* Nikkei extends gains, up 0.5 pct
* Nikkei hits six-month high at one point
By Antoni Slodkowski
TOKYO, Dec 3 (Reuters) - Japan's Nikkei share average hit a six-month high on Friday after a stream of positive U.S. retail and housing data raised hopes for a swift recovery in the world's biggest economy.
U.S. retailers reported higher-than-forecast sales for November, while initial weekly claims for jobless benefits fell to a two-year low.
Fast Retailing lost around 3 percent after it said on Thursday sales at the Japan outlets of its Uniqlo casual-clothing chain tumbled 14.5 percent year-on-year in November.
It was one of the most actively traded stocks by turnover and the worst performing Nikkei component in percentage terms.
"As Wall Street posted big gains recently, investors' expectations that the U.S. economy will pick up steam are rising and that's why the market tested the six-month high today," said Kazuhiro Takahashi, general manager at Daiwa Capital Markets
"Investors will now watch if the Nikkei can pierce that level and then stay above it," said Takahashi adding that afternoon trade is likely to lose steam ahead of the weekend and as market players await U.S. employment figures due at 1330 GMT.
The Nikkei extended Thursday's nearly 2 percent gains, adding 0.5 percent or 51.86 points to 10,221.92. At one stage it hit a six-month intraday high of 10,254.00.
The broader Topix index was 0.5 percent higher at 881.86.
A report by the U.S. National Association of Realtors on Wednesday said home sales in October jumped 10.4 percent, against economists' forecast for a 0.5 percent decline, suggesting the economic recovery had started to stabilise.
The U.S. government's monthly employment report on Friday is forecast to show another month of job gains in both the private and public sectors. In a Reuters poll, nonfarm payrolls are seen up 140,000 in November, while private payrolls are seen up 153,000..
Even with improving labour market conditions, however, the unemployment rate was expected to remain at a lofty 9.6 percent for a fourth straight month.
Tokyo shares were also supported as the European Central Bank allayed concerns about a growing euro zone crisis with hefty purchases of Portuguese and Irish debt. The ECB said, however, it does not at present plan to increase the size of its liquidity programme.
Shares of Yahoo Japan rose 1.1 percent after Japan's anti-monopoly watchdog gave the official go-ahead on Thursday to a search-engine alliance between Yahoo Japan and Google Inc that had been questioned by competitors.
ABC Mart fell 1.1 percent after the discount shoes retailer reported same-store sales in November declined 6.1 percent. (Additional reporting by Aiko Hayashi and Ayai Tomisawa; Editing by Michael Watson)