Nikkei falls on firmer yen, caution before quarterly earnings

* Companies releasing earnings this week include chip-related shares

* Market does not want to see strong yen before earnings - analyst

* Suzuki Motor tumbles after Maruti Suzuki posts dismal results

TOKYO, Jan 28 (Reuters) - Japan’s Nikkei fell on Monday as a stronger yen hurt sentiment and weighed on the broader market, but losses were capped by investor caution ahead of third-quarter corporate earnings reports this week.

Wall Street was buoyed after a deal was announced to reopen the U.S. government following a prolonged shutdown, but the Japanese market shrugged off the news.

The Nikkei share average dropped 0.3 percent to 20,708.22 points by the midday break.

The broader Topix shed 0.3 percent to 1,561.05, with 28 of Topix’s 33 subsectors in the red.

“Investors have been nervous to see major manufacturers’ earnings, and thin trade has reflected their reluctance to take positions aggressively,” said Hiroyuki Fukunaga, chief executive of Investrust.

Four of the five trading days of last week saw less than two trillion yen in turnover on the Tokyo Stock Exchange’s main board.

Also souring the mood, the yen advanced 0.2 percent to 109.34 against the dollar.

“The market does not want to see the strong yen especially when currency-sensitive manufacturers release their results,” Fukunaga said, adding that the Nikkei’s downside is expected around 20,000 depending on the results.

Analysts said that the market has been wary since precision motor maker Nidec Corp and automation equipment maker Yaskawa Electric Corp both lowered their annual operating profit outlooks earlier this month as the Sino-U.S. trade dispute dampened Chinese manufacturers’ investment appetite.

Companies releasing earnings this week include silicon products maker Shin-Etsu Chemical, chip equipment makers Advantest Corp and Tokyo Electron.

Large cap stocks such as SoftBank Group Corp fell 1 percent, while TDK Corp plunged 2.8 percent. Nintendo Co shed 2.7 percent.

Suzuki Motor dropped 2.7 percent after Maruti Suzuki India Ltd, majority owned by Suzuki, posted a lower-than-expected profit for the third quarter.

Declining issues outweighed advancing ones 1,303 to 717. (Editing by Kim Coghill)