TOKYO, Feb 7 (Reuters) -Japan's Nikkei is expected to rise towards a nine-month high on Monday, boosted by optimism on a recovery in the global economy as the U.S. jobless rate fell, a weaker yen against the dollar and corporate earnings beating estimates.
The unemployment rate in the world's largest economy dropped in January, although fewer jobs than expected were added.
Market players said buying on Monday will be centred around major exporters' shares after the greenback gained against the yen and as many high tech companies posted stronger-than-expected corporate earnings last week.
"The announcement from two major steel firms, which boosted shares last week, will provide further support to the sector, helping overall sentiment," said Hiroichi Nishi, general manager at Nikko Cordial Securities.
Nippon Steel Corp and Sumitomo Metal Industries said they would merge to create the world's second-largest steelmaker to better fend off Asian rivals, sending their stocks and others in the sector sharply higher on Friday.
Traders said that the benchmark may pierce this year's intraday high of 10,620.57 hit on Jan. 13 when it opens, and in the mid-term the psychologically important 11,000 line will come into focus.
Nikkei futures traded in Chicago closed at 10,640, 1 percent above the Osaka close of 10,530.
The benchmark Nikkei ended Friday up 1.1 percent, at 10,543.52, its highest level since Jan. 19
Analysts said the index may trade between 10,550-10,700 on Monday.
In Egypt the government and opposition held talks on ending the political crisis as tensions remained high, although some signs of normality returned on Sunday as banks opened their doors for the first time in a week.
Energy shares, which have rallied on worries over Egypt may fall prey to some profit-taking after prices of oil fell nearly 2 percent on Friday as an unfounded report about a possible announcement from Egypt set off speculation that President Hosni Mubarak could step down shortly.
The Tokyo Stock Exchange has decided to extend its trading hours from May 9 as part of a plan to boost volumes and fend off growing competition from exchanges in Asia, a spokesman said on Saturday.
Japan's main bourse had been looking to shorten the 90-minute midday break by ending morning trade at 11:30 a.m. instead of 11 a.m., but had not fixed a date.
STOCKS TO WATCH:
--Nissan Motor Co
Nissan has had some delays in delivering its Leaf electric automobile to U.S. customers, the Financial Times reported on its website on Sunday.
--Toyota Motor Corp
Toyota sees a "tough" situation for U.S. sales with a strong Japanese yen, particularly for its Lexus and Scion brands, said Jim Lentz, president of Toyota Motor Sales.
--Sapporo Holdings
The Japanese brewer will spend about 30 billion yen ($365.1 million) to take majority control of unlisted softdrinks maker Pokka Corp, a source with knowledge of the matter said on Saturday.
--Mitsubishi Motors Corp
Mitsubishi said it will add the Outlander Sport compact SUV model to its production line-up in Normal, Illinois, around the middle of 2012 to shore up production at the severely underused factory. ($1=82.17 Yen) (Reporting by Antoni Slodkowski; Editing by Joseph Radford)