* Nikkei may hover 17,500 until next FOMC - analysts
* Toshiba turns positive after it releases earnings
By Ayai Tomisawa
TOKYO, Sept 7 (Reuters) - Japanese stocks bounced from seven-month lows on Monday in choppy trade, helped by gains in the Chinese market after regulators sought to calm sentiment.
Trading, however, remained cautious as a mixed U.S. jobs report did little to offer clarity on when the Federal Reserve would begin raising interest rates.
The Nikkei rose 0.4 percent to 17,855.90 in midmorning trade after falling as low as 17,478.72 earlier, the lowest since Feb. 5. A breach below 17,450.77 would wipe off its year-to-date gains.
The gains tracked Chinese markets, which resumed trading after an extended break and rose at the open following remarks by regulators to calm sentiment.
“The jobs report itself was good. The U.S. economy is recovering, and it should be good for the Japanese economy if we didn’t have worries about China,” said Yoshihiro Okumura, an analyst at Chibagin Asset Management.
But he said that the market, which in recent weeks has been hit by worries of a hard landing in China, may stay sluggish ahead of the Fed’s Sept 16 and 17 policy meeting, he said.
“Investors will likely remain wary until the rate hike happens,” Okumura said, adding that the Nikkei may hover around 17,500-levels until the next FOMC.
Nonfarm payrolls increased 173,000 last month, fewer than the 220,000 that economists polled by Reuters had expected. But the unemployment rate dropped to 5.1 percent, its lowest in more than seven years, and wages accelerated.
Automakers with exposure to the United States rallied. Honda Motor Corp rose 1.1 percent and Fuji Heavy Industries added 1.4 percent.
Outperforming the market was Toshiba Corp, which reversed early losses and rose 1.5 percent after the company released its earnings for the last fiscal year, easing fears that the stock would be put under the watch list if it missed the deadline to release its earnings again.
“It’s a relief that the company avoided the worst-case scenario to go under the watch list, so some day traders are seen covering their short positions,” said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management.
Domestic demand-related stocks were sold. Real estate companies Mitsubishi Estate Co dropped 1.6 percent and Mitsui Fudosan Co fell 2.0 percent. Financials were lower, with Nomura Holdings falling 2.2 percent, Mitsubishi UFJ Financial Group shedding 1.4 percent and Mizuho Financial Group tumbling 2.9 percent.
The broader Topix dropped 0.2 percent to 1,441.58 and the JPX-Nikkei Index 400 fell 0.2 percent to 12,944.31. (Editing by Shri Navaratnam)