* Dollar trims gains as investors pocket profits
* Japan shares up, U.S. jobs data underpins sentiment
* Gold extends losses prompted by dollar rebound
By Susan Fenton
HONG KONG, Dec 7 (Reuters) - The dollar trimmed gains early on Monday as investors pocketed profits after Friday's rally but strong U.S. jobs data lifted sentiment across Asian financial markets, encouraging investors to move into riskier assets.
The dollar eased after posting its biggest one-day gain this year on Friday, jumping 2.5 percent on news that U.S. employers cut only 11,000 jobs last month, the smallest decline since the start of recession in December 2007.
The dollar was down 0.5 percent against a basket of currencies in early trade on Monday.
The jobs data underpinned investor sentiment across Asia, raising hopes that a strengthening U.S. economy will support demand for Asian exports and a global economic recovery, although investors were reluctant to push shares much higher following sharp gains in recent months.
Japan's Nikkei index rose more than 1 percent to a five-week high, bolstered by gains in shares of exporters after the yen slid below 90 to the dollar late on Friday for the first time in four weeks.
"The U.S. jobs data has sparked interest in a greater range of riskier assets, and this is sending investors back to stocks," said Hiroichi Nishi, general manager of equities at Nikko Cordial Securities in Tokyo.
Shares of debt-laden Japan Airlines Corp rallied 8 percent after a government source said it was considering guaranteeing around $7.8 billion in loans and other funds to the struggling carrier.
The MSCI index of Asia Pacific stocks traded outside Japan was little changed while the Thomson Reuters index of regional shares was down 0.4 percent, dragged lower by a dip in shares in Australia, where falling commodities prices put pressure on shares of resources companies.
Australia's benchmark index was down 0.9 percent despite encouraging economic news as data showed that local job advertisements surged last month.
GOLD EXTENDS LOSSES
Elsewhere in Asia, financial markets were awaiting a speech by U.S. Federal Reserve Chairman Ben Bernanke at 1745 GMT for any hints on the U.S. interest rate outlook as Friday's jobs data prompted some speculation that rates could rise sooner than expected.
U.S. stocks posted modest gains on Friday but ended well off the day's 15-month highs on rate concerns and as the stronger dollar chipped away at commodity prices and related shares.
Gold extended losses on Monday with COMEX February gold down 1.3 percent at $1,154.5 an ounce, after sliding 4 percent in New York on Friday.
Oil however, edged up 0.4 percent to $75.74 a barrel on the view that U.S. oil demand would increase in tandem with economic recovery. (Additional reporting by Elaine Lies in TOKYO, Editing by Kim Coghill)