Nikkei edges down on yen's rise but range-bound

 * Nikkei drops 0.4 pct as yen weighs on exporters

 * Dollar slips to three-week low below 82.52 yen

 * SQ, set on Friday, unlikely to have major impact on Nikkei

 TOKYO, Dec 7 (Reuters) - Japan's Nikkei average fell on
Tuesday as the yen's recent firmness weighed on shares of
precision machinery makers and exporters, though stocks generally
moved in narrow ranges on a lack of fresh factors.

 The Nikkei was weighed by profit-taking after it posted
strong gains last week, but investors were unwilling to sell too
aggressively on views that Japanese shares are still on an upward
trend, analysts said.

 "The yen's firmness is putting pressure on the Nikkei. Shares
of precision machinery shares are especially under pressure due
to the yen's strength on the euro," said Hiroaki Kuramochi, chief
equity marketing officer at Tokai Tokyo Securities.

 Kuramochi said shares of exporters in general were being
pressured, while strong prices for crude oil and commodities such
as gold were expected to provide support to resource-related
shares.

 As of mid-morning, the benchmark Nikkei .N225 was down 0.4
percent, or 42.35 points, at 10,124.88.

 The broader Topix index .TOPX fell 0.4 percent to 877.80.

 "So far we are not overly worried about the yen's recent
recovery, but we'll be more concerned should the yen approach 80
(against the dollar)," Kuramochi said.

 The euro was under pressure in Asia on views that the euro
zone appeared split on how to resolve the region's debt crisis.

 The euro was down 0.2 percent against the yen EURJPY= at
109.77 yen.

 The dollar slipped to a three-week low of against the yen
JPY= to below 82.52 yen.

 The yen's firmness against the euro weighed on the subindex
of precision machinery makers .IPRCS.T such as Citizen 7762.T
which have strong ties in Europe. Shares in the firm dropped 1.1
percent and the subindex fell 1 percent.

 WATCHING ASIA

 Investors were watching share prices in other Asian markets
due to looming speculation over a possible monetary tightening by
the Chinese government.

 Market participants were hesitant about taking large
positions in the Nikkei ahead of the closely watched settlement
price that will be set on Friday, analysts said.

 The settlement, known in Japan as the special quotation or
"SQ", is calculated from the opening prices of the 225 shares on
the Nikkei average on the second Friday of the month.

 Still, SQ is unlikely to influence the key Nikkei average as
many participants appeared to have completed rolling over their
positions to the March contract in the futures market, a
Tokyo-based options trader said.

 The options trader said Nikkei futures and options contracts
expiring in December are expected to settle at around
10,050-10,300, the options trader said.
 (Reporting by Chikafumi Hodo; Editing by Joseph Radford)