Aug. 5 (Bloomberg) -- Japan’s Topix index fell for the first time in 14 sessions as financial reports from Isuzu Motors Ltd. and Fast Retailing Co. raised concern a recovery in demand for products from cars to clothes will be delayed.

Isuzu sank 4.7 percent after first-quarter revenue fell by more than half. Fast Retailing, Japan’s largest chain of clothing shops, lost 3.5 percent after store sales dropped for the first time in nine months. Yamaha Motor Co. extended its decline after an analyst said the motorcycle maker’s forecast cut yesterday was “beyond anything imaginable.”

“Whether sales will recover in the second half remains to be seen, although companies are doing well in their efforts to cut costs,” said Yoshihiro Okumura, who helps oversee the equivalent of $365 million at Chiba-gin Asset Management Co.

The Nikkei 225 Stock Average lost 122.48, or 1.2 percent, to close at 10,252.53 in Tokyo. The broader Topix index declined 9.44, or 1 percent, to 949.58, with twice as many stocks retreating as advancing. Shares extended their drop in the afternoon as the yen strengthened against the dollar.

The Topix climbed for 13 consecutive sessions through yesterday, its longest winning streak since 1988, as earnings at companies from Honda Motor Co. to Sony Corp. beat analysts’ estimates because of cost reductions. The 14-day relative- strength index for the gauge exceeded 70 this week, the level that some traders see as a sign to sell.

‘Near-term Ceiling?’

“People are feeling they’ve reached the near-term ceiling, but aren’t 100 percent sure if this is the right time to sell,” said Naoki Fujiwara, chief fund manager at Tokyo-based Shinkin Asset Management Co., which oversees the equivalent of $3.7 billion. “As a result, they are staying on the sideline.”

Isuzu, Japan’s largest maker of light-duty trucks, sank 4.7 percent to 163 yen. First-quarter sales tumbled 55 percent, dragging Isuzu to a net loss from a year-earlier profit.

Yamaha, the world’s No. 2 motorcycle maker, slid 5.3 percent to 1,038 yen, adding to a 9.9 percent plunge yesterday, when the company forecast a net loss that’s more than four times wider than its previous projection.

“I thought it wouldn’t be a surprise, regardless of how much the company lowered its forecast,” Shingo Hayashi, an analyst at Daiwa Securities Group Inc., said in a Japanese- language memo to clients. Even so, the extent of the loss estimate was “beyond anything imaginable.”

Toyota Motor Corp. slid 1.2 percent and was the biggest drag on the Topix. The automaker narrowed its full-year loss forecast by almost a fifth yesterday, while barely raising its sales target.

Papermakers Rise

Fast Retailing sank 3.5 percent to 11,400 yen, contributing the most to the Nikkei’s slide. Sales at its Uniqlo casual- clothing stores fell in July for the first time in nine months. Nomura Holdings Inc. cut the stock to “neutral” from “buy.”

Nippon Paper Inc., Japan’s No. 2 maker of the material, gained 3.1 percent after first-quarter operating profit jumped 40 percent. Rengo Co., the nation’s top maker of cardboard boxes, added 2.6 percent after quarterly profit soared 81 percent. Rengo released its report yesterday during trading hours.

This week is the busiest of Japan’s earnings season, with more than one-third of the 1,693 companies in the Topix scheduled to report results, according to Bloomberg data.

Mitsui & Co., a trading house that generates about half its revenue from resources, advanced 1.9 percent to 1,271 yen and was the most-actively traded stock by value today in Tokyo.

Nomura reiterated its “buy” rating on the stock and raised its price estimate by 12 percent to 1,565 yen, citing increasing demand for iron ore in China. While Mitsui reported first-quarter net income fell 44 percent from the same period last year, the company is almost halfway to its full-year target, Yasuhiro Narita, an analyst at Nomura, said in a note to clients.

Nikkei futures expiring in September retreated 1.4 percent to 10,250 in Osaka and Singapore.

To contact the reporter for this story: Masaki Kondo in Tokyo at mkondo3@bloomberg.net; Toshiro Hasegawa in Tokyo at thasegawa6@bloomberg.net.

Last Updated: August 5, 2009 03:57 EDT