* Foreign-led short-covering cited ahead of book closings
* Recent rally may stall after mid-December - analyst
* Next target seen at June high of 10,251.90
By Aiko Hayashi
TOKYO, Nov 19 (Reuters) - Japan's Nikkei average climbed more than 1 percent to a fresh five-month high above 10,000 on Friday, propelled by hedge fund inflows from overseas and getting additional support from a fall in the yen.
Blue-chip shares rose broadly, with banking shares likely buoyed by short-covering and new long positions by a U.S. brokerage on the view that they are undervalued, one market player said.
Technicals have also brightened after the Nikkei on Thursday broke through solid resistance at its 200-day moving average for the first time since May and gathered momentum. The next target looms around its June high of 10,251.90.
"Many hedge funds close books in November and now is a time when short-covering tends to emerge. Solid U.S. economic data and GM's listing yesterday are also lending help," said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities.
By the midmorning, the benchmark Nikkei had gained 0.8 percent to 10,096.79, after rising as much as 1.2 percent to 10,130.23, its highest since June 22.
On Thursday, it jumped 2.1 percent to close at its session peak of 10,013.63, its highest finish also since June 22, as strong fund inflows from overseas bolstered financial shares.
Foreign investors were net buyers of Japanese stocks over the past two weeks, Ministry of Finance data showed.
The broader Topix added 0.7 percent to 875.17.
"The main driving force for recent gains are position adjustments by funds, in which they buy back oversold assets and sell those that had been overbought. Japanese stocks represent an oversold asset," said Kenichi Hirano, operating officer at Tachibana Securities.
"These moves are mainly due to overseas funds who need to close books in November and December, and buying energy like this will likely continue until mid-December. But that means it's not as if Japanese stocks will keep pushing higher at this speed after that."
The dollar was changing hands at 83.57 yen, near a high of 83.79 yen hit earlier, its strongest level since Oct. 5.
A blockbuster General Motors Co stock offering dovetailed with upbeat U.S. economic data and easing Irish debt tensions to lift global stocks on Thursday. U.S. stocks ended up more than 1 percent.
GM shares jumped as investors bet the U.S. automaker can make a sustained recovery as it returned to the market after its IPO, while data showed U.S. weekly applications for unemployment insurance hit a two-year low last week and factory activity in the country's mid-Atlantic region accelerated in November.
Exporters climbed, with Toyota Motor Corp up 2 percent at 3,280 yen and Advantest rising 1.9 percent to 1,703 yen.
Banking shares also rose. Japan's top lender Mitsubishi UFJ Financial Group gained 1.2 percent to 417 yen. (Editing by Chris Gallagher)