Nikkei heads lower as Honda, Toyota Tsusho fall

TOKYO, Nov 1 (Reuters) The Nikkei share average fell 0.2 percent on Wednesday as Honda Motor Co. Ltd. and other exporters dropped on a stronger yen and Toyota Tsusho Corp. slid on dilution concerns.

Pioneer Corp. fell after the electronics maker cut its full-year sales forecast due to lower-than-expected shipments of plasma televisions.

The yen hovered near its highest in a month against the dollar on Wednesday, at 116.85 yen in early Tokyo trade.

''With the yen in the 116 range, that is weighing on shares of Japanese blue chip firms,'' said Hideyuki Suzuki, investment information manager at SBI Securities.

A stronger yen is a negative for Japanese companies that make the bulk of their profits abroad as it eats into profits when dollar-denominated earnings are brought home.

Selling was also reinforced by a belief that earnings results have not been as good as investors originally hoped, Suzuki said.

''There haven't been too many positive surprises from earnings results so far,'' he said. The Nikkei was down 31.02 points at 16,368.37 as of 0133 GMT. The broader TOPIX index was up 0.11 percent at 1,619.12.

Honda fell 1 percent to 4,100 yen.

Toyota Tsusho dropped 5.5 percent, making it the biggest percentage loser among the Nikkei 225.

The trading house, which is affiliated Toyota Motor Corp. T>, said it would increase its outstanding stock by around 8 percent to fund investment in facilities and operations.

Pioneer fell 2.8 percent after the electronics maker on Tuesday cut its full-year sales forecast to 820 billion yen from 845 billion yen due to lower-than-expected plasma TV shipments, even though it raised its annual profit forecast to above market expectations.

REUTERS SRS BD0724