TOKYO, Jan 4 (Reuters) - Japan's Nikkei share average is expected to rise on its first trading day of 2013 and could test a nearly two-year high as a deal in Washington to avert the "fiscal cliff" buoys sentiment and a weaker yen is likely to lift exporters. Market participants said the Nikkei was likely to trade between 10,600 and 10,800 on Friday. The Nikkei closed up 0.7 percent at 10,395.18 on Dec. 28, the last trading day of 2012, after touching its highest level since March 10, 2011, in intraday trade. If the index touches the 10,800-mark, it will be the first time since Feb. 21, 2011. Nikkei futures in Chicago closed at 10,765 on Thursday, up 335 points from the Osaka close of 10,430 on the final trading day of 2012. "It's a relief that the U.S. fiscal cliff was averted," said Hiroichi Nishi, general manager at SMBC Nikko Securities, adding that the market would likely cheer positive developments that happened while Japanese markets were closed for the New Year holidays. "Exporters should benefit from a weaker yen on expectations that they will have strong forecasts for the next fiscal year." On Wednesday, President Barack Obama signed "fiscal cliff" legislation that raises tax rates for top earners and extends tax cuts for the middle class. On Friday morning, the yen traded at 87.56 yen to the dollar, its weakest since July 2010. A weaker yen inflates exporters' overseas earnings when repatriated. Japanese shares gained 23 percent last year, their best yearly gain since 2005, after rising expectations of aggressive monetary stimulus under new Prime Minister Shinzo Abe weakened the yen and bolstered exporters. > Fed minutes short-circuit Wall St rally > Euro falls to three-week low vs dollar after Fed minutes > Benchmark yields hit 8-month high on Fed wariness > Gold down 1.2 pct as Fed minutes show doubts on QE > Brent crude slips as profit taking, Fed minutes weigh STOCKS TO WATCH --Fuji Heavy Industries Ltd The Subaru maker is recalling as many as 634,000 vehicles in the United States for potential lighting problems that could lead to smoke or fire, according to U.S. safety regulators. The recall potentially affects some Forester vehicles from model years 2009 through 2012, all Legacy and Outback vehicles from model years 2010 and 2011, and some Tribeca vehicles from model years 2006 through 2012, according to documents filed with the U.S. National Highway Traffic Safety Administration. --Mizuho Financial Group Mizuho agreed to pay $175,000 to settle civil charges by U.S. futures regulators in connection with allegations that the bank failed to hold enough funds in its secured accounts to protect clients, the regulators said.