* Nikkei extends gains, up 0.6 pct by midmorning
* Hits 9-mth peak at one point
* Strong U.S. jobs boost appetite for risky assets
By Antoni Slodkowski
TOKYO, Feb 7 (Reuters) - Japan's Nikkei average extended last week's gains to hit a nine-month high on Monday, helped by a fall in the U.S. jobless rate, a weaker yen against the dollar and after generally strong Japanese corporate earnings last week.
The unemployment rate in the world's largest economy dropped to a 21-month low of 9 percent in January, bolstering hopes for a sustained recovery and helping the Nasdaq Composite Index reach a 3-year high, although fewer jobs than expected were added.
Market players said buying on Monday was centred around major exporters' shares after the dollar gained against the yen on the back of the jobs data, and as many high tech companies posted stronger-than-expected corporate earnings last week.
"The result numbers were strong, but the real reason why investors were encouraged were the long-term growth prospects presented by many companies," said Mitsuo Shimizu, deputy general manager at Cosmo Securities.
Better-than-expected results or annual guidance from the likes of Sony Corp, Hitachi Ltd and Softbank Corp lifted their shares on Friday.
"Quite a few firms almost fully achieved their yearly earning targets by December, but still didn't raise forecasts, so we can expect some outlook hikes right before the full-year results are due in March," Shimizu said.
By midmorning the benchmark Nikkei had gained 0.6 percent, or 59.65 points, to 10,603.05, at one point rising to 10,644.21, its highest since May 6.
The broader Topix added 0.6 percent to 940.45.
With worries over inflation and more tightening measures prompting global investors to shift funds from emerging markets into developed ones, the Nikkei has gained 3.7 percent so far in 2011. The Standard & Poor's 500 Index has added 4.2 percent, while Asian stocks excluding Japan have advanced only 0.8 percent.
But brokers said that the benchmark may have difficulties posting further rapid gains, as the end of the financial year is nearing and in February-March Japanese domestic institutional players typically sell Tokyo stocks to lower risk and lock in profits.
Shares of Sapporo Holdings rose 1.9 percent to 384 yen after a source told Reuters the brewer will spend about 30 billion yen to take majority control of unlisted soft drinks maker Pokka Corp.
The market is waiting for the world's biggest automaker, Toyota Motor Corp earnings due tomorrow. It is set to post the biggest drop in October-December quarter profits among Japan's top car makers as its export-heavy domestic operations lose money on the generally strong yen. (Reporting by Antoni Slodkowski; Editing by Joseph Radford)