* Resource stocks up on higher oil prices amid economy hopes
* Shippers jump on brokerage upgrades
* Nikkei could hit 10,000 soon but sustainability in doubt
By Aiko Hayashi
TOKYO, June 10 (Reuters) - Japan's Nikkei average rose 1
percent on Wednesday, buoyed by resource shares such as trading
firm Mitsubishi Corp <8058.T> after oil prices hit a seven-month
high above $70 a barrel amid hopes for a recovery in the global
economy.
Shipping firms surged, with Mitsui O.S.K. Lines <9104.T>
rising more than 5 percent after brokerage upgrades for the
sector and individual companies, saying their current share
prices appeared undervalued.
"Those that sold heavily on the view that the global economy
was falling into an abyss are now buying back, as more people
think it hit bottom in January-March," said Kenichi Hirano,
operating officer at Tachibana Securities.
"I wouldn't be surprised if the Nikkei touches the 10,000
level soon, but we need proof of a recovery in the real economy
before it can go beyond that."
In moderate trade, the benchmark Nikkei <> added 98.31
points to 9,885.13 by midday, in sight of the eight-month
intraday high of 9,914.07 hit on Monday.
The broader Topix <> gained 1.3 percent to 929.98.
Machinery stocks such as Komatsu Ltd <6301.T> advanced, even
after data showed Japan's core machinery orders unexpectedly fell
5.4 percent in April, suggesting any recovery in capital
expenditure is still fragile. []
"The orders data doesn't undermine the view that Japan's
economy has bottomed out and exports are showing signs of
recovery," said Chotaro Morita, chief fixed-income strategist for
Japan at Barclays Capital.
"But given that capital spending will likely remain low due
to oversupply and a cautious corporate outlook for investment,
the orders data suggests that the economic cycle of exports
leading to production, spurring investment and consumption may be
weaker this time than usual."
TRADINGS FIRMS, SHIPPERS HIGHER
Energy-related shares gained on higher oil prices after data
showing a steep drop in U.S. crude inventories and a U.S.
government report revised global demand expectations higher.
[]
Mitsubishi Corp jumped 4.6 percent to 1,962 yen and Mitsui &
Co <8031.T> gained 2.6 percent to 1,289 yen. Oil and gas field
developer Inpex <1605.T> added 3.4 percent to 832,000.
Shares of smelters also climbed after copper hit eight-month
peaks on Tuesday. Dowa Holdings <5714.T> shot up 6.5 percent to
462 yen and Sumitomo Metal Mining <5713.T> advanced 6.1 percent
to 1,518 yen.
Shipping firms gained. Mitsui O.S.K. Lines jumped 5.2 percent
to 689 yen, Nippon Yusen <9101.T> rose 3.4 percent to 452 yen and
Kawasaki Kisen <9107.T> added 5.5 percent to 445 yen.
Credit Suisse hiked its rating on the shipping sector to
"overweight" from "market weight", saying earnings are likely to
bottom in the current financial year.
Shares of earth-moving equipment maker Komatsu Ltd <6301.T>
rose 2.2 percent to 1,563 yen, while rival Hitachi Construction
<6305.T> was up 1.9 percent at 1,714 yen.
Kawasaki Heavy Industries <7012.T> soared 10.7 percent to 239
yen, after the Nikkei business daily said the company and a
research institute had developed a battery that can be charged in
under 10 seconds, adding that they aimed to make it usable for
large vehicles such as buses and trains in five years.
Shares of Cosmo Oil Co <5007.T> rose 4.1 percent to 353 yen
after the refiner said on Tuesday that it and South Korea's
Hyundai Oilbank would form a joint venture to build the world's
biggest paraxylene-making facility in 2013, at Hyundai's Daesan
refinery -- a move to target growing petrochemicals demand in
China. []
Some 1.2 billion shares changed hands on the Tokyo exchange's
first section, in line with last week's morning average.
Advancing stocks outnumbered declining ones by nearly 4 to 1.
(Additional reporting by the Tokyo newsroom; Editing by Michael
Watson)
