UPDATE1: Tokyo stocks up for 3rd day as eurozone concern eased.

TOKYO, July 30 Kyodo

(EDS: ADDING DETAILS, PRICES)

Tokyo stocks rose for the third straight trading session Monday as concern eased about the eurozone sovereign debt crisis and its impact on the global economy following a pledge by German and French leaders to protect the euro, but Japan's disappointing industrial production data capped gains.

The 225-issue Nikkei Stock Average ended up 68.80 points, or 0.80 percent, from Friday at 8,635.44. The broader Topix index of all First Section issues on the Tokyo Stock Exchange finished 5.30 points, or 0.73 percent, higher at 731.74.

Gainers were led by the rubber products, pulp and paper, and insurance sectors. Decliners included the electricity and gas, iron and steel, and mining sectors.

Buying predominated as investors became less risk-averse on reports late last week that German Chancellor Angela Merkel and French President Francois Hollande agreed during telephone talks to take measures to protect the euro, brokers said.

"The teleconference followed similar comments by European Central Bank President (Mario) Draghi. Now there are strong hopes for some sort of action," said Hiroichi Nishi, equity division manager at SMBC Nikko Securities Inc.

Stocks were top-heavy, however, as worse-than-expected Japanese industrial production data for June, released by the government before the opening bell, dampened investor sentiment, the brokers said.

The industrial production index fell a seasonally adjusted 0.1 percent from the previous month to 92.1, the third consecutive month of decline.

Investors also refrained from further buying ahead of a slew of key events this week, such as European Central Bank and the U.S. Federal Reserve board meetings, as well as the release of first-quarter earnings results by major companies including Toyota Motor Co., brokers said.

"The market's top concern for now is what the ECB and the Fed will do," said SMBC's Nishi.

Hitachi Tool Engineering shot up 90 yen or 11.9 percent to 844 yen, after the announcement that the manufacturer of automobile-related tools will become a wholly owned subsidiary of Hitachi Metals Ltd.

Foster Electric, a manufacturer of speaker parts, surged 121 yen or 11.3 percent to 1,194 yen, after it revised up its operating profit forecast by 3.3 percent for the business year to March 2013.

Komatsu ended at 1,731 yen, down 32 yen or 1.8 percent, after the Nikkei business daily reported at the weekend that the construction machinery maker is expected to see a roughly 20 percent decline in its group operating profit for the April-June period.

Declines in power companies were notable amid persistent concern about their earnings, as most of the nuclear plants in Japan remain idled amid nationwide protests against their resumption in the wake of the Fukushima nuclear crisis.

Kansai Electric Power fell 70 yen or 11.2 percent to 555 yen, and Tohoku Electric Power slumped 70 yen or 12.9 percent to 474 yen.

On the First Section, rising stocks outnumbered decliners 1,247 to 312 with 106 others unchanged.

Trading volume fell to 1,449.21 million shares from Friday's 1,665.06 million shares.