Nikkei rebounds on short-covering

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TOKYO, Aug 6 (Reuters): Japan's Nikkei share average rose 1 per cent on Tuesday as a story that a Japanese pension fund might buy more stocks and the yen's retreat sparked short-covering in a holiday-thin trade. The benchmark Nikkei gained 143.02 points to 14,401.06, after dropping as low as 14,031.61, while the broader Topix rose 0.8 per cent to 1,193.66 in thin trade, with 2.26 billion shares changing hands. Sony Corp was one of the notable losers, falling 4.6 per cent and was the fourth most traded stock by turnover on the main board after it rejected proposals from activist shareholder Daniel Loeb of Third Point to spin off a part of its entertainment business. The dollar reversed early declines against the yen after sources told the reporter that the pension for Japan's civil servants is considering changing its investment strategy to allow more of its $80 billion to go into stocks and less into domestic government bonds.