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Japan shares rise but pare gains, economy shrinks
AP - Tuesday, November 18
TOKYO - Japanese shares closed slightly higher Monday but well off the day's high as grim economic numbers confirmed the economy is in recession and underlined the gloomy outlook for corporate earnings.
The benchmark Nikkei 225 stock average sank nearly 250 points in early trade after news the economy contracted in the third quarter but then bounced about 550 points higher before giving up most of those gains to close up 60.19 points, or 0.7 percent, at 8,522.58.
The broader Topix index nudged up 0.4 percent, or 3.58 points, to 850.49.
"In early trade, investors dumped shares on disappointing GDP data, but later we saw buying, mainly exporters, on the weakening yen," said Shino Securities senior strategist Yutaka Miura.
The yen weakened to 97.56 against the dollar during the session but by the close of trading had strengthened and was trading close to Friday's level of 97.20 yen to the dollar.
Tokyo said gross domestic product contracted in July-September for the second-straight quarter, dragging the economy into recession for the first time since 2001. Two straight quarters of negative growth is defined as a recession.
But Japanese shares fared better than equities in the U.S. where the Dow Jones industrials ended Friday down 3.8 percent after a volatile session.
Panasonic Corp. gained 3.8 percent to 1,489 yen, and Fujitsu Ltd. rose 3.9 percent to 426 yen.
Memory chip maker Elpida Memory, Inc. plunged 14 percent to 413 yen after Friday saying it would slash the conversion price on convertible bonds issued earlier this month.
Real estate companies retreated on news of a slump in office rents. Mitsubishi Estate Co. fell 5.4 percent to 1,396 yen and Mitsui Fudosan Co. slid 5.2 percent to 1,383 yen.
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