* Intervention, monetary easing impact limited
* Hitachi, MHI climb. Sources say in merger talks
* Longer-term gains seen hinging on US jobs data
By Ayai Tomisawa
TOKYO, Aug 4 (Reuters) - The Nikkei average came off five-week lows on Thursday after Japan intervened in currency markets to stem the yen's climb and after the central bank eased monetary policy, but gave up earlier gains as worries about the health of the global economy dominated.
Japan's biggest industrial electronics firm, Hitachi Ltd and Mitsubishi Heavy Industries Ltd , the nation's leading heavy machinery maker, gained in heavy trade and supported market sentiment after sources said they may merge.
Intervention pushed the yen down to about 79 yen to the dollar from a level of around 77 yen, but market players feared that with the U.S. and euro zone economic and fiscal woes unresolved, the impact from Tokyo's solo intervention may be limited.
"The impact from the intervention may be short-lived as the view that the yen is still a safe haven currency hasn't changed amid concerns over the global economy," said Makoto Nagahori, head of equities at Instinet.
"If closely watched U.S. unemployment data confirms a stagnant recovery in the U.S. economy this Friday, the dollar will likely fall, and the yen may rise again anyway," he said.
The benchmark Nikkei average rose 0.2 percent to 9,659.18, while the broader Topix shed 0.1 percent to 826.36.
The Bank Of Japan said it will increase the size of its 10 trillion yen ($130 billion) asset buying programme by 5 trillion yen. It also increased by 5 trillion yen a 30 trillion yen programme offering cheap fixed-rate funds via its market operation and lifted its purchase target for exchanged traded funds to 1.4 trillion yen from 900 billion yen.
"The stock market is not giving credit to today's easing and intervention," said Ryoji Musha, President of Musha Research.
"First, it was not coordinated intervention and the yen's rise is due mainly to an investor shift to safe haven currencies amid concerns about the U.S. economy, not something that Japan can tackle on its own."
A merger of Hitachi and Mitsubishi Heavy would create one of the world's largest infrastructure firms with more than $150 billion in combined sales. Hitachi, the most actively traded firm by turnover on the main board, gained 1.7 percent to 471 yen and Mitsubishi Heavy rose 3.4 percent to 361 yen.
"It's going to be a history-changing event if true," said Fujio Ando, senior managing director at Chibagin Asset Management.
"It would really be praiseworthy if they can really move this forward because the merger means they will be creating a new company with companies from different ex-zaibatsu or business groups. This used to be seen as extremely difficult."
A merger would be one of the largest ever in Japan. Hitachi, with a market value of $27 billion, would likely be the acquirer of Mitsubishi Heavy, valued at nearly $16 billion as of Wednesday's closing price. nL3E7J40QT ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Starmine smartdata set on Hitachi/Mitsubishi Heavy:
http://link.reuters.com/jum92s
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EXPORTERS GAIN ON INTERVENTION
Exporters rose in heavy trade, with Toyota Motor rising 0.6 percent to 3,140 yen.
However, Tokyo investors remained wary ahead of a crucial U.S. jobs report at the end of the week, which comes amid fears the American economy is stalling.
The pace of growth in the U.S. services sector fell in July to its lowest since February 2010 and the pace of U.S. private sector job growth slowed in July with employers adding 114,000 positions, but the jobs additions exceeded forecasts.
Tokyo Electron rose 1.7 percent to 3,955 yen helping other battered chip-related shares regain some ground after recent hefty losses. The S&P technology index gained 1.2 percent. (Additional reporting by Antoni Slodkowski; Editing by Edwina Gibbs)