Nikkei falls for 2nd day on exporters; Sony sags after rejecting fund plan
* Volume likely to stay thin - analysts * Strong yen hurts exporters * Company earnings overall good - Mizuho Securities By Ayai Tomisawa TOKYO, Aug 6 (Reuters) - Japan's Nikkei share average fell for a second day on Tuesday, on the yen's strength against the dollar, while Sony Corp tumbled after rejecting proposals from a U.S. fund to spin off a part of its entertainment business. Exporters took a hit, with Toyota Motor Corp falling 1.6 percent and Honda Motor Co shedding 0.8 percent after the dollar fell 0.6 percent to 98.31 yen overnight. It was last traded at 98.04 yen. A rise in the yen hurts Japanese exporters' competitiveness overseas as well as their earnings when repatriated. The Nikkei dropped 1.4 percent to 14,064.88 in midmorning trade, staying below both its 5-day and 25-day moving averages but was supported above its 75-day moving average of 13,976.77. As of Monday, 1,519 listed companies, excluding utility firms and financials whose business year ended in March, had reported their quarterly results, and on aggregate their pretax profit rose by 35 percent on the year, while sales rose by 8 percent, Mizuho Securities said. "We blame the yen's rise... we had some blue chip companies like Toyota reporting stellar earnings, but as the yen has strengthened those companies have failed to lift the market and we missed a rally," said Yoshiyuki Kondo, a strategist at Daiwa Securities. The Topix dropped 1.0 percent to 1,172.93. Sony Corp was one of the notable decliners, falling 3.5 percent and was the third most traded stock after it rejected proposals from activist shareholder Daniel Loeb of Third Point to spin off a part of its entertainment business. "I think the chances that Third Point will sell its shares are slim, although the market seems to be reacting to that slim chance today. A fall in Sony shares from this particular news should be limited," said Makoto Kikuchi, chief executive of Myojo Asset Management, adding that the hedge fund may yet appeal directly to Sony shareholders next June, a large number of whom are foreign investors. On Tuesday, investors are expected to remain focused on earnings news season for direction. Corporate earnings from companies such as Isuzu Motor Motors Ltd and Suntory Beverage & Food are expected later in the day. Market observers said that Tuesday's trading volume may stay thin, after Monday's volume for both the Nikkei and the Topix was the lowest since December 2012. For the Topix, only 1.99 billion shares changed hands, falling below 2.0 billion shares for the first time since December and down 23 percent from last week's average daily volume of 2.6 billion shares.