(Updates with level as of 0230 GMT)

By Brigid Riley

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

rose on Thursday, as investors snapped up undervalued stocks

after data showed better-than-expected economic growth in the

June quarter and Wall Street closed higher overnight on

September rate cut prospects.

The Nikkei had risen 1% to 36,808.75 by the midday

break after starting in negative territory on some

profit-taking, while the broader Topix was up 1.2% at

2,612.48.

Stocks sensitive to the economy's performance received some

support from the data showing Japan's economy expanded by a

faster-than-expected annualised 3.1% in April-June.

Oil and coal producers rose 4.5% to lead sectoral

gains, while banks and securities firms

were not far behind, each gaining about 4%.

But the larger trend was investors kept buying shares that

have underperformed since last month, particularly financials

which have not recovered as much as expected until now, said

Kenji Abe, chief strategist at Daiwa Securities.

"Japanese equity prices plunged from mid-July to early

August and are now quite undervalued," said the strategist.

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.

Investors are now awaiting 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, Mizuho Financial Group ( MFG )

climbed 5.6% and Sumitomo Mitsui Financial Group ( SMFG ) was up

5.3%.

Fast Retailing ( FRCOF ) climbed 1.3% to give the Nikkei the

biggest lift, while AI-focused startup investor SoftBank Group

was up 2.6%.

The largest percentage gainer in the Nikkei was Dentsu Group ( DNTUF )

with a rise of 8.7%. Kawasaki Heavy Industries ( KWHIF )

and Socionext ( SOCNF ) followed, both jumping 8.1%.

(Reporting by Brigid Riley; Editing by Subhranshu Sahu)