* Nikkei volatile as short-covering fights China jitters
* Eyes on China after Shanghai tumble
TOKYO, Aug 18 (Reuters) - Japan's Nikkei stock average clawed higher on Tuesday as short-covering emerged a day after its biggest percentage loss since March, though gains were checked by jitters ahead of the start of Chinese stock market trade.
Mitsubishi Corp and other trading houses lost ground after commodities fell on growing doubts about economic recovery. Chinese stocks tumbled 5.8 percent on Monday, their biggest daily percentage drop in nine months, on worries about added share supply and commodity price declines.
Market analysts said they expected support to hold for the benchmark Nikkei around 10,100, or just a bit above the 25-day moving average, but that the Japanese market would take direction from the Shanghai bourse, which opens towards the end of Japanese morning trade.
"I myself think the macroeconomic indicators in general suggest that things are improving globally and there's no reason to be so pessimistic, but there's not a lot we can do about market sentiment as long as stocks keep on falling," said Noritsugu Hirakawa, a strategist at Okasan Securities.
"If Shanghai manages to stabilise above 2,800, I think the Nikkei will rise a bit, mainly on short-covering. But it all depends."
On Monday, the Shanghai Composite Index closed down 176.342 points at 2,870.630, extending last week's 6.6 percent drop.
U.S. stocks fell the most in seven weeks on Monday after a sell-off in major Asian markets fed into a drop in European stocks, with a disappointing outlook from retailer Lowe's Cos stoking worries about weak U.S. consumer spending.
"Right now the hopes for the world economy are really pinned on China, in what is likely to be something of a temporary phenomenon, but moves today will be dictated by this," said Kenichi Hirano, operating officer at Tachibana Securities.
The Nikkei edged up 0.2 percent or 23.76 points to 10,292.37. It closed at 10,268.61 on Monday after falling 3.1 percent, its biggest one-day percentage fall in nearly five months.
The broader Topix fell 0.2 percent to 947.46.
Little impact is expected from the start of campaigning for an Aug. 30 election for Japan's lower house of parliament, which polls show the opposition Democrats have a good shot at winning.
"This will be neutral for the market at this point, although the start of the campaign means we have a bit of a political vacuum, which can't be said to be good," said Tachibana's Hirano.
Trading companies lost ground as metals and oil prices fell on Monday, with Mitsubishi Corp, Japan's largest trader, losing 2.8 percent to 1,868 yen.
Mitsui & Co fell 2 percent to 1,217 yen and Itochu Corp lost 2.1 percent to 653 yen.
Sumitomo Mitsui Construction and IHI Corp gained after a report in the Nikkei business daily that the two firms had won a 40 billion yen order to build a bridge in Vietnam, the Nikkei said.
Sumitomo Mitsui, a general contractor, soared 11 percent to 111 yen and IHI gained 1.2 percent to 176 yen. (Reporting by Elaine Lies; Editing by Joseph Radford)