* Yen's fall has limited impact as production problems weigh
* TEPCO tumbles to new low on debt worries
* Resource-related stocks fall on profit-taking after rallies
By Antoni Slodkowski
TOKYO, April 6 (Reuters) - Japan's Nikkei average edged higher on Wednesday but was seen stuck in a narrow range, with investors taking profits on recent outperformers such as resource-related stocks and blue-chip exporters nudging higher helped by a weaker yen.
Shares in Tokyo Electric Power Co plunged more than 16 percent to a new all-time low of 293 yen in the first hour of trade on mounting concern the utility is likely to face huge damages payments due to the ongoing crisis at its stricken nuclear power plant.
The Bank of Japan's purchases of exchange-traded funds, which amounted to 18.4 billion yen ($216 million) on Tuesday, under an asset purchase programme adopted to bolster the economy were seen as lending some support to market sentiment.
"The dollar going above 85 yen is a significant breakthrough," said Hiroaki Osakabe, a fund manager at Chibagin Asset Management.
"But carmakers and other manufacturers have to be able to produce at full capacity first to really feel its positive impact. That's why they're not surging on the news," said Osakabe.
Underscoring market players' sensitivity to news about bottlenecks, Toyota Motor Corp gained 0.8 percent to 3,285 yen after the Nikkei business daily said it will reopen most of its domestic automobile plants as early as next week to start producing a limited number of models.[ID:nL3E7F52UGv]
By midmorning the benchmark Nikkei was up 0.1 percent at 9,622.35, while the broader Topix shed 0.4 percent to 843.35.
Support for the benchmark is seen at 9,500, where it settled after the post-quake panic sell-off, but some analysts say it may fall further as the market, having rebounded strongly after the disasters, has become vulnerable to negative news.
"Everyone is waiting for earnings reports to start at the end of the month and until then the market will probably slowly move lower," said Mitsuo Shimizu, deputy general manager at Cosmo Securities.
Shimizu said that with options prices settling this Friday -- the first time since the quake -- Tokyo stocks will likely come under more selling pressure in the near term.
The dollar hit a six-month high of 85.23 yen in early Asia trade and was seen aiming for 85.93 yen, which was the non-intervention peak from September last year.
The Nikkei is expected to trade between 9,500 and 9,700 on Wednesday after slipping more than 1 percent the day before in a sign that the post-quake rebound has run its course as the Nikkei bounced off its 200-day moving average at 9,822.
Oil-related shares such as Japan's largest oil and gas developer, Inpex Corp , and trading houses such as Mitsui Co lost on profit-taking after oil prices rose on Tuesday to their highest since 2008 on supply concerns.
Inpex fell 0.6 percent to 639,000 yen after having advanced more than 15 percent in March, while Mitsui Co was 1.5 percent lower at 1,477 yen. (Reporting by Antoni Slodkowski; Editing by Michael Watson)