Nikkei gains as dollar advances

By Elaine Lies

TOKYO (Reuters) - Japan's Nikkei stock average edged up by 0.4 percent on Monday as the dollar rose, but Toyota Motor Co weakened on worries about a slowing U.S. economy after the biggest monthly fall in jobs there in five years.

Oil field developer Inpex Holdings Inc and other resource-linked shares, including trading houses, climbed after crude oil and precious metals rose overseas. But steelmakers fell on reports of a sharp rise in raw material costs.

Market players said that despite the U.S. jobs data and lingering worries about U.S. banks after a string of cuts in earnings estimates, the fact that Wall Street held largely firm was encouraging.

"The jobs data was bad and what the market had dreaded for so long finally happened -- (bond insurer) MBIA had its rating cut. But even so, Wall Street was able to largely shrug off that sort of bad news," said Nagayuki Yamagishi, a strategist at Mitsubishi UFJ Securities.

"Markets seem to have simply become resigned to the fact that the U.S. economy's in bad shape, and have factored this in."

On Friday, MBIA Inc's insurance arm lost its top rating from Finch. But while just the chance of such a cut roiled financial markets earlier this year, several other bond insurers have already lost triple-A ratings, and the news was not a surprise.

Others remained a bit more wary.

"I believe the worst may have passed, and markets have priced in a mild recession. But if the recession turns out to not be mild, things could change," said Hiroaki Osakabe, a fund manager at Chiba Asset Management.