TOKYO, April 5 (Reuters) – Japan’s Nikkei average hit a fresh 18-month high on Monday after U.S. employers created jobs in March at the fastest rate in three years, the strongest signal yet that the U.S. recovery is on a solid footing.

Helped by the yen’s post-jobs data dip to a seven-month low against the dollar, the Nikkei pushed above a 38.2 percent retracement of its slide from a 2007 peak to its 2008 trough, and hit a fresh 18-month high for the fifth straight session.

But popular stock Fast Retailing (9983.T) slid 9.2 percent after the company said its Uniqlo casual-clothing chain’s same-store sales slid 16.4 percent in March from a year earlier, hit by unseasonably cold weather.

Technical indicators such as MACD as well as daily and weekly Ichimoku charts show the Nikkei is in an uptrend. The Nikkei’s relative strength index (RSI), however, has risen to above 70, and has entered levels at which the market is considered overbought.

But Nagayuki Yamagishi, investment strategist at Mitsubishi UFJ Securities, played down worries that the Nikkei’s rally was looking overstretched.

“As long as it rises along with gains in the five-day moving average, an extreme sense of overheating is unlikely to emerge,” said Yamagishi. The Nikkei has mostly moved above its five-day moving average since early March.

U.S. nonfarm payrolls rose 162,000 in March, the largest since March 2007, and only the third time payrolls have increased since the recession struck in late 2007.

The Nikkei .N225 rose 0.5 percent to 11,343.28.

It climbed as high as 11,408.17, its highest since October 2008 and above 11,313.6, the 38.2 percent retracement of its 2007 to 2008 slide, for a second straight session.

The broader Topix index rose 0.6 percent to 995.34.

Yamagishi said the Nikkei may face resistance at 11,600, adding that trade just above that level has been relatively sparse in recent years.

If that level is breached, however, the Nikkei could set its sights on 12,000, Yamagishi said.

In terms of retracement levels, the next major level is the 50 percent retracement of the 2007 to 2008 sell-off near 12,650.

Sharp Corp (6753.T) rose 3.1 percent to 1,246 yen. It plans to start making advanced 3D displays this year that require no special glasses for cellphones and other mobile devices, betting demand for 3D images will grow beyond movie theatres and living rooms to portable machines. [ID:nTOE630063]

The Nikkei business daily also reported on Monday that Sharp plans to diversify into the electronic signboard business by offering 52- and 60-inch LCD panels that can be assembled into large displays at low cost.

Fast Retailing (9983.T) tumbled 9.2 percent to 15,150 yen and was the biggest percentage decliner on the Nikkei 225.

The slide in March sales snapped a trend of generally robust growth since 2008 on the back of hit products like its “Heattech” line of basic garments made of heat-retaining fabric.

Softbank shares fell 3.5 percent, the second-biggest percentage loser among Nikkei 225 stocks, to 2,256 yen on news that Japan’s government planned to make it easier for mobile phone users to switch operators while keeping the same phone. [ID:nTOE63401G]

The move is a risk for Softbank Corp (9984.T) due to its weak network and it’s status as sole provider of iPhone and could prompt customers to switch to NTT DoCoMo, which has a strong network.

NTT DoCoMo (9437.T) shares gained 0.6 percent to 144,000 yen. (Editing by Edwina Gibbs)