* Insurers jump after Goldman hikes ratings

* Market rally is temporary respite and not recovery - analysts

* U.S. jobs data on focus

By Ayai Tomisawa

TOKYO, Sept 3 (Reuters) - Japan's Nikkei share average rose for the first time in four days on Thursday as gains on Wall Street boosted sentiment and bargain hunters flocked to recently battered stocks.

The Nikkei gained 1.8 percent to 18,423.16 points by midmorning after falling 0.4 percent on the previous day in extremely volatile trading.

During the last three sessions through Wednesday, the index declined 5.4 percent.

The Japanese market's volatility went above 40 in the previous day, but it dropped to 34 on Thursday.

Traders said global markets were getting some respite from worries about China, as markets there are closed on Thursday and Friday for ceremonies to mark the end of World War Two.

But any relief rallies could be brief.

"Until the state of China's economy becomes clearer, there will not be a substantial recovery in the market," said Fujio Ando, an analyst at Chibagin Securities,

Ando said investors will be closely watching whether analysts keep their bullish earnings expectations for Japanese firms with exposure to China and global markets.

Brokerage analysts are scheduled to release full-year guidance this week and next week.

Once bargain hunting runs its course, investors will likely move to the sidelines before the release of U.S. jobs data on Friday, which may give a hint on when the Federal Reserve will raise interest rates.

All of the Topix's 33 subsectors were in positive territory, with the insurance sector leading gains after Goldman Sachs hiked some insurers' ratings.

MS&AD Insurance Group Holdings jumped 5.9 percent and Sompo Japan Nipponkoa Holdings surged 5.7 percent after Goldman raised both of them to 'buy' from 'neutral'. The brokerage said that insurers have been constantly reducing their equity holdings, which should mean that they are better placed to invest more capital in overseas business expansion, which in turn leads to a higher return on equity.

Exporters were in demand as well. Toyota Motor Corp jumped 3.5 percent and Nissan Motor Co surged 3.0 percent.

The broader Topix rose 1.9 percent to 1,493.67 and the JPX-Nikkei Index 400 advanced 1.9 percent to 13,416.56.

(Editing by Kim Coghill)