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What are y'all running on your 1981 xs400s? I have mag wheels, Wondering if instead of a 120/90-16 on the back would it be ok to run a 120/80-16? What would I notice (If anything) if I did? Thanks a lot in advance!
The 120/80-16 will have a smaller diameter than the stock tire. It will not roll as far per revolution as the stock tire, so your actual speed will be lower than what your speedometer indicates. Also, the rear end of the bike will sit about ½" lower (more squat), so you might be more likely to drag some hard parts when cornering.
Other than that, it should fit just fine without interference.
Actually, I was incorrect - as I often am when I don't spend too much time thinking about what I say. Your indicated speed will be correct if you are using a stock size front tire as that drives the speedometer cable. Using a smaller rear tire will result in a lower speed at any engine RPM and an overall lower top speed assuming you are using stock sprockets.
Unless you are going for a "look" with the different rear tire, I would go with stock sizes. There are a number of choices out there. Personally I am running IRC RS-310 tires front and rear (90/90-18 and 120/90-16), but off of the top of my head I know that Duro and Kenda also make rear tires to fit the stock sizing.