TOKYO, Dec 26 (Reuters) - Japan's Nikkei share average is set to edge higher on Wednesday, drawing support from expectations for an aggressive monetary easing stance by the new government, which has also helped to weaken the yen and bolstered exporters' shares. Shinzo Abe is set to be selected as prime minister by lawmakers on Wednesday after leading his Liberal Democratic Party to a landslide victory in a lower house election earlier this month. Market players said the Nikkei was likely to trade between 10,000 and 10,200 on Wednesday, but due to the Christmas holiday doldrums, volume is likely to stay thin. "The market is overbought, so the Nikkei may not rise sharply, but 'Abe trades' may invite some buying," said Hiroichi Nishi, general manager at SMBC Nikko Securities, adding that if the dollar trades above 85 yen, investors are likely to chase the Nikkei higher to near 10,200. On Tuesday, the Nikkei gained 1.4 percent to 10,080.12, nearing a nine-month intraday high of 10,175.16 hit on Friday. The dollar last traded at 84.93 yen, having risen as high as 84.965 yen on Tuesday morning, its highest level since April 2011. A weak yen boosts exporters' overseas earnings when repatriated. After rising 16.4 percent over the last six weeks, the Nikkei is in "overbought" territory, with its 14-day relative strength index at 72.66, above 70 which is deemed the overbought threshold and signalling that a correction may be imminent. The broader Topix rose 0.6 percent to 838.01 on Tuesday. > Yen hits 20-month low over BOJ concerns, fiscal cliff buoys dollar > US prices flat, volume plummets before Christmas STOCKS TO WATCH --Sumitomo Mitsui Financial Group Inc Sumitomo Mitsui plans to speed up expansion in Asia via its non-banking units such as consumer finance and credit, hoping to lure the region's retail clients, the head of Japan's third-largest lender by assets said. --JX Nippon Oil & Energy Corp Japan's trade ministry on Tuesday imposed administrative sanctions on refiner JX after it admitted to failing to keep inspection records properly at its Mizushima-B refinery. --Hitachi Ltd Hitachi remains in talks with Lithuania over its plans to build a nuclear plant after the European country's new centre-left government said it could shelve nuclear projects, the company's top executive said on Tuesday. --Mitsubishi Chemical Holdings Corp Mitsubishi Chemical said it will acquire drug capsule maker Qualicaps Co Ltd from U.S.-based Carlyle Group LP for 55.8 billion yen ($660 million) to beef up its pharmaceutical operations.