* Exporters fall after slide on Wall Street
* Canon, Honda earnings awaited after the bell
* Economic uncertainty remains despite solid results-analyst
By Aiko Hayashi
TOKYO, Oct 27 (Reuters) - The Nikkei average lost 1.5 percent
on Tuesday as Astellas Pharma <4503.T> sank after saying it was
terminating development of an arthritis drug, while
resource-linked stocks were hurt by lower oil prices.
Blue-chip exporters such as Honda Motor Co <7267.T> also
dragged on the market after U.S. stocks fell on chances that
lawmakers may let a federal home buyer tax credit expire.
Investors worry that the struggling U.S. housing market could
lose a crucial incentive that has spurred hopes of stabilisation
in recent months. []
"Japanese earnings for the first half have been better than
expected so far, but the fact the market remains susceptible to
falls in overseas markets shows that investors still lack
confidence about the outlook for the economic recovery," said
Mitsuo Shimizu, deputy general manager at Cosmo Securities.
In moderate trade, the benchmark Nikkei <> ended the
morning down 151.77 points at 10,210.85, after rising 0.8 percent
the previous day to hit its highest finish in four weeks.
The broader Topix <> retreated 1.9 percent to 893.35.
Japan's corporate earnings season heats up this week, with
companies reporting later in the day including Honda and Canon
Inc <7751.T>.
Along with corporate earnings, economic indicators are a big
focus this week, market players said. On Thursday, Japan will
announce its industrial output data for September and the U.S.
government will report its first estimate on third-quarter gross
domestic product.
"The market will likely be a tug-of-war for a while between
macro data overseas and micro data at home, with the earnings
season continuing in Japan," said Shimizu at Cosmo Securities.
RESOURCE STOCKS, ASTELLAS DOWN
Hitachi Ltd <6501.T> jumped 4 percent to 311 yen after the
electronics conglomerate reduced its annual net loss forecast by
15 percent, bringing it nearer market expectations, with the firm
citing a recovery in emerging markets, government spending and
cost cuts. []
Astellas dropped 6.4 percent to 3,350 yen.
Oil and gas developer Inpex Corp <1605.T> fell 1.8 percent to
777,000 yen after oil prices declined for a fourth day to stand
below $79 a barrel on Tuesday, hurt by a stronger dollar and
concerns that a sluggish economic recovery would keep fuel demand
low. []
Trading houses, which are major dealers in energy and have
stakes in oil and gas projects, also slid.
Mitsubishi Corp <8058.T>, Japan's largest trading house, lost
4.7 percent 1,977 yen, while fellow trading house Mitsui & Co
<8031.T> tumbled 5.5 percent at 1,235 yen and Marubeni Corp
<8002.T> skidded 3.5 percent to 467 yen.
Exporters fell, with Honda sliding 2.6 percent to 2,825 yen.
Canon shed 1.9 percent to 3,580 yen and TDK Corp <6762.T> slipped
1.3 percent to 5,230 yen.
Among other notable stocks, Fujifilm Holdings <4901.T> surged
6.2 percent to 2,590 yen after Nomura Holdings raised its rating
on the maker of digital cameras and high-tech film used in LCD
panels, citing progress with structural reforms and hopes for
better-than-expected earnings for the second quarter.
Some 923 million shares changed hands on the Tokyo exchange's
first section, above last week's morning average of 884 million.
Declining stocks outnumbered advancing ones by more than 12
to 1.
(Editing by Chris Gallagher)
