* Foreigners turn to net buying before open
* Obama jobs speech awaited for clues on U.S. economy
* Sumco jumps over 5 pct after Credit Suisse upgrade
By Lisa Twaronite
TOKYO, Sept 8 (Reuters) - The Nikkei stock average rose for the second straight session on Thursday, tracking U.S. gains made on hopes of an improvement in Europe's debt situation, but the rise was tempered by continuing uncertainty about the U.S. economic outlook.
In a possible sign that foreign investors have turned more positive towards Japanese shares, nine foreign securities houses placed net buy orders for 1.7 million shares before the start of trade on Thursday, following 29 trading sessions of net selling.
"Buybacks and short-covering will continue, but the upside is heavy until we can confirm the strength of the U.S. economy and see an improvement in Europe," said Kenichi Hirano, operating officer at Tachibana Securities.
Investors are looking ahead to U.S. President Barack Obama's speech to Congress on Thursday after the U.S. market close, to hear his administration's plans to boost the economy.
The benchmark Nikkei was up 0.7 percent at 8,826.64 in midmorning trade after opening more than 1 percent higher. The broader Topix index added 0.8 percent to 759.84.
Wall Street bounced more than 2 percent on Wednesday, reversing three days of losses, after Germany's top court smoothed the way for Berlin's participation in bailouts that could ease Europe's debt crisis.
Friday's special quotation, or "SQ", to settle Nikkei futures and options contracts expiring in September, could affect trading. The closely watched settlement price is calculated from the opening prices of the 225 shares in the Nikkei average.
The looming SQ settlement makes it "difficult to sell," Hirano said, and could keep trading in a relatively narrow range on Thursday.
Sumco , the world's No.2 supplier of silicon wafers used to make chips, surged 5.5 percent to 902 yen after Credit Suisse raised its rating to "neutral" from "underperform", saying its poor earnings estimate and falling DRAM demand have been priced in.
Sumco on Wednesday slashed its annual operating profit forecast by 37 percent on weak PC demand and slower-than-expected growth in smartphones and tablet PCs, and said the fragile economy could make chip demand retreat further. (Additional reporting by Ayai Tomisawa; Editing by Chris Gallagher)