Nikkei set to rise on weak yen, offsetting U.S. 'cliff' worries

TOKYO, Dec 25 (Reuters) - Japan's Nikkei share average is set to rise on Tuesday despite a fall in Wall Street as exporters are likely to gain on the weak yen, while volume may stay low due to a lack of participants during the Christmas holiday. Market players said the Nikkei was likely to trade between 10,000 to 10,200 on Tuesday, after ending down 1.0 percent to close at 9,940.06 on Friday. Monday was a national holiday in Japan. U.S. stocks eased overnight as worries about the U.S. "fiscal cliff" dampened enthusiasm, which had dragged down Japanese shares on Friday after a Republican proposal to avert a U.S. fiscal crunch failed to get enough support. On Sunday, some U.S. lawmakers expressed concern the country would go over the cliff, and fail to avoid $6 billion in spending cuts and tax hikes starting January, with some Republicans saying that was President Barack Obama's goal. With only a week left before the fiscal cliff Dec. 31, talks are now stalled with Obama and House of Representatives Speaker John Boehner out of Washington for the holidays. But analysts said that the weak yen will likely offset such negative sentiment as the dollar last traded at 84.88 yen , having risen as high as 84.965 yen on Tuesday morning, the best level since April 2011. A weak yen lifts exporters' overseas earnings when repatriated. "Yes, there is a 'cliff' concern, but the Japanese market's sentiment is steady on the back of the weak yen," said Yutaka Miura, a senior technical analyst at Mizuho Securities. "That said, the market may be swayed by futures trading as volume is expected to stay low as foreign investors are away on holidays." Analysts also said that most buying may come in early trade, with the Nikkei's immediate resistance seen around its futures close in Chicago at 10,145, up from the close in Osaka of 9,960. Shinzo Abe, who is set to become prime minister on Wednesday, renewed pressure on the Bank of Japan (BOJ) to adopt a higher inflation target. Abe said he would try to revise a law guaranteeing the BOJ's independence if his demand for a binding 2 percent inflation target - double its current goal - is not met.

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--Mitsubishi Chemical Holdings Corp Mitsubishi Chemical will acquire Qualicaps Co Ltd from U.S.-based Carlyle Group LP, a person familiar with the matter said on Tuesday, rewarding the buyout firm's second attempt to sell the drug capsule maker.

--Nomura Holdings Inc Nomura has wound down its five-member Hong Kong-based financial institutions group (FIG) banking team as part of a wider reorganisation of its investment banking business, sources familiar with the matter said on Monday.

--Mitsubishi Electric Corp Mitsubishi Electric pledged to pay a total 77.3 billion yen ($916 million) to several Japanese government agencies for overbilling for equipment and services over several decades and slashed its annual profit forecast by a quarter.