* Nikkei looks towards targets of 10,500, 10,800
* Tech exporters strong on signs of U.S. economic recovery
* Market awaiting Toyota earnings after close * Eyes turning towards macro indicators, especially U.S. jobs
By Elaine Lies
TOKYO, Aug 4 (Reuters) - Japan's Nikkei stock average hit a 10-month closing high on Tuesday, buoyed by high tech exporters such as Advantest Corp after U.S. data underscored recovery hopes for the world's largest economy. Much of the action was driven by earnings, with Astellas Pharma up after the drugmaker reported relatively firm April-June results thanks to solid sales of its mainstay drugs, while Suzuki Motor slid after posting an 80 percent drop in quarterly operating profit.
But profit-taking eroded earlier gains in what analysts said was a natural reaction to rises that have seen the Nikkei climb more than 3 percent in the last week.
"Given the strong overseas stock performances and good earnings in Japan, there's still some room for the Nikkei to rise, though we're seeing some people taking profits now," said Nagayuki Yamagishi, strategist at Mitsubishi UFJ Securities.
"But there's no real change in investor appetite for risk, and no danger of the Nikkei slipping back below 10,000."
Toyota Motor Corp reported its third straight quarterly loss after the close but lifted its bearish forecast to call for a smaller loss this year.
The benchmark Nikkei was up 0.2 percent or 22.54 points at 10,375.01 after earlier rising as high as 10,479.19, its highest since Oct. 6.
The broader Topix rose 0.2 percent to 959.02.
Analysts said that for markets to push higher, further strong signs of improvement in the global economy are needed.
"Certainly we've seen a lot of good earnings, but much of this is due to cost-cutting and various government incentives, and demand itself has yet to really recover," said Takashi Ushio, head of the investment strategy division at Marusan Securities.
"There's a slightly breathless sense to the gains at this point and we really need to see the U.S. jobs data."
U.S. stocks rose on Monday, pushing the S&P 500 index above 1,000 for the first time in nine months, after a key index of national factory activity beat analysts' forecasts and rose to the highest since August 2008.
Separately, a survey showed on Monday that global factory business activity stabilised in July as new orders and output recovered to levels not seen in well over a year.
The U.S. economy is expected to have lost 320,000 nonfarm payroll jobs in July, a hefty number but still an improvement over last month's drop of 467,000. The unemployment rate is expected to rise to 9.6 percent.
TECHS AND TRADING HOUSES High-tech exporters rose on the signs of recovery in the U.S. economy, with chip-tester maker Advantest up 2.9 percent to 2,135 yen and Tokyo Electron up 2.1 percent to 4,940 yen.
Panasonic Corp edged up 0.3 percent to 1,507 yen, after earlier hitting its highest this year, in the wake of reporting a smaller-than-expected quarterly loss and lifting its half-year outlook as it cuts costs to cope with a firmer yen and weak TV sales.
Trading firms climbed as renewed optimism about economic recovery sent commodity prices rallying, with the Reuters-Jefferies CRB index, a basket of 19 commodity futures, rising 3.4 percent on Monday.
Mitsui & Co surged 5.7 percent to 1,247 yen after posting better than expected results.
Mitsubishi Corp, Japan's biggest trading house, gained 2.1 percent to 1,956 yen. Mitsubishi's stronger-than-expected first-quarter results announced last week prompted Daiwa Institute of Research to raise its rating on the firm to "buy" from "neutral" on Monday.
Car companies lost ground after a long winning streak that saw several hit their highest levels since late last year in early trade on Tuesday. Honda Motor Co lost 1 percent to 3,040 yen and Nissan Motor Corp, which like Honda posted a smaller than expected first quarter loss last week, lost 4.4 percent to 694 yen. Toyota shed 1.5 percent to 4,030 yen. Suzuki sank 5 percent to 2,300 yen. Trade was active, with 2.4 billion shares changing hands on the Tokyo exchange's first section compared to last week's daily average of 2 billion.
Advancing shares outnumbered declining ones 877 to 653. (Reporting by Elaine Lies; Editing by Hugh Lawson)