TOKYO, Jan 21 (Reuters) - Japanese shares fell on Friday, with technology heavyweights tracking Nasdaq"s 1% fall overnight, as fears of inflation and higher interest rates dented risk appetite. The Nikkei share average (.N225) lost 1.5% to 27,365.50 by 0221 GMT, after losing as much as 2.3%. The broader Topix (.TOPX) fell 1.02% to 1,918.77. The Nikkei is down 2.6% for the week, while the Topix was 2.9% lower. "The market tracked the Wall Street and chip-related shares became a target of a sell-off after the Nasdaq"s losses," said Kazuharu Konishi, head of equities at Mitsubishi UFJ Kokusai Asset Management. "There will be no positive or negative comments on the U.S. rates from Federal Reserve senior officials until the FOMC (Federal Open Market Committee) next week, so investors will remain cautious." Wall Street"s main indexes ended sharply lower overnight, as investors considered whether equities were bargains after a sell-off to start the year that has seen the Nasdaq fall into a correction territory. Chip-related stocks fell, with Tokyo Electron (8035.T) losing 6.3%, Advantest dropping 4.18% and Shin-Etsu Chemical (4063.T) losing 2.46%. Toyota Motor (7203.T) fell 2.45% after the automaker said it would slow production at as many as 11 plants in Japan because of rising COVID-19 infections among its workers and those at parts suppliers. read more As the coronavirus infections surge to a record, Japan"s western prefecture of Osaka and two neighbouring regions are expected to join in a widening declaration of COVID-19 prevention measures, which already cover the capital Tokyo and a dozen other regions. read more Despite the wider curb, airlines and railway shares (.IAIRL.T), (.IRAIL.T) advanced, with ANA Holdings (9202.T) gaining 1.57% and West Japan Railway (9021.T) rising 1.56%.