(Corrects companies' earnings expectations in paragraph 7)
* Airline sector worst performer after Manchester blast sours mood
* Fujifilm sags after saying it will report earnings after June
By Ayai Tomisawa
TOKYO, May 23 Japanese stocks were flat on Tuesday morning as a risk-averse mood kept investors sidelined following an explosion in the English city of Manchester, which lifted the safe-haven yen and depressed some export-oriented shares.
The Nikkei share average fell 0.1 percent to 19,662.91 in midmorning trade.
Airline shares was the worst performer on the board, falling 1.3 percent on concerns that overseas travel may be hit after a blast at a concert in Britain's city of Manchester killed at least 19 people.
Japan Airlines dropped 1.7 percent and ANA Holdings fell 0.8 percent.
Also souring sentiment in the travel industry was news that China is investigating six Japanese citizens on suspicion of "illegal activities", China's foreign ministry said on Monday, after Japanese media reported they may have been suspected of spying.
Elsewhere, the domestic earnings season, now at the tail-end, has partly influenced trading in Japanese stocks over the past month.
According to Rakuten Securities, companies expect a 5.9 percent rise in their net profit for the year through March 2018. The Nikkei is trading at 14 times its projected earnings, and unless the yen strengthens against the dollar significantly and the economy sags, the Nikkei's downside should be limited, Rakuten analysts wrote.
On Tuesday, the dollar was down 0.2 percent at 111.055 yen after earlier slipping to 110.860, pressuring exporters.
Nissan Motor Co dropped 1.4 percent, Subaru Corp fell 1.0 percent and Advantest Corp tumbled 1.6 percent.
"There are few domestic catalysts as the earnings season is over, so political developments in U.S. and other geopolitical issues surrounding North Korea will likely determine the Japanese market's direction for a while," said Kazuhiro Takahashi, an equity strategist at Daiwa Securities.
Fujifilm Holdings, which last month postponed earnings announcement over questionable accounting practice at its overseas unit, fell 1.1 percent to a one-month low. The company said it will announce last fiscal year's earnings after June.
The broader Topix was up 0.1 percent to 1,568.40 and the JPX-Nikkei Index 400 was flat at 14,004.72. (Editing by Shri Navaratnam)
UPDATE 2-Investors call on Mylan chairman, director to step down
NEW YORK, June 28 An investor group led by New York City's comptroller called for Mylan NV's Chairman Robert Coury and Director Wendy Cameron to step down, as part of a campaign against the firm's executive pay packages and high prices for an allergy treatment.
BRIEF-Dova Pharmaceuticals prices IPO at $17/share
* Dova Pharmaceuticals Inc Announces pricing of initial public offering