* Nikkei powers to first close above 10,000 in eight months * China, Japan economic data feeds recovery hopes
* Nomura gains on upgrade, other brokerages climb
* Shippers power higher, Mitsubishi Heavy rises By Elaine Lies TOKYO, June 12 (Reuters) - Japan's Nikkei stock average climbed to close above 10,000 on Friday for the first time in eight months as upbeat data from Japan and China fed hopes for global economic recovery, leading to broad-based buying. Nomura Holdings rose more than 5 percent after Merrill Lynch upgraded it to "buy" from "neutral", saying in a report that Japan's largest brokerage was likely to turn profitable in the next financial year. Other securities firms gained as well.
The latest round of Chinese economic data, released during the midday break, showed factory output growth rebounded in May alongside stronger expansion in credit and consumer spending, bolstering evidence that the world's third-largest economy is on the path to recovery.
Sentiment was given a another boost by Japanese data showing that consumer confidence improved in May.
But market analysts said the benchmark, which rose 3.8 percent this week for its third straight week of gains, may take a breather soon. It has risen 44 percent since a March 10 low just above 7,000.
"Buyers have returned and sentiment is good," said Koichi Ogawa, chief portfolio manager at Daiwa SB Investments.
"But the 'green shoots' rally has really about reached its limits, and we'll need some signs of improving company earnings such as upward forecast revisions, perhaps in a month or so, to really make more gains. For a while, expect consolidation."
In active trade, the Nikkei climbed 154.49 points to 10,135.82, its highest close since October 7. It rose as far as 10,170.82 at one point.
The broader Topix gained 1.1 percent to 950.54.
China's industrial production for May grew 8.9 percent, beating economists' forecasts of a 7.5 percent rise but in line with a figure reported by Chinese newspapers earlier this week.
Retail sales grew by 15.2 percent in the year to May, also beating forecasts.
"The Nikkei could be trading between 10,000 and 12,000 by the end of this year, as the economic outlook for emerging countries such as China and India is pretty bullish," said Yoku Ihara, a manager at Retela Crea Securities.
Trade was active, partly due to trade linked to the settlement of Nikkei futures and options contracts. Those expiring in June likely settled at 10,147.65, Tokyo market participants said earlier in the day, citing estimates by local brokerages.
SECURITIES SURGE, SHIPPERS SHARP
Shares of Nomura climbed 5.2 percent to 917 yen on the brokerage upgrade and after it won its first rights issue mandate in Europe this year, underwriting a 420 million Swiss franc ($390 million) deal for Swiss flavouring and fragrance maker Givaudan
Other brokerages climbed as well, with the securities subindex up 4.5 percent to become the biggest gainer among the subindexes. Shippers, which are sensitive to news about China, powered higher after the noon break. Kawasaki Kisen rose 3.2 percent to 458 yen, Mitsui O.S.K. Lines gained 1.5 percent to 700 yen and Nippon Yusen rose 2.2 percent to 468 yen. Mitsubishi Heavy jumped 4.6 percent to 409 yen, helped by a report that it was close to securing a deal to construct the world's first large-scale coal gasification power plant in Australia. An additional boost came from a brokerage upgrade.
A wide range of shares advanced, with clothing retailer Fast Retailing, a popular stock among individual investors, gaining 2.4 percent to 12,780 yen.
But NEC Electronics Corp slid 2.7 percent to 981 yen after the Nikkei business daily said the company was likely to end the April-June quarter with a group operating loss of about 20 billion yen ($204.5 million), as sales of chips for use in information devices and automobiles remain weak.
Trade was active, with just under 4 billion shares changing hands on the Tokyo exchange's first section compared to last week's daily average of 2.4 billion.
Advancing shares outnumbered declining ones by nearly 2 to 1.
(Reporting by Elaine Lies; Editing by Joseph Radford)