TOKYO, March 22 (Reuters) - Japan's Nikkei share average is expected to retreat on Friday, pulling back from a 4 1/2-year high marked on the previous day on renewed worries about Cyprus' debt problems, while gains in the yen will likely hurt exporters. Market players said declines in the U.S. market also dampened investor sentiment, with the Nikkei expected to trade between 12,350 to 12,550 after ending up 1.3 percent to 12,635.69 on Thursday, its highest closing level since early September 2008. The benchmark is up 0.6 percent so far in the week. Nikkei futures in Chicago closed at 12,445, 1 percent down from the Osaka close of 12,570. "The renewed concerns about a Cyprus bailout is hitting the mood. Investors worry about the effect on the euro zone. The Tokyo market has 'overbought signs' anyway, so profit-taking won't be surprising," said Hiroichi Nishi, an assistant general manager at SMBC Nikko Securities. The Nikkei is currently trading 6.8 percent above its 25-day moving average. When the index moves more than 5 percent above the technical line, it is considered overbought. The European Union gave Cyprus till Monday to raise the billions of euros it needs to secure an international bailout. Failing that, it could face a collapse of its financial system that could push it out of the euro currency zone.. Further denting sentiment, Standard & Poor's cut Cyprus credit rating deeper into junk status and a survey showed the euro zone's economic downturn has deepened this month, even before Cyprus's bailout debacle The heightened worries about Cyprus and risk of further problems for the euro zone have seen investors seek shelter in the safe-haven yen. That has put pressure on the Nikkei as investors fret the recent weakening trend in the yen may stall and undermine the export-driven economy. The dollar last traded at 95.08 yen, having fallen more than 1 percent on Thursday. On Thursday, new Bank of Japan governor Haruhiko Kuroda told a news conference further bold easing measures were needed to beat deflation. Analysts said that unless there is a new development, such as the BOJ calling an emergency meeting to discuss easing monetary policy before a regular rate review on April 3-4, big gains in the Nikkei are unlikely before the policy meeting. > Wall St slides as Oracle drops, Cyprus worries escalate > Yen squeezed higher, euro remains in doldrums > Gold hits nearly 1-month high on fears over Cyprus > Oil falls on demand outlook worries as Cyprus struggles STOCKS TO WATCH --Honda Motor Co Honda will recall 76,000 Acura TSX sedans in the United States to install a water-resistant cover over the electronic control unit to prevent corrosion that could ultimately lead to stalling. --Renesas Electronics Corp Renesas is in talks with foreign companies about selling the mobile phone chip business it bought from Nokia Oyj three years ago, the company's new president said.