By Elaine Lies

TOKYO, Nov 6 (Reuters) - Japan's Nikkei stock average rose 0.7 percent on Friday as exporters climbed after good news on U.S. jobs renewed hopes about the pace of economic recovery and as tech shares rose after gains by their U.S. peers, but profit-taking weighed on gains.

Pioneer Corp advanced nearly 9 percent after UBS upgraded the consumer electronics company to "neutral" from "sell" after it said on Thursday that it needs to raise less funds than previously planned, and NEC Corp climbed despite saying it plans to raise up to $1.5 billion in shares.

But the market's gains were limited by wariness ahead of U.S. jobs data due on Friday, as well as by longer-term uncertainty about the Japanese market, which some analysts said reflected concern about more potential corporate fundraising. The Nikkei finished the week down 2.4 percent, its second straight negative week. It has lost 4.8 percent in the last two weeks.

"Japanese shares aren't rising compared to the rest of Asia because there aren't a lot of merits for investors, they aren't going to make money due to fundraising," said Tomomi Yamashita, a fund manager at Shinkin Asset Management. "As long as this funding risk is there, nobody's going to want to buy even with good earnings results. They'll just buy companies that are fiscally sound."

T&D Holdings Inc dropped 10.8 percent to 2,115 yen, becoming the biggest drag on the Nikkei 225, after the insurance company gave notice on Thursday that it may raise up to 120 billion yen ($1.3 billion) to repay debt by selling new shares.

The benchmark Nikkei rose 71.91 points to 9,789.35 on Friday after marking a one-month closing low on Thursday. The broader Topix fell 0.1 percent to 874.01.

The Nikkei fell behind the rest of Asia, with the MSCI Index of Asia-Pacific stocks outside Japan rising 1.8 percent as of 0609 GMT. Some analysts said that with earnings mostly over, Japanese markets are searching for new drivers.

"Japanese stocks have been weighed down relative to others as the profitability of Japanese companies is lagging behind companies in other Asian countries," said Hideyuki Ishiguro, a supervisor at Okasan Securities' investment strategy section. BANKS SLIP, NEC SURGES

Weekly jobs data released on Thursday showed that the number of people filing jobless claims fell to a 10-month low last week.

The U.S. government is scheduled to release its key monthly jobs report on Friday, with economists polled by Reuters forecasting a loss of 175,000 jobs in October, sharply below the 263,000jobs cut in the previous month. But the unemployment rate is forecast to rise to 9.9 percent.

Bank shares slipped on what some analysts said were persistent worries that they too might be forced into fund raising, though others said this was only an excuse to take profits after recent rises and most pared their losses.

No. 2 bank Mizuho Financial Group lost 1.1 percent to 179 yen and Sumitomo Mitsui Financial Group shed 0.3 percent to 3,160 yen. Top lender Mitsubishi UFJ Financial Group was flat after erasing earlier losses.

In other banking news, Sumitomo Trust and Banking Co Ltd and Chuo Mitsui Trust Holdings Inc said they are in talks to merge, which would create Japan's largest trust bank with scale to better compete in the crowded asset management industry.

Chuo Mitsui lost 2.2 percent to 313 yen and Sumitomo Trust edged down 0.8 percent.

NEC surged 10.1 percent to 273 yen. Analysts said that since the news NEC might raise funds had been out in the market for months and sharply depressed the share price, the actual announcement was factored in and short-covering emerged.

Canon and other exporters gained after Wall Street jumped on the jobs data, with Canon gaining 1.8 percent to 3,410 yen and Honda Motor Co up 0.5 percent to 2,800 yen. Sony Corp gained 1.6 percent.

Trade fell off a bit, with 1.9 billion shares changing hands on the Tokyo exchange's first section compared to last week's daily average of 2 billion yen. Declining shares outpaced advancing ones by over 2 to 1. (Additional reporting by Chikafumi Hodo; Editing by Joseph Radford) ((elaine.lies@thomsonreuters.com; +81 3 6441 1807; Reuters Messaging:elaine.lies.reuters.com@reuters.net))
Keywords: MARKETS JAPAN STOCKS Reuters Terminal users can see other related news and rates by double-clicking on: All Nikkei indices All shares listed on Nikkei-225 N225 index TOPIX index Nikkei Japan 1000 TOPIX sector data Nikkei 300 index TOPIX futures data Osaka N225 data Chicago N225 data Top 30 by volume Top 30 by value Total volume Total value 1st section sector RICs All TSE weighted avg Top 30 gainers by pct Top 30 losers by pct Top 30 net gainers Top 30 net losers Active Japanese stocks Japan economic indicators ASIA-PACIFIC STOCK MARKETS: Pan-Asia Japan S.Korea S.E. Asia Hong Kong Taiwan Australia/NZ India China OTHER MARKETS: Wall Street Gold Currency Eurostocks Oil JP bonds ADR Report LME metals US bonds Stocks News US Stocks News Europe DIARIES & DATA: IPO diary & data Asia earnings diary U.S. earnings diary European diary Japan diary Wall Street Week Ahead Eurostocks Week Ahead TOP NEWS: For top Asian company news: Top News Japan U.S. company news Europe company news Forex news Global Economy news All Equity news Tech, Media, Telecoms Banking news Politics/General news Asia Macro data A multimedia version of Reuters Top News is available at: http://topnews.session.rservices.com LIVE PRICES & DATA: World stocks Currencies Dow Jones/NASDAQ Debt FTSE 100 LME price overview Yen/dollar

(Multimedia versions of Reuters Top News are now available for: * 3000 Xtra : visit http://topnews.session.rservices.com * BridgeStation: view story .134 * Reuters Plus: from your WebDSS screen For more information on Top News, visit http://topnews.reuters.com)

COPYRIGHT

Copyright Thomson Reuters 2009. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.