* Nikkei has been trapped in a narrow range for few weeks
* Exporters' shares mixed
By Ayai Tomisawa
TOKYO, Oct 18 (Reuters) - Japan's Nikkei share average edged up on Tuesday, helped by buying in stocks which are sensitive to domestic demand, but gains were limited as the yen inched higher, keeping investors on edge.
The Nikkei rose 0.2 percent to 16,928.31 points by midmorning, after trading in negative territory earlier.
Real estate stocks, pharmaceutical shares and construction companies outperformed, with Mitsui Fudosan Co surging 2.5 percent, Eisai Co gaining 1.6 percent and Kajima Corp advancing 0.5 percent.
"Investors are slightly risk averse while their attention has been on the dollar-yen levels," said Kazuhiro Takahashi, an equity strategist at Daiwa Securities. "They are waiting for a turning point, and until then, they will likely stay on the sidelines."
The Nikkei has mostly stayed in a narrow 16,500-17,000 range bound for the past three weeks amid few major catalysts.
Takahashi added that Japanese corporate earnings for the first half, which will start later this week, will likely provide some catalysts, and once the market prices in companies' full-year forecasts, the Nikkei is expected to regain ground.
Exporters were mixed, with Nissan Motor Co falling 0.8 percent, Panasonic Corp rising 0.3 percent and Tokyo Electron Ltd adding 0.1 percent.
The dollar took a breather from its recent gains as investors evaluated whether the U.S. Federal Reserve will let inflation run above target before raising interest rates, and as investors took some profits from the recent dollar rally.
On Tuesday, the dollar was down 0.2 percent at 103.72 .
The broader Topix was flat at 1,352.99 and the JPX-Nikkei Index 400 was also flat at 12,106.65. (Editing by Kim Coghill)