(Updates with closing levels)

By Brigid Riley

TOKYO, Aug 15 (Reuters) - Japan's Nikkei share average

rose on Thursday, as data showed better-than-expected economic

growth in the June quarter and Wall Street closed higher

overnight on September rate cut prospects in a boost to investor

sentiment.

The Nikkei closed 0.8% higher at 36,726.64, locking

in a fourth straight day of gains, while the broader Topix

finished up 0.7% at 2,600.75.

Stocks sensitive to the economy's performance rose after

data showed Japan's economy expanded by a faster-than-expected

annualised 3.1% in April-June.

Banks rose 2.8% to lead sectoral gains, while

both securities firms and oil and coal producers

gained 2.7%.

The positive economic news gave support as investors

continued to buy shares that have underperformed since last

month, said Kenji Abe, chief strategist at Daiwa Securities.

"Japanese equity prices plunged from mid-July to early

August and are now quite undervalued," he said.

The Nikkei tanked 12.4% on Aug. 5 in its biggest single-day

fall since Black Monday amid U.S. recession fears and a sharply

stronger yen.

It has since clawed back all the losses from that fall but

remains well off an all-time peak of 42,426.77 touched on July

11.

Wall Street also lent some support to the Nikkei on

Thursday. U.S. stocks closed higher on Wednesday as fresh

inflation data reassured investors that the Federal Reserve

would start cutting rates next month.

Japanese equities' gains narrowed somewhat during afternoon

trade as investor attention turned toward U.S. retail sales and

weekly unemployment data due later in the day to gauge the

health of the world's largest economy.

Among individual stocks, Fast Retailing ( FRCOF ) climbed

2.1% to give the Nikkei the biggest lift, followed by

chip-making equipment giant Tokyo Electron ( TOELF ), up 1.5%,

and AI-focused startup investor SoftBank Group adding

2.2%.

The largest percentage gainers in the Nikkei were Dentsu

Group ( DNTUF ), up 9.8%, followed by Socionext ( SOCNF ) gaining

7.9% and Kawasaki Heavy Industries ( KWHIF ) up by 7.4%.