With US markets closed for the Labor Day holiday, Friday's encouraging news about the employment picture continued to spill over onto trading on Monday.

Some investors, particularly in Asia, were catching up with the US jobs numbers, which were not as bad as some had feared. The slowing of the world's largest economy has been one of the major factors holding investors back over recent months.

MSCI's all-country world stock index and its Thomson Reuters counterpart were up more than 0.4 percent after a nearly 3.7 percent gains for the MSCI last week.

Europe's FTSEurofirst 300 edged slightly higher, up around 0.2 percent.

The jobs data was supportive, but utilities shares topped the gainers list after Chancellor Angela Merkel's coalition government agreed to a two-tier extension of the lifespans of German nuclear power plants on Sunday.

Trading was also thin because US markets are closed for Labor Day.

Japan's Nikkei earlier closed up 2.05 percent.

"After a string of disappointing numbers, the data last week provided an element of stability and helped increase risk appetite," said Henk Potts, equity strategist at Barclays Wealth.

"When you couple that with the outlook for corporates, it looks pretty good."

The latest corporate earnings season has been relatively strong in both the United States and Europe while merger and acquisition activity in August was the most robust for the month since 1999.

The dollar was generally weaker with the euro rising for a time to its highest in three weeks before easing back.

"We are seeing some relief from fears about a double-dip recession in the US helping risk sentiment and the euro," said Gareth Berry, currency strategist at UBS. "But whether this sentiment can be sustained or not is difficult to say."

IMF chief economist Olivier Blanchard told France's Le Figaro that a US slowdown would have an automatic impact on growth in Asia in the short term but "decoupling" between developing and rich economies is possible in the medium term.

The euro was down 0.1 percent at $1.2876, having risen to $1.2918 earlier in the day, its highest since Aug. 12.

The dollar index, a gauge of the greenback's performance against a basket of six major currencies, was flat and the dollar fell slightly to 84.21 yen, not far from a 15-year low of 83.58 hit late last month.

Euro zone government bond yields fell in an adjustment to Friday's post-jobs selloff.

Meanwhile, world oil prices diverged on Monday, the end of the traditional peak demand season for motor fuel in the United States.

Brent North Sea crude for October rose 38 cents to $77. 5 in late London trade.

New York's main contract, light sweet crude for delivery in October, fell 14 cents to $74.46  a barrel.