Nikkei jumps 2.8 pct on softer yen, N.Korea report

(Updates to midday break of trade)

TOKYO, May 29 (Reuters) - The Nikkei rose 2.8 percent on Thursday, led by high-tech exporters as the yen softened and further boosted by an unsubstantiated report that North Korean leader Kim Jong-il may be dead.

The Nikkei was up nearly 2 percent when talk about the Kim Jong-il report began to spread, a trader and a fund manager said.

"The rumour prompted short-covering in the market on receding worries about geopolitical risks," the trader said.

A little-known South Korean online news site reported Kim Jong-il had been assassinated, quoting a highly placed Chinese security official.

South Korea's National Intelligence Service said it had no information to substantiate the report and was making further checks.

North Korea's official media has had numerous reports this week of Kim out in public for inspection tours and South Korea's spy agency earlier this week denied a previous round of rumours of Kim's death.

The Nikkei .N225 added 383.28 points to 14,092.72 after falling 1.3 percent the previous day.

The broader Topix index advanced 2.1 percent to 1,377.37.

In New York on Wednesday the dollar traded at a two-week high against the yen at 105.32 before paring some of its gains. It was trading at 104.73 JPY= in early Asian trade. (Reporting by Aiko Hayashi; editing by Hugh Lawson and Rodney Joyce)