buying to bring their stock allotments up to required levels, taking advantage of current bargain prices to do so.
"Foreign investors, such as hedge funds, have stopped selling, and that combined with the thin volume and apparent pension fund buying helped push the Nikkei higher," said Masayoshi Okamoto, head of trading at Jujiya Securities.
Though at one point early in afternoon trade the benchmark Nikkei .N225 climbed more than 3 percent, by the close it had shed most of its gains as the dollar slipped against the yen, ending up 60.19 points at 8,522.58.
The broader Topix .TOPX rose 0.4 percent to 850.49.
The market was volatile in relatively light trade, with the Nikkei losing close to 3 percent at one point in the morning after data showed Japan's economy shrank 0.1 percent in the third quarter, lagging market expectations for anaemic growth of 0.1 percent. [ID:nT120174]
On the Tokyo exchange's first section, 2.03 billion shares changed hands, compared with last week's daily average of 2.11 billion.
The contraction confirmed that the global financial crisis has sabotaged growth in yet another major economy, with the euro zone already in recession, using the most common definition of two consecutive quarters of contraction. [ID:nLE536930]
But market players said the GDP was old data that the market mostly shrugged off after the initial response.
"It wasn't a surprise, and people are expecting poor figures for the next quarter as well, but that's largely factored in already," said Daiwa SB Investment's Ogawa.
