* Exporters higher on weaker yen

* Fast Retailing strong on brokerage upgrade

By Ayai Tomisawa

TOKYO, Oct 15 (Reuters) - Japan's Nikkei share average

extended its rise into a fifth day on Tuesday, tracking gains on

Wall Street after top U.S. lawmakers signalled they could soon

reach a deal to reopen the government and avert a possible debt

default for now.

The Nikkei was up 0.6 percent at 14,490.92 in

midmorning trade after trading as high as 14,510.37. Resistance

is seen at 14,606.66, a 61.8 percent retracement of its May high

from its June low.

Japanese markets were closed on Monday for a national

holiday.

Exporters were in demand as the yen stayed near a two-week

low against the dollar. Sony Corp rose 2.1

percent, Honda Motor Co advanced 0.5 percent and Canon

Inc added 0.5 percent.

"Although many foreign investors are staying on the

sidelines because of the U.S. concerns, short-term investors are

in favour of exporters which are expected to raise their

full-year forecasts," said a trader at a Japanese brokerage.

Fuji Heavy Industries Ltd gained 1 percent and was

the seventh most-traded stock by turnover after the Nikkei

business daily said the Subaru maker was expected to report

strong earnings for the April-September period.

The Nikkei, without citing sources, said the automaker's

operating profit for the six months was seen rising 250 percent

on the year to about 150 billion yen, above the average market

forecast for 142.6 billion yen.

Fast Retailing Co rose 1.8 percent after CLSA raised

its rating on the Uniqlo operator to "buy" from "sell" and

lifted its target price to 44,500 yen from 27,000 yen, citing

its store expansion plan.

The broader Topix added 0.4 percent to 1,201.88.

On Monday, U.S. stocks posted modest gains as investors bet

that there would soon be a deal in Washington to increase the

debt limit. The ceiling needs to be raised by Thursday.

Senate Majority Leader Harry Reid said that he and his

Republican counterpart, Mitch McConnell, have made strong

progress toward reaching a deal.

But investors stayed cautious ahead of the Thursday

deadline.

"The market is still precarious ... Even if default can be

avoided, investors are not ready to take risk at this point,"

said Takuya Takahashi, an analyst at Daiwa Securities. "They are

cautiously buying back cheap shares."

The Nikkei is still down 2.1 percent from a 9-1/2-week high

marked on Sept. 27.