TOKYO, Nov 2 (Reuters) - Japan's Nikkei share average extended its strong rally to top a new 21-year peak on Thursday morning, with the mining sector getting a boost while buyers continued to pile into companies such as Honda Motor and Sony on robust earnings prospects.
The Nikkei rose 0.5 percent to 22,527.07 in early deals, the highest level since July 1996, trimming those gains to stand flat at 22,429.30 in midmorning trade.
Mining stocks staged a rally and were the best performers on the board, with Inpex Corp rising 2.3 percent and Japan Petroleum Exploration Co adding 0.4 percent.
Honda Motor Co rose more than 5 percent after the automaker raised its forecast for full-year operating profit by 2.8 percent as it expects to sell more cars and motorcycles this year. It also boosted its second quarter dividend and announced a share buyback plan.
Sony Corp jumped 2.7 percent, extending its gains from the previous day to hit a nine-year high after it forecast record earnings.
On the other hand, Panasonic Corp, the world's largest automotive lithium-ion battery maker, tumbled more than 4 percent after Tesla Inc pushed back its target for volume production on its new Model 3 sedan by about three months, saying it was difficult to predict how long it would take to fix all production bottlenecks.
The broader Topix gained 0.2 percent to 1,790.61. (Editing by Shri Navaratnam)