* Nikkei starts 2011 up 1.2 pct
* Bullish trend in global equities helps
* Strong global manufacturing data lends support
* Market to focus on Friday's U.S. payrolls data -analyst
By Antoni Slodkowski
TOKYO, Jan 4 (Reuters) - Japan's Nikkei average gained in its first trading session of 2011, buoyed as global shares resumed their rally on stronger global manufacturing data, while resource shares rose as the outlook for growth boosted optimism about demand for oil.
A bounce in the dollar back to about 81.78 yen after slipping below 81 at the year-end to its lowest in nearly two months will be seen as a positive short-term factor, traders said, although the dollar's recent softness is likely to weigh on exporters' shares in the long run.
Stocks are also getting a boost from the "January effect" when fund managers are no longer distracted by year-end window dressing and instead focus on stocks they find attractive.
"Market players are now focusing on the U.S. payrolls data due on Friday which will likely have an impact on both Wall Street shares and the dollar/yen rate," said Kazuhiro Takahashi, general manager at Daiwa Capital Markets.
"The Nikkei is basically recouping its losses from the last trading day of 2010. As Tokyo lacks domestic trading incentives, investors will monitor exchange rates and look to overseas markets to see if bullishiness in global equities will prevail," said Takahashi.
By midmorning the benchmark Nikkei was up 1.5 percent or 150.98 points at 10,379.90
The broader Topix index gained 1.4 percent to 911.65.
On Thursday, the final trading day of 2010, the index fell 1.1 percent to 10,228.92, pressured by profit taking as the yen advanced against the dollar. It ended 2010 down 3 percent.
The Institute for Supply Management said U.S. manufacturing grew for a 17th straight month following news of faster growth in European manufacturing as well, bolstering investors' appetite for riskier assets.
Traders said that positive outlook for global equities will be further bolstered after data showed China's factory inflation cooled in December, easing concerns the government would raise interest rates or take other steps to control growth.
Shares in resource-related companies led the advance on the Nikkei as crude oil prices were steady near their highest in more than two years.
Oil gained as accelerating manufacturing activity in industrialised economies and winter weather fanned optimism that U.S. crude inventories will continue to drain.
Inpex Corp, Japan's top oil and gas developer, gained 3.8 percent and Mitsubishi Corp, Japan's biggest trading company, was 3.7 percent higher.
On the charts, the Nikkei was supported at its 25-day moving average, currently around 10,232. (Reporting by Antoni Slodkowski; Editing by Edmund Klamann)