* Topix hits 2-year highs
* Toyota rises to 4-1/2-month high
* Toshiba soars after report auditor to sign off on results
By Ayai Tomisawa
TOKYO, Aug 7 (Reuters) - Japan's Nikkei share average rose on Monday morning, led by sharp gains for Toyota Motor Corp after it upgraded its earnings outlook, while a weaker yen following strong U.S. jobs data underpinned overall sentiment.
Toyota rallied 2.3 percent to 6,360 yen, the highest level since mid-March, after the world's No.2 automaker raised its full-year outlook on Friday thanks to favourable exchange rates.
The Nikkei rose 0.6 percent to 20,080.50 in midmorning trade. The broader Topix gained 0.6 percent to 1,641.21, after reaching 1,642.34, the highest level since August 2015.
"Carmakers had conservative earnings outlooks in the beginning of this fiscal year, so the fact that Toyota raised its forecast is boosting sentiment," said Hikaru Sato, a senior technical analyst at Daiwa Securities. "The market has been happy with quarterly Japanese corporate earnings so far, and such positive sentiment will likely last this week."
The dollar, which briefly sank below 110.00 yen to a seven-week low last week, finally pulled ahead after stronger-than-expected jobs growth in July.
On Friday, the keenly followed U.S. jobs data showed U.S. nonfarm payrolls rose by a better-than-expected 209,000 jobs last month, and June's employment gain was revised higher.
In Asian trade, the dollar was up 0.1 percent at 110.785 yen after rising as high as 111.050 on Friday.
Japanese financial stocks, which invest in higher yielding products, staged a rally after the solid U.S. jobs data pushed up U.S. Treasury yields. Insurers Dai-ichi Life Holdings rose 1.4 percent, T&D Holdings gained 2.1 percent, while banks Mizuho Financial Group surged 1.0 percent and Sumitomo Mitsui Financial Group climbed 0.8 percent.
Another big mover was Toshiba Corp, which soared more than 9 percent to hit a 1-1/2-week high after the Nikkan Kogyo Shimbun newspaper reported on Monday that the company's auditor will sign off on its financial results for the year ended March.
Toshiba's auditor, Pricewaterhouse Coopers Aarata, will issue a so-called "unqualified opinion" or a "qualified opinion" by a bourse-imposed deadline on Thursday, the daily said, without citing sources. (Editing by Shri Navaratnam)