* Short-covering of carmakers leads Nikkei higher
* Nikon tumbles after doubling loss forecast
* U.S. data disappoints, eyes on Friday jobs figures
TOKYO, Aug 6 (Reuters) - Japan's Nikkei stock average edged higher on Thursday as Honda Motor Co and other carmakers gained, but rises were expected to be capped after U.S. data suggested that economic recovery might be more shaky than hoped. Nikon Corp tumbled over 9 percent after the precision equipment and camera maker warned on Wednesday its operating loss would be more than double its initial estimate this year as it wrote down the value of unsold chipmaking gear. U.S. shares lost ground on Wednesday after weak data on the services sector and private payrolls cooled recent optimism the recession was retreating, with the ADP private-sector jobs report showing private employers cut 371,000 jobs last month.
"These figures showed that while the economy is recovering, the recovery is still a bit weaker than people were hoping," said Hiroichi Nishi, a general manager in the equity division of Nikko Cordial Securities.
"Japanese earnings have shown that the worst is likely behind us, but whether sales will expand from here on in is the big question. Attention is now turning to macroeconomic issues."
The U.S. service sector contracted in July at a faster pace than in June, with the Institute for Supply Management's services index falling to 46.4 last month from 47.0 in June.
That was below a median forecast for a rise to 48. The dividing line between growth and contraction is 50.
The ADP report increased investor caution ahead of Friday's keenly awaited nonfarm payrolls data. 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, while the unemployment rate is expected to have risen to 9.6 percent.
Investor short-covering after Wednesday's profit-taking, which hit cars and car parts makers especially hard, buoyed the Nikkei from the open, analysts said.
The benchmark rose 0.8 percent or 80.52 points to 10,330.39 It hit a 10-month high of 10,479.19 on Tuesday, when it also marked a 10-month closing high. The broader Topix gained 0.6 percent to 955.06.
With Japan's earnings season winding down, investors are searching for fresh trading factors to take the Nikkei higher, though gains are likely to be slow and marked by occasional dips as the market works its way upwards, analysts said. "Given the disappointing U.S. data, both Wall Street and the Nikkei are actually doing rather well," said Yumi Nishimura, deputy general manager at Daiwa Securities SMBC.
Nikon on Wednesday said it lowered its forecast for the financial year to next March to an operating loss of 30 billion yen, more than double its previous estimate for a loss of 12 billion yen.
Its shares fell 9.9 percent to 1,694 yen.
But carmakers climbed, with Honda up 2.7 percent to 3,080 yen and Toyota Motor Co gaining 2 percent, on short-covering after profit-taking sales on Wednesday.
Car parts maker Denso Corp, which also slid on Wednesday, rose 5.4 percent to 2,845 yen. (Reporting by Elaine Lies; Editing by Joseph Radford)