RPT-Nikkei powers to 8-mth closing high near 10,000

(Repeats to fix format)

* Nikkei hits eight-month closing high in active trade

* Resource shares lead market up as oil, copper strong

* Shippers surge on brokerage upgrades

* Hopes for China indicators an additional boost

By Elaine Lies

TOKYO, June 10 (Reuters) - Japan's Nikkei stock average rose 2.1 percent on Wednesday to come within a hair's breadth of the psychologically important mark of 10,000, as fresh funds flowed into the market on hopes for a recovery in the global economy.

Resource shares such as trading firm Mitsubishi Corp (8058.T) led gains on strong oil and metals prices while shipping lines surged after brokerage upgrades, helping the market shrug off an unexpected decline in machinery orders.

The Nikkei ended at fresh eight-month closing high and it has risen 42 percent since hitting a March 10 bear market low.

"There's a lot of general optimism and signs that the economy's improving over the longer term, and not really any reasons to sell at this point," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.

"Certainly there's still a gap between company profits and the rally we're seeing here on the Nikkei, but a lot of retail investors are coming back into the market now, and there's quite a flow of funds into stocks."

Buying interest was strong ahead of Friday's settlement of Nikkei futures and options, also helped by expectations that a slew of Chinese data due out later this week will show its economy is on the path to recovery.

Two Chinese newspapers reported that China's industrial production rose by 8.9 percent in May from a year earlier, well ahead of forecasts and the fastest growth since September last year. [ID:nPEK63329]

"If this is true, it certainly would prove to be quite a boost for the market," said Hideyuki Ishiguro, a supervisor in the investment advisory department of Okasan Securities.

The benchmark Nikkei .N225 rose 204.67 points in active trade to 9,991.49, its highest close since October 7. The broader Topix .TOPX rose 2 percent to 937.01.

CONSTRUCTION MACHINERY STOCKS UP

But some in the market remained wary, noting that while a break above 10,000 is likely this week, staying above that level will be harder and require additional proof of economic improvement, such as better company earnings.

Oil prices climbed after data showed a steep drop in U.S. crude inventories and a U.S. government report revised global demand expectations higher, while smelters were bolstered after copper prices scaled an eight-month peak. CLc1 [O/R]

Trading house Mitsubishi rose 6.3 percent to 1,995 yen, while fellow trader Marubeni Corp (8002.T) rose 5.3 percent to 478 yen. Sojitz (2768.T) surged 6.6 percent to 227 yen.

Among smelters, Dowa Holdings (5714.T) shot up 8.8 percent to 472 yen and Sumitomo Metal Mining (5713.T) rose 6.9 percent to 1,529 yen.

Credit Suisse hiked its rating on the shipping sector to "overweight" from "market weight", saying earnings are likely to bottom in the current financial year.

Mitsui O.S.K. Lines jumped 5.5 percent to 691 yen, Nippon Yusen (9101.T) rose 4.4 percent to 456 yen and Kawasaki Kisen (9107.T) added 6.4 percent to 449 yen.

Shares of earth-moving equipment maker Komatsu Ltd (6301.T) rose 3.3 percent to 1,581 yen, while rival Hitachi Construction (6305.T) was up 3.8 percent at 1,746 yen, helped by hopes for China's economy and despite the fall in machinery orders. [JPMORD=ECI]

Kawasaki Heavy Industries (7012.T) soared 15.7 percent to 250 yen after the Nikkei business daily said the company and a research institute had developed a battery that can be charged in under 10 seconds, adding that they aimed to make it usable for large vehicles such as buses and trains in five years.

Trade picked up on the Tokyo exchange's first section, with 2.8 billion shares changing hands, above last week's daily average of 2.4 billion.

Advancing stocks outnumbered declining ones by over 7 to 1. (Editing by Edwina Gibbs)