* Nikkei's resistance level seen around 8,850 - analyst
* Hitachi Cable up on merger report
* Construction shares lower on outlook cuts
By Ayai Tomisawa
TOKYO, Nov 13 Japan's Nikkei share average edged
up on Tuesday, snapping a six-day losing streak as investors
bought back battered shares on dips, but gains may be limited on
concerns about a U.S. fiscal policy standoff that threatens to
push the country into recession.
Market players said the Nikkei was likely to trade between
8,650 to 8,750 points on Tuesday, after falling on Monday to its
lowest close in four weeks.
Traders said that investors are buying back heavily sold
stocks such as exporters but such buying is likely to be
"The Nikkei's once-support lines have become its resistance
lines now," said Kenichi Hirano, a strategist at Tachibana
Securities, adding that investors may chase the market higher
for the next few days to cover their short positions, but stay
on the sidelines when the Nikkei nears 8,850.
Its 25-day moving average is at 8,853, while its 75-day
moving average is at 8,897.
The Nikkei rose 0.5 percent to 8,715.65, and the
broader Topix gained 0.2 percent to 724.19.
The U.S. "fiscal cliff" - a series of budget cuts and tax
hikes that will start to go into effect in the new year - have
investors cautious because of the potential for harm to U.S. and
global economic growth.
"But at the same time, there is a sign that the U.S. economy
is recovering, and if upcoming U.S. data gives hope to the
market, we may see more rises as the underlying worries are
whether the U.S. ecnomy is recovering or not," said Takashi Ito,
equity market strategist at Nomura Securities.
He said that fiscal problems in Europe are seen as more
serious, as they will only be solved in the long term.
"As long as Greece's default can be stopped, the market may
not react too wildly. Greece's problem is like a disease which
cannot be cured right away but needs to be monitored not to get
Euro zone finance ministers gathered in Brussels did not
agree to disburse more money to Greece on Monday, as expected.
The euro zone and the International Monetary Fund clashed over a
longer-term target date to shrink the country's debt pile, but
Greece's international lenders agreed to give the country two
more years to make the cuts demanded of it.
European Union officials said euro zone finance ministers
will meet again on Nov. 20 to discuss Greece.
The benchmark Nikkei is up 2.6 percent this year, trailing a
9.7 percent gain in the U.S. S&P 500 and a 10.2 percent
rise in the pan-European STOXX Europe 600.
Japanese equities carry a 12-month forward price-to-book
ratio of 0.83, much cheaper than the S&P 500's 1.9 and STOXX
Europe 600's 1.38, data from Thomson Reuters Datastream showed.
Hitachi Cable Ltd jumped 18.7 percent to 127 yen,
hitting a three-month high after the Nikkei newspaper said it
and Hitachi Metals Ltd plan to merge in April, creating
a materials producer with businesses ranging from automotive and
electronic parts to fibre optics.
Construction shares were lower, with Shimizu Corp
shedding 5.9 percent to 225 yen, hitting a 12-year low after the
general contractor cut its annual operating profit forecast by
one-third to 14.5 billion yen, citing higher than expected
project costs and slower-than-expected improvement in margins.
Taisei Corp dropped 2.4 percent to 201 yen after
the contractor cut its full-year net profit outlook for the year