TOKYO (Reuters) - Japan's Nikkei average hit its highest point in eight months on Monday, buoyed by a weaker yen that pushed up exporters such as Canon Inc (7751.T) and by hopes for a recovery in the U.S. economy after it shed fewer jobs than expected in May.
JGC Corp (1963.T) shot up nearly 5 percent after the Nikkei business daily reported on Monday that the plant engineering firm won a 150 billion yen ($1.5 billion) order for a natural gas project in Algeria.
Market players said the Nikkei could soon reach the psychologically important 10,000 mark, but they cautioned that the road to a recovery for the global economy is set to be rocky.
"The rate of deterioration in the economy is slowing, though it's not as if economic indicators are all turning positive from negative yet," said Takahiko Murai, general manager of equities at Nozomi Securities.
"Money is flowing into assets such as commodities and stocks as risk tolerance has steadily improved on the back of hopes for a recovery. But we are still not in a position to be overly optimistic over the medium to long term."
In subdued trade, the benchmark Nikkei .N225 rose 1 percent or 97.83 points to 9,865.84, after rising as much as 1.5 percent to reach its highest level since October 8.
That followed a 2.6 percent gain made last week, and a rise of almost 8 percent in May. So far, it has recovered about 40 percent from its March lows on a growing view that the worst may have passed for the global economy.
The broader Topix also added 1 percent, to 925.49.
The U.S. Labor Department reported on Friday that employers cut 345,000 jobs in May -- substantially less than analysts had forecast -- but the U.S. unemployment rate hit 9.4 percent, its highest since 1983.
U.S. stocks flip-flopped throughout Friday's session, with the major indexes ending split as investors paused to consider conflicting signals in the jobs data. .N
"Investors are welcoming the weaker yen and the better-than-expected U.S. jobs report," said Yutaka Miura, senior technical analyst at Mizuho Securities.
"But investors will need to be cautious as unemployment in the United States may increase, considering what may happen with GM's restructuring."
General Motors (GM.N) last week filed for bankruptcy in the third-biggest such filing in U.S. history and the largest ever in U.S. manufacturing.
EXPORTERS LEAD GAINS
The dollar was fetching around 98.40 yen after hitting a one-month high at 98.90 yen on EBS on Friday as the smaller-than-expected U.S. job losses sparked concerns that the Federal Reserve may lift interest rates sooner than previously thought.
