TOKYO, Sept 2 (Reuters) - Japan's Nikkei average is likely to rise on Thursday, moving further away from a 16-month low touched the previous day after U.S. and Chinese manufacturing data eased investor worries about the global economy.
Nikkei futures traded in Chicago closed at 9,115, up 2.1 percent from the Osaka close. U.S. stocks jumped 3 percent and commodities rallied after the strong U.S. and Chinese manufacturing data.
Investor confidence in Tokyo was already boosted on Wednesday by data showing a manufacturing rebound in China and stronger-than-expected growth in Australia, which led to a halt in the rapid advance of the yen.
Global stocks later also drew support after the Institute for Supply Management said its index of U.S. factory activity rose to 56.3 in August from 55.5 in July, much higher than forecast by economists.
"With U.S. stocks jumping and worries about risk-taking somewhat receding, the market will likely climb at first," said Kazuhiro Takahashi, general manager at Daiwa Securities Capital Markets.
"But investors then will probably stand on the sidelines as the yen is still on the strong side, and there's a growing sense of uncertainty about Friday's jobs data after the poor ADP data."
Ahead of the key U.S. nonfarm payrolls data on Friday, investors on Wall Street shrugged off a report from ADP Employer Services even though it showed private U.S. companies unexpectedly cut 10,000 jobs in August. Government data also indicated U.S. construction spending fell to its lowest rate in 10 years.
The benchmark Nikkei is likely to move between 8,950 and 9,150, market players said.
It rose 1.2 percent on Wednesday to 8,927.02, after falling as low as 8,796.45, its lowest since April 2009.
The next targets for the index will likely be around 9,280 and then 9,360, highs hit in late August, Takahashi said.
The next technical level for the Nikkei if it resumes falling is 8,697, a 61.8 percent retracement of the rally from its March 2009 low to its April 2010 high.
STOCKS TO WATCH
-- Mitsubishi Corp
Mitsubishi Corp on Wednesday formed an alliance in new energy and environmental technologies with the world's largest independent research laboratory, the U.S.-based Battelle Memorial Institute, the Nikkei business daily reported.
-- Aeon Co Ltd
Aeon, Japan's second-largest retail group, will bid for the Thai, Malaysian and Singaporean operations of French retailer Carrefour, three sources familiar with the matter said.
-- JFE Holdings Inc
JFE Holdings, the world's fifth-biggest steelmaker, said it had agreed with BHP Billiton Mitsubishi Alliance (BMA) on a hard coking coal price of $209 a tonne for October-December, down from $225 the previous quarter. (Reporting by Aiko Hayashi; Editing by Chris Gallagher)