Nikkei pares gains after N.Korea test, but impact limited
* Investors expected to shrug off N.Korea test
* GM discussions with creditors seen as bigger factor
TOKYO, May 25 (Reuters) - Japan's Nikkei stock average was up 1.1 percent on Monday after paring gains in the wake of a North Korean nuclear test, but the impact was expected to be limited with upcoming economic indicators carrying more weight with investors. During the noon break, North Korea said it had successfully conducted a nuclear test, causing both Nikkei futures in Osaka JNIc1 and the Nikkei .N225 to trim morning gains. [ID:nSEO141656]
But market analysts said that while the immediate news had sparked some profit-taking, the impact was likely to be limited over the longer term.
"North Korea's the kind of country that often plays this kind of card. If the test had been carried out by a country that had never done this before, the impact would be much greater," said Hideyuki Ishiguro, a supervisor at the investment advisory department of Okasan Securities.
"This adds some uncertainty to the regional political picture, but I think investors are paying a lot more attention to economic things right now, such as upcoming indicators and what happens to GM."
The benchmark Nikkei gained 103.32 points to 9,329.13 after rising as far as 9,402.76, a gain of 1.9 percent, in earlier trade. The broader Topix rose 0.9 percent to 883.29.
Figures for U.S. existing home sales in April will be released on Wednesday, and new home sales data for the same month comes out on Thursday.
General Motors GM.N faces a June 1 deadline to work out issues with its creditors if it wants to avoid a bankruptcy filing.
On Friday, a spokesman for some GM creditors said the company's largest bond holders, with a total of roughly $27 billion in debt, plan to reject GM's current offer for a 10 percent equity stake. [ID:nN22369035]
Drugmaker Shionogi (4507.T) jumped after a report that it has developed a new flu drug, while construction machinery makers such as Komatsu (6301.T) gained on a brokerage upgrade that cited robust demand in China.
Shionogi rose 5.5 percent to 1,947 yen and Komatsu gained 2.5 percent to 1,359 yen. (Reporting by Elaine Lies; Editing by Joseph Radford)
