Nikkei closes at 3-month high on robust US jobs data

The Nikkei average closed at a three-month high on Monday, shrugging off a disappointing earnings season for Japanese firms as robust jobs data boosted confidence in an economic recovery in the United States.

The forecast-beating jobs numbers have lowered the chance of further stimulus by the US Federal Reserve and supported the dollar against the yen.

"This time around, you are likely to get global trade growth at the same time as a weaker yen and playing on strong operational gearing. Both together should be pretty good for corporate profits," said Nicholas Smith, Japan strategist at CLSA.

Japan's quarterly corporate earnings have generally been weak so far. Out of 109 Nikkei companies that have reported, two thirds of them failed to meet market expectations, Thomson Reuters StarMine data showed. That compares with just one-third of S&P 500 firms.

Smith recommended investors buy automakers and Nomura Holdings to tap into the better growth picture.

Toyota Motor Corp, Nissan Motor Co and Honda Motor Co rose between 2.9 and 3.3%, while Nomura added 3.1% and Mitsubishi UFJ Financial Group climbed 1.6%.

The Nikkei advanced 1.1% to 8,929.20 and the broader Topix added 1.2% to 769.85.

Some market participants were cautious on the benchmark's ability to gain further, however.

"I am rather surprised that the Nikkei has managed to maintain this level," said Fumiyuki Nakanishi, general manager of investment and research at SMBC Friend Securities.

"For the benchmark to rise above 9,000, there needs to be a resolution out of Greece and for US economic data to remain strong. But if we are talking about Japanese firms, it's difficult to see a v-style recovery considering the viability of their cost cuts and restructuring measures, as well as the strong yen."

Greece's coalition parties face a key deadline later in the day to decide on whether to accept the painful terms of a new European Union bailout deal.

Trading volume on the Topix dipped, with 2.18 billion shares changing hands, down from 2.33 billion on Friday.