* 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 short-lived. "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 worse." 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 ending March.
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