* Post-election celebratory mood, strong data buoy market
* Analysts say eyes now on new cabinet members, policies
TOKYO, Aug 31 (Reuters) - Japan's Nikkei average hit its highest level in nearly 11 months on Monday after a historic victory by the opposition in Sunday's national election and after better-than-expected output data.
Sunday's victory for the Democrats, led by Yukio Hatoyama, ends a half-century of almost unbroken rule by the Liberal Democratic Party and breaks a deadlock in parliament.
Advantest Corp, a chip-tester maker, gained after chip maker Intel raised its third-quarter revenue outlook on stronger-than-expected demand for its microprocessors and chipsets.
"There is a celebratory mood in the market," said Hiroaki Kuramochi," chief equity marketing officer at Tokai Tokyo Securities.
"But you can't really read deeper into it than that at the moment as nothing new has come out yet such as who will be named to the cabinet."
The benchmark Nikkei climbed 1.4 percent to 10,684.13, hitting at one point 10,767.00, its highest level since Oct. 6. Market players said the gain was being led by buying of Nikkei futures, sparking short-covering.
The broader Topix added 1 percent to 979.25.
"The influence of the election on stocks is as you see it now. But I think it's nonsense to say that the market will keep on rising just on these election results," said Hiroaki Osakabe, fund manager, Chibagin Asset Management.
"There's a lot of things -- the market even got a little bit of a boost from the industrial production data this morning, which was better than forecast."
Japan's industrial output rose 1.9 percent in July to increase for a fifth straight month as exports recover on the back of stimulus spending around the world, above the 1.4 percent forecast by economists.
The pace of rises for output is also expected to accelerate in the coming months.
Shares of Advantest climbed 2.2 percent to 2,370 yen and Tokyo Electron Ltd added 0.8 percent to 5,130 yen.
Automakers also rose, with Honda Motor Co adding 1 percent to 3,020 yen.
Elpida Memory Inc advanced 1.7 percent to 1,468 yen after the firm said its shareholders approved a change in the memory maker's articles of incorporation on Saturday to allow it to issue new shares for planned and future capital raises.
But Daiichi Sankyo slipped 1.7 percent to 2,010 yen after some researchers said AstraZeneca's new blood thinner works could prove a stronger rival to Plavix, the world's second biggest selling drug, than Daiichi Sankyo's and Eli Lilly's recently launched Effient. (Reporting by Aiko Hayashi and Elaine Lies; Editing by Edwina Gibbs)