Nikkei climbs to 7-month high, in overbought territory

* Nikkei up 0.3 pct; Topix adds 0.1 pct

* Construction firms gain on hopes of infrastructure works

* Advantest surges on report of strong orders this qtr

TOKYO, Dec 10 (Reuters) - Japan's Nikkei share average climbed to a seven-month high on Monday, buoyed by a jump in Chinese November factory output and a better-than-expected U.S. jobs report. The Nikkei gained 0.3 percent to 9,556.28 after trading as high as 9,584.46, its best level in seven months. The gains took the benchmark back into "overbought" territory, with its 14-day relative strength index at 70.2. Seventy or above is deemed overbought, which often signals a possible short-term pull back. Growth in China's factory output and retail sales rose to eight-month highs in November boosting Japanese firms with significant exposure to the world's second-largest economy. Construction machinery makers Komatsu Ltd and Hitachi Construction Machinery Co Ltd advanced 1 and 1.2 percent, respectively. "You have some pretty decent comments coming out of the Chinese macro number which is always going to be a driver for Japanese companies," a senior dealer at a foreign brokerage said. He added construction firms were in demand on speculations that infrastructure spending would be increased after a tunnel in central Japan collapsed on Dec. 2, and last Friday's earthquake. Sumitomo Mitsui Construction Co Ltd rallied 6.1 percent and Taisei Corp added 0.9 percent. Adding to the positive sentiment, U.S. employers created 146,000 jobs last month, defying predictions that superstorm Sandy would deal a big blow to the labour market. But a steep drop in U.S. consumer confidence in December, the largest fall in more than 1-1/2 years, offered a cautionary note on the health of the world's largest economy. Panasonic Corp climbed 3.6 percent after the Asahi newspaper said the consumer electronics maker was considering selling its main building in Tokyo by the end of March 2013, in an effort to secure funds as it struggles against heavy losses.

Other notable gainers included Advantest Corp, up 6.6 percent after Bloomberg news quoted the chip tester maker's President Haruo Matsuno as saying that he expected new orders to rise 20 percent in the October-December quarter from the previous three months. The broader Topix added 0.1 percent to 790.86. The Nikkei has rallied 10.3 percent over the past 3-1/2 weeks while the yen has weakened after Shinzo Abe, the leader of the main opposition which is expected to win a Dec. 16 general election, called for the Bank of Japan to embark on "unlimited easing" and set an inflation target of 2 percent. The benchmark Nikkei is up 13 percent this year, in line with a 12.8 percent rise in the U.S. S&P 500 but lagging a 14.2 percent gain in the pan-European STOXX Europe 600 index.