* Nikkei up 0.9 pct, moving further away from 16-mth lows
* Resistance looms ahead; next support seen at 8,800, 8,697
By Aiko Hayashi
TOKYO, Sept 9 (Reuters) - Japan's Nikkei average rose 0.9 percent on Thursday, lifted by short-covering after successful bond auctions in Portugal and Poland helped ease worries about Europe's debt problems.
The benchmark Nikkei moved further away from a 16-month low below 9,000, hit last week, with support seen solid around 8,800, a level it has tested and held a few times in recent weeks.
But the strength of the yen, which stayed within sight of a 15-year high versus the dollar touched the previous day, weighed on investor confidence, and on technical charts, resistance looms, casting doubt over further gains in the Nikkei.
"Worries about Europe were soothed somewhat following a bond auction in Portugal, and that prompted short-covering in the market, which was hit hard by the advance in the yen versus the dollar and the euro yesterday," said Tsuyoshi Segawa, an equity strategist at Mizuho Securities.
"But market players were reminded that Europe's sovereign concerns are continuing and that that's not something that will improve right away. Even though further falls are likely to be limited for the Nikkei, more gains are also likely to be capped for a while."
The benchmark Nikkei rose 82.38 points to 9,106.98. It fell 2.2 percent the previous day to 9,024.60 after falling as low as 8,997.63, back towards a 16-month low of 8,796.45 hit on Sept. 1.
The broader Topix added 0.7 percent to 826.30.
In early Asia trade, the dollar traded at 83.92 yen after falling as low as 83.34 yen on Wednesday, a new 15-year low, with traders testing Japanese authorities' pain threshold for currency strength.
Market sentiment improved after a successful auction of Portuguese debt eased concerns about the credit-worthiness of weaker European economies.
Portugal raised 1.04 billion euros, helping soothe fears about government funding in Europe. Poland's sale of five-year bonds also saw solid demand.
U.S. stocks rose as banking shares gained ground, while a key European index, the FTSEurofirst 300, rose 1 percent to a four-month closing high.
In Japan, the Nikkei stayed below 9,170, around its 25-day moving average, which had served as strong resistance from August until this week. The 25-day moving average is considered a proxy for a one-month moving average and is closely watched in Japan.
The bottom of the Nikkei's Ichimoku cloud lies around 9,530, forming resistance for the index. Ichimoku charts are popular with Japanese traders.
Market analysts see support around 8,800, and after that, the next target is 8,697, a 61.8 percent retracement of the Nikkei's rally from its March 2009 low to its April 2010 high.
Shares of exporters regained ground after leading a drop in the market the previous day.
Sony Corp rose 1.1 percent to 2,484 yen and Canon Inc advanced 1.3 percent to 3,555 yen. Automakers also climbed, with Toyota Motor Corp up 1.8 percent at 2,927 yen.
Shares in anti-virus software maker Trend Micro gained 17.9 percent to 2,755 yen after a newspaper quoted its CEO as saying the firm regularly receives takeover proposals and would consider any actual offers. (Editing by Joseph Radford)