* For the week, Nikkei is up 1.5 pct * Topix outperforms Nikkei as defensive shares bought * Japan Display soars on strong profit By Ayai Tomisawa TOKYO, Feb 13 (Reuters) – Japan’s Nikkei share average fell on Friday, retreating from a 7-1/2 year closing high as investors took profits from the previous day’s gainers such as Fanuc Corp, but buying in defensive shares limited the losses.

Fanuc, which rose 6.2 percent on Thursday on media reports saying that Third Point bought a stake in the company, fell 1.3 percent on profit-taking and lopped a hefty 11 points off the Nikkei.

By late morning, the Nikkei was down 0.2 percent at 17,952.72, after the benchmark closed at 17,979.72 on Thursday, the highest closing level since July 2007. For the week, the Nikkei has gained 1.5 percent.

However, the broader Topix outperformed, rising 0.2 percent to 1,451.82, with 19 of its 33 subsectors in positive territory.

Financial stocks and real estate stocks led the gains on the Topix, with the securities sector rising 1.1 percent, the other financial sector gaining 2.3 percent and the real estate sector adding 1.8 percent.

The securities sector has dropped 3.6 percent since the beginning of the year, while the other financial sector is up 1.8 percent and the real estate sector has added 0.5 percent. The Nikkei is up 2.7 percent during the same period.

“Shares that have underperformed the overall market are being bought, especially domestic-demand sensitive shares,” said Kyoya Okazawa, head of global equities & commodity derivatives at BNP Paribas.

Okazawa, who recently visited foreign investors, said that global macro funds had reduced risky assets including Japanese stocks after the Swiss National Bank surprised the market by deciding to end the cap on the franc in January.

But he said that global macro funds are expected to start revisiting Japanese shares as they started focusing on how weak oil prices will benefit the Japanese economy and related sectors such as retail.

“Stronger consumption in the domestic market will be a key.” Meanwhile, a ceasefire agreement between Russia and Ukraine eased tensions in the market.

Exporters were mixed after the dollar traded at 119.04 yen , knocked down from a five-week high of 120.48 touched on Wednesday.

Toyota Motor Corp dropped 0.5 percent, while Honda Motor Co gained 0.2 percent.

Bucking the weakness, Japan Display soared as much as 7.7 percent to a four-month high on strong profits.

The JPX-Nikkei Index 400 rose 0.1 percent to 13,147.36.

(Editing by Kim Coghill)