* Japan stocks rise broadly on short-covering, play catch-up
* U.S. economic data help to bolster confidence -analysts
* Caution remains, eyes on U.S. jobs data, G20 -analysts
* Resistance seen around 9,500, near 26-week moving average
By Aiko Hayashi
TOKYO, Nov 4 (Reuters) - Japan's Nikkei average rose 2.2 percent on Thursday on a wave of short-covering as the Federal Reserve's monetary easing passed without ructions in the currency market and investors took heart from solid U.S. economic data.
Analysts said foreign investors, including a big European name, were principal players behind the Nikkei's climb away from seven-week lows hit earlier this week, helping the benchmark to book its biggest daily percentage gain in more than a month.
The Fed said it would buy $600 billion more in Treasuries by the middle of next year to boost the economy.
"Stocks gained mostly on short-covering by foreign investors including hedge funds, but it's still not any kind of active buying," said Masayuki Otani, chief market analyst at Securities Japan, Inc.
"Despite today's gains, it's also too early to let down your guard as the currency markets haven't really stablised yet, and we have U.S. jobs data and G20 going ahead. The market is unlikely to have any clear direction for the next week or two."
South Korea will host a summit of leaders from the Group of 20 major economies in Seoul on Nov. 11-12.
Japanese markets were closed on Wednesday, but the broader Topix index hit a 19-month closing low and the Nikkei touched a fresh seven-week low on Tuesday.
That contrasts with the Hong Kong Hang Seng index's rise to a 28-month high the day before. The U.S. Dow and the Nasdaq also closed at levels not seen since 2008.
"The fears ahead of the Fed meeting that the yen would advance further have receded in Tokyo, prompting short-covering. A bunch of upbeat U.S. economic indicators, including ADP jobs figures, is another positive factor," said Yumi Nishimura, deputy general manager at Daiwa Securities Capital Markets.
"With the focus now shifting from the Fed to fundamentals, investors no longer have to deal with a lack of trading factors, given the positive U.S. economic data. Japanese stocks had particularly lagged other markets this week and that's also likely being corrected now."
In a broad-based rise, the benchmark Nikkei gained 198.80 points to 9,358.78, its best daily performance since Sept. 15, when the index rose 2.3 percent after Japanese authorities intervened in the currency market for the first time in six years.
On Tuesday, the Nikkei ended slightly higher, after falling as far as 9,123.62, its lowest intraday level since Sept. 9.
The broader Topix added 1.6 percent to 816.33, after booking its lowest finish in 19 months at 803.12 on Tuesday.
For the Nikkei, analysts expected resistance around 9,500, near its 26-week moving average, which has contained the benchmark for more than five months.
BROAD GAINS
Overseas investors have been tepid buyers of Japanese equities over the past few months, buying a net 40.8 billion yen ($503.8 million) in Japanese shares from late August until late October, weekly Ministry of Finance capital flows data showed.
In economic news, the U.S. services sector grew more quickly than expected in October and factory orders posted their largest gain in eight months.
A separate report showed that U.S. private employers added more jobs than expected in October. The ADP figures came ahead of the government's much more comprehensive labour market report on Friday, which includes both public and private sector employment.
In Asia trade, the dollar traded at 80.85 yen, not far from its all-time low of 79.95 yen, and traders remained on alert for possible yen-selling intervention by Japanese authorities to weaken their currency.
The Bank of Japan meets on Nov. 4-5, having brought forward its policy review from mid-November to speed up the launch of its 5 trillion yen asset buying scheme.
Analysts had said the timing of the meeting gave the BOJ a chance to act quickly if the Fed surprised the market, and many now expect the central bank to stand pat on Friday unless the yen rises sharply by then.
Blue-chip exporters climbed, with Canon Inc up 2.9 percent at 3,780 yen and TDK Corp rising 3.7 percent to 4,795 yen. Honda Motor Co rose 1.5 percent to 2,766 yen.
Panasonic Corp gained 1.8 percent to 1,160 yen after the Nikkei business daily reported it would acquire a small stake in Tesla Motors Inc and jointly develop electric vehicle batteries with the U.S. electric vehicle maker.
Suzuki Motor Corp shot up 3.7 percent to 2,044 yen after the automaker booked a hefty jump in quarterly profits and raised its annual outlook, as strong sales in India offset a robust yen, but it warned of tough times ahead in developed markets.
Fancl Corp tumbled 8.9 percent to 1,121 yen after the cosmetics maker cut its earnings forecast on Tuesday.
Nearly 46 percent of major Japanese companies listed on the Tokyo exchange's first section, excluding financials, have reported first-half earnings so far, and they are likely to book a 49.8 percent rise in recurring profit for the year to March, data from Mizuho Securities Research & Consulting showed.
About 45 percent of those that have already reported left their forecast numbers for the full year unchanged, while about 37 percent raised their projections, the data showed.
Trade picked up on the Tokyo exchange's first section, with 1.78 billion shares changing hands, the highest this week.
Advancing stocks outnumbered decliners by more than 7 to 1. (Editing by Edmund Klamann)