* Nikkei rises 0.7 pct, helped by defensive stocks
* Daiichi Sankyo extends losses on probe of FDA decision
* Drugmakers under pressure after U.S. healthcare proposal
* Exporter shares lose steam as yen rises vs dlr
(Adds stocks, details)
By Aiko Hayashi
TOKYO, Feb 27 (Reuters) - The Nikkei average rose 0.7 percent
on Friday helped by defensive stocks like KDDI Corp <9433.T> but
Daiichi Sankyo <4568.T> slid on a probe into a FDA decision to
remove a scientist from a panel which reviewed a key drug
candidate.
The market received support from data showing Japan's
industrial output in January was in line with a median market
forecast, even though 10.0 percent fall from the previous month
was the biggest drop on record. []
"Defensive stocks are strong, with exporters taking a
breather due to a halt in the weakening of the yen," said Yoku
Ihara, manager at Retela Crea Securities.
"The market is also being pushed up by buying related to
end-month position adjustments," he said.
The benchmark Nikkei <> added 53.27 points to 7,511.20,
although it had fallen into negative territory at one point.
Earlier this week, the Nikkei came within sight of a 26-year low
just below 7,000.
The broader Topix <> gained 0.6 percent to 746.70, after
earlier in the week hitting its lowest close since December 1983.
"Investors can't aggressively sell stocks as the
supply-demand balance is relatively good, with buying from what
many believe to be public pension funds supporting the market at
lows," said Mitsushige Akino, chief fund manager at Ichiyoshi
Investment Management.
Defensive stocks gained in the face of a deepening global
economic downturn and as many exporter shares softened. KDDI,
Japan's second-biggest wireless carrier, advanced 3.2 percent to
513,000 yen, while smaller rival Softbank Corp <9984.T> jumped
4.2 percent to 1,190 yen.
Kao Corp <4452.T>, Japan's largest household products maker,
rose 1.3 percent to 1,845 yen.
Still, some exporters advanced as the yen hovered near 98 yen
<JPY=> against the dollar. Investors usually welcome a softer yen
as it boosts exporters' profits when repatriated.
Canon Inc <7751.T> gained 1.8 percent to 2,495 yen and
industrial robot maker Fanuc Ltd <6954.T> climbed 2.1 percent to
6,460 yen.
But drugmakers fell on a U.S. plan to expand healthcare
coverage and curb costs, letting consumers buy cheaper medicines
and preventing drug companies from making deals that block
generic competition.
"Investors are fretting over the U.S. healthcare proposal
news, as Japanese drugmakers export their products there. If drug
prices were to be cut, for instance, that would cap topline
growth," said Akino.
Eisai Co <4523.T> fell 0.3 percent to 2,985 yen and Takeda
Pharmaceutical <4502.T> slipped 0.5 percent to 3,920 yen.
Daiichi Sankyo <4568.T> sank 5.2 percent to 1,593 yen,
extending losses on news that congressional investigators are
probing the U.S. Food and Drug Administration's decision to
remove a scientist from an advisory panel that reviewed Eli Lilly
and Co <LLY.N> and Daiichi Sankyo's proposed blood thinner
prasugrel. []
It has lost 14.2 percent in the past two days.
Trade was light on the Tokyo exchange's first section, with
803 million shares changing hands, compared with last week's
morning average of 819 million.
Declining stocks outnumbered advancing ones, 799 to 712.
(Reporting by Aiko Hayashi; Editing by Edwina Gibbs)
