* Global data eases pessimism over economy, lifts Nikkei
* Early signs of shift back from bonds to stocks -analyst
* Caution remains on U.S. jobs data after poor ADP -analyst
By Aiko Hayashi
TOKYO, Sept 2 (Reuters) - Japan's Nikkei average rose 1.2 percent on Thursday, moving further away from a 16-month low touched the previous day, after U.S. and Chinese manufacturing data eased investor worries about the global economy.
After sliding 7.5 percent in August, market players said the Nikkei is steadying somewhat, likely helped by buying from domestic institutional investors at lows and buying of futures by foreigners.
A manufacturing rebound in China and stronger-than-expected growth in Australia, help halt the yen's advance and lifted the Tokyo market on Wednesday.
Global stocks later also drew support after the Institute for Supply Management said its index of U.S. factory activity rose to 56.3 in August from 55.5 in July, much higher than forecast by economists.
"It's too early to say worries about a double-dip recession in the economy have been wiped away just because China's PMI, Australia's GDP and U.S. data weren't bad," said Masahiko Sato, an executive director at Nomura Securities' equity marketing department.
"But stocks may become more resilient to poor economic indicators going forward and gain further if money that had shifted to bonds on extreme concern over the economy comes back to equities, early signs of which have likely appeared in U.S., Germany and U.K. bonds after yesterday's data."
The benchmark Nikkei gained 108.70 points to 9,035.72 by the midday break. It rose 1.2 percent on Wednesday, after falling as low as 8,796.45, its lowest since April 2009.
The broader Topix inched up 0.8 percent to 817.57.
"With U.S. stocks jumping and worries about risk-taking somewhat receding, the market will likely climb at first," said Kazuhiro Takahashi, general manager at Daiwa Securities Capital Markets.
"But then investors will probably stand on the sidelines as the yen is still on the strong side, and there's a growing sense of uncertainty about Friday's jobs data after the poor ADP data."
Investors on Wall Street shrugged off a report from ADP Employer Services even though it showed private U.S. companies unexpectedly cut 10,000 jobs in August. Government data also indicated U.S. construction spending fell to its lowest rate in 10 years.
The next targets for the Nikkei will likely be around 9,280 and then 9,360, highs hit in late August, Takahashi said.
If it resumes falling, the next technical level is 8,697, a 61.8 percent retracement of the rally from its March 2009 low to its April 2010 high.
Honda Motor Co and other exporters that are sensitive to the health of the world economy led gains in the overall market.
Honda rose 1.9 percent to 2,861 yen, Canon Inc rose 1.4 percent to 3,515 yen and Sony Corp gained 1.7 percent to 2,416 yen.
But shares of Sawai Pharmaceutical tumbled 10.2 percent to 7,580 yen after the generic drugmaker said it plans to raise as much as 30 billion yen for investment in equipment, research and partnerships through issuing convertible bonds.
The move could increase the firm's shares by about 20 percent. (Editing by Edwina Gibbs)