Nikkei rises to 4-1/2 year high on strong US jobs, weak yen

* Sumitomo Mitsui jumps after saying to repay bailout funds

* U.S. jobs weakens yen, adds to bullish mood

* Automakers boosted by Citi target price hike - analyst

TOKYO, March 11 (Reuters) - The Nikkei share average rose to its highest since Sept. 2008 on Monday morning as signs of recovery in the U.S. jobs market boosted investor sentiment and a weaker yen fuelled gains in exporters and banks. Sumitomo Mitsui Trust Holdings Inc shot up 4.5 percent to a four-year high after the bank said it would repay 200 billion yen ($2.1 billion) in public bailout money, ending more than a decade of partial government ownership.

Mizuho Financial Group Inc and Mitsubishi UFJ Financial Group Inc gained 3.9 and 4.9 percent, respectively, in heavy trade as the softer yen and government's reflationary policies were expected to stimulate demand for loans, a trader said. The Nikkei rose 0.8 percent to 12,387.68 and the broader Topix advanced 1.7 percent to 1,038.19, with both at levels not seen since just before the collapse of Lehman Brothers roiled global markets in September 2008. The gains were underpinned by the yen slumping to more than 96 per dollar, its weakest since August 2009, after unexpected strength in the U.S. jobs report last week. Signs of a recovery in the U.S. labour market bolstered sentiment among investors in Japanese stocks, which are already riding a bullish streak on expectations of aggressive easing by the Bank of Japan under governor nominee Haruhiko Kuroda. "On a dollar basis, Japan is now significantly outperforming, and from that perspective it's reflecting the real recovery signs emerging globally for Japanese exports that go beyond the weaker yen," said Stefan Worrall, director of cash equities at Credit Suisse. Honda Motor Co Ltd, Nissan Motor Co Ltd and Yamaha Motor got an extra boost from Citi target price hikes, according to an analyst, rising between 2.6 and 3.6 percent. Sharp Corp was out of favour, however, falling 1.6 percent after the Asahi newspaper said Hon Hai Precision Industry Co Ltd would not invest in the troubled electronics maker before a March 26 deadline. Gains in exporters, banks and real estate have largely led the Nikkei's 42 percent rally since mid-November, when Prime Minister Shinzo Abe stepped up the calls for aggressive monetary and fiscal policy that saw his party sweep to power in December. And while a softer yen has improved the fundamentals for Japanese companies, some wonder if the sharp gains have made stocks overpriced. "The Topix's 12-month forward price-to-earnings ratio is now 13.3, which implies that investors are pricing in a 50 to 60 percent increase in profits for companies, based on the weaker yen," said Masayuki Doshida, a senior market analyst at Rakuten Securities. "That means Japanese shares are no longer looking so cheap compared to U.S. or German stocks, which may blunt the rally," he said.