Japan's government is considering guaranteeing about 700 billion yen ($7.8 billion) in loans and other funds to Japan Airlines Corp <9205.T>, a government source said on Monday.

Shares in JAL jumped 8 percent after the Nikkei business daily reported on Sunday the government's possible loan and investment guarantee.

As of 0015 GMT, JAL shares rose 8 yen to 108 yen, outperforming a 1.7 percent gain in the benchmark Nikkei average <.N225>.

(Reporting by Yoshifumi Takemoto)