Japanese stocks fall on disappointing business outlook

By Junko Fujita

TOKYO, Oct. 28 (Reuters) – Japanese stocks fell on Thursday as disappointing prospects for leading tech companies led to a wider sell-off, although gains in heavy chip-linked stocks limited the losses.

The Nikkei stock average was down 0.9% to 28,829.54 by 02:06 GMT, while the broad Topix fell 0.65% to 2,000.68.

“I expected some companies to miss market expectations in this earnings season, but the downgrades were a big surprise. It took a toll on investor sentiment,” said Shigetoshi Kamada, managing director of the research department of Tachibana Securities.

“Investors are waiting for Toyota’s earnings next week because automakers are affecting their related industries. At the same time, the US Fed’s policy meeting is also a big factor in their sentiment.”

Robot maker Fanuc fell 8.54% as it slashed its outlook for this year, citing shortages of chips and other parts.

Hitachi lost 1.39% of automakers’ output due to the chip shortage that plagued the tech conglomerate.

Computer maker Fujitsu also fell 8% after its outlook beat expectations.

The Japanese market also followed a weaker finish overnight on the S&P 500, which ended lower on lower oil prices and lower Treasury yields.

Investors remained cautious about central bank rate policies ahead of the Fed’s policy meeting next week, Kamada said.

On Thursday, the Bank of Japan is expected to keep monetary policy parameters stable and also forecast that inflation will stay below its 2% target for at least two years.

On the other hand, silicon wafer maker Shin-Etsu Chemical gained 3.21% and chipmaking equipment maker Screen Holdings jumped 8.74 on solid profits.

Their peers Tokyo Electron rose 1.96% and Advantest by 3.61%, limiting overall losses on Nikkei.

(Reporting by Junko Fujita; Editing by Rashmi Aich)

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