Rises in techs, traders boost Nikkei but gains pared

* Nikkei up on short-covering, buoyed by U.S. gains

* But 10,000 resistance seen strong, next target 10,200

* Techs up after gains by U.S. peers, banks rise

* Late rise in yen against dollar pares gains

By Elaine Lies

TOKYO, Nov 10 (Reuters) - Japan's Nikkei average rose 0.6 percent on Tuesday as trading houses climbed after rises in commodities the day before, though a late rise by the yen against the dollar pared gains in many shares. Advantest Corp (6857.T) and other chip-related shares rose after gains by their U.S. peers, while bank shares climbed after remarks by Japan's banking minister suggesting the government may not strictly enforce capital requirements for banks. David Riley, co-head of global sovereign ratings at Fitch Ratings, told Reuters Television in an interview that Fitch would have to review its AA-minus rating on Japanese government bonds if there was a material increase in debt issuance above the current 44 trillion yen ($490 billion) next fiscal year. [ID:nT286946]

Analysts said such long-term uncertainties would keep Japanese shares lagging behind their global peers.

"It's hard to get foreign investors to come and buy Japan, because even though earnings have been good, compared to the rest of the world their recovery has been on the weak side," said Hideyuki Ishiguro, a supervisor at Okasan Securities.

Others pointed to a broad range of factors inhibiting buying of Japanese shares including the yen's strength against the dollar and worries about a rise in government bond issuance.

In thin trade, the benchmark Nikkei .N225 gained 61.74 points to 9,870.73 after earlier rising as much as 1.7 percent. The broader Topix , which is not as heavily tech-centred, rose 0.2 percent to 872.44.

Analysts said the Nikkei faces resistance around 10,000, just about where the 25-day moving average comes in, but if it gains upward momentum it could quickly punch through that level.

The next key technical level is 10,200, which is where the Nikkei's 75-day moving average comes in.

"Even if we see positive fundamentals we are not seeing enough inflows to push prices higher. Without money flowing into the market the Nikkei's topside will be limited at around 10,500 yen," said Masumi Yamamoto, a market analyst at Daiwa Securities SMBC.

RISK-TAKING, BUT NOT JAPAN?

As shown by Wall Street's gains, in which the Dow rose to a 13-month high, risk appetite was fed by the G20's weekend pledge to keep emergency measures in place until recovery was assured, raising expectations for prolonged low interest rates.

"The market became more confident that the current ultra low interest rate policy will continue after the G20 meeting, giving investors more chance to take risks," said Shoji Yoshigoe, deputy general manager and senior investment strategist at Mitsubishi UFJ Securities.