TOKYO, July 20 (Reuters) - Japan's Nikkei share average fell on Thursday after two straight sessions of advances, as chip stocks sank in line with U.S. peers, eclipsing gains for automakers amid a weaker yen.

Investors were also cautious with earnings due after the market close from bellwether companies including motor-maker Nidec and chip-making tool maker Disco Corporation .

The Nikkei declined 1.14% to 32,521.88 as of the midday recess, ending near the session's low.

That followed a 1.6% rise over the previous two sessions that brought it just below the key psychological 33,000 mark, where the closely watched 25-day moving average also sits.

"The Nikkei gained steadily over the last couple of days to get to this point, but ultimately the 25-day moving average is proving to be a barrier to further gains," said Maki Sawada, a strategist at Nomura Securities.

"A focal point for investors is if it can recover above that level quickly."

The Nikkei closed at a 33-year high of 33,753.33 on July 3, before retreating as much as 5.8% till July 12.

The broader Topix index entered the lunch break with a milder 0.69% fall.

The Nikkei's decline on Thursday was exaggerated by tumbles for heavily weighted chip stocks, with Advantest and Tokyo Electron combining to shave 98 points from the index.

Chip maker Renesas Electronics and chip component maker Screen Holdings also suffered losses of around 3% each.

But looking stock by stock, the Nikkei's performance was more balanced, with 89 of its 225 components rising, 134 declining and two flat.

Automakers were among the winners, after a weakening in the yen overnight boosted the value of overseas revenue.

Subaru gained 1.68% and Suzuki added 1.04%.

Nissan climbed 1.53%, garnering additional support from its decision to adopt Tesla's charging network in North America. (Reporting by Kevin Buckland; Editing by Rashmi Aich)