TOKYO, June 16 (Reuters) – Japan’s Nikkei average rose 1.8 percent on Wednesday to a one-month closing high as short-covering picked up and investors grew more confident about the global economy after successful debt sales by some of the weakest euro zone members.

The market gained across the board, with blue-chip exporters such as Canon Inc (7751.T) in favour on easing worries about a stronger yen, while Nintendo (7974.OS) jumped 5.2 percent after taking the wraps off its new 3D DS portable game player. [ID:nN1547425]

The benchmark Nikkei picked up steam after ending the previous day above its 25-day moving average of just below 9,900 for the first time in nearly two months, as risk appetite, long under siege due to worries about Europe’s debt crisis, improved.

“At this point, sentiment’s improved on a short-term basis, particularly after the S&P 500 broke above its 200-day moving average to show that the market there has bottomed out,” said Hideyuki Ishiguro, a strategist at Okasan Securities.

“Expectations for this week’s summit of euro zone leaders and the Group of 20 leaders’ summit later this month are also helping, with all of this feeding into short-covering.”

The benchmark Nikkei .N225 gained 179.26 points to 10,067.15, its highest close since mid-May. The broader Topix rose 1.5 percent to 892.38.

Some market players said that with the Nikkei sitting above 10,000, it looks to have hit a double bottom, and the next resistance levels will likely be around 10,200 and 10,300, around its 50-week moving average and its 200-day moving average.

“The speculative sell-off in response to negative news, which we had seen up until now, may have come to a halt, and short-covering is now picking up momentum,” said Masaru Hamasaki, a senior strategist at Toyota Asset Management.

While some said the Nikkei could try the 200-day moving average as early as Thursday, others said a recent buildup of long positions in blue-chip shares such as Sony Corp (6758.T) could pose a threat to further advances.

“If the market’s upward momentum falls off at all, investors could start unwinding these positions,” said Toshiyuki Kanayama, a market analyst at Monex Inc.

EURO BOOST

U.S. stocks climbed more than 2 percent, with the S&P 500 turning positive for the year as solid demand for Irish and Spanish government debt calmed investors’ nerves a day after Moody’s downgraded Greece’s credit rating to junk status.

The euro hit a two-week high above $1.23 EUR=. [ID:nLDE65E126]

The euro steadied near two-week highs, while euro/yen EURJPY= was flat at 112.74, having jumped nearly 0.9 percent in the previous session. [FRX/]

Chip equipment maker Tokyo Electron (8035.T) and other chip-linked shares climbed after two Taiwanese chipmakers forecast growing demand in the coming months, helping to boost the Philadelphia semiconductor index .SOXX 5.5 percent [ID:nTOE65E03Y].

Tokyo Electron rose 2.3 percent to 5,770 yen, chip tester maker Advantest (6857.T) rose 2.5 percent to 2,028 yen and stepper maker Nikon Corp (7731.T) rose 5.6 percent to 1,728 yen.

Itochu Corp (8001.T) and other trading houses rose along with rising metals prices as signs of an improving economy and easing European debt problems boosted investor demand for industrial metals. [ID:nLDE65E11P]

Shares of Promise Co (8574.T) rose 3.6 percent to 658 yen, extending earlier gains after the company president told Reuters in an interview that Sumitomo Mitsui Financial Group Inc (8316.T) has pledged to help the Japanese consumer lender with its financing.

Ken Kubo said that he is confident his firm will be able to repay 460 billion yen ($5 billion) in short-term debt in the financial year to March 2011. [ID:nTKG006771]

Volume picked up slightly, with 1.7 billion shares changing hands on the Tokyo exchange’s first section, after posting a four-month low on Monday at just below 1.5 billion. Advancing stocks outnumbered declining one by more than 6 to 1.