* Earnings in full swing this week; Canon, Sony to report
* Eyes on companies' currency assumptions, impact on f'casts
* Toyota down; media reports to cut H2 dlr/yen rate to 80 yen
By Aiko Hayashi
TOKYO, Oct 25 (Reuters) - Japan's Nikkei average inched down on Monday as investors grew cautious ahead of the peak of Japan's earnings season, with many focusing on the impact of a strong yen on companies' full-year earnings outlooks.
The benchmark Nikkei erased small earlier gains as the dollar fell broadly after investors interpreted a Group of 20 agreement to shun competitive currency devaluations as a greenlight to resume dollar selling.
The reporting season gets into full swing in Japan, with a flurry of major companies set to report this week including Canon Inc on Wednesday and Sony Corp on Friday.
"The market here will likely be rangebound until earnings reports by blue-chip exporters this week are out of the way. Many in the market appear to think their full-year guidance figures won't be very good," said Hajime Nakajima, deputy general manager at Cosmo Securities.
One market focus is companies' currency assumptions for the year, and if a change in assumption rates will result in revisions for full-year earnings forecasts, analysts said.
Toyota Motor Corp will lower its dollar/yen rate assumption by 10 yen to 80 yen for the October-March second half of the business year, which will cut its operating profit for the period by 150 billion yen ($1.84 billion), the Yomiuri newspaper said on Monday.
By the midday break, the benchmark Nikkei had shed 0.3 percent to 9,399.80, while the broader Topix dipped 0.5 percent to 820.81.
In early Asian trade the dollar was down 0.4 percent against the yen at 81.09 yen.
"The G20 meeting agreed to refrain from competitive currency devaluations, and that had sparked expectations that extreme strength in the yen would be avoided," said Yumi Nishimura, deputy general manager at Daiwa Securities Capital Markets.
"But now the market seems to be returning to a bias toward weakness in the dollar, eyeing a possible further easing by the Federal Reserve next month, and that's weighing on stocks."
On Friday, the Nikkei average rose 0.5 percent, though it shed 0.8 percent on the week, weighed down by a fall of nearly 2 percent on Wednesday after China unexpectedly tightened credit.
The Nikkei's support likely stands at its 13-week moving average, now 9,372, which has served as support since September.
Resistance looms at its 26-week moving average, now 9,566, which has held down the Nikkei for about five months.
Exporter shares were generally soft, with Canon down 1.3 percent at 3,735 yen and Sony falling 1.4 percent to 2,696 yen. Toyota inched down 1.1 percent to 2,893 yen.
Shares of Honda Motor Co slipped 1 percent to 2,888 yen after the automaker said on Friday it was recalling 528,000 vehicles worldwide due to potential problems with a master brake cylinder seal.
But KDDI Corp surged 8.6 percent to 441,500 yen after the mobile phone operator said it would buy back up to 100 billion yen of its own shares in what could be the second-biggest share repurchase in Japan this year.
KDDI decided to launch the buyback because its stock was depressed and it had no plans for major acquisitions or any other big investments, Tadashi Onodera, who will step down as president in December, told a news conference in Tokyo. (Editing by Joseph Radford)