Tokyo stocks fell on Thursday as caution about earnings hurt Canon Inc and other tech firms after disappointing outlooks this week from Eloped Memory Inc and Nintendo Co. Analysts also cited the yen's recent firmness as making investors nervous about the earnings of Toyota Motor Corp and rivals after computer game maker Nintendo on Wednesday blamed a strong yen for its downward revision. The Nikkei average closed down 35.26 points or 0.31 percent at 11,341.31. It rose 0.88 percent the previous day following solid performances on Wall Street and amid renewed hopes for steady demand from China.
The broader TOPIX index edged down 0.26 percent to 1,141.94. "Nintendo's disappointing earnings stemming from a strong yen have fuelled jitters over the earnings of exporters," said Susumu Abe, manager at Mito Securities' information and investment department.
A higher yen makes Japanese products less price-competitive abroad and eats into exporters' profits when repatriated.
"Likewise, Ellipse's earnings, which took a hit from weak demand for digital electronics products, were negative, although the market's expectations for the high-tech sector had been pretty low."
Electronics conglomerate NEC Corp cut its forecast for annual operating profit by 10 percent after the market closed, joining a growing number of electronics firms struggling with slower demand and faster price falls than anticipated.
Shares of NEC closed unchanged at 584 yen. Its rival Fujitsu Ltd, whose earnings are due on Friday, was flat at 614 yen. Consumer electronics giant Sony Corp announced sluggish quarterly earnings, as expected, after the market closed. Sony had given preliminary earnings figures last week, when it caught the market off guard by slashing its profit target due to falling prices of televisions and other key products, sending its shares to their lowest level since December 8.
Shares of Sony fell 0.5 percent to 3,790 yen on Thursday and are now down around 4 percent since it cut the target. Office equipment maker Canon fell 0.8 percent to 5,270 yen.
Its earnings for the 12 months to December are due on Friday. KDDI Corp, Japan's second-largest telecom operator dropped 2 percent to 543,000 yen. After the market closed KDDI announced earnings results and cut its full-year forecast due to lower anticipated revenues and higher costs.
Among automakers, Toyota, the world's second-biggest automaker that in November posted a surprise drop in second-quarter profits due partly to a strong yen, fell 1 percent to 4,010 yen.
Rival Honda Motor Co lost 1.7 percent to 5,290 yen. In contrast, Mitsubishi Motors Corp climbed 6.3 percent to 153 yen and was the most active issue by volume after the Nihon Keisei business daily said Mitsubishi Heavy Industries Ltd would lead the ailing car maker's rehabilitation.
Mitsubishi Heavy slumped 2.4 percent to 282 yen. Trade slowed, with 1.40 billion shares changing hands on the main board, down from 1.66 billion on Wednesday.
Decline's outnumbered gainers 765 to 633.