Nikkei expected to gain as soft yen props up exporters

A Tokyo Stock Exchange employee rests his hands on a logo of the bourse in Tokyo June 4, 2012.

TOKYO (Reuters) - Japan's Nikkei share average was seen rising on Thursday, supported by gains for exporters after positive U.S. data helped weaken the yen against the dollar, but risk sentiment is likely to remain low amid the holiday season's thin trade.

Market players said the Nikkei was likely to trade between 8,850 to 9,000 on Thursday after Nikkei futures in Chicago closed at 8,935, up 0.2 percent from the close in Osaka of 8,920.

"The market benefited less than expected from a weaker yen yesterday but I think the exchange rate will play a bigger role in the Nikkei's movements today," said Toshiyuki Kanayama, senior market analyst at Monex. "If the index finally manages to break through the 200-day moving average, which it has so far failed to do, then it has the 9,000 mark to contend with."

The yen weakened against the dollar to a one-month-low after U.S. industrial output expanded 0.6 percent last month, the fastest pace since April, while manufacturing stepped up 0.5 percent on the month, suggesting a stronger economic base than previously thought.

Offsetting data showing the most positive homebuilder sentiment in more than five years in July, the New York Fed's general business conditions index for August missed expectations and contracted for the first time since October 2011, while consumer prices stayed flat.

U.S. shares were subdued amid August's customary low volume, with the S&P 500 seen coasting this week around the 1,400 level ahead of an options settlement this Friday.

The Nikkei closed down 0.1 percent at 8,925.04 on Wednesday, paring earlier losses, with weaker banks and steel companies outweighing gains for a few exporters. The benchmark index is now up 5.6 percent on the year.

> Wall St continues advance but at a snail's pace .N > Dollar gains from diminished prospects for Fed easing <FRX/> > Yields rise on stronger U.S. data, fewer Europe fears <US/> > Gold rises on hope for US easing, hedge fund bullish <GOL/> > Brent ends above $116 to 3-month high on tight supply <O/R>

STOCKS TO WATCH

-MITSUBISHI ESTATE CO (8802.T)

Property developer Mitsubishi Estate's debts will reach an all-time high of 2.11 trillion yen ($26.76 billion) at the end of this fiscal year as it includes special-purpose companies handling redevelopment in its consolidated earnings, the Nikkei business daily reported.

-MAEDA CORP (1824.T)

Maeda Corp has won a 3.5 billion yen ($44 million) contract to install solar panels at 5,000 convenience stores operated by Seven & I Holdings Co Ltd (3382.T) to cover part of the stores' electricity needs, according to the Nikkei business daily.

($1 = 78.8600 Japanese yen)

(Reporting by Sophie Knight; Editing by Richard Pullin)