* Nikkei turns positive after starting day down 1 pct
* But remains poised for third straight negative week
By Elaine Lies
TOKYO, Aug 27 (Reuters) - Japan's Nikkei average turned positive on Friday, boosted by short-covering after hopes emerged for possible measures from Japanese authorities to stem the yen's rise, though caution remained on whether these would be effective.
But investors remained nervous ahead of U.S. gross domestic product data due out later in the day and said that whether the market closed above 8,800 or not was likely to be one key to future moves.
Kyodo news agency reported that Japanese Prime Minister Naoto Kan will hold a news conference on Friday on the government's steps to cope with a recent surge in the yen.
Separately, Japanese Finance Minister Yoshihiko Noda reiterated that the government will take appropriate action on currencies when necessary.
"I think these reports are just being used by people as a reason to buy, since if they really had some concrete policy in mind they would probably announce it much sooner," said Masayoshi Okamoto, head of dealing at Jujiya Securities.
"The most important things for the market's direction next week are the U.S. GDP figures and especially how U.S. stocks respond. Even bad data might not be a problem since it could well already be factored in -- what's important is what stocks do."
The dollar rose slightly against the yen, edging up 0.3 percent to 84.70,
In thin trade, the benchmark Nikkei climbed 0.5 percent or 48.35 points to 8,954.55, climbing further away from a 16-month low hit on Wednesday. But it was poised to end the week down for its third straight negative week, the worst such run since April.
The broader Topix gained 0.6 percent to 816.22.
Market players have said that the longer the Nikkei stays below 9,000, which has been a key support level several times in the past year, the greater the chance that strong resistance will develop at that point.
"It had appeared that risk avoidance might be starting to abate slightly, but with poor figures expected for U.S. GDP data later today there's a lot of wariness in the market," said Nagayuki Yamagishi, a strategist for Mitsubishi UFJ Morgan Stanley Securities.
"In addition, U.S. indicators recently haven't been very good, especially housing-related ones, so there'll be a lot of market attention on what (Federal Reserve Chairman Ben) Bernanke says for hints as to what sort of policy steps the Fed might take, and that could affect the dollar/yen rate."
Bernanke will speak later on Friday at the annual Federal Reserve conference in Jackson Hole, Wyoming.
A number of exporters turned positive after starting the day in negative territory.
Honda Motor Co rose 1.6 percent to 2,811 yen, TDK Corp rose 2.3 percent to 4,395 yen, and chip tester maker Advantest Corp gained 1.3 percent to 1,644 yen. (Reporting by Elaine Lies; Editing by Joseph Radford)