TOKYO: Japanese shares fell on Thursday, tracking Wall Street losses overnight, as heavyweights Honda Motor and Sumitomo Rubber dropped on disappointing forecasts. The Nikkei lost 0.98% to close at 27,446.10, while the broader Topix fell 0.66% to 1,936.66.

“Wall Street’s decline overnight affected the Japanese market to a certain extent but investors sold shares as they were disappointed by companies which reported worse-than expected outlook,” said Chihiro Ohta, assistant general manager at the investment research and investor services at SMBC Nikko Securities.

Honda Motor slipped 4.08%, as the automaker’s revised forecast missed an average forecast by 24 analysts, even as it lifted its full-year operating profit outlook.

Rival Toyota Motor fell 1.51%.

Sumitomo Rubber Industries tanked 12.74%, as the tyre maker cut its annual profit forecast. Peers Yokohama Rubber fell 6.51% to become the biggest loser on the Nikkei, while Bridgestone lost 3.2%.

The rubber sector lost 3.77% to become the biggest loser on the Tokyo Stock Exchange’s 33 industry sub-indexes. Casio Computer lost 5.71%, after the watch maker cut its annual operating profit forecast.

Japanese shares rise on Wall Street gains, robust outlook

Overnight, Wall Street ended sharply lower as Republican gains in midterm elections appeared more modest than some expected, with investors also focusing on upcoming inflation data that will provide clues about the severity of future interest rate hikes.

Bucking the trend, Kajima surged 6.91%, after the construction firm raised its annual profit outlook. Kawasaki Heavy Industries jumped 5.27%, as the aircraft and train maker made a similar move.