Nikkei extends rise into 5th day on U.S. deal optimism
* Exporters higher on weaker yen
* Fast Retailing strong on brokerage upgrade
TOKYO, Oct 15 (Reuters) - Japan's Nikkei share average extended its rise into a fifth day on Tuesday, tracking gains on Wall Street after top U.S. lawmakers signalled they could soon reach a deal to reopen the government and avert a possible debt default for now. The Nikkei was up 0.6 percent at 14,490.92 in midmorning trade after trading as high as 14,510.37. Resistance is seen at 14,606.66, a 61.8 percent retracement of its May high from its June low. Japanese markets were closed on Monday for a national holiday. Exporters were in demand as the yen stayed near a two-week low against the dollar. Sony Corp rose 2.1 percent, Honda Motor Co advanced 0.5 percent and Canon Inc added 0.5 percent. "Although many foreign investors are staying on the sidelines because of the U.S. concerns, short-term investors are in favour of exporters which are expected to raise their full-year forecasts," said a trader at a Japanese brokerage. Fuji Heavy Industries Ltd gained 1 percent and was the seventh most-traded stock by turnover after the Nikkei business daily said the Subaru maker was expected to report strong earnings for the April-September period. The Nikkei, without citing sources, said the automaker's operating profit for the six months was seen rising 250 percent on the year to about 150 billion yen, above the average market forecast for 142.6 billion yen. Fast Retailing Co rose 1.8 percent after CLSA raised its rating on the Uniqlo operator to "buy" from "sell" and lifted its target price to 44,500 yen from 27,000 yen, citing its store expansion plan. The broader Topix added 0.4 percent to 1,201.88. On Monday, U.S. stocks posted modest gains as investors bet that there would soon be a deal in Washington to increase the debt limit. The ceiling needs to be raised by Thursday. Senate Majority Leader Harry Reid said that he and his Republican counterpart, Mitch McConnell, have made strong progress toward reaching a deal. But investors stayed cautious ahead of the Thursday deadline. "The market is still precarious ... Even if default can be avoided, investors are not ready to take risk at this point," said Takuya Takahashi, an analyst at Daiwa Securities. "They are cautiously buying back cheap shares." The Nikkei is still down 2.1 percent from a 9-1/2-week high marked on Sept. 27.