Japan shares close higher thanks to positive corporate profits and Toyota declines

Japanese stocks closed higher on Tuesday, as investors reacted to expectations of some companies for a strong performance, even as Toyota Motor shares fell after the company reported worse-than-expected earnings.

The Nikkei average rose 0.33 percent to 27,678.92 points, while the broader Topix gained 0.47 percent to 1,938.50 points.

Toyota shares fell 1.94 percent and pressured the Nikkei index after the company reported a 25 percent drop in profit for the quarter ending in September and slashed its annual production target, as automakers grapple with rising material costs and a chronic shortage of semiconductors.

On the other hand, Japan Tobacco jumped 8.73 percent and was the top gainer on the Nikkei index, after the cigarette and beverage manufacturer raised its annual profit forecast.

Panasonic Holdings shares rose 7.33 percent despite the company’s operating profit falling 11 percent in the second quarter, at a time when the giant performed better than analysts’ expectations.

It is almost certain that the US central bank will raise interest rates by 75 basis points on Wednesday. Still, investors will look for any indications of when the Federal Reserve may begin to consider slowing the pace of future rate increases.