Nikkei edges up, 1Q GDP data beat f'cast but underlying picture still weak

* Nikkei up 0.2%, Topix flat
* Japan Q1 GDP rose, defying expectations for a contraction
* But gains limited as data showed lacklustre domestic
demand
* Exporters edge higher as yen weakens to 2-week low vs
dollar

By Shinichi Saoshiro
TOKYO, May 20 (Reuters) - Japan's Nikkei share average edged
higher on Monday as growth in the nation's economy unexpectedly
accelerated in the first quarter, although market gains were
limited as the data also pointed towards lacklustre domestic
demand.
The Nikkei .N225 ended 0.2% higher at 21,301.73.
Data released on Monday showed Japan's gross domestic
product (GDP) grew at an annualised 2.1% in the first quarter
versus expectations of a 0.2% contraction. However, the surprise
expansion was mostly caused by imports declining faster than
exports, leading to a net exports contribution to GDP.

"The GDP surprised for the better and that's the main driver
behind the stock market's gains. Those who bet on weak data were
caught wrong-footed and reversing their positions," said Takashi
Hiroki, chief strategist at Monex Securities.
Yet on the whole the GDP data "is not encouraging, with
private consumption and capex declining and exports rising only
because weak domestic demand depressed imports," he said, adding
that Monday's market advance "is purely technical, few are
buying because they think the economy is doing well."
Exporters gained as the yen JPY= weakened to a two-week
low against the dollar.
NEC Corp 6701.T added 1.4%, Canon Inc 7751.T rose 1.1%
and Nintendo Co 7974.T 1.4%.
Technology firms, on the other hand, sagged after U.S.
counterparts slipped on Friday due to persistent trade tensions
between the United States and China.
Tokyo Electron 8035.T shed 3.1%, Sony Corp 6758.T fell
0.5% and Toshiba Corp 6502.T dropped 1%.
Paper manufacturing company Hokuetsu Corp 3865.T soared 9%
after forecasting a 62.9% operating profit surge for the year
ending March 2020. TYK Corporation 5363.T sank 19% after the maker of heat
resistant materials forecast its operating profit for the
current financial year will likely decline by 30.3%.
Of Tokyo's 33 subindexes, 21 were higher, led by real estate
.IRLTY.T , while iron and steel .ISTEL.T tumbled.
The broader Topix .TOPX was flat at 1,554.92.

(Editing by Shri Navaratnam)