* Defensive stocks rally while investors avoid exporters
* Can’t tell if selling has hit bottom - trader
By Ayai Tomisawa
TOKYO, June 27 (Reuters) - Japan’s Nikkei share average rebounded on Monday as government officials stepped up warnings that they may intervene in currency markets to stabilise the yen after Britain voted to leave the European Union.
The Nikkei rose 1.6 percent to 15,189.21 in midmorning trade, after diving 7.9 percent on Friday in the wake of Britain’s historic decision.
Prime Minister Shinzo Abe said on Monday he has instructed Finance Minister Taro Aso to watch currency markets “ever more closely” and take steps if necessary.
Abe summoned Aso and Bank of Japan Deputy Governor Hiroshi Nakaso to discuss how to deal with the market turbulence caused by Brexit.
Traders said that investors remained cautious as they try to assess the impact of the Brexit on Japan’s economy in the long term, and expect the government to take necessary measures to contain any fallout. The yen rose to a more than two-and-a-half- year high of 99.11 yen to the dollar on Friday.
“Although it’s rebounding today, we can’t tell if selling has hit the bottom yet,” said Kenji Yoshikawa, head of equity business division at Mizuho Securities. “We still don’t know if or when measures will come out, and we can’t price that in yet.”
While investors avoided investment in exporters that are sensitive to foreign exchange rates, defensive stocks such as pharmaceutical shares and food processors rallied.
Takeda Pharmaceutical Co rose 4.1 percent, Astellas Pharma jumped 6.2 percent, while Kikkoman Corp soared 4.9 percent.
Automakers extended their drops, with Toyota Motor Corp falling 2.5 percent and Nissan Motor Co shedding 2.2 percent.
“These stocks have hit multi-year lows, but even though they seem cheap, people find them risky to invest in due to deep uncertainty in the European region as well as currency risk,” said Yoshihiro Okumura, general manager at Chibagin Asset Management.
Executives at Asian automakers with factories in Britain, including Toyota and Nissan say they could slow investments in Britain or even put them on ice for now.
Securities firms stumbled, with Nomura Holdings diving 6 percent and Daiwa Securities stumbling 5.3 percent.
The broader Topix gained 1.2 percent to 1,218.92 and the JPX-Nikkei Index 400 added 1.3 percent to 11,005.58.
Editing by Kim Coghill