Nikkei rises 1 pct, resource stocks lead gains

* Resource stocks up on higher oil prices amid economy hopes

* Shippers jump on brokerage upgrades

* Nikkei could hit 10,000 soon but sustainability in doubt

By Aiko Hayashi

TOKYO, June 10 (Reuters) - Japan's Nikkei average rose 1 percent on Wednesday, buoyed by resource shares such as trading firm Mitsubishi Corp (8058.T) after oil prices hit a seven-month high above $70 a barrel amid hopes for a recovery in the global economy.

Shipping firms surged, with Mitsui O.S.K. Lines (9104.T) rising more than 5 percent after brokerage upgrades for the sector and individual companies, saying their current share prices appeared undervalued.

"Those that sold heavily on the view that the global economy was falling into an abyss are now buying back, as more people think it hit bottom in January-March," said Kenichi Hirano, operating officer at Tachibana Securities.

"I wouldn't be surprised if the Nikkei touches the 10,000 level soon, but we need proof of a recovery in the real economy before it can go beyond that."

In moderate trade, the benchmark Nikkei .N225 added 98.31 points to 9,885.13 by midday, in sight of the eight-month intraday high of 9,914.07 hit on Monday.

The broader Topix gained 1.3 percent to 929.98.

Machinery stocks such as Komatsu Ltd (6301.T) advanced, even after data showed Japan's core machinery orders unexpectedly fell 5.4 percent in April, suggesting any recovery in capital expenditure is still fragile. [JPMORD=ECI]

"The orders data doesn't undermine the view that Japan's economy has bottomed out and exports are showing signs of recovery," said Chotaro Morita, chief fixed-income strategist for Japan at Barclays Capital.

"But given that capital spending will likely remain low due to oversupply and a cautious corporate outlook for investment, the orders data suggests that the economic cycle of exports leading to production, spurring investment and consumption may be weaker this time than usual."

TRADINGS FIRMS, SHIPPERS HIGHER

Energy-related shares gained on higher oil prices after data showing a steep drop in U.S. crude inventories and a U.S. government report revised global demand expectations higher. [O/R]

Mitsubishi Corp jumped 4.6 percent to 1,962 yen and Mitsui & Co (8031.T) gained 2.6 percent to 1,289 yen. Oil and gas field developer Inpex (1605.T) added 3.4 percent to 832,000.