* Nikkei hit 2 percent five-day intraday high at one point
* Toyota sharply underperforms
* U.S. economy data boosts sentiment -market player
* Wall Street posted biggest gains in 3 months
* Resistance at June 21 high of 10,251.90
By Antoni Slodkowski
TOKYO, Dec 2 (Reuters) - Japan's Nikkei average jumped almost 2 percent and at one point hit a fresh five-month high on Thursday, encouraged by talk of bold steps to resolve the EU's debt crisis, strong U.S. economic data and a softer yen.
Speculation grew that the European Central Bank could step up its purchases of government debt and a U.S. official told Reuters Washington would support boosting an EU rescue facility via IMF funds, lifting U.S. stocks on Wednesday.
U.S. private-sector payrolls achieved their biggest gain in three years, according to ADP data, while global manufacturing picked up speed, boosted by China and Germany.
"Foreign funds came back today and are the driving force behind this jump, as expectations for the U.S. economy to pick up speed are high after yesterday's data," said Hiroaki Kuramochi, chief equity marketing officer at Tokai Tokyo Securities.
A Goldman Sachs prediction that the Nikkei will gain about 20 percent in the next year also boosted sentiment.
"We view conditions as ripe for a repeat of Japan's outperformance in early 2010, including: a stronger US economy, inflation concerns in emerging Asia, the yen's reversal, a continued earnings expansion, supportive valuations," a report from the brokerage said.
Blue chips exporters led the Nikkei's advance with construction machinery maker Komatsu Ltd climbing 3.9 percent but Toyota Motor Corp fared badly, one of the weakest Nikkei 225 component in percentage terms, after a dismal U.S. sales performance in November.
The Nikkei gained 1.8 percent or 178.07 points to 10,166.12. At one stage it jumped 2 percent, hitting a fresh five-month intraday high of 10,187.59.
It rallied 8 percent in November, its best monthly performance since March, with foreigners shifting funds back to lagging Tokyo equities after U.S. monetary easing lifted expectations of more liquidity in financial markets.
"If the rally continues like this the Nikkei could finish this year around 10,500," said Kuramochi, adding that immediate resistance lies at its June 21 high of 10,251.90 and which may be pierced later in the week.
The broader Topix index was 1.4 percent higher at 877.84.
The pace of growth in U.S. manufacturing tapered off slightly in November, though the sector still posted its 16th consecutive month of expansion, according to an industry report released on Wednesday. Market players also await more U.S. employment data due on Friday.
Toyota's shares, the most actively traded by turnover on the main board, fell 0.8 percent to 3,285 yen.
In contrast to a 17 percent climb for U.S. industry-wide auto sales, Toyota's sales dropped 3 percent in November. It has also told U.S. dealers it will pay for a secondary repair related to a massive safety recall on its top-selling Camry for sticking accelerator pedals.
Skymark Airlines Inc, Japan's third-largest carrier, rallied 6.5 percent to 1,058 yen after saying it plans to hire hundreds of new staff from those who have left restructuring Japan Airlines.
Trading volume strengthened with almost 1 billion shares changing hands on the Tokyo exchange's first section by the midday break, on track to come in a well above the Wednesday's closing average of 1.7 billion shares. (Additional reporting by Aiko Hayashi; Editing by Edwina Gibbs)