Shares of Japan Airlines Corp., Asia's largest carrier, fell the most in five months on the Tokyo Stock Exchange after Bank of America-Merrill Lynch cut its target price for the stock.

Shares fell as much as 5.7 percent, the most since Oct. 16, to 200 yen in Tokyo. All Nippon Airways Co. dropped as much as 5.4 percent to 384 yen.

Japan Air is forecasting its third annual loss in four years as tumbling demand for overseas travel slashes sales. Bank of America-Merrill Lynch cut its target price for the shares to 120 yen from 140 yen.

"It is too early for prices to begin incorporating expectations of a recovery," Yasuhito Tsuchiya, an analyst at Bank of America-Merrill Lynch wrote in a report dated yesterday. The company reiterated its 'underperform' ratings on Japan Air and All Nippon.