Nikkei up 0.3 pct, led by exporters on softer yen

(Updates to midday)

TOKYO, Aug 5 (Reuters) - The Nikkei average rose for the first time in three days on Tuesday, up 0.3 percent, as investors picked up recently battered exporters like TDK Corp (6762.T) and Canon Inc (7751.T) on a softer yen.

Credit Saison (8253.T) soared more than 12 percent after financial sources said the consumer credit company was in merger talk with Orix Corp (8591.T). [ID:nN04518742]

But the gains were held in check by a large drop in energy shares, with oil and gas developer Inpex Holdings (1605.T) off 4.1 percent after a sharp fall in oil prices.

The benchmark Nikkei .N225 ended the morning up 34.85 points at 12,968.03. The broader Topix gained 0.1 percent to 1,249.09.